WEBVTT - The Gold Standard: When Money Meant Something 0:00:01.480 --> 0:00:07.680 Welcome to Stuff you should know, a production of iHeartRadio. 0:00:11.400 --> 0:00:13.840 Hey, and welcome to the podcast. I'm Josh and there's 0:00:13.960 --> 0:00:18.240 Chuck and it's just us here today to explain something 0:00:18.680 --> 0:00:21.840 that every person in the world should know about, the 0:00:22.000 --> 0:00:26.079 gold stand. I have an intro. I have an intro 0:00:26.160 --> 0:00:32.120 hold on oh goud, Chuck. Yes, have you ever gone 0:00:32.280 --> 0:00:38.720 to a bank and traded a dollar in for actual gold? 0:00:40.200 --> 0:00:44.040 No, I've never even seen gold in person. That wasn't like, 0:00:44.159 --> 0:00:47.600 you know, on whatever, a ring or something. 0:00:47.920 --> 0:00:50.040 Sure, and that is a huge use for gold. 0:00:50.479 --> 0:00:54.120 I've never seen nuggets or bars ingots. 0:00:54.480 --> 0:00:57.400 I haven't either. I have never even seen a gold coin. 0:00:57.480 --> 0:00:58.120 Now that I think. 0:00:58.080 --> 0:00:59.920 About it, I don't think I have either. 0:01:00.480 --> 0:01:02.880 But there was a point in time where you could 0:01:02.880 --> 0:01:05.399 see gold anytime you wanted, if you went to your 0:01:05.480 --> 0:01:07.720 bank and you took a certain amount of dollars or 0:01:07.760 --> 0:01:12.240 pounds or francs or pesos, because countries all over the 0:01:12.280 --> 0:01:16.560 world were on what's known as the gold standard. And 0:01:16.760 --> 0:01:22.120 just a quick broad stroke explanation I guess is that 0:01:22.480 --> 0:01:26.319 on a gold standard, every single one of your dollars 0:01:26.400 --> 0:01:31.640 or pesos or francs or Deutsche marks are redeemable for gold, 0:01:31.959 --> 0:01:34.759 which means that you have to have an equal amount 0:01:34.800 --> 0:01:39.160 of gold in your country in safes and vaults to 0:01:39.280 --> 0:01:44.039 cover every single dollar or paso or Deutsche mark or 0:01:44.040 --> 0:01:47.520 frank out there. You can't just keep printing money. You 0:01:47.560 --> 0:01:49.680 can only print as much money as can cover the 0:01:49.720 --> 0:01:51.000 amount of gold that you have. 0:01:52.040 --> 0:01:56.600 Yeah, which is you know, it's sort of a public 0:01:56.680 --> 0:02:00.600 safeguard to say, hey, your dollar, your pay paper money, 0:02:00.760 --> 0:02:04.520 or your coins are worth something because it's worth this 0:02:04.720 --> 0:02:07.920 much of this other thing that we've also agreed is 0:02:07.960 --> 0:02:09.640 worth money exactly. 0:02:10.400 --> 0:02:13.520 And so for you, if you're walking around in a 0:02:13.560 --> 0:02:16.160 country that's on the gold standard, you can go trade 0:02:16.160 --> 0:02:19.919 your dollars in for gold, your paper currency in for gold. Right. 0:02:20.639 --> 0:02:24.440 It also gives you a lot of stability and understanding 0:02:24.480 --> 0:02:26.560 that when you wake up in the morning, what you 0:02:26.880 --> 0:02:29.560 bought for one dollar yesterday, you're going to be able 0:02:29.560 --> 0:02:32.640 to buy for one dollar today. Prices don't fluctuate very 0:02:32.720 --> 0:02:34.640 much on the gold standard, and then on more of 0:02:34.639 --> 0:02:39.560 a macro level, if you're a country and you're importing 0:02:39.600 --> 0:02:42.639 tons of stuff, that means your currency is going out. 0:02:42.680 --> 0:02:45.839 You're using your currency to buy these imports, and when 0:02:45.840 --> 0:02:48.480 a bunch of your currency is out there, you need 0:02:48.520 --> 0:02:50.760 it back home, so you have to use some of 0:02:50.760 --> 0:02:55.160 that gold to buy your currency back. So the upshot 0:02:55.160 --> 0:02:57.280 of all of this is the gold Standard is very 0:02:57.280 --> 0:03:00.960 different from the type of currency that we have today, 0:03:01.280 --> 0:03:03.840 and I feel like we should maybe explain a little 0:03:03.840 --> 0:03:06.160 more eventually about how they're different. 0:03:06.880 --> 0:03:09.760 Yeah, for sure. I mean we've been back and forth 0:03:09.800 --> 0:03:12.520 between the gold Standard and the other, which we call 0:03:12.639 --> 0:03:16.640 fiat currency, which is a Latin term, and that you know, 0:03:16.720 --> 0:03:19.600 fiat currency basically is what we're working with now because 0:03:19.600 --> 0:03:22.880 the gold Standard is basically dead. But that's where you can, 0:03:23.400 --> 0:03:26.320 you know, where you have more you know, monetary policy 0:03:27.160 --> 0:03:30.240 guiding the markets and stuff like that, rather than like, no, 0:03:30.480 --> 0:03:33.240 it's like it's tied to gold like kind of end 0:03:33.280 --> 0:03:36.160 of story. Yeah, there are people that love and you know, 0:03:36.160 --> 0:03:38.520 we're going to talk about sort of the benefits and 0:03:38.560 --> 0:03:42.080 the arguments for and against. But people that are into 0:03:42.240 --> 0:03:45.760 the gold Standard as an idea, they're kind of out 0:03:45.800 --> 0:03:48.120 of luck, but they're still around. They're called gold bugs. 0:03:48.120 --> 0:03:52.000 They've been called that since Edgar alland Post's story that's 0:03:52.000 --> 0:03:54.360 where it came from, about the search for buried treasure. 0:03:55.320 --> 0:03:58.080 But you know, it's still a fight in some circles 0:03:58.080 --> 0:04:00.400 from people who are like way into the gold standard. 0:04:00.960 --> 0:04:02.960 Yeah, and there's I mean, they have a lot of 0:04:03.000 --> 0:04:05.640 good points. But the problem is is that that train 0:04:05.720 --> 0:04:08.080 has left the station in it and it's coming back, 0:04:08.480 --> 0:04:12.720 not coming back. So why gold? Right? There's alsort. You 0:04:12.760 --> 0:04:16.360 could pay your currency to wheat, right, and you could 0:04:16.400 --> 0:04:18.400 take your dollar bill and go into the bank and 0:04:18.480 --> 0:04:21.200 they'll give you like a bushel of wheat in return. Right, 0:04:21.600 --> 0:04:23.479 why gold in particular? 0:04:24.200 --> 0:04:26.039 Well, yeah, I said that, you know, that's something that 0:04:26.080 --> 0:04:28.400 they all agreed was worth something, And that's kind of 0:04:28.440 --> 0:04:31.960 the deal. Like something's only worth something if everyone agrees 0:04:32.040 --> 0:04:35.600 that it's worth something, right, But you can't, you know, 0:04:36.000 --> 0:04:38.039 you've got to pick something that makes sense. And gold 0:04:38.160 --> 0:04:40.440 has always made a lot of sense for a lot 0:04:40.520 --> 0:04:45.800 of reasons. It is, it's scarce, but not like rare rare. 0:04:46.640 --> 0:04:49.360 It's rare enough to be precious, but not so rare 0:04:49.400 --> 0:04:52.040 that like you know, it's impossible to find. So you've 0:04:52.040 --> 0:04:53.680 got to have enough of it, but not too much 0:04:53.720 --> 0:04:57.720 of the thing. It's also you can divide it up 0:04:57.760 --> 0:05:00.280 into small things, you can melt it down, you can 0:05:00.440 --> 0:05:03.680 make it into stuff, making it into coins, you know, 0:05:04.040 --> 0:05:09.839 is certainly valuable. It's valuable, it's resistant to being corroded 0:05:09.880 --> 0:05:12.960 and like rusted, it's durable. So all that stuff makes 0:05:13.000 --> 0:05:15.400 it just sort of a valuable thing to trade. 0:05:16.000 --> 0:05:19.120 Yeah, and you said it's durable. Like most of the 0:05:19.200 --> 0:05:23.279 gold that's ever been mined in the history of humanity 0:05:23.760 --> 0:05:26.760 is still around because you can change it from one 0:05:26.839 --> 0:05:28.919 form to another, say like from a necklace into a 0:05:28.920 --> 0:05:31.520 gold coin. But there's still that same amount of gold 0:05:31.640 --> 0:05:34.960 on earth. And I guess as of twenty twenty five, 0:05:35.040 --> 0:05:38.400 I think the World Gold Council says that two hundred 0:05:38.440 --> 0:05:42.480 and nineteen thousand, eight hundred and ninety tons of gold 0:05:42.800 --> 0:05:45.919 have been mined throughout history, and about two thirds of 0:05:45.960 --> 0:05:49.159 those have been mined since nineteen fifty alone. 0:05:49.680 --> 0:05:52.440 Right, And most of that is still around, Like you said, 0:05:52.480 --> 0:05:56.240 it's still out there, which kind of proves that gold 0:05:56.360 --> 0:05:58.400 was a pretty good pick that and silver, I mean, 0:05:58.440 --> 0:06:02.279 silver was we'll talk about the fact that gold and 0:06:02.320 --> 0:06:04.440 silver kind of went back and forth over the years. 0:06:04.600 --> 0:06:07.000 There's just a lot more silver, so silver has just 0:06:07.040 --> 0:06:08.599 been worthless, right. 0:06:08.600 --> 0:06:11.280 But it's still worthwhile. And in fact, if we're going 0:06:11.360 --> 0:06:13.599 to start to go back a little bit in history, 0:06:15.160 --> 0:06:19.640 the very first, I guess currency that the United States 0:06:19.680 --> 0:06:24.160 came up with, and the history for Great Britain tracks 0:06:24.279 --> 0:06:28.800 very similarly. But in the US they said, we're going 0:06:28.880 --> 0:06:32.400 to use gold and silver for coinage, and they had 0:06:32.440 --> 0:06:36.000 to set an amount how much silver do you need 0:06:36.040 --> 0:06:39.440 to buy you know, one unit of gold because they 0:06:39.440 --> 0:06:42.400 are related to one another, you're using both for currency. 0:06:42.640 --> 0:06:45.920 So they said, you know what, fifteen pieces of silver 0:06:46.240 --> 0:06:50.560 grains I think is equal to one grain of gold. 0:06:51.440 --> 0:06:54.360 Yeah, so like a fifteen to one ratio. But they 0:06:54.400 --> 0:06:57.040 realized right away that like if they're going to start 0:06:57.080 --> 0:07:02.360 setting this like thesetios in these sort of units as 0:07:02.480 --> 0:07:05.720 being you know, kind of blocked in, it's just going 0:07:05.760 --> 0:07:09.080 to create a lot of trouble over time, like especially 0:07:09.120 --> 0:07:11.800 when the amount of gold and silver increases in deep well, 0:07:11.800 --> 0:07:14.840 I guess not so much decrease, but you know, like 0:07:14.920 --> 0:07:17.600 when there's a gold rush or when like they find 0:07:17.600 --> 0:07:21.080 a new vein of silver somewhere that changes the amount 0:07:21.080 --> 0:07:23.000 of gold and silver in the world. But they still 0:07:23.040 --> 0:07:25.080 had locked into that fifteen to one ratio. It's not 0:07:25.120 --> 0:07:27.560 like they kept changing it over and over. So I 0:07:28.040 --> 0:07:30.160 think kind of right away people were like, oh wait 0:07:30.200 --> 0:07:33.440 a minute, this is all a little bit artificial in 0:07:33.480 --> 0:07:33.800 a way. 0:07:34.080 --> 0:07:37.760 Yeah, And that's something that goldbugs have trouble with is that, 0:07:37.920 --> 0:07:43.160 you know, it doesn't really matter how you know, honest 0:07:43.840 --> 0:07:47.080 a gold standard keeps the government, it's still all artificial. 0:07:47.120 --> 0:07:50.680 There's still manipulation that can happen. And yeah, when a 0:07:50.680 --> 0:07:54.000 bunch of gold comes on the market, gold becomes less valuable. 0:07:54.200 --> 0:07:56.720 If a bunch of silver comes on the market, relative 0:07:56.760 --> 0:07:59.600 to gold, silver becomes less valuable. And one of the 0:07:59.640 --> 0:08:03.160 problems with using a commodity to back your currency is 0:08:03.160 --> 0:08:07.800 that sometimes the value of the commodity can rise beyond 0:08:07.880 --> 0:08:10.360 the face value of the currency. So if you have 0:08:10.400 --> 0:08:13.600 a ten dollars gold piece and the price of gold 0:08:13.680 --> 0:08:18.360 actually puts that one ounce at twenty dollars, you're not 0:08:18.360 --> 0:08:20.080 going to go spend that ten bucks. You're going to 0:08:20.120 --> 0:08:22.520 melt that thing down or sell it to somebody for 0:08:22.640 --> 0:08:26.320 twenty dollars. Yeah, So that's a there's problems here with 0:08:27.000 --> 0:08:30.000 money that actually means something in the world. 0:08:31.080 --> 0:08:33.520 Yeah, for sure. And that happened. And when that happened 0:08:33.880 --> 0:08:36.600 kind of the first time, I guess for the United States, 0:08:37.559 --> 0:08:40.480 people started doing that. They started melting gold coins or 0:08:41.000 --> 0:08:44.319 keeping them in hoarding gold coins and they started trading 0:08:44.360 --> 0:08:47.360 and using silver as currency. So all of a sudden 0:08:47.400 --> 0:08:49.480 we were like, wait a minute. We thought we were 0:08:49.520 --> 0:08:52.040 on a gold sale or we're heading toward a gold standard, 0:08:52.440 --> 0:08:54.559 and now we're kind of on a de facto silver 0:08:54.679 --> 0:08:56.439 standard because that's what people are using. 0:08:56.800 --> 0:08:59.199 Yeah, so the government was like, well, let's just make 0:08:59.240 --> 0:09:01.440 the sixteen to one, and it brought everything a little 0:09:01.480 --> 0:09:04.200 bit more into parody. Then there was the Minor forty 0:09:04.280 --> 0:09:07.520 nine or gold rush in California, and then there was 0:09:07.600 --> 0:09:10.600 also another gold rush in Australia about the same time. 0:09:10.720 --> 0:09:14.000 So the market price for gold went down again because 0:09:14.040 --> 0:09:18.360 the supply increased, which basically made the US government throw 0:09:18.400 --> 0:09:20.520 their hands up in the air and say, we give up. 0:09:20.880 --> 0:09:22.720 We're going to go watch football. 0:09:23.800 --> 0:09:27.520 Yeah, they're kind of football, I guess. Over across the pond. 0:09:28.280 --> 0:09:33.160 Isaac Newton finished out his long, storied career as the 0:09:33.200 --> 0:09:34.040 Master of the Mint. 0:09:34.280 --> 0:09:34.600 Mm hm. 0:09:35.120 --> 0:09:37.000 He did a lot of other stuff obviously before that, 0:09:37.559 --> 0:09:39.679 but he worked as the Master of the Mint at 0:09:39.679 --> 0:09:42.280 the end of his life until his death, and he 0:09:43.240 --> 0:09:46.360 was all about gold. Was like he encouraged overvaluing it 0:09:46.400 --> 0:09:49.360 and said we should really just set gold as the 0:09:49.520 --> 0:09:52.000 gold standard for England and they adopted that in what 0:09:52.080 --> 0:09:53.199 like eighteen nineteen. 0:09:54.000 --> 0:09:57.040 Yeah, so I think they were the first country on 0:09:57.200 --> 0:10:00.000 an actual gold standard, and then it kind of spread 0:10:00.120 --> 0:10:02.520 around Europe from there because they're like, this is actually 0:10:02.600 --> 0:10:06.400 pretty good, pretty good idea because you don't need necessarily 0:10:06.440 --> 0:10:08.720 a central bank, you don't have to have somebody figuring 0:10:08.720 --> 0:10:10.959 out what lever to pole or whatever. The gold actually 0:10:11.080 --> 0:10:15.320 kind of naturally flows from one place to another to 0:10:15.400 --> 0:10:19.839 basically keep this homeostasis, this balance throughout the world among 0:10:19.960 --> 0:10:23.160 all the countries that are on the gold standard, right. Yeah, 0:10:23.840 --> 0:10:27.200 So the thing is is humans are humans. You can 0:10:27.280 --> 0:10:30.920 mess up anything that is, even something that naturally flows 0:10:30.920 --> 0:10:33.280 from one place to another. We can basically put our 0:10:33.280 --> 0:10:37.320 foot in it and screw it up. And that was 0:10:37.400 --> 0:10:41.240 the case usually, as we'll see throughout history, that's usually 0:10:41.280 --> 0:10:44.520 the case when war comes along, and that happened in 0:10:44.559 --> 0:10:47.560 the United States with the Civil War. And we've talked 0:10:47.600 --> 0:10:50.320 many times about this about how before the Civil War 0:10:50.360 --> 0:10:53.400 there was like eight thousand different types of currency in 0:10:53.520 --> 0:10:56.439 use in the United States, like your general store intel 0:10:56.520 --> 0:11:00.760 might have its own currency that you could use. And 0:11:00.840 --> 0:11:03.880 as the Civil War came along, that all changed very quickly. 0:11:04.559 --> 0:11:06.840 Yeah, that was I remember we took that feels like 0:11:07.120 --> 0:11:11.199 very many years ago. We were talking about that in 0:11:11.240 --> 0:11:13.240 a few episodes. It was kind of the hot topic 0:11:13.280 --> 0:11:14.000 for us for a while. 0:11:14.120 --> 0:11:15.200 It was so hot. 0:11:15.559 --> 0:11:17.600 We were talking about all those different currencies, like one 0:11:17.640 --> 0:11:20.520 town might have a currency and then two miles down 0:11:20.559 --> 0:11:22.640 the road, the next town might have their own currency, 0:11:23.320 --> 0:11:25.760 which you know within that town as long as everyone again, 0:11:25.840 --> 0:11:29.320 if everyone agrees what something is worth, it's working out, okay. 0:11:29.320 --> 0:11:31.440 But that's a mess if you're trying to be a country, 0:11:32.760 --> 0:11:35.280 which we despite the Civil War, we were trying to 0:11:35.280 --> 0:11:40.880 be a country. And so the Civil War starts and 0:11:41.000 --> 0:11:44.240 the federal government was like hey, like you know, Josh 0:11:44.240 --> 0:11:47.360 Clark will say one day, wars are expensive, and so 0:11:47.520 --> 0:11:50.600 they issued war bonds. I think about half a five 0:11:50.640 --> 0:11:54.079 hundred billion dollars in war bonds. War bonds are what 0:11:54.200 --> 0:11:56.320 you buy to basically, you know, or you sell as 0:11:56.320 --> 0:11:58.840 a government and people buy to kind of finance the 0:11:58.840 --> 0:12:01.920 world and saying, a loan you money to go fight 0:12:01.960 --> 0:12:06.480 this war. Because that bond is ensured, I know for 0:12:06.559 --> 0:12:09.560 a fact that eventually I'm going to get repaid with 0:12:09.720 --> 0:12:13.079 interest for lending you that money to fight this war. Right, 0:12:13.200 --> 0:12:15.560 So it's like it's super safe on the investor side, 0:12:15.600 --> 0:12:17.000 but it's just a long term payout. 0:12:17.320 --> 0:12:20.080 Yeah. The thing is is when they issued those as 0:12:20.120 --> 0:12:22.600 far as I know, they weren't backed with gold, and 0:12:22.640 --> 0:12:25.120 then they weren't even further. They just started issuing straight 0:12:25.200 --> 0:12:28.040 up paper currency that had it wasn't pegged to gold 0:12:28.120 --> 0:12:30.720 or silver backed up by any of it. It was 0:12:30.920 --> 0:12:34.640 the first fiat currency in the United States, and like 0:12:34.679 --> 0:12:38.240 you said, is just basically the government saying this has value. 0:12:38.280 --> 0:12:40.960 Because we say it has value. You can use this 0:12:41.080 --> 0:12:44.160 to buy stuff, you can use this to pay your taxes. 0:12:44.480 --> 0:12:48.200 It is currency even though it's not backed by anything. 0:12:48.840 --> 0:12:50.320 And the reason they did that is because it was 0:12:50.360 --> 0:12:53.920 so expensive. They literally had to print money say it 0:12:53.960 --> 0:12:56.680 was it had worth and instead of using it to 0:12:56.760 --> 0:13:00.720 pay their debts, to basically fight this war. And so 0:13:01.160 --> 0:13:06.840 the market the United States, well the United States just 0:13:06.880 --> 0:13:10.200 became flooded with all this paper currency. So the paper 0:13:10.240 --> 0:13:14.080 currency plus all the goldback currency just became less and 0:13:14.160 --> 0:13:19.160 less valuable. And I think the inflation that came about 0:13:19.200 --> 0:13:23.439 after the Civil War, because inflation happens when the value 0:13:23.480 --> 0:13:25.960 of your currency is weak because there's too much of 0:13:25.960 --> 0:13:29.480 it like out there. Yeah, it was like twenty five 0:13:29.559 --> 0:13:33.079 percent during the Civil War. And just for a reference, 0:13:33.840 --> 0:13:36.600 in twenty twenty two, at the peak of the most 0:13:36.720 --> 0:13:41.000 recent inflation in June, it was at nine percent and 0:13:41.040 --> 0:13:44.200 that was pretty uncomfortable. I can't imagine twenty five percent. 0:13:45.000 --> 0:13:46.920 No, we were in a pretty bad way. And this 0:13:47.080 --> 0:13:51.040 was also a time when the country started dabbling in 0:13:51.200 --> 0:13:53.800 national debt and saying like, hey, like, as a country, 0:13:53.800 --> 0:13:56.240 we can go into deep debt. Yeah, and like, let's 0:13:56.280 --> 0:13:59.600 see if anybody really cares it. Went this is these 0:13:59.600 --> 0:14:03.160 are pretty staggering numbers. The national debt in eighteen sixty 0:14:03.200 --> 0:14:06.400 was sixty five million. Six years later it was two 0:14:06.480 --> 0:14:10.679 point seven six billion dollars. And this is when gold 0:14:10.720 --> 0:14:14.440 standard or what are they called gold bugs started saying, hey, 0:14:15.559 --> 0:14:17.600 I think you've just proved our point, Like you printed 0:14:17.640 --> 0:14:21.040 all this money the Fiat currency, and we're in real 0:14:21.160 --> 0:14:21.880 trouble now. 0:14:22.080 --> 0:14:25.520 Yeah, And so Lincoln says, hold on, hold on, and 0:14:25.560 --> 0:14:27.640 he rolls up his sleeves a little bit and gets 0:14:27.640 --> 0:14:31.480 to work, spits in his hand, rubs them together, picks 0:14:31.520 --> 0:14:33.200 up an ax for no reason, just to kind of 0:14:33.200 --> 0:14:33.720 look tough. 0:14:34.280 --> 0:14:34.520 Yeah. 0:14:34.560 --> 0:14:36.720 Sure, there works, and he says, we're going to take 0:14:36.840 --> 0:14:39.880 all of those, all of the bills out there, all 0:14:39.920 --> 0:14:43.280 the dollars on the market, and just take them back 0:14:43.400 --> 0:14:47.880 and start destroying them. Yeah, and by doing that, we're 0:14:47.920 --> 0:14:52.120 going to actually lower the supply of dollars, which increases 0:14:52.160 --> 0:14:55.920 their value. Right, And so problem solved. That's going to 0:14:55.960 --> 0:14:58.760 fight inflation because the dollar is stronger again because there's 0:14:58.840 --> 0:15:03.440 less dollars on there. And on just a basic economic 0:15:03.880 --> 0:15:07.960 basis of supply and demand, it makes sense. But what 0:15:08.040 --> 0:15:10.160 the government didn't realize all the way back in the 0:15:10.200 --> 0:15:13.000 eighteen sixties is that it takes a little more finesse 0:15:13.040 --> 0:15:16.000 than that to not just screw up the economy like 0:15:16.040 --> 0:15:19.440 a pendulum from one problem to the opposite problem. 0:15:19.960 --> 0:15:23.840 Yeah, Like, can you imagine being a citizen in the 0:15:23.920 --> 0:15:26.520 United States back then, in those early days when they're 0:15:26.520 --> 0:15:29.600 just trying to figure this stuff out, and you know, 0:15:29.920 --> 0:15:31.320 I bet a lot of people didn't have a real 0:15:31.400 --> 0:15:33.640 understanding of this, But if you did, could you imagine 0:15:33.680 --> 0:15:36.640 just seeing your country be like, hey, let's print a 0:15:36.640 --> 0:15:39.320 bunch of paper and say it's really valuable, right, and 0:15:39.360 --> 0:15:41.880 then when they got in trouble, be like, hey, let's 0:15:41.960 --> 0:15:44.680 burn all that stuff that we printed and said was valuable. 0:15:44.800 --> 0:15:48.320 Yeah, Like they would just come up behind, like congressmen 0:15:48.720 --> 0:15:50.840 would come up behind people counting their money and just 0:15:50.920 --> 0:15:52.560 yank it out of their hands and run off and 0:15:52.640 --> 0:15:54.040 you couldn't do anything about it. 0:15:55.080 --> 0:15:57.320 Yeah, paper football, So that was a real hot item 0:15:57.320 --> 0:15:57.800 at the time. 0:15:58.240 --> 0:16:02.440 So, okay, a bunch of bills, a bunch of money 0:16:02.480 --> 0:16:07.200 just gets taken back, burned, destroyed, taken off of the market. 0:16:07.240 --> 0:16:10.440 It's just not there anymore, and the value of the 0:16:10.480 --> 0:16:15.640 dollar strengthens. The problem is because the dollar is more 0:16:16.280 --> 0:16:18.480 is worth more than it was before, and seems like 0:16:18.520 --> 0:16:20.560 it's just going to keep going up in value. People 0:16:20.600 --> 0:16:21.880 are like, well, I'm going to hang on to my 0:16:21.960 --> 0:16:25.000 dollar because it's going to increase in value, so I'll 0:16:25.000 --> 0:16:27.920 be able to buy more later. The problem is in 0:16:28.000 --> 0:16:32.120 the current term that means that people aren't out buying stuff. 0:16:32.280 --> 0:16:37.480 And if you're making say pre industrial televisions, which were 0:16:37.560 --> 0:16:40.480 just boxes that you know, like somebody with a puppet 0:16:40.520 --> 0:16:43.040 could get in and make a little show, but they 0:16:43.120 --> 0:16:46.400 call them TVs back then, if you're making those and 0:16:46.560 --> 0:16:50.160 people are not spending money on the pre industrial televisions, 0:16:50.480 --> 0:16:53.400 your profits are going to start to go down, you 0:16:53.480 --> 0:16:55.720 have less reason to produce more and more of those, 0:16:56.040 --> 0:16:59.080 which means you need less workers, which means you start 0:16:59.160 --> 0:17:02.520 laying people off, which means those workers have less wages 0:17:02.760 --> 0:17:05.440 to spend money on. And the whole thing becomes this 0:17:05.560 --> 0:17:09.160 self feeding cycle that just gets worse and worse and worse. 0:17:09.320 --> 0:17:11.520 And we call them recessions, and when they're really bad, 0:17:11.560 --> 0:17:15.320 we call them depressions. And that happened from the government 0:17:15.440 --> 0:17:18.359 soaking up all of those bills after the Civil War, 0:17:18.800 --> 0:17:21.840 and it caused what's called the Long Depression from eighteen 0:17:21.920 --> 0:17:23.879 seventy three to eighteen seventy nine. 0:17:24.720 --> 0:17:28.720 Yeah, and some say it almost went to like nineteen hundred, 0:17:28.760 --> 0:17:31.080 like eighteen ninety seven before we were fully out of that. 0:17:31.200 --> 0:17:33.560 And it was a real, like I think it was 0:17:33.560 --> 0:17:35.879 a real wake up call early on to the United 0:17:35.880 --> 0:17:40.320 States of like, hey, you can't There's got to be 0:17:40.359 --> 0:17:42.200 a better way than just printing a bunch of money 0:17:42.240 --> 0:17:44.560 when you think you need it, like kind of artificially 0:17:44.680 --> 0:17:48.400 manipulating the value of the dollar like that is only 0:17:48.440 --> 0:17:51.600 going to lead to trouble. So, boy, that's a great 0:17:51.640 --> 0:17:55.399 first act, I think I think so too. Back in 0:17:55.480 --> 0:17:58.120 form after vacation yeah. 0:17:58.000 --> 0:17:59.400 Yeah, I feel pretty good. 0:18:00.040 --> 0:18:01.120 Okay, you're feeling good. 0:18:01.200 --> 0:18:03.119 Yeah, and you're doing great. You're looking sharp. 0:18:03.200 --> 0:18:06.680 Man, I appreciate it. So let's take a break. We'll 0:18:06.680 --> 0:18:08.919 come back and we'll talk about the Golden Age. We 0:18:08.920 --> 0:18:10.800 love our golden ages. The golden age of the gold 0:18:10.800 --> 0:18:11.800 standard right after. 0:18:11.640 --> 0:18:44.600 This, so the United States just basically just stepping in 0:18:44.680 --> 0:18:46.760 it and then stepping out of it and stepping in 0:18:46.800 --> 0:18:50.600 another pile of it. Yeah, in the eighteen seventies, this is. 0:18:50.760 --> 0:18:53.440 Not talking about gold either, right, No, no. 0:18:52.920 --> 0:18:57.560 No, I couldn't come up with something that wasn't just 0:18:57.640 --> 0:19:00.720 absolutely gross. So yeah, I'll keep moving on. But this 0:19:00.880 --> 0:19:03.520 was the time when the world was globalizing for kind 0:19:03.520 --> 0:19:05.760 of the first time, and so other countries are taking 0:19:05.800 --> 0:19:08.600 note of this and they're like, yeah, this gold standard 0:19:08.720 --> 0:19:11.119 might be a good thing. And like you said, it 0:19:11.200 --> 0:19:14.080 kicked off a golden age from eighteen seventy one to 0:19:14.200 --> 0:19:18.480 basically through war about to World War One. It was 0:19:18.520 --> 0:19:22.159 a golden age for gold. There's no other way to 0:19:22.200 --> 0:19:23.840 put it. I didn't want to say that, but there's 0:19:23.880 --> 0:19:24.800 no other way to put it. 0:19:25.520 --> 0:19:29.840 Yeah, It's like what forty something years where everyone was 0:19:29.880 --> 0:19:32.800 sort of agreeing that the gold standard was the place 0:19:32.840 --> 0:19:36.399 to be because there was debate like after the mess, 0:19:36.440 --> 0:19:39.840 you know, post Civil War, of like what we're even 0:19:39.880 --> 0:19:41.560 allowed to do as a country, and like can the 0:19:41.600 --> 0:19:45.640 government even print money? Like that? The Supreme Court came 0:19:45.640 --> 0:19:48.399 along in eighteen seventy one. They said, yes, they can 0:19:48.440 --> 0:19:51.520 print money. Maybe they need to, you know, we need 0:19:51.520 --> 0:19:56.960 to rethink our process, but the government printing money is okay. 0:19:57.200 --> 0:19:59.879 Yeah, it's kind of it's legal. Yeah. Yeah, So that 0:20:00.000 --> 0:20:02.720 I was settled, but that still didn't mean like that 0:20:02.760 --> 0:20:05.320 the government should do that. There was still this question 0:20:05.400 --> 0:20:08.040 should we keep going this way as supported by the 0:20:08.040 --> 0:20:11.359 Greenback Party, who were like, yes, this actually makes a 0:20:11.400 --> 0:20:13.840 lot of sense. Or there are other groups like the 0:20:13.880 --> 0:20:16.600 silver movement, the gold bugs were out there who were like, no, 0:20:16.680 --> 0:20:22.200 we need a commodity backed currency, right. Apparently the Wizard 0:20:22.240 --> 0:20:24.240 of Oz and I'm sure we've mentioned this before, but 0:20:24.320 --> 0:20:27.560 it was supposed to be an allegory for this debate 0:20:27.800 --> 0:20:31.800 over whether to go with the Greenbacks and World City, 0:20:32.280 --> 0:20:37.640 go with the gold standard, the yellow brick road, or 0:20:38.640 --> 0:20:43.880 to go with the Ruby standard. Which were the slippers. 0:20:44.200 --> 0:20:46.880 Right or the were wheat like you suggested that would 0:20:46.880 --> 0:20:49.200 be the scarecrow exactly. 0:20:50.400 --> 0:20:57.080 Yeah, So all of those scarecrow rubies, gold, the greenbacks, 0:20:57.080 --> 0:21:00.399 all of those were part of this national bait. And 0:21:00.440 --> 0:21:03.639 finally it was settled in nineteen hundred when William McKinley 0:21:03.760 --> 0:21:07.240 was made president. He said, it's gold. We're just going 0:21:07.280 --> 0:21:11.040 with gold. And even more than that, you cannot print 0:21:11.280 --> 0:21:14.879 a dollar beyond the amount of gold. We have to 0:21:14.960 --> 0:21:15.560 back it up. 0:21:16.200 --> 0:21:19.400 Yeah, that was that was key to that whole declaration. 0:21:19.520 --> 0:21:23.560 He was a pro gold candidate, pro gold standard, and 0:21:23.600 --> 0:21:26.439 like you said, in nineteen hundred twenty one, he was like, 0:21:26.480 --> 0:21:29.199 we got to have some real teeth behind this. I 0:21:29.240 --> 0:21:31.840 can't just say it as president and make it so. 0:21:31.840 --> 0:21:34.560 So they passed the Gold Standard Act of nineteen hundred, 0:21:35.040 --> 0:21:38.920 and that had some language in there that said exactly 0:21:38.960 --> 0:21:42.160 that is, hey, that circulation, it's got to be tied 0:21:42.200 --> 0:21:44.439 to gold. We can't print one dollar more than we 0:21:44.520 --> 0:21:48.520 have in equal amounts of gold. And that was it. 0:21:49.240 --> 0:21:52.200 You know, that was the classic gold standard period. It 0:21:52.320 --> 0:21:56.280 meant that nations were trading with one another on equal 0:21:56.320 --> 0:21:59.920 ground and it was dependent on sending like physical gold 0:22:00.119 --> 0:22:04.960 one another. If you were producing more and exporting more, 0:22:05.480 --> 0:22:07.679 then you had a lot of gold, you know, stockpiled 0:22:07.720 --> 0:22:10.119 in your country. If you had a trade deficit, you 0:22:10.160 --> 0:22:12.720 had a lot less gold, and it was everyone kind 0:22:12.760 --> 0:22:15.320 of knew what that meant, and it worked for a 0:22:15.320 --> 0:22:15.800 long time. 0:22:16.000 --> 0:22:18.280 It did work. I mean, there were dozens of nations 0:22:18.320 --> 0:22:20.480 all on the gold standard at the same time, so 0:22:20.960 --> 0:22:23.040 you knew how much you were going to get paid 0:22:23.119 --> 0:22:29.440 for your shipmen of pre industrial televisions overseas, right, because 0:22:29.440 --> 0:22:34.159 there were bonkers for them in Portugal. But the reason 0:22:34.240 --> 0:22:37.280 why you knew is because there was such stability among 0:22:37.440 --> 0:22:44.320 your currency and international currency pegged to gold, that when 0:22:44.400 --> 0:22:47.320 you ship that shipment out, by the time it arrived 0:22:47.560 --> 0:22:51.280 it was the same price. Yes, with fiat currency, the 0:22:51.400 --> 0:22:54.240 price of stuff can fluctuate so much over a day 0:22:54.320 --> 0:22:57.200 or a week that when you sent a shipment out, 0:22:57.520 --> 0:22:59.960 if you hadn't already settled the contract, which you proba 0:23:00.000 --> 0:23:02.640 probably did, but by the time it arrived, you might 0:23:02.680 --> 0:23:05.120 be making way less than you were going to when 0:23:05.160 --> 0:23:08.000 you shipped it out. That's not really what happened during 0:23:08.000 --> 0:23:11.080 the classic Golden age of the gold standard. It was 0:23:11.160 --> 0:23:14.320 all much more stable than that. 0:23:13.400 --> 0:23:16.520 That's right. But like you said, we pegged the end 0:23:16.560 --> 0:23:19.199 of that to basically World War One, because, as you 0:23:19.240 --> 0:23:22.800 mentioned earlier, wars are really expensive. They're going to spike 0:23:22.840 --> 0:23:26.160 your national debt if you get involved in one. And 0:23:26.200 --> 0:23:28.560 in Europe and World War One, they were like, this 0:23:28.640 --> 0:23:32.800 war's really really expensive, and our supply of gold is 0:23:32.840 --> 0:23:37.159 being constrained, so we have to we have to leave it. 0:23:37.240 --> 0:23:43.440 So the international gold standard dissolved basically mostly worldwide except 0:23:43.480 --> 0:23:45.920 for the US and UK. We stayed on that gold standard. 0:23:46.480 --> 0:23:50.879 And because of that, for a while, the British pound 0:23:50.920 --> 0:23:54.639 and the US dollar were basically the global reserve currencies 0:23:55.560 --> 0:23:57.720 because you know, they had gold to back them, so 0:23:57.760 --> 0:24:01.639 they were the gold standard, the dollar in the pound. 0:24:01.960 --> 0:24:04.640 Yeah, because it's not I mean, it's not figurative when 0:24:04.640 --> 0:24:06.760 you're saying like you had to use your gold to 0:24:06.800 --> 0:24:09.800 buy back your currency if you were in a trade deficit, right, 0:24:10.240 --> 0:24:12.960 you actually had to ship gold to the country you 0:24:13.000 --> 0:24:15.400 were buying your dollars or your pounds back from. 0:24:15.760 --> 0:24:16.280 Yeah. 0:24:16.320 --> 0:24:20.119 So with the US and the UK having currencies pegged 0:24:20.119 --> 0:24:23.200 to gold and then be being the global reserve currency, 0:24:23.240 --> 0:24:26.240 you could just ship currency overseas, which is so much 0:24:26.240 --> 0:24:29.600 easier than shipping gold, right, So that was each lighter, 0:24:30.080 --> 0:24:33.800 it is super light. So the US and England both 0:24:33.880 --> 0:24:37.080 ended up with like the vast majority of the world's gold, 0:24:37.160 --> 0:24:40.240 because you know, you could take a dollar, you could 0:24:40.240 --> 0:24:42.119 take a pound to the US of the UK and 0:24:42.160 --> 0:24:45.560 say give me some gold for this, and those those notes, 0:24:45.640 --> 0:24:49.760 those the paper dollars were good as gold essentially, which 0:24:49.800 --> 0:24:51.879 is I'm pretty sure where that came from. 0:24:52.280 --> 0:24:55.240 Yeah, I mean that's funny. The gold standard and good 0:24:55.240 --> 0:24:57.160 as gold, like a lot of these terms like literally 0:24:57.160 --> 0:24:59.320 come from these weird monetary policies. 0:24:59.480 --> 0:25:03.560 Yeah, yeah, William McKinley. 0:25:03.040 --> 0:25:10.840 Yeah, old gold back. So things were going along okay 0:25:10.880 --> 0:25:14.560 after that, and then the nineteen twenty nine stock market 0:25:14.640 --> 0:25:19.119 crash came and banks started failing all over the world 0:25:19.600 --> 0:25:21.800 and everyone you know those you know, when stuff like 0:25:21.800 --> 0:25:25.000 this happens, there's it seems like it used to happen more, 0:25:25.000 --> 0:25:27.600 but there can be a real panic, and people start 0:25:27.600 --> 0:25:30.919 converting their dollars and their pounds to gold because they 0:25:30.960 --> 0:25:33.760 were like, we know, gold is worth something I don't 0:25:33.760 --> 0:25:36.600 want to have like this this paper currency on hand. 0:25:36.680 --> 0:25:39.159 That's like clearly losing value very quickly. 0:25:39.720 --> 0:25:41.880 Right, if I weigh a day, I might get less 0:25:41.920 --> 0:25:44.720 gold than I will if I cash my bank account 0:25:44.720 --> 0:25:48.959 into today. And remember earlier, I said, like, how this 0:25:49.080 --> 0:25:51.360 is all. It all kind of self regulates, it all 0:25:51.400 --> 0:25:55.040 moves naturally from one place to another. But still humans 0:25:55.080 --> 0:25:57.840 can screw things up just because we're human. This is 0:25:57.880 --> 0:26:00.080 how we screwed it up. There were a banking can 0:26:00.280 --> 0:26:03.720 after banking panics, where people just made runs on banks 0:26:03.760 --> 0:26:05.120 and said give me all my money and the bank 0:26:05.119 --> 0:26:07.040 would be like, we don't have it. They would shell 0:26:07.080 --> 0:26:09.159 out all their money and end up closing. And there 0:26:09.200 --> 0:26:13.520 were like ten thousand bank closures in the early nineteen 0:26:13.640 --> 0:26:16.480 thirties in the United States alone between nineteen thirty and 0:26:16.560 --> 0:26:20.080 nineteen thirty two because people would run in and like 0:26:20.280 --> 0:26:23.040 just take all their money out, and so banks were failing. 0:26:23.359 --> 0:26:25.960 This was before the FDIIC. So if you had a 0:26:25.960 --> 0:26:29.960 bunch of money and the bank like closed forever before 0:26:30.000 --> 0:26:32.840 you could cash it in, you were broke. Like that 0:26:32.960 --> 0:26:37.040 money was worthless, right, And that caused even more people 0:26:37.160 --> 0:26:40.280 to make runs on banks, which created this huge, terrible 0:26:41.040 --> 0:26:43.600 ripple effect. And so the UK and the US were 0:26:43.600 --> 0:26:46.800 both faced with this challenge like what do you do. 0:26:46.800 --> 0:26:48.679 Do you stay on the gold standard or do you 0:26:48.720 --> 0:26:51.720 go off the gold standard? And the UK was. 0:26:51.760 --> 0:26:55.560 Up first, Yeah, they abandoned the gold standard in nineteen 0:26:55.760 --> 0:26:59.760 thirty one. Apparently there's a story that their central banker 0:27:00.240 --> 0:27:03.840 named Monte Hugh Norman at the time, suffered a nervous 0:27:03.880 --> 0:27:06.080 breakdown because he was you know, it's kind of up 0:27:06.080 --> 0:27:09.040 to him to make that final call. And can you 0:27:09.080 --> 0:27:12.840 imagine the pressure to be in charge of like a 0:27:13.320 --> 0:27:16.679 kind of a worldwide economy, almost right, and how important 0:27:16.760 --> 0:27:17.640 these decisions are. 0:27:18.680 --> 0:27:22.800 So ask your question, no, no, I cannot imagine that 0:27:22.880 --> 0:27:23.119 kind of. 0:27:23.119 --> 0:27:26.360 Pressure it either. So the pounds value, of course, immediately 0:27:26.440 --> 0:27:30.159 drops even further than it already was. So people that 0:27:30.280 --> 0:27:33.439 were had lost faith in the paper money were saying, like, 0:27:33.480 --> 0:27:36.959 see there, like good thing. We traded in our pounds 0:27:37.000 --> 0:27:40.200 for gold and America and of course everywhere around the 0:27:40.200 --> 0:27:43.520 world is seeing this happen, so everyone else is losing confidence. 0:27:43.560 --> 0:27:46.479 And this is when you know, further runs on banks happened. 0:27:47.080 --> 0:27:50.480 And we had a president, a lame duck named Herbert Hoover, 0:27:50.560 --> 0:27:53.560 who was leaving office in nineteen thirty three and told 0:27:53.640 --> 0:27:57.040 incoming FDR he was like, hey, you know, we're in 0:27:57.119 --> 0:27:59.960 real trouble here. The reason we have gold is because 0:28:00.119 --> 0:28:04.280 can't trust governments. And FDR was like you know what, 0:28:04.400 --> 0:28:07.320 I think I've got this. So he went in office 0:28:07.920 --> 0:28:10.040 and he said, I'm going to I'm going to fix 0:28:10.119 --> 0:28:11.400 this crisis for good. 0:28:12.280 --> 0:28:14.199 One of Yeah, one of the first things he did was, 0:28:14.440 --> 0:28:17.600 I think the day after he was inaugurated, he declared 0:28:17.640 --> 0:28:21.080 a four day banking holiday, so all the banks closed 0:28:21.160 --> 0:28:24.760 right for four days so there couldn't be any runs 0:28:24.760 --> 0:28:28.520 on banks. And I was watching this. There's this dude 0:28:28.560 --> 0:28:33.560 who's a YouTuber named the Casual Historian, and he bills 0:28:33.640 --> 0:28:38.320 himself as a Conservatorian, which I take to be in 0:28:38.320 --> 0:28:42.800 a combination of a conservative and a vegetarian right probably, 0:28:43.240 --> 0:28:46.000 But he was explaining that this actually didn't do much 0:28:46.360 --> 0:28:49.360 in real terms, like the banks that were about to 0:28:49.440 --> 0:28:52.920 fail before the banking holiday still failed afterwards. But as 0:28:52.920 --> 0:28:55.400 far as the public was concerned, it was a huge 0:28:55.440 --> 0:28:58.400 signal for essentially the first time that the government was 0:28:58.440 --> 0:29:01.120 going to step in. Because there's one thing that you 0:29:01.200 --> 0:29:05.880 cannot argue against with the gold standard is because you're constrained, 0:29:06.240 --> 0:29:09.200 you cannot print more money than you have gold to 0:29:09.280 --> 0:29:12.400 back it. There is nothing you can do in an 0:29:12.400 --> 0:29:16.280 economic crisis except sit there and watch it happen. You 0:29:16.320 --> 0:29:18.640 can't do anything there's no leverage for you to pull 0:29:18.680 --> 0:29:21.440 the pull the country out of it. The only way 0:29:21.640 --> 0:29:24.240 that you can pull your country out of a recession 0:29:24.320 --> 0:29:28.760 or a depression is by printing more money and actually 0:29:28.880 --> 0:29:33.360 devaluing the money that people are hoarding. So it's you're 0:29:33.400 --> 0:29:36.120 basically saying, you got all this money that you're stashed 0:29:36.120 --> 0:29:38.520 away because it's so valuable. Well, guess what, It's not 0:29:38.600 --> 0:29:40.920 so valuable anymore, so you might as well get out 0:29:40.960 --> 0:29:41.800 there and spend it. 0:29:42.640 --> 0:29:45.280 Yeah, for sure. And you know, we were in big 0:29:45.320 --> 0:29:47.640 trouble obviously in the nineteen thirties, you know, you mentioned 0:29:47.680 --> 0:29:52.479 earlier sort of that cycle that happens when companies are 0:29:52.480 --> 0:29:56.960 producing less and fewer customers and not hiring people or 0:29:57.200 --> 0:30:00.800 firing people. And in nineteen thirty three, the unemployment of 0:30:00.800 --> 0:30:02.560 the United States was twenty five percent. 0:30:02.760 --> 0:30:03.600 That's so crazy. 0:30:04.280 --> 0:30:07.080 I know, it's staggering. And I think worldwide, almost one 0:30:07.080 --> 0:30:09.440 in three people were out of work in nineteen thirty two, 0:30:09.560 --> 0:30:12.240 So it wasn't just the United States like that many 0:30:12.280 --> 0:30:15.240 people being out at work at once, And that's the 0:30:15.280 --> 0:30:19.080 thing that I always you know, thankfully it hasn't happened yet, 0:30:19.080 --> 0:30:22.680 but with the AI conversations and people. I've had conversations 0:30:22.680 --> 0:30:25.280 with people in my sphere. 0:30:25.040 --> 0:30:27.000 Are you sure? They were people and not box. 0:30:28.200 --> 0:30:29.840 They think it's such a great thing. And I was like, 0:30:29.920 --> 0:30:32.080 you know, I'm not even arguing the merits of arts 0:30:32.200 --> 0:30:34.280 or not and things like that, But I said, I 0:30:34.400 --> 0:30:37.440 just worry about what would happen if like twenty percent 0:30:37.480 --> 0:30:39.360 of the workforce was laid off in the span of 0:30:39.400 --> 0:30:41.760 like a year or so because of AI. It's like, 0:30:41.760 --> 0:30:45.400 that's what I worry about. And we haven't seen that yet, thankfully, 0:30:45.440 --> 0:30:46.400 but I guess we'll see. 0:30:46.800 --> 0:30:49.000 Yeah, you, me and I were talking about the same thing, 0:30:49.080 --> 0:30:51.440 and she brought up a really great question, which is 0:30:51.480 --> 0:30:53.200 like one of the things that a lot of the 0:30:53.360 --> 0:30:56.160 AI proponents say is like, eventually you were going to 0:30:56.200 --> 0:30:58.560 create this utopia where like no one has to work 0:30:58.600 --> 0:31:02.160 and everybody's right. And her question is like, if that's 0:31:02.200 --> 0:31:04.600 your goal, why don't we take some of that wealth 0:31:04.640 --> 0:31:07.040 and just start now before I act? Right, do we 0:31:07.080 --> 0:31:08.920 have to wait for AI to do that? We can 0:31:09.000 --> 0:31:12.520 do it now? I thought, yes, rather clever. I stood 0:31:12.600 --> 0:31:14.280 up and clapped right. 0:31:15.560 --> 0:31:17.640 She's like, that's weird. Here, we're in our living room. 0:31:17.840 --> 0:31:22.320 She left the room, all right, So things are bad. 0:31:22.840 --> 0:31:27.360 They had that banking holiday. Congress passes what's called the 0:31:27.400 --> 0:31:31.600 Emergency Banking Act at the time, which basically, like you said, 0:31:32.000 --> 0:31:36.040 allowed them to, in an emergency issue, just start printing money. Basically, 0:31:36.080 --> 0:31:39.520 that's not back to the gold standard, but we had 0:31:39.600 --> 0:31:42.280 that gold standard because the gold Standard Act of nineteen hundred, 0:31:42.360 --> 0:31:46.320 so they had to create this Banking Act, I guess 0:31:46.400 --> 0:31:47.320 to work around that. 0:31:47.400 --> 0:31:51.480 Right, Yeah, They basically said, Okay, this is just emergency measures, 0:31:51.480 --> 0:31:54.440 and we're just printing this money to give to banks 0:31:54.880 --> 0:31:57.920 to keep them from going under. So the government is 0:31:57.960 --> 0:32:00.520 signaling all over the place, we're stepping in. We're going 0:32:00.600 --> 0:32:04.160 to make sure that this that like, we're going to 0:32:04.280 --> 0:32:07.240 do something about this for the first time. I think 0:32:07.240 --> 0:32:09.760 that was my point before I got off on the 0:32:09.800 --> 0:32:12.000 tangent for a little while a minute ago. But the 0:32:12.040 --> 0:32:14.480 government is signaling all over the place that they're going 0:32:14.520 --> 0:32:16.880 to back up banks so you don't have to run 0:32:16.920 --> 0:32:18.720 and get all of your money out and just keep 0:32:18.760 --> 0:32:22.200 making this whole thing worse. So that was like a 0:32:22.360 --> 0:32:25.240 first step. But the problem is is there was still 0:32:25.320 --> 0:32:27.600 plenty of gold out there that people were hoarding. They 0:32:27.600 --> 0:32:29.600 were like, yeah, that's great, thanks a lot, but I'm 0:32:29.640 --> 0:32:31.760 not taking this goal back to the bank right now 0:32:31.840 --> 0:32:35.080 because I don't have any confidence in the banking system. 0:32:35.360 --> 0:32:37.720 So the government figured out how to deal with this. 0:32:38.600 --> 0:32:41.680 They said, well, you know what, we will put you 0:32:41.800 --> 0:32:45.320 in jail for ten years and find you the modern 0:32:45.360 --> 0:32:47.960 equivalent of two hundred and fifty thousand dollars. If you 0:32:48.000 --> 0:32:51.479 don't give us your gold, we'll give you the equal 0:32:51.520 --> 0:32:56.320 amount of paper dollars back, but you can't legally own 0:32:56.400 --> 0:32:57.200 gold anymore. 0:32:58.040 --> 0:32:59.920 Yeah, and that was it. That was I mean, I 0:33:00.080 --> 0:33:04.320 think it was about a month after they sort of 0:33:04.360 --> 0:33:07.480 restored that public confidence with the Emergency Banking Act, like 0:33:07.640 --> 0:33:10.920 FDR was moving very quickly and said all right, we're 0:33:11.000 --> 0:33:14.600 suspending the gold standard officially. And then the next year 0:33:15.200 --> 0:33:17.320 was that Gold Reserve Act of nineteen thirty four that 0:33:17.360 --> 0:33:19.400 you were talking about, where they were like, yeah, you can't. 0:33:19.440 --> 0:33:21.720 I mean, you can keep your rings and if you 0:33:21.800 --> 0:33:24.640 got like collectible coins and stuff, we're not coming after those. Yeah, 0:33:24.680 --> 0:33:27.040 but you can't have bars of gold and a safe 0:33:27.040 --> 0:33:27.920 in your house anymore. 0:33:28.040 --> 0:33:31.280 Yeah. And Jimmy the Greek was like, whow right close. 0:33:33.880 --> 0:33:37.080 So yeah, so now you had to have you had 0:33:37.120 --> 0:33:40.880 to use paper currency, so this was the shift in 0:33:40.920 --> 0:33:43.760 the United States, and this had already happened in other countries, 0:33:43.800 --> 0:33:46.520 like you said, especially in Europe after World War One, 0:33:47.400 --> 0:33:52.200 and the gold standard was dead. And one of the 0:33:52.200 --> 0:33:55.200 things that demonstrated the death of the gold standard was 0:33:56.160 --> 0:33:59.720 economists generally today say that the US being able to 0:33:59.800 --> 0:34:05.240 print money and basically kickstar inflation to pull us out 0:34:05.280 --> 0:34:11.600 of the deflationary spiral aka the depression. That's basically ninety 0:34:11.640 --> 0:34:13.840 percent of the reason that the US got out of 0:34:13.880 --> 0:34:16.759 the Great Depression. It was leaving the gold standard being 0:34:16.800 --> 0:34:18.960 able to print money. Because if you can just print 0:34:19.000 --> 0:34:21.319 money and take money off the market and put more 0:34:21.360 --> 0:34:23.880 money on the market when you need it, you can 0:34:24.160 --> 0:34:27.680 adjust the economy enough to get it out of crises 0:34:28.080 --> 0:34:32.319 one way or the other. And that that's actually the 0:34:32.360 --> 0:34:35.360 better way of doing it. And so the gold standard 0:34:35.520 --> 0:34:36.960 never came back again. 0:34:37.800 --> 0:34:39.759 That's right. And so that could be the end of 0:34:39.800 --> 0:34:42.920 our show, but that would be weird because we haven't 0:34:42.920 --> 0:34:46.200 had our second ad break yet. So we're gonna do that, 0:34:46.280 --> 0:34:48.080 and we're going to come back and just say see 0:34:48.120 --> 0:34:50.000 you later and read a listener mail, right, because the 0:34:50.000 --> 0:34:53.400 gold standard's gone forever, gone forever, all right, we'll be 0:34:53.480 --> 0:35:25.680 right back. Okay, we're back here for Act three, which 0:35:25.719 --> 0:35:27.920 means this time for listener mail. Because a gold standard 0:35:27.960 --> 0:35:28.440 is dead. 0:35:28.320 --> 0:35:30.080 This is where the golden gun goes off. 0:35:30.680 --> 0:35:33.080 That's right, because no, the gold standard is not dead. 0:35:34.520 --> 0:35:38.320 It actually had another sort of brief not even stint, 0:35:38.440 --> 0:35:40.839 like it kind of had a maybe not a Golden Age, 0:35:40.880 --> 0:35:45.600 but maybe a heyday when the Bretton Woods Agreement came around, 0:35:45.640 --> 0:35:48.799 which was a U in a United Nations agreement that 0:35:48.840 --> 0:35:52.440 came around in nineteen forty four in Brettonwood's New Hampshire 0:35:52.920 --> 0:35:55.920 that had a whole brand new system that was really 0:35:56.120 --> 0:35:59.040 kind of like that original gold standard, with forty four 0:35:59.680 --> 0:36:03.040 country signed on along with the US that said, all right, 0:36:03.120 --> 0:36:06.640 the US dollar now is pegged to gold at thirty 0:36:06.640 --> 0:36:10.080 five dollars an ounce, and everybody else that's signing on 0:36:10.200 --> 0:36:13.080 is tying their currency to our dollar. 0:36:13.200 --> 0:36:17.160 Right, so there's a fixed rate, like there's fifteen pesos 0:36:17.200 --> 0:36:19.880 for one dollar and one dollar equals this much gold. 0:36:20.120 --> 0:36:24.320 So it's essentially the world going back on a gold standard. 0:36:24.520 --> 0:36:27.360 They just figured out a good way around it to 0:36:27.400 --> 0:36:31.279 make it much easier, right. Yeah, and again, just like 0:36:31.320 --> 0:36:33.799 the first time, if everybody's playing by the rules. Then 0:36:34.160 --> 0:36:36.680 this keeps you from monkeying with interest rates to make 0:36:36.719 --> 0:36:40.279 your exports more attractive. It prevents trade wars, it does 0:36:40.320 --> 0:36:44.759 all sorts of calm, peaceful stuff. But the problem is 0:36:45.360 --> 0:36:48.319 there's just and this is the same problem today. There 0:36:48.440 --> 0:36:51.920 just wasn't enough gold in the world to cover the 0:36:51.960 --> 0:36:55.399 increasing expense of modern life. 0:36:55.680 --> 0:36:57.720 Yeah, for sure. And they had put things in place 0:36:57.800 --> 0:37:00.520 because you know, they were a little smarter than time around. 0:37:00.560 --> 0:37:03.240 They were like, all right, we'll create the International Monetary Fund, 0:37:03.719 --> 0:37:06.560 We'll create the World Bank. So that means that there's 0:37:06.640 --> 0:37:10.520 their official worldwide bodies kind of coordinating this monetary policy 0:37:11.000 --> 0:37:13.399 between all the countries to make sure that no one's 0:37:13.440 --> 0:37:15.960 doing hinky stuff. And it took a long time. This 0:37:16.080 --> 0:37:18.840 wasn't like, you know, they reached this agreement in nineteen 0:37:18.880 --> 0:37:21.080 forty four and by nineteen forty five it was all 0:37:21.160 --> 0:37:23.880 set in stone. I think it didn't actually take effective 0:37:24.120 --> 0:37:28.720 fourteen years later in nineteen fifty eight. By the nineteen sixties, 0:37:28.719 --> 0:37:33.080 like shortly thereafter, the US was was spending like a 0:37:33.360 --> 0:37:37.319 like a drunk ten year old military spending was in 0:37:37.440 --> 0:37:41.880 foreign aid. We're all just like ramping up spending on imports, 0:37:42.320 --> 0:37:44.960 foreign investment. There are a lot of dollars from the 0:37:45.040 --> 0:37:48.919 United States and worldwide circulation. And even though we held 0:37:48.920 --> 0:37:51.200 a lot of the world's gold reserves, like seventy five 0:37:51.239 --> 0:37:53.640 percent at the time, like you said, we still didn't 0:37:53.680 --> 0:37:55.400 have enough gold to cover all that kind of money. 0:37:55.800 --> 0:37:57.840 No, and this is the I mean, this is what 0:37:58.000 --> 0:38:01.240 keeps governments honest. There is a possibility of a worst 0:38:01.280 --> 0:38:04.680 case scenario where all of the people holding those dollars 0:38:04.719 --> 0:38:07.080 can all come back at once and say, hey, we 0:38:07.120 --> 0:38:10.680 want this, we want our goal. We're turning in our currency, 0:38:11.000 --> 0:38:13.839 give us our gold. And you know it's bad enough 0:38:13.840 --> 0:38:17.400 when you're talking about citizens making runs on banks. If 0:38:17.440 --> 0:38:21.640 you're talking about entire foreign governments bringing all of their 0:38:21.680 --> 0:38:24.040 cash reserves to you and saying we want gold, you 0:38:24.160 --> 0:38:28.000 got a really big problem. And finally, in nineteen seventy one, 0:38:28.440 --> 0:38:31.359 Nixon admitted, like, we don't have enough gold to cover 0:38:31.440 --> 0:38:35.319 the currency out there. Sorry, guys, you can't turn that 0:38:35.440 --> 0:38:39.200 in for gold anymore. Sorry, and just kind of backed 0:38:39.200 --> 0:38:39.839 out of the room. 0:38:40.760 --> 0:38:44.000 Yeah, he backed out of the room. And it was 0:38:44.080 --> 0:38:47.040 it was a big deal because this isn't the kind 0:38:47.080 --> 0:38:50.320 of thing that we could we had pegged our dollar 0:38:50.440 --> 0:38:53.719 to like worldwide value, so we couldn't just say that 0:38:53.760 --> 0:38:59.520 by ourselves. In nineteen seventy three, the Monetary Fund they 0:38:59.560 --> 0:39:02.040 went off the gold standard. They basically kind of came 0:39:02.040 --> 0:39:05.160 along for the ride, yeah, and said, all right, everybody 0:39:05.200 --> 0:39:08.200 should kind of go to this fiat currency system, and 0:39:08.480 --> 0:39:11.280 like that was the true real end of the gold standard, 0:39:11.320 --> 0:39:14.640 and like there's this that ship is so far out 0:39:14.680 --> 0:39:16.840 of the harbor now, there's no way they could go back. 0:39:16.680 --> 0:39:19.279 To it now. And it eventually kind of became a 0:39:19.440 --> 0:39:24.239 fringe right wing position for some reason. They just kind 0:39:24.239 --> 0:39:26.759 of adopted it. But that doesn't mean all of the 0:39:26.840 --> 0:39:29.759 right wing agrees with it. In fact, Milton Friedman, who's 0:39:29.800 --> 0:39:34.680 a right wing conservative economist hero, he was even like, 0:39:34.760 --> 0:39:37.200 that's a terrible idea to go back on it. He 0:39:37.239 --> 0:39:39.359 wrote a paper, and I think nineteen ninety or co 0:39:39.440 --> 0:39:42.279 wrote one that basically demonstrated just how bad of an 0:39:42.320 --> 0:39:45.680 idea it would be. But there's still plenty of people 0:39:45.719 --> 0:39:48.120 who are like, no, gold is where I want to 0:39:48.160 --> 0:39:52.000 put my faith in. One of the reasons why it's 0:39:52.040 --> 0:39:56.799 still around is because people believe that if there's a 0:39:57.080 --> 0:40:02.520 social collapse right afterward, people will still accept gold. They 0:40:02.560 --> 0:40:06.239 won't accept dollars or pounds or euros, but they'll take 0:40:06.320 --> 0:40:09.200 gold in return. So that's one reason a lot of 0:40:09.200 --> 0:40:12.120 people still have faith in goals and investment. There's other 0:40:12.160 --> 0:40:14.239 people who are like, gold's always going to become more 0:40:14.280 --> 0:40:18.000 and more valuable because there's a finite amount of it, right, 0:40:18.920 --> 0:40:23.959 And that actually is the same thing for bitcoin. There's 0:40:24.000 --> 0:40:27.000 a finite amount of bitcoins, which means that over time 0:40:27.120 --> 0:40:29.960 it's going to become more and more valuable. It's going 0:40:30.040 --> 0:40:32.600 to buy more and more stuff, which makes it a 0:40:32.640 --> 0:40:36.160 deflationary currency, which actually makes it dangerous because that means 0:40:36.200 --> 0:40:39.080 people are more likely to buy in HORD bitcoins or 0:40:39.120 --> 0:40:43.000 buy in HORD gold because eventually it's going to become 0:40:43.239 --> 0:40:45.600 more valuable, and that's how you go into a recession. 0:40:46.560 --> 0:40:50.759 Yeah. I've never I'm just you know, me and economics 0:40:50.800 --> 0:40:53.200 and money. I'm just a big dummy with all that. 0:40:53.800 --> 0:40:57.759 So cryptocurrency is something that even though we've podcasted on it, 0:40:57.960 --> 0:40:59.759 I just it's not like I'm saying like I don't 0:40:59.800 --> 0:41:02.120 try cryptocurrency. I just I don't understand it and I 0:41:02.160 --> 0:41:04.000 have no interest in understanding it. 0:41:04.239 --> 0:41:07.600 Yeah. Yeah, although it does seem to have gained a 0:41:07.600 --> 0:41:11.600 lot of legitimacy, especially Yeah coin sure, but I mean 0:41:11.640 --> 0:41:15.200 it's a wild ride, like it was at like sixteen 0:41:15.280 --> 0:41:18.719 thousand earlier this year, early like last year, and now 0:41:18.760 --> 0:41:21.480 it's at like sixty one, and sixty one is down 0:41:21.480 --> 0:41:25.080 from ninety something a month or two ago. Like maybe 0:41:25.080 --> 0:41:27.799 it's a long term thing, but that's not something you 0:41:27.880 --> 0:41:29.680 want to I mean, you would have to be so 0:41:29.760 --> 0:41:32.600 insane to trade that stuff on a daily basis. 0:41:33.120 --> 0:41:35.040 I don't have the stomach for I'm just that's not 0:41:35.160 --> 0:41:37.920 who I am either. You know, I want to I 0:41:37.920 --> 0:41:39.239 want to sit around and you and I want to 0:41:39.280 --> 0:41:44.680 sit around listen to elevator music, not track the currency cryptocurrency. 0:41:44.760 --> 0:41:46.720 No, but for some people that is quite thrilling. 0:41:47.400 --> 0:41:49.440 Oh I bet it is. Have fun with that if 0:41:49.440 --> 0:41:54.799 that's your thing for Larry David. Right, So, like we said, 0:41:55.040 --> 0:41:57.600 I think an act one that you know, there are 0:41:57.640 --> 0:41:59.600 still people that argue for the gold standard and people 0:41:59.640 --> 0:42:01.840 that aregue against it, even though that ship is sailed, 0:42:02.640 --> 0:42:04.719 and there are you know, some pretty good arguments each way. 0:42:05.880 --> 0:42:10.879 If you're for the gold Standard, you know you can say, 0:42:10.960 --> 0:42:14.000 like hey, that's going to definitely put a lid on 0:42:14.040 --> 0:42:16.960 this crazy government spending that we have had going on, 0:42:17.640 --> 0:42:20.279 and it'll stabilize the money supply. We've seen it do 0:42:20.360 --> 0:42:25.040 that literally, so you know, that's a pretty decent like 0:42:25.040 --> 0:42:27.320 they got a lot of data to back those claims 0:42:27.360 --> 0:42:28.000 up for sure. 0:42:28.800 --> 0:42:32.200 Yeah, one of them is it's just basically throwing shade 0:42:32.239 --> 0:42:35.840 at how out of control government spending gets when the 0:42:35.880 --> 0:42:38.560 government is allowed to literally just print money when it 0:42:38.600 --> 0:42:42.600 wants to. One of those things that you'll see a 0:42:42.640 --> 0:42:46.640 lot is that the purchasing power of the dollar has 0:42:46.680 --> 0:42:50.839 declined by more than eighty five percent since the US 0:42:50.960 --> 0:42:53.560 left the gold standard in nineteen seventy one. And the 0:42:53.600 --> 0:42:56.320 reason why is because the government just keeps printing money 0:42:56.320 --> 0:43:01.040 anytime it likes, which causes inflation. Well, that's purposeful, like 0:43:01.320 --> 0:43:05.239 a fiat currency is an inflationary currency as opposed to 0:43:05.280 --> 0:43:09.320 a deflationary currency like gold. They want inflation to happen 0:43:09.360 --> 0:43:12.600 because inflation you can keep on top of. It's deflation 0:43:12.719 --> 0:43:15.560 that's really hard to come out of. So yeah, it's 0:43:15.600 --> 0:43:19.239 not really a problem if you can buy less with 0:43:19.320 --> 0:43:22.880 a dollar than you did before because you're adjusting for inflation. 0:43:23.280 --> 0:43:25.359 It's not a problem as long as your wages are 0:43:25.440 --> 0:43:28.280 keeping up with it. The problem is is wages haven't 0:43:28.360 --> 0:43:30.359 kept up with it, and so people are being paid 0:43:30.400 --> 0:43:32.439 the same amount as before and are able to buy 0:43:32.520 --> 0:43:35.160 less because they have less money. Even though the cost 0:43:35.160 --> 0:43:38.919 of living has increased their wages are wages haven't gone 0:43:39.000 --> 0:43:40.200 up commensurate to it. 0:43:41.120 --> 0:43:42.920 Yeah, for sure. And if you want to talk about 0:43:42.960 --> 0:43:44.440 like you know, we're talking about printing money and a 0:43:44.440 --> 0:43:49.000 spike in the cash supply, here's a pretty staggering statistic. 0:43:49.960 --> 0:43:53.319 The supply of money in nineteen seventy, this is what 0:43:53.360 --> 0:43:55.200 they call the M two money supply, which is all 0:43:55.200 --> 0:43:58.200 the cash, all the money and checking accounts, all the 0:43:58.239 --> 0:44:02.280 travelers checks, was about six hundred billion dollars in nineteen seventy, 0:44:02.520 --> 0:44:07.080 the year before I was born. In August of last year, 0:44:07.560 --> 0:44:12.520 it was twenty two trillion dollars, which is an increase 0:44:12.560 --> 0:44:15.680 of three thousand, five hundred and sixty six percent over 0:44:16.120 --> 0:44:21.279 whatever fifty four years, and twenty percent of that was 0:44:21.560 --> 0:44:23.319 created in twenty twenty. 0:44:23.600 --> 0:44:24.759 Yeah, just that year. 0:44:25.480 --> 0:44:25.760 Yeah. 0:44:26.400 --> 0:44:30.399 Yeah, So there's this, I mean, there's clear evidence that 0:44:30.440 --> 0:44:32.839 like the government will just print money as much as 0:44:32.840 --> 0:44:35.560 it can whenever it wants to. Part of the problem 0:44:35.600 --> 0:44:39.040 is is that also increases the national debt because for 0:44:39.200 --> 0:44:41.720 money out there, if you can print money, make new money, 0:44:41.920 --> 0:44:45.239 you can spend that new money if you're the organization 0:44:45.440 --> 0:44:48.800 that is creating the money. So the national debt increased 0:44:48.840 --> 0:44:52.480 tremendously too over that same time period from nineteen seventy 0:44:52.560 --> 0:44:54.800 to twenty twenty five. 0:44:55.600 --> 0:44:59.719 Yeah, it could increase nine thousand percent. It was three 0:44:59.800 --> 0:45:02.319 hund undred ninety eight billion back then and now it 0:45:02.400 --> 0:45:06.240 is over thirty six trillion dollars, and it's a number 0:45:06.280 --> 0:45:10.400 that is just hard to even comprehend. That seemingly nobody, 0:45:11.040 --> 0:45:14.440 well not nobody, but the right people aren't concerned enough. 0:45:14.280 --> 0:45:17.480 About So gold bugs are like, see, if you let 0:45:17.480 --> 0:45:19.480 the government print money, they're going to print money and 0:45:19.520 --> 0:45:22.520 they're going to spend more money. The gold standard keeps 0:45:22.560 --> 0:45:23.920 them from being able to do that. 0:45:24.239 --> 0:45:29.000 And of story, that's right. But there are anti goldbugs. 0:45:29.040 --> 0:45:31.480 There are people who prefer fiat currency and the ability 0:45:31.480 --> 0:45:34.520 for the government to step in and throw levers and 0:45:34.920 --> 0:45:41.040 control monetary policy through debate and decision making. And that's 0:45:41.120 --> 0:45:43.120 one of the big arguments. It's like, hey, we need 0:45:43.160 --> 0:45:47.799 to be able to make these decisions sort of on 0:45:47.840 --> 0:45:51.440 the fly and move quickly to save ourselves in times 0:45:51.440 --> 0:45:54.640 of doubt and in times of economic stress, and they 0:45:54.640 --> 0:45:56.840 can also combat a lot of those a lot of 0:45:56.880 --> 0:45:59.239 that data too. They can also say, well, yeah, but 0:45:59.280 --> 0:46:01.240 you really should look at these numbers instead. 0:46:02.239 --> 0:46:08.120 Yeah. So goldbugs always say that that there's stability in 0:46:08.680 --> 0:46:11.239 gold currency, right, But the problem is is that if 0:46:11.280 --> 0:46:15.640 you look at the gold markets, they fluctuate tremendously, so 0:46:15.719 --> 0:46:18.520 that's actually kind of out the window. Another one, this 0:46:18.560 --> 0:46:20.839 one I couldn't find an answer to that. I can't 0:46:20.840 --> 0:46:24.520 wrap my head around those. And the total value of 0:46:24.600 --> 0:46:27.880 all the gold in the world is thirty six trillion dollars, 0:46:28.239 --> 0:46:30.040 which is eye popping, but. 0:46:29.960 --> 0:46:33.799 That's the debt. But yeah, exactly ironically. 0:46:33.320 --> 0:46:37.799 But if you took the entire global economy and valued that, 0:46:37.800 --> 0:46:40.680 that's more like one hundred and twenty six trillion dollars. 0:46:41.000 --> 0:46:43.960 So if the world went on a gold standard again, 0:46:44.520 --> 0:46:47.360 how would you shrink one hundred and twenty six trillion 0:46:47.400 --> 0:46:50.359 dollars into thirty six trillion? That right there, that's what 0:46:50.360 --> 0:46:52.480 we've been saying. The ship has left the harbor, that 0:46:52.560 --> 0:46:56.120 train has left the station. It's just there's again, there's 0:46:56.160 --> 0:46:58.920 not enough gold to cover the value of everything in 0:46:58.960 --> 0:46:59.480 the world. 0:47:00.360 --> 0:47:04.000 Yeah, for sure. Another big sort of argument that people 0:47:04.120 --> 0:47:06.239 against the gold standard point too, is like, hey, look 0:47:06.239 --> 0:47:09.200 at our stock market. People aren't putting their money in 0:47:09.239 --> 0:47:12.640 their mattress anymore and making runs on banks. They're shifting 0:47:12.640 --> 0:47:16.359 that money. They're cash dollars into the stock market, and 0:47:16.520 --> 0:47:19.239 those dollars have grown and grown and grown. I mean, 0:47:19.280 --> 0:47:22.600 there are always dips in the stock markets, and even 0:47:23.719 --> 0:47:26.480 you know, there have been some very bad days in 0:47:26.520 --> 0:47:29.759 a row with the stock market, and you know, the 0:47:30.000 --> 0:47:31.839 crash of two thousand and eight and the dot com 0:47:31.840 --> 0:47:34.840 bubble and all that stuff always affects the stock market, 0:47:34.880 --> 0:47:38.040 but it's proven to be a pretty stable thing over time. 0:47:39.200 --> 0:47:43.239 It has. And in fact, if you there's this comparison 0:47:43.280 --> 0:47:44.920 I found I can't remember where I found it, but 0:47:45.080 --> 0:47:49.120 if you took five thousand dollars in nineteen seventy one 0:47:49.480 --> 0:47:54.000 to celebrate the birth of Chuck, Yeah, and you said, 0:47:54.040 --> 0:47:56.840 I'm going to go buy five thousand dollars worth of gold, 0:47:56.840 --> 0:47:58.879 It's going to be a great present for Chuck. I'm 0:47:58.880 --> 0:48:01.680 also going to bring a little I'm a little frank incense. 0:48:01.680 --> 0:48:04.960 It is going to get biblical in the year. The 0:48:05.600 --> 0:48:09.240 gold actually would have increased about seventy five hundred percent. 0:48:09.880 --> 0:48:12.640 And this is gold prices are so all over the place. 0:48:12.680 --> 0:48:15.600 This is probably already out of date. But I think 0:48:15.840 --> 0:48:18.960 in the end of twenty twenty five, you would have 0:48:19.000 --> 0:48:22.360 had three hundred and seventy nine thousand, five hundred dollars 0:48:22.360 --> 0:48:25.279 worth of gold from that five thousand dollars worth of 0:48:25.280 --> 0:48:28.040 gold you bought in nineteen seventy one. So that makes 0:48:28.080 --> 0:48:30.880 it seem like, okay, great, gold's a good investment. What 0:48:31.000 --> 0:48:33.080 happens if you invested it in the stock. 0:48:32.800 --> 0:48:36.680 Market, Well, if you had had that same five grand 0:48:36.760 --> 0:48:38.440 after my birth and put it in the S and 0:48:38.480 --> 0:48:41.600 P five hundred, you would have made two hundred and 0:48:41.680 --> 0:48:45.360 seventy one thousand, five hundred dollars. So the gold standard 0:48:45.440 --> 0:48:47.719 wins in that case. But that is if you were 0:48:48.280 --> 0:48:50.640 just taking those dividends, if you're taking the money that 0:48:50.680 --> 0:48:52.600 you're making from the stocks and saying like, all right, 0:48:52.640 --> 0:48:55.640 that's that's my income or whatever. If you had kept 0:48:55.719 --> 0:48:58.680 reinvesting all that from the five grand, it would be 0:48:59.239 --> 0:49:05.960 one point one eight five million plus what five hundred bucks. Yeah, 0:49:06.320 --> 0:49:09.360 So that's a return of almost twenty four thousand percent 0:49:09.480 --> 0:49:11.719 rather than seventy five hundred percent. 0:49:11.480 --> 0:49:13.359 Right, And even if you're like, okay, we'll wait a minute, 0:49:13.360 --> 0:49:16.280 adjusting for inflation, how much is that? So I looked 0:49:16.280 --> 0:49:18.880 it up. I went on our beloved west Egg, and 0:49:19.000 --> 0:49:21.719 something that costs five thousand dollars in nineteen seventy one 0:49:22.040 --> 0:49:27.240 would cost you forty thousand dollars today. So even after 0:49:27.280 --> 0:49:29.480 you bought that five thousand dollars thing, you'd still have 0:49:29.920 --> 0:49:33.359 one point one million and change left over. So it 0:49:33.440 --> 0:49:36.160 would be much better to invest it in the market. 0:49:36.239 --> 0:49:38.840 As volatile as it is, as unpredictable as it is, 0:49:39.120 --> 0:49:41.480 as as easy as it is to lose your shirt 0:49:41.719 --> 0:49:45.799 over the course of time, the ability to unleash the 0:49:45.800 --> 0:49:48.319 stock market that having a fiat currency and being able 0:49:48.320 --> 0:49:52.240 to print money creates is a it's a better return 0:49:52.440 --> 0:49:53.200 on investment. 0:49:53.280 --> 0:49:56.439 Yeah, I'm surprised I got through this one. 0:49:56.480 --> 0:49:57.160 You did great. 0:49:58.080 --> 0:49:58.759 Well, you did great. 0:49:58.880 --> 0:49:59.600 You did great. 0:50:00.080 --> 0:50:01.880 Who wrote the original article here? Who is this? 0:50:02.000 --> 0:50:03.719 That was Olivia Joint She did great. 0:50:03.920 --> 0:50:06.000 Yeah, she did great too. And you did a lot 0:50:06.000 --> 0:50:08.400 of great supplemental research. Everyone's doing great, everybody. 0:50:08.520 --> 0:50:11.799 It was just great up in here. We should also 0:50:11.840 --> 0:50:13.560 say we probably got a lot of stuff frong. We 0:50:13.560 --> 0:50:15.680 probably walked past a lot of stuff. This is such 0:50:15.719 --> 0:50:20.360 a detailed nuance discussion that people who are like monetary 0:50:20.400 --> 0:50:23.120 policy walks this is one of their favorite things to do, 0:50:23.239 --> 0:50:25.960 is to point out all of these nitpicky little things 0:50:26.239 --> 0:50:30.520 based on mind boggling economics that are really hard to describe. 0:50:30.719 --> 0:50:34.160 We just glanced over the surface of this, but I think, yeah, 0:50:34.160 --> 0:50:36.920 probably we got more right than you'd think. 0:50:37.640 --> 0:50:39.960 Yeah, it's tough to tackle something like this because there 0:50:39.960 --> 0:50:42.280 are people that know a gazillion times and more about 0:50:42.280 --> 0:50:43.080 this kind of thing than we do. 0:50:43.400 --> 0:50:47.040 Yep, and Chuck just said tackle, so he unlocked listener mail. 0:50:49.600 --> 0:50:53.279 I'm going to call this this was from our crowd's episode, 0:50:53.440 --> 0:50:56.640 and this is a classroom hack, a question hack from 0:50:56.680 --> 0:50:59.720 a I think a teacher. Hey, guys, love the episode 0:50:59.719 --> 0:51:02.560 about Yeah, I'm a middle school teacher and crowds are 0:51:02.600 --> 0:51:05.879 my standard environment. Your comments about being afraid to ask 0:51:05.920 --> 0:51:07.759 a question in class really spoke to me because a 0:51:07.760 --> 0:51:10.040 big part of my job is navigating the power of 0:51:10.120 --> 0:51:13.320 language with crowds in my students. There's a simple teacher 0:51:13.360 --> 0:51:16.680 hack that is most effective and easiest, the easiest change 0:51:16.680 --> 0:51:19.800 I've ever made to my communication with students and Aaron 0:51:20.000 --> 0:51:22.319 from New Brunswick, Canada. I will go ahead and say that, 0:51:22.400 --> 0:51:25.080 like anyone speaking in front of a crowd where you 0:51:25.120 --> 0:51:28.120 like source questions, I think this is a pretty good 0:51:28.120 --> 0:51:31.560 way to go. And here it is. Instead of saying 0:51:31.880 --> 0:51:35.120 does anyone have any questions? What I say instead is 0:51:35.200 --> 0:51:38.480 what questions do you have? There must be questions. It 0:51:38.600 --> 0:51:43.040 really works a completely different response from the students. Guys. 0:51:43.080 --> 0:51:47.040 The assumption that questions are expected always prompts at least 0:51:47.040 --> 0:51:49.400 one kid to get the courage, which opens up the 0:51:49.400 --> 0:51:52.799 gates for everyone else who is too apprehensive. Thanks for 0:51:52.840 --> 0:51:55.840 being my first podcast in twenty twelve and for continuing 0:51:55.880 --> 0:51:58.520 to bring joy and relaxation to a tire but satisfied teacher. 0:51:58.920 --> 0:52:00.960 Peace and love and again that is from Aaron with 0:52:01.000 --> 0:52:03.480 an E from New Brunswick, Canada. 0:52:03.600 --> 0:52:05.839 Thanks Aaron, Peace and love back to you too, and 0:52:05.880 --> 0:52:06.760 thanks for teaching. 0:52:07.760 --> 0:52:08.399 It's a good hack. 0:52:08.719 --> 0:52:11.640 It's a great hack. Questions who's got them? I know 0:52:11.680 --> 0:52:15.360 there's some? Don't lie right, and then just get more 0:52:15.400 --> 0:52:18.560 aggressive right huh huh, give me a question? 0:52:19.360 --> 0:52:20.480 Yeah that works. 0:52:20.560 --> 0:52:22.279 If you want to be like Aaron and send us 0:52:22.320 --> 0:52:24.600 a great email and say peace and love that's awesome. 0:52:24.719 --> 0:52:27.560 You can send it off again via email to the 0:52:27.760 --> 0:52:34.600 email address stuff podcast at iHeartRadio dot com. 0:52:35.600 --> 0:52:38.520 Stuff you Should Know is a production of iHeartRadio. For 0:52:38.600 --> 0:52:42.759 more podcasts my heart Radio, visit the iHeartRadio app, Apple Podcasts, 0:52:42.880 --> 0:52:44.720 or wherever you listen to your favorite shows.