WEBVTT - SYSK Selects: How Currency Works 0:00:00.200 --> 0:00:03.280 Hi, everybody, this is Charles W. Chuck Bryant here to 0:00:03.279 --> 0:00:08.520 talk about currency, specifically the September eight, two fourteen Stuff 0:00:08.560 --> 0:00:11.719 You Should Know episode How Currency Works. I think this 0:00:11.760 --> 0:00:14.080 one was really cool because it's not just money, all 0:00:14.160 --> 0:00:16.959 kinds of currency everybody. So that's why this is my pick. 0:00:17.239 --> 0:00:18.840 I hope you check it out and hope you enjoy 0:00:18.880 --> 0:00:24.840 it all over again. Welcome to Stuff you Should Know, 0:00:25.040 --> 0:00:33.400 a production of My Heart Radios How Stuff Works. Hey, 0:00:33.440 --> 0:00:36.239 and welcome to the podcast. I'm Josh Clark with Charles W. 0:00:36.400 --> 0:00:41.120 Chuck Bryant, and Jerry all Right. Yeah, that makes the 0:00:41.200 --> 0:00:45.640 Stuff you Should Know. Have you ever had one of those? Uh? 0:00:45.720 --> 0:00:47.600 I don't know why I wanted one, but when I 0:00:47.640 --> 0:00:49.880 was a kid, I wanted one of those coin things 0:00:49.920 --> 0:00:52.839 you wanted your hip to make change. I wanted one 0:00:52.840 --> 0:00:56.040 of those worst than anything, really. Yeah, I don't think 0:00:56.360 --> 0:00:58.280 like a peanut vendor. I don't know when I said 0:00:58.320 --> 0:01:00.240 when I was at six Flags what everyone I saw 0:01:00.320 --> 0:01:03.320 those things? I just thought it was boss. That's really funny. 0:01:03.360 --> 0:01:04.760 And I don't think I knew that you could buy 0:01:04.800 --> 0:01:06.640 them for like three bucks or else. I would have 0:01:07.120 --> 0:01:10.360 a bunch of them. Yeah, because there's not much to them. 0:01:10.480 --> 0:01:13.720 It's just like the thing's not counting anything when you 0:01:13.720 --> 0:01:17.399 press it with your thumbs. Releases. But each one, you know, 0:01:17.760 --> 0:01:20.959 your quarters, they have different sizes, so you know, you 0:01:21.000 --> 0:01:24.080 can just without even looking, you could go, here's three quarters, buddy. 0:01:24.360 --> 0:01:27.280 I know what somebody's getting for Christmas this year. I 0:01:27.360 --> 0:01:29.119 just thought of that out of nowhere. I haven't remember 0:01:29.160 --> 0:01:30.480 that since I was a kid. I was obsessed with 0:01:30.520 --> 0:01:32.319 those things for a little while. Well, you know what, 0:01:32.400 --> 0:01:37.880 you were technically obsessed with a dispenser of currency? How's 0:01:37.920 --> 0:01:41.280 that ted that one up? Yeah? Yeah, knocked it out 0:01:41.280 --> 0:01:43.400 of the part. I collected banks too, which is a 0:01:43.440 --> 0:01:47.000 weird thing for a kid to do. Banks like piggy banks. Yeah, 0:01:47.080 --> 0:01:49.000 even then, none of them were piggybanks. Well what was 0:01:49.000 --> 0:01:51.920 your favorite one? Oh man? I still have the collection. 0:01:51.960 --> 0:01:54.240 My mom's got them. Um. I wonder if they're worth 0:01:54.240 --> 0:01:56.920 any money, and I doubt it. I mean it was 0:01:57.040 --> 0:02:01.800 like a Garfield Bank and uh and uh Opus the 0:02:01.800 --> 0:02:08.960 penguin Eric Davis? Now was it Opus from bloom County? How? 0:02:08.960 --> 0:02:10.320 Why am I blanking out on that? That was my 0:02:10.320 --> 0:02:15.359 favorite comic? I don't know that sounds right, man, I'm 0:02:15.440 --> 0:02:17.880 losing it, buddy, So the penguin from Bloom County, we're 0:02:17.919 --> 0:02:20.440 going with that. I was obsessed with Bloom County and 0:02:20.480 --> 0:02:25.000 then Change Counters nice and Biggiebanks cool. That was my childhood. 0:02:25.120 --> 0:02:29.560 And Dale Murphy not Eric Davis. Now, who's that? Who's 0:02:29.639 --> 0:02:33.760 for the Reds? Oh? The Reds player? Yeah? He was 0:02:33.800 --> 0:02:37.359 great though, I love it he as a non Reds fan. 0:02:37.520 --> 0:02:40.520 I was an Eric Davis fan. I'm with you. Where 0:02:40.560 --> 0:02:44.480 are you obsessed with? I liked baseball, baseball cards? Did 0:02:44.480 --> 0:02:47.560 you claim anything? Mad magazines? Yeah? Me too. Those are 0:02:47.560 --> 0:02:49.920 still I think at my dad's house. They'd better be. 0:02:50.080 --> 0:02:53.360 You still got him? Uh? What else did I collect? 0:02:53.600 --> 0:02:56.919 I saved up my Sports Illustrated for years too. Um. 0:02:57.000 --> 0:02:58.920 And remember the first one I ever got had Muhammad 0:02:58.919 --> 0:03:01.120 Ali on the cover. That's all I am. Wow. It 0:03:01.200 --> 0:03:03.240 was during his comeback and when he was like fat 0:03:03.240 --> 0:03:07.080 and mustachioed. Don't call it a comeback. It was not 0:03:07.080 --> 0:03:11.560 not much one. That's not how that goes? Uh? How's 0:03:11.600 --> 0:03:13.600 that first side track? To get us going? I haven't 0:03:13.639 --> 0:03:16.320 even done the intro. Let's hear it? So the intro 0:03:16.600 --> 0:03:21.680 is as follows Chuck in two New York Magazine, not 0:03:21.800 --> 0:03:24.760 the New York Times, not New Yorker, New York Magazine, 0:03:24.880 --> 0:03:27.320 which is an equally good publication in that time out 0:03:27.320 --> 0:03:31.680 in New York. Not the Village Voice, all right, just 0:03:31.880 --> 0:03:35.480 New York Magazine, um which is actually where the movie 0:03:35.520 --> 0:03:38.160 Saturday Night Fever came from. It came from an article 0:03:38.280 --> 0:03:42.360 that was later admitted to be completely fabricated by the author. Yeah, 0:03:42.400 --> 0:03:45.360 in that magazine. Awesome. Anyway, New York Magazine ran a 0:03:45.400 --> 0:03:49.360 really interesting article in January called um or January called 0:03:49.400 --> 0:03:52.440 SuDS for Drugs, and it talked about how there's a 0:03:52.600 --> 0:03:58.960 huge black market for tide laundry detergent, specifically liquid tide 0:03:59.560 --> 0:04:03.400 in the United States. Yeah, they did not make it anymore. No, 0:04:03.600 --> 0:04:06.720 they make plenty of it, but tons of it gets stolen. 0:04:07.320 --> 0:04:10.960 And the reason why is tied is such an agreed 0:04:11.080 --> 0:04:16.920 upon great laundry detergent that tied and only tied. Like 0:04:17.160 --> 0:04:20.680 if you try to use gain or um all or 0:04:20.720 --> 0:04:23.520 anything like that, you would get turned away. But if 0:04:23.560 --> 0:04:27.800 you have a jug of tied liquid laundry detergent, you 0:04:27.839 --> 0:04:30.880 can buy drugs in the United States with it. It 0:04:31.000 --> 0:04:33.799 is agreed upon as a currency. I had no idea 0:04:34.240 --> 0:04:36.720 even though you can just buy it in the store. Yeah, 0:04:37.000 --> 0:04:39.360 let's see. That's the part I don't get, because if 0:04:39.400 --> 0:04:41.760 you're a crackhead and you steal a carton of them, 0:04:42.000 --> 0:04:43.719 then all of a sudden, you didn't have to pay 0:04:43.760 --> 0:04:47.560 for this tide and you can use it to buy drugs. Interesting, 0:04:48.000 --> 0:04:49.520 why don't use any of that stuff? And I don't 0:04:49.520 --> 0:04:51.760 mean to pick on just crackheads. If you're a junkie, 0:04:52.080 --> 0:04:56.520 same thing. Sure, if you have a gambling habit, Yeah, 0:04:56.560 --> 0:04:59.600 we've man, we got we got a lot of crap 0:04:59.600 --> 0:05:01.400 from a cup. The people by using about using the 0:05:01.400 --> 0:05:05.200 word junkie, Yeah, it's pretty derogatory if you think about it. 0:05:05.240 --> 0:05:07.320 I guess, well, but it's a word with a definition 0:05:07.640 --> 0:05:10.160 which means something, and that's what it means. I mean, 0:05:10.200 --> 0:05:13.400 it's not like we were just like slagging people. Yeah, no, 0:05:13.600 --> 0:05:16.720 I get what they're saying, though. You're saying like it's 0:05:16.760 --> 0:05:19.919 just such a dismissive term of anyone who's addicted. It 0:05:19.960 --> 0:05:21.760 really kind of flies in the face of the disease 0:05:21.800 --> 0:05:24.960 model of addiction. Yeah. Yeah, so I had to talk 0:05:25.040 --> 0:05:26.919 to the people who call us out on man, I 0:05:26.960 --> 0:05:30.719 get it. But the point is tied is now a 0:05:30.800 --> 0:05:34.720 currency as like remember our prison episode we talked about 0:05:34.720 --> 0:05:40.640 how honey buns are currency. Yeah, same thing, right, cigarettes, yeah, currency, 0:05:40.920 --> 0:05:43.960 deer skins, Yeah, those were currency once. That's where we 0:05:44.000 --> 0:05:46.800 get the word bucks from. I think what you're getting at. Oh, 0:05:46.880 --> 0:05:50.159 I can't wait to get to that stuff later. Okay, etymology, 0:05:50.240 --> 0:05:53.960 I love that stuff. Um. I think what you're trying 0:05:54.000 --> 0:05:57.479 to say is that or what you are saying is 0:05:57.520 --> 0:06:01.520 that currency is nothing more or than a medium of 0:06:01.560 --> 0:06:05.400 exchange and a substitute for something a good or a service. Yeah, 0:06:05.520 --> 0:06:08.640 it is an agreed upon that's the key. Yeah, it's 0:06:08.640 --> 0:06:10.520 got to be agreed upon. Yeah, you can't be like 0:06:10.800 --> 0:06:13.800 I'll give you five Lincoln logs for a car. Well 0:06:13.839 --> 0:06:16.120 that's what you do when you're a kid, right, And 0:06:16.200 --> 0:06:17.839 you go, I don't think I want Linkol logs, and 0:06:17.880 --> 0:06:20.479 everybody goes, oh you do. Right. But if the other 0:06:20.520 --> 0:06:23.880 person says those Lincoln I don't want Lincoln logs, then 0:06:23.920 --> 0:06:26.080 what you have are Lincol logs, not a currency, because 0:06:26.080 --> 0:06:28.320 it has to be mutually agreed upon, like you say, 0:06:28.360 --> 0:06:32.560 like dollar bills. Yeah. I have gone off on this 0:06:32.680 --> 0:06:37.120 on our show about the amazing fact that this paper 0:06:37.760 --> 0:06:39.680 we have all agreed as is worth something, and that 0:06:39.680 --> 0:06:43.080 as the only reason it's worth something that people dedicate 0:06:43.200 --> 0:06:50.440 their lives to pursuing paper is as as ephemeral as 0:06:51.320 --> 0:06:56.800 a cloud. Almost. Yeah, not the greatest analogy you I've made, 0:06:56.800 --> 0:07:00.479 but it's still kind of works, all right. So let's 0:07:00.560 --> 0:07:05.600 let's talk olden days and currency as a substitute for things. Um, 0:07:05.680 --> 0:07:08.599 what currency did was solved the problem. It allowed you 0:07:08.640 --> 0:07:11.200 to give change and make change. Yeah, that's a that's 0:07:11.200 --> 0:07:13.040 a big one. Because back in the day, if you 0:07:13.120 --> 0:07:17.520 had a bushel of corn and you wanted a chicken, 0:07:18.120 --> 0:07:19.840 you would go to your neighbor. Well, you had to 0:07:19.840 --> 0:07:22.960 find somebody they had a chicken that wanted corn. So 0:07:23.000 --> 0:07:25.680 that's the first problem. That's a problem. But what if 0:07:25.680 --> 0:07:28.120 you do find someone, You're like, great, my neighbor's got 0:07:28.160 --> 0:07:30.960 a chicken and I've got this corn. He wants this corn. 0:07:31.000 --> 0:07:32.320 He wants the corn, but he says, you know what, 0:07:32.320 --> 0:07:34.040 this chicken is worth a lot more than that corn. 0:07:35.520 --> 0:07:38.920 Somebody's getting a bad deal until you can make change. Yeah, 0:07:38.960 --> 0:07:41.320 because what if corn you could that's not the best 0:07:41.360 --> 0:07:42.920 example because you could take out some of the corn. 0:07:43.520 --> 0:07:47.520 Let's say you can't chop a chicken. Yeah, Well, you 0:07:47.640 --> 0:07:50.800 got a cow, your neighbor has a chicken, and it's 0:07:50.840 --> 0:07:53.960 not an even trade. But you just need one chicken 0:07:54.760 --> 0:07:57.600 and your neighbor just needs one cow. You can't make 0:07:57.680 --> 0:08:00.200 change like that. You can't make change. So that's one 0:08:00.240 --> 0:08:05.040 of the first roles that currency its fulfilled, was a 0:08:05.080 --> 0:08:09.400 way to make change, to make trade more equal. Yeah, 0:08:09.400 --> 0:08:10.760 and before that, I think there were a lot of 0:08:10.760 --> 0:08:14.520 bad deals going down out of desperation. You know, like 0:08:14.560 --> 0:08:17.080 if your family really needed that chicken for a reason, 0:08:17.920 --> 0:08:20.840 you might end up taking a bad deal just because 0:08:20.840 --> 0:08:22.600 you need that chicken. You give your cow away for 0:08:22.680 --> 0:08:25.720 that chicken. Yeah, and then your family would berate you. 0:08:25.960 --> 0:08:28.920 It's right, where's the milk, honey? Yeah, this is like 0:08:28.960 --> 0:08:32.240 the magic beans incident all over again. Can't milk a chicken, honey? 0:08:33.320 --> 0:08:38.160 You get berated by your wife. Another reason that currency 0:08:38.440 --> 0:08:42.040 uh became popular is because it allowed you for the 0:08:42.080 --> 0:08:46.920 first time to really a mass wealth. Because you can 0:08:47.000 --> 0:08:49.920 harvest all the corn you want, but that corn is 0:08:49.960 --> 0:08:51.880 gonna go bad unless you can find a way to 0:08:51.880 --> 0:08:54.680 trade it in. A barn full of rotten corn does 0:08:54.840 --> 0:08:56.760 no one any good. It doesn't make you any richer 0:08:56.880 --> 0:09:00.600 like in in practice, practically speaking, you would be an 0:09:00.600 --> 0:09:05.480 extraordinarily wealthy person if you had tons of corn. In theory, 0:09:05.840 --> 0:09:08.839 but like you said, it's gonna go bad, so you 0:09:08.880 --> 0:09:13.520 could lose all all your wealth would literally rot away. 0:09:13.600 --> 0:09:16.840 That's not the case with say a gold coin. Gold 0:09:16.880 --> 0:09:20.560 coins aren't gonna go bad and deteriorate. So there that 0:09:20.720 --> 0:09:24.600 stand in for those enormous stocks of corn because you 0:09:24.640 --> 0:09:27.320 had all that corn and then you traded it for 0:09:27.400 --> 0:09:30.480 gold coins. So what you did was you took your 0:09:30.520 --> 0:09:35.480 wealth of corn and stored it into something of equal value, 0:09:35.640 --> 0:09:38.200 in this case gold coins. Yeah, and that had a 0:09:38.360 --> 0:09:44.199 huge impact on civilization because the most powerful people were 0:09:44.240 --> 0:09:48.199 not just the ones who held the political and military influence. 0:09:48.240 --> 0:09:50.680 All of a sudden, if you could accumulate wealth, then 0:09:50.720 --> 0:09:52.640 you could buy that junk. Yeah. It gave rise to 0:09:52.679 --> 0:09:56.720 the merchant class. And it democratized is that the word. 0:09:57.520 --> 0:10:00.640 It democratized the world. It did because before it was 0:10:00.679 --> 0:10:03.760 like you were born into a wealthy, noble family, and 0:10:03.760 --> 0:10:07.080 that's gain power. And if you weren't t yes, that 0:10:07.160 --> 0:10:09.760 meant that you work the land for this wealthy family. 0:10:10.120 --> 0:10:13.120 But if you can sell something and get money in 0:10:13.200 --> 0:10:15.840 exchange for it instead of a cow for a chicken. Yeah, 0:10:16.600 --> 0:10:18.240 you say that junk up and you buy someone to 0:10:18.280 --> 0:10:23.760 go kill that landowner and then that's your land. Right. Democracy, 0:10:23.760 --> 0:10:29.560 democracy work. Uh. They are generally considered to be four 0:10:29.760 --> 0:10:35.040 categories of UM currency. You have commodity currency, coins, paper money, 0:10:35.240 --> 0:10:40.640 and electronic currency these days, and in the commodity system, 0:10:40.679 --> 0:10:44.680 it is a placeholder, like we said, um for purchasing power, 0:10:44.760 --> 0:10:49.319 but it is also has value as a thing because 0:10:49.400 --> 0:10:52.880 corn is valuable. Um, it's not just a piece of paper, 0:10:53.640 --> 0:10:55.520 where in the case of the Aztecs or little Coco, 0:10:55.640 --> 0:10:59.040 beans were valuable and so they use those as money. 0:10:59.080 --> 0:11:02.280 But um. One of the roblems with that is if 0:11:02.400 --> 0:11:05.120 the person you're trading with doesn't find that valuable, then 0:11:05.200 --> 0:11:09.880 it's worthless. Yeah. Usually within a society, everyone will find 0:11:09.920 --> 0:11:14.440 that commodity currency valuable, Like the Aztecs with cocao. They 0:11:14.480 --> 0:11:16.560 love the stuff. They made chocolate out of it. It 0:11:16.600 --> 0:11:19.839 was the elixir of the gods, kind of stuff. Drank 0:11:19.880 --> 0:11:22.640 it right, Yeah. Mina Zuma drank like twenty or forty 0:11:22.679 --> 0:11:25.320 cups of it to day until he died from drinking 0:11:25.360 --> 0:11:29.760 too much chocolate. Um. But the canky sitters who came 0:11:29.960 --> 0:11:34.160 didn't value cocow beans at all, So rather than trade, 0:11:34.480 --> 0:11:39.640 they just took everything yeah and dumped the cacao beans 0:11:39.640 --> 0:11:42.000 because it was worthless to them. Yeah, but that is 0:11:42.040 --> 0:11:44.760 a good example of a commodity based currency, like even 0:11:44.800 --> 0:11:50.280 if even if everything else falls apart, that cocw beans 0:11:50.360 --> 0:11:52.559 still has value and that you can make chocolate out 0:11:52.559 --> 0:11:56.319 of it. In the society, chocolate is valued ergo they 0:11:56.400 --> 0:11:58.880 value the cacao beans, so you can use it as currency. 0:11:59.040 --> 0:12:02.880 Plus in this case, cacaw beans um are easy to carry, 0:12:02.920 --> 0:12:07.320 so they're portable, and they're plentiful and small, so you 0:12:07.360 --> 0:12:09.840 can make change with them. Yeah, but not everything was 0:12:09.880 --> 0:12:12.840 the cacao bean. In commodity currency, a lot of stuff 0:12:12.920 --> 0:12:16.840 is perishable more perishable um, a lot of like cattle 0:12:16.920 --> 0:12:19.560 is super bulky. You can't carry on a bunch of cows, goats, 0:12:19.880 --> 0:12:24.240 goats um. But nevertheless, that is a form of commodity currency. 0:12:24.320 --> 0:12:28.280 Has just had its downside, Like the goat has has 0:12:28.400 --> 0:12:33.360 value in and of itself. Yeah, cute cute milk, meat 0:12:33.760 --> 0:12:38.040 and cute hair and cute and very cute. I'm gonna 0:12:38.040 --> 0:12:39.640 get one of those pigmy goats one of these days. 0:12:40.760 --> 0:12:42.520 It's gonna happen. You're gonna come over to my house 0:12:42.520 --> 0:12:44.520 and then little goat is gonna bounce in the room. 0:12:44.960 --> 0:12:47.600 Clip clop, you're gonna go. What the have you ever 0:12:47.640 --> 0:12:50.920 seen be the Lamb? I showed you that, right, dude, 0:12:50.960 --> 0:12:56.320 of that's probably my top five if you don't know, 0:12:56.480 --> 0:13:02.040 Be the Lamb where into YouTube? Now? Oh was it 0:13:02.120 --> 0:13:03.959 a lamb? I think so. I thought it was a 0:13:04.000 --> 0:13:09.120 pigmy goat. I think it's a lamb. Jerry says, Lamb. Alright, 0:13:09.160 --> 0:13:37.760 I win. Alright, here's some cacao beans. Nice. Okay, we're back. 0:13:37.840 --> 0:13:39.760 Let's see if we can get the mojo back again. 0:13:39.800 --> 0:13:42.240 All right, the mojo is still flowing because our message 0:13:42.240 --> 0:13:45.320 break in reality, was only two seconds long. That's our 0:13:45.360 --> 0:13:48.720 dirty secret. Coins is our next form of currency. And 0:13:48.840 --> 0:13:52.680 they were first minute a minute in Lydia, which is 0:13:52.679 --> 0:13:57.599 modern Turkey, and they're king uh Crosis or crotus. So 0:13:57.720 --> 0:13:59.560 you know what, I'm gonna make these little small metal ingots. 0:13:59.559 --> 0:14:02.080 I'm gonna amblem with our emblem and it's six ford 0:14:02.160 --> 0:14:05.320 BC and this is called coins and it's worth something. 0:14:06.120 --> 0:14:08.439 And the Greek said this is great, and the Romans 0:14:08.440 --> 0:14:11.040 said this is great. And they're we're gonna make ours 0:14:11.040 --> 0:14:13.680 out of silver and gold. So it's actually worth something. 0:14:14.640 --> 0:14:17.600 Although when you think about it, that's just you know, 0:14:18.080 --> 0:14:21.080 worth something because someone says it's worth something. Gold, sure, 0:14:21.120 --> 0:14:23.280 all of it. Yeah, I read this Forbes article that 0:14:23.360 --> 0:14:27.840 basically said all currency is a fiat currency. Fiat currency 0:14:27.920 --> 0:14:31.040 means that it has valued by fiat, like um, the 0:14:31.080 --> 0:14:34.840 fiat of the king, a decree um, and it says 0:14:36.000 --> 0:14:39.000 the government or the king says this has value. It's 0:14:39.120 --> 0:14:43.200 it's n gold, it's valuable, so go trade it as 0:14:43.240 --> 0:14:45.640 such by fiat. Right. Yeah, if you think about the 0:14:45.640 --> 0:14:48.040 only things that really have real value or like food 0:14:48.040 --> 0:14:50.680 and water pretty much, you know, like you can make 0:14:50.720 --> 0:14:53.960 the case that a commodity based currency like cocao beans 0:14:54.520 --> 0:14:58.080 isn't necessarily a fiat currency because it does have inherent 0:14:58.120 --> 0:15:01.000 value that anybody can use. But gold old is, Yeah, 0:15:01.280 --> 0:15:05.120 it's not really that valuable. It's not really that useful, 0:15:05.480 --> 0:15:08.840 especially in like a pre industrial society. I wonder if 0:15:08.880 --> 0:15:11.800 gold first became valuable because it was shiny and and 0:15:12.120 --> 0:15:16.280 it literally yes, they could make pretty things with it, honestly, yes, interesting, 0:15:16.360 --> 0:15:19.280 I think that's exactly why. Because it's so malleable, you 0:15:19.320 --> 0:15:22.640 can't make tools out of it. Yeah, even today it's 0:15:22.680 --> 0:15:24.600 not that useful. I mean, they use it in some 0:15:24.640 --> 0:15:28.320 solid state electronics and things, but it's not it's more 0:15:28.480 --> 0:15:33.840 valuable simply because it's gold. Yeah, so even if it's 0:15:33.880 --> 0:15:38.240 backed with gold, it's technically still a fiat currency. I've 0:15:38.240 --> 0:15:41.040 never heard that term f I A T. So what 0:15:41.080 --> 0:15:43.200 does the fiat car all about? Does that mean it's 0:15:43.240 --> 0:15:48.600 just special because they say it is? All right? Um 0:15:48.680 --> 0:15:51.320 in China, I thought the Chinese made the first coins, 0:15:51.440 --> 0:15:56.040 but Ums says no. Yeah. Grabster says that it happened 0:15:56.040 --> 0:15:58.440 about the same time it did in the West fifth 0:15:58.440 --> 0:16:04.040 century BC. They started out oddly with tools like knives, 0:16:04.080 --> 0:16:07.040 shapes as currency with little holes drilled in them so 0:16:07.040 --> 0:16:09.040 they could keep it on a string, and they just 0:16:09.080 --> 0:16:10.880 shrank over the earth until it was about the size 0:16:10.880 --> 0:16:13.320 of a coin, right, I thought was odd, But they 0:16:13.400 --> 0:16:16.040 kept the hole in there. So even until like the 0:16:16.080 --> 0:16:20.520 mid nineteenth century, the Chinese coins still we're just these 0:16:20.560 --> 0:16:22.440 little round coins with a hole in the middle so 0:16:22.480 --> 0:16:25.360 you could string them on a string. Yeah, that's because 0:16:25.360 --> 0:16:27.800 they didn't have the little coin dispenser on the hip. 0:16:28.360 --> 0:16:31.120 They would have thought of that, which is surprising because 0:16:31.160 --> 0:16:35.800 the Chinese invented practically everything except the coin dispenser, the 0:16:35.880 --> 0:16:39.080 hip mounted coin dispenser. Did they even still make those? 0:16:39.080 --> 0:16:43.400 Sure they do. I'll bet all right, I'm gonna buy one. Um. 0:16:43.440 --> 0:16:46.400 If not, Archie McPhee probably makes it in an ironic version. 0:16:46.480 --> 0:16:49.800 So who's that they make? Um, you've seen all their stuff. 0:16:50.680 --> 0:16:54.360 They make like funny like they were the original, probably 0:16:54.440 --> 0:16:59.040 like bacon air freshener, car freshener. They make stuff like that. 0:16:59.120 --> 0:17:03.200 They make his head, gotcha. They outfit Um, they all 0:17:03.200 --> 0:17:06.960 their stuffs in urban outfitters, probably in the chakey section. Yes, 0:17:07.720 --> 0:17:11.800 all right, I hate them. Then. Uh So, one of 0:17:11.800 --> 0:17:14.879 the big impacts of coins was now the government actually 0:17:14.920 --> 0:17:19.920 controlled the money supply and could manipulate it and say 0:17:19.960 --> 0:17:23.920 what it's worth. And Roman emperors were dumb and said, 0:17:23.960 --> 0:17:26.359 you know what, We're just gonna reduce your amount of 0:17:26.359 --> 0:17:29.960 precious metal in some of these because that makes us richer. 0:17:30.480 --> 0:17:33.160 But that devalued things such that it ended up being 0:17:33.200 --> 0:17:35.320 one of the factors in their downfall. Yeah, they didn't 0:17:35.400 --> 0:17:38.960 quite understand now it worked, and it took thousands of 0:17:39.040 --> 0:17:41.840 years for anybody to figure out really how it worked. 0:17:41.840 --> 0:17:44.679 But basically if you still know how it works kind of, 0:17:44.840 --> 0:17:46.439 you know, I think we have a better grasp than 0:17:46.480 --> 0:17:50.160 the early Roman emperors. Yeah, that's because they would say, hey, man, 0:17:50.320 --> 0:17:55.119 I've got a ton of gold, and my predecessors would 0:17:55.119 --> 0:17:58.240 make ten thousand gold coins out of a ton, but I, 0:17:58.960 --> 0:18:01.400 being as clever as I am, I'm going to make 0:18:01.640 --> 0:18:05.520 twenty thousand gold coins out of this ton and double 0:18:05.600 --> 0:18:08.800 my money. But rather than double the money, it devalued 0:18:08.840 --> 0:18:11.960 the currency and led to the decline of the Roman Empire. 0:18:12.640 --> 0:18:16.520 That's right, like you said, But that's how Yeah, and 0:18:16.800 --> 0:18:19.159 after that, um, it took a while for coins to 0:18:19.680 --> 0:18:21.679 come back in fashion, all the way to the Renaissance 0:18:21.720 --> 0:18:24.240 because in the Dark Ages, because of a lot of 0:18:24.240 --> 0:18:28.480 that uh stuff, people didn't trust coins right, and for 0:18:28.600 --> 0:18:31.960 good reason, because there was a someone behind it who 0:18:31.960 --> 0:18:36.439 could decree the percentage of gold in that coin. The 0:18:36.480 --> 0:18:38.480 thing is is um and we'll get to this later. 0:18:40.400 --> 0:18:44.720 The powers that be can decree value, but ultimately it's 0:18:44.760 --> 0:18:47.000 up to the general public, the people who are trading 0:18:47.040 --> 0:18:50.520 in these things, to determine really how valuable they are. 0:18:51.080 --> 0:18:54.199 There's something called perception of value that has to do 0:18:54.320 --> 0:18:57.200 with just how valuable a currency is or not we'll 0:18:57.240 --> 0:19:00.880 talk about in a minute, but that's what happened in Rome. Uh. 0:19:01.080 --> 0:19:03.920 Next up, we have paper money or is they call 0:19:04.000 --> 0:19:09.359 it folding money here in the South, and um they 0:19:10.160 --> 0:19:12.760 paper money was first developed by the Chinese as well, 0:19:12.840 --> 0:19:16.880 and they used um, like you said, a buckskin, sometimes bark, 0:19:17.000 --> 0:19:21.200 parchment and it was a bill of payment. And leather 0:19:21.320 --> 0:19:24.639 was also used in Europe around eleven undred, which didn't 0:19:24.640 --> 0:19:26.879 really catch on then. No, I think leather money be 0:19:26.960 --> 0:19:29.639 kind of cool though. Leather money, sure, if you know, 0:19:29.680 --> 0:19:33.640 if you hate animals, what better way to kill more 0:19:33.680 --> 0:19:35.560 of them? I wonder how much a cow would have 0:19:35.560 --> 0:19:39.720 been worth then, yeah, because you while they were using 0:19:39.720 --> 0:19:43.800 the skin for other stuff anyway, good point though. Uh. 0:19:43.800 --> 0:19:48.600 In Sweden in six sixty one they issued paper money, 0:19:48.640 --> 0:19:51.520 but they didn't quite understand it either and flooded the 0:19:51.520 --> 0:19:57.440 market with it, which made it almost worthless as well. Out, Um, 0:19:57.520 --> 0:20:02.440 I get the the I get the desire though, like, oh, 0:20:02.520 --> 0:20:04.800 everyone says this stuff is worth something, let's just print 0:20:04.800 --> 0:20:08.600 a ton of it exactly. Yeah. Um, So it didn't 0:20:08.600 --> 0:20:11.439 catch on after the Swedish experiment of the seventeenth century, 0:20:11.480 --> 0:20:13.639 but it didn't take too much longer. It was the 0:20:13.680 --> 0:20:17.359 eighteenth century when paper money finally did catch on, and 0:20:17.400 --> 0:20:21.080 it was based on the practice of goldsmiths at the time, 0:20:21.560 --> 0:20:23.679 where if you gave them some gold, they give you 0:20:23.720 --> 0:20:26.960 basically an IOU say they were making something out of 0:20:27.000 --> 0:20:29.680 the gold, or they were hanging onto the gold for you. 0:20:29.680 --> 0:20:33.480 You had what what it amounts to a promissory note 0:20:33.920 --> 0:20:36.280 saying you bring this I O U back to me 0:20:36.520 --> 0:20:38.840 and I'll give you this amount of gold and return. 0:20:39.400 --> 0:20:42.960 It was basically the first what what's called gold backed 0:20:43.359 --> 0:20:46.800 paper currency. And once banks figured out just how that 0:20:46.840 --> 0:20:50.600 could work in theory and in practice, anybody could start 0:20:50.600 --> 0:20:54.000 issuing currency. Yeah, and um, money was backed by gold. 0:20:54.320 --> 0:20:56.199 Even right here in the US all the way up 0:20:56.280 --> 0:21:03.120 until nineteen UM every dollar had and not theory, every 0:21:03.119 --> 0:21:07.000 dollar had gold somewhere, not just dollars. Pretty much any 0:21:07.040 --> 0:21:09.479 paper currency in the world at the time was backed 0:21:09.480 --> 0:21:12.560 by gold, silver, some sort of precious metal that we 0:21:12.600 --> 0:21:15.960 all agreed was valuable because it's shiny. Yeah, but there 0:21:16.040 --> 0:21:18.400 was a stock somewhere in the world that you could 0:21:18.480 --> 0:21:24.240 trade your paper money for that value in gold. Yeah, 0:21:24.440 --> 0:21:28.200 you could go somewhere to the gold trader. E let's 0:21:28.200 --> 0:21:30.639 say here I want all this money in gold. Did 0:21:30.720 --> 0:21:34.280 you know that's what the the Wizard of Oz is about. 0:21:34.440 --> 0:21:38.040 It's an allegory for the gold standard. Oh man, it's 0:21:38.880 --> 0:21:41.000 depending on who you ask, it's about ten different things. 0:21:41.119 --> 0:21:44.240 It's an allegory, a populist allegory for the gold standards. 0:21:44.240 --> 0:21:47.400 I just posted an article about like ten different theories 0:21:47.440 --> 0:21:50.320 on what the Wizard of Odds means on our Facebook page. 0:21:50.560 --> 0:21:52.960 Mine is right and yours is right, and then everyone 0:21:53.000 --> 0:21:55.800 else is wrong. Thank you. That's all I ever want 0:21:55.800 --> 0:21:59.160 to hear from you, I know. Um. So, now we're 0:21:59.200 --> 0:22:02.679 on to E money, which is uh. It seems like 0:22:02.720 --> 0:22:06.160 something super new, but it actually came about after World 0:22:06.240 --> 0:22:11.080 War Two when UM banks started recording their information of 0:22:11.119 --> 0:22:14.800 the day onto magnetic reels and taking it to the 0:22:14.800 --> 0:22:18.320 Federal Reserve Bank, and all of a sudden they said, 0:22:18.320 --> 0:22:20.919 you know, we don't need these silly ten dollar bills 0:22:21.520 --> 0:22:24.760 because we can just record this all electronically. And all 0:22:24.800 --> 0:22:28.760 it took then was a wire connection and trust for 0:22:28.800 --> 0:22:32.400 people to trust that this really is money, even though 0:22:32.440 --> 0:22:36.240 I'm not seeing any money right right then. That is 0:22:36.280 --> 0:22:39.359 the real distinction of it, because with an electronic transfer, 0:22:40.760 --> 0:22:44.359 originally you're transferring information about money, like I will I 0:22:44.480 --> 0:22:48.480 have a hundred thousand dollars over here I officially give 0:22:48.560 --> 0:22:52.320 to you, and so that that electronic transfer becomes a 0:22:52.359 --> 0:22:56.200 promissory note in and of itself. Um. And they figured 0:22:56.240 --> 0:22:58.679 out that they can do this after they realized that 0:22:58.840 --> 0:23:01.560 money in and of its self isn't valuable, so we 0:23:01.600 --> 0:23:04.960 can just do this whole thing electronically. And like you said, 0:23:05.160 --> 0:23:07.920 they did have hundred thousand dollar notes and apparently there's 0:23:07.960 --> 0:23:11.360 some in circulation still, there's a couple hundred of them 0:23:11.359 --> 0:23:15.320 in circulation. They had five hundred, one thousand, ten thousand, 0:23:15.359 --> 0:23:18.200 and hundred thousand dollar bills. There's a really neat mental 0:23:18.200 --> 0:23:21.679 floss article that you can read called a hundred thousand 0:23:21.680 --> 0:23:25.679