Big Swedish Coins, Italian Women Pole Vaulters, and the Future of Money, Part I

“Dollars? There’sa wherea my uncle lives.  Dollars, Taxes!” – Duck Soup

We’re gonna need a bigger purse . . .

This post was inspired by a great e-mail from Ricky, which makes it the second reader-inspired post I’ve done this month.  Heck, it’s the second in seven days.  We’ll see the post I was originally going to do next week, probably.  I plan these posts out weeks in advance and have a backlog of over a year’s worth of planned post topics, but the requests are just so much fun.

Here’s the basic thesis statement in Ricky’s words:

“I’m right there with you that collapse is coming to our house of cards because of the way they were dealt.  But after all of the individual survival dramas play out, survival ultimately depends on a community rising from the ashes.  And the glue of a community is ultimately the deals made between its individuals.  And money is the encapsulation of those deals.

“So when the dust settles and the smoke clears and the phoenix rises from the ashes of the eagle’s nest, there’s gonna need to be a reset on money.  On what it is, and how it works.”

There’s a lot more information from Ricky which may lead to yet another post, but this statement alone is a great taking off point.

To address this question, let’s go back to first principles.  First, I’ll restate:

What does money look like after the collapse? 

I’ll start from first principles so that everyone has an idea of where I’m coming from.  The most basic first principle about money is this simple question:

What is money?

I can’t answer any better than to say that money is an idea.  Sure, you’d look through all of the piles of money I keep at Chateau Wilder and say that those stacks of cash and piles of gold and silver doubloons were money.  And they are money.

Heck, the Swedes once mined and refined so much copper (around the year 1600 A.D. or so) that they couldn’t sell it all, since the tuba, which uses approximately 89% of world copper production had yet to be invented.  Being crafty Swedes they came up with the idea that the best way to use all that extra copper was to put Sweden on the “copper standard.”  Since these Swedes were apparently very strong but not particularly bright, they took the concept to 11 and used nothing but copper coins as currency.  Okay, sure, it’s silly.  But we can make it Wilder-level silly:  let’s not use lots of small coins, let’s make ludicrously large coins.  I mean the Rosie O’Donnell of coins.  Some of the coins they used were quite O’Donnellesque, with the largest one weighing about 45 pounds.  You could get your lifting in by just going grocery shopping, which may explain why Planet Fitness® franchises were so unprofitable in Sweden in 1620.

Yes, a 45 pound coin.  Don’t get me started about how large their pockets were, but as a hint they could hold an entire twelve pack, a dozen clowns and the case of Avengers:  Endgame.  FYI:  This was a 10 “Daler” coin.  Daler came from the Bohemian coin name “Thaler,” which later became Dollar.

In the simplest definition, money is just something that we agree is money.  Money is perhaps the most abstract concept people deal with on a regular basis, and we’re forced to deal with it practically and emotionally even though most money doesn’t exist physically even as a dollar bill:  it’s a ledger entry on a balance sheet on a bank, and it’s not backed by anything.  At all.

Counting spare change was how the Swedish women trained for the 1644 Olympics®.  But that’s back when men were men.  In 2019, however, “men” can be pregnant and “women” can drive well.  Soon enough?  Men will cry and be in touch with their feelings.

Money can be a gold coin, or a promise for, say, a bushel of wheat or a cigarette.  Money can also be a string of numbers or just a piece of paper.  As long as there’s someone who will trade you a rifle or a beer or a T-34 tank for it, it’s money.

We’ve been dealing with “money as just an idea” for so long we even have a name for money which has less backing than a third Hillary™ presidential campaign:  Fiat© money.  Fiat comes from the Latin for “found on roadside dead” – oh, wait, that’s Ford®.  Fiat™ is “fix it again, Tony,” which is more literally translated from the Latin as “let there be.”  This means that fiat money is “let there be” money.  Those Italians were good with language.  It’s good when we keep Italians working on language, wine, and hot Italian chicks doing pole vault because Italian engineers can’t seem to figure out how to keep oil on the inside of the car.

In the best version of Europe, Germans chicks do shot put and car engine design.  The Italian chicks do pole vault.  Preferably in slow motion.  

Money in the United States today is fiat money, made up money.

The net result is that we send money that we printed from cool paper and people from around the world fight for the opportunity to give us oil, gold, PEZ®, flat screen televisions, and other physical things.  Heck, they even ship it to us using our made-up currency as payment for the shipping costs.  To top it off, if we’re feeling lazy that day, a guy in comfortable shoes working in a windowless office in Washington D.C. will press a button and a computer will spit out strings of digits that we’ll use for money because paper is just too much trouble.

If the United States doesn’t have enough money, the solution is simple:  we’ll print (or make up) some more.

If you’re shaking your head wondering how we convinced the world that this was a good deal, well, I am too.  It might have something to do with all of those nuclear missiles and the strange thing that happens to world leaders that announce that they’re going to start trading internationally in currency other than the dollar.  Or, heck, maybe the United States has a track record of really being super fiscally responsible?

Yes, there are many good reasons to take the dollar.

Well . . . no.  In actuality, the United States defaulted on the very first debt it ever took on, represented by the Continental dollar, which was supposed to be (at the start) the same as a Spanish silver dollar.  How badly did we default on that debt?  Well, we ended up printing $241 million dollars, which doesn’t include the huge numbers of British forgery notes that were created during the Revolutionary War to mess with our economy.  It was like we were trying to pay for muskets and wooden teeth with Tribbles® instead of real money.  It was worse than Tribbles© – at least you can make good soup with a Tribble if you pluck it right.  Nope – most of the creditors ended up with nothing, which makes a pretty poor soup unless you’re fasting (The Last Weight Loss Advice You’ll Ever Need, Plus a Girl in a Bikini Drinking Water).

Worst thing about Tribble© soup?  The bones. 

This particular default stung our Founding Fathers Parental Units (it is 2019, after all) so much that when the Constitutional Convention met, they added into the Constitution that “No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts  . . . .”

So, the United States learned its financial lesson and never ended up with financial problems again.

Just kidding.  We’re still a financial basketcase.  But we have nukes.

I hate to leave you on a cliffhanger, but this is now an average length post, and I’ve already written more than you’ve read here in Part 1 for Part 2, and I haven’t put the funny bits in yet.  So, more coming on Friday which will work towards answering the thesis that Ricky put forward above.

Thanks, Ricky!