“It was the most amazing magic trick I’ve ever seen.” – The Prestige
Mimes aren’t magicians, they just have obstacle illusions.
This is a post about finance. It’s an awesome one, so bear with me.
I’ve always been a bit of a ham. When I was in third grade, I got up and did impressions and sang a song. This was in front of the entire school on talent night, Kindergarten through Senior, and all their parents. My impressions were horrible. My singing was worse.
The next year, I got to play a drunken uncle in our fourth grade play. I’m not making that up. I had a flask and everything, and the teacher pinned the neck tie of my costume up over my shoulder, since drunks apparently can’t wear a tie properly. However, you can bet that I delivered my lines with the best drunken slur a fourth grader can muster.
It was another time and place, where we could make jokes with the idea of being funny. If they did a play like that today, I’m sure that the school district would be shut down, burned, and exorcised from Twitter™ and Facebook®. I mean, the parents in the play were a man and a woman played . . . by a boy and a girl. And they were married. And they didn’t have tattoos.
Sacrilege!
The floor collapsed during the fourth grade play. I guess I was going through a stage.
As I’ve mentioned before, I lived pretty far out on Wilder Mountain. The nearest kid to my house lived nine miles away. The nearest McDonalds™ at that time was a two hour car trip. So, a trip to a magic store was entirely out of the question. But then came college.
Where I was still a ham.
In college, I was living near Capitol City, and they did have a magic store. So, I bought three magic tricks. All three were fun, because they were professional grade, and if you had the mechanical dexterity to open a beer can, you could do very professional, close up magic.
One was a coin trick.
COVID shut down the mint? It makes no cents.
It’s still my favorite trick. I haven’t done it in years, but it’s fun to do. First, I’d show the person I’m doing the trick with (we’ll call them “Mark”) two coins – a United States $0.50 coin, and a Mexican 50 centavo coin. Then, I put the coins into their right hand. By the time the coins are in their hands, it’s not a half dollar and a 50 centavo piece – it’s now a half dollar and a United States $0.25.
I’d then ask Mark to put one coin in each hand, while his hands were behind his back, so I can’t see them. Once each hand has a coin in it, I ask them to hold their hands straight out in front of them. I’d then guess where the $0.50 piece was.
That wasn’t the trick.
Then, regardless of if my guess was correct, I’d bet them something (say, a Coke® or a beer – remember I was in college) that they couldn’t show me the 50 centavo piece.
They’d smile, and then open their hand, and then show me the quarter and look amazed that it wasn’t the 50 centavo piece.
Except the first few times, it didn’t work. At all. It’s not that I messed up the trick, one hand had $0.50 in it, and one hand had a quarter. But the first few times I did the trick, the Mark immediately recognized that it wasn’t the 50 centavo, and knew it was a quarter.
Well, that sucks.
You have no idea how long this meme took.
But then I thought back – at the magic store where I’d bought the trick, the salesman performing the trick had said, “notice how much smaller the 50 centavo piece is than the half dollar.” I tried that the next time I did the trick.
Perfect.
Mark, merely by my suggestion, had developed the mental image that the 50 centavo piece was small. Every time I’ve done the trick using that phrase, and I mean every single time, ever, it worked like a charm. Without saying “notice how much smaller . . .”? Over half the time the person could tell that the second coin was a quarter.
The next refinement was the reveal. Remember when I told the Mark to hold his hands out front, and I’d guess which hand had the fifty cent piece in it? Amazingly, 90% of people put the half dollar into the same hand. Which hand? I’m not giving up all of my secrets.
I would, on purpose, guess the wrong hand after telling Mark not to show me the coins, right or wrong.
They’d smile and tell me I was wrong. They felt awesome – they’d beaten the magician. Obviously, the trick was going wrong.
All part of the plan.
The next thing I said was, “I bet you a beer Coke™ that you can’t show me the 50 centavo piece,” and then they opened their hand to see an ordinary quarter? After seeing the quarter, I’d ask Mark to open the other hand where they’d see a normal fifty cent piece. They were always amazed when I did it right, but in order for the trick to work, I had to say the right things.
The trick paid for itself in, um, beverages and things. And the Mark didn’t mind – Mark was amused, and I got paid a small fee for that amusement.
But the things that sold the trick wasn’t the mechanics and metal, it was what I was saying, and how I was saying it, and, even being intentionally wrong was part of the final sale. You can buy this trick yourself, for about $12 – search “Scotch and Soda Trick” on Amazon.
You’re welcome.
But what does this have to do with money?
A lot, actually.
His version of Purple Rain was awful.
Number One – People who sell stuff know how to sell. Like my magic trick, salesmen do trial and error to learn what works. If you buy a car every five years from a dealer, and they have contact with 30 customers a week, who has the upper hand?
If you’re listening to a politician who’s spent his entire life just getting elected, what likelihood to you have of understanding their real character and values? They probably don’t remember them themselves. If you’re buying a car, a house, or even a burger at McDonalds, they know the game. There’s a reason that every well-trained McDonalds© employee asks, “Do you want fries with that?”
They know the game. McDonalds® knows that a potato costs them pennies, but a basket of fries can go for $3. Profits may be fleeting, but the pant size increase is forever.
One of the tricks that Bernie Madoff used with his customers was to dress very frugally. Despite the fact that he was stealing billions ($20 billion by the best estimate I found), he knew the game better than his Marks. He also was selective with clients – he wouldn’t accept just anyone. No, you had to apply and be approved. You had to know someone.
Number Two – Knowing the trick is everything. When I did the coin trick, only I knew what was coming. It was all scripted, and I knew exactly what the outcome was going to be. When I asked people to let me guess which hand the coin was in, they thought that was the trick. No, the trick was that there was no fifty centavo piece. But because I created the structure, I knew where the trick was.
That’s a tremendous advantage. I can use that knowledge to create a scenario where I can manipulate emotions to get the reactions and responses I want. Why? I control the conditions. I control the reveal.
What sorts of tricks are out in the world?
- “No money down.”
- “I never got your text.”
- “Yes, I’ll hold your beer, there’s no way this could go wrong.”
- “No interest for the first six months.”
- “Housing prices always go up.”
- “CNN – The Most Trusted Name in News.”
Number Three – Things are rarely as they seem. Mark saw only what I wanted him to see during the trick, and I carefully made sure by closing his hand around the coins after I put them there. Then I told him to not let me see when he put the coins in each hand. Why? Because I didn’t want him to see what was really going on.
One of the biggest illusions that most people don’t recognize is that our money is entirely made up. The $ and € and ¥ and £ only have meaning because we give them meaning. The United States dollar has no backing other than . . . the promise to trade it for a dollar. That’s it. And people keep playing the game even though the Federal Reserve™ tells them the dollar will be worth less every year. On purpose.
Oh, and the Federal Reserve©? It’s not Federal, and it doesn’t have a Reserve. Discuss.
Generally, people didn’t believe that the government had a super-secret plan to eavesdrop on all electronic communications from anyone. Then Edward Snowden showed . . . they have a plan to monitor all electronic communications, everywhere. When Snowden joined Twitter® he soon had more followers than the National Security Agency. That’s okay, the NSA follows everyone.
I knew there was a reason my computer has a sticker that says “Intel Inside.”
Number Four – It’s super easy to suggest things to people. This shocked me. One time Scott Adams mentioned that in a line at a copier, if you have to make a copy, all you have to do is have a reason to jump the line. He suggested, “Hey, can I cut in front of you? I have to make a copy.” Note that making a copy is exactly what everyone else was doing, but the request, coupled with a reason, seemed to work. No matter how stupid the reason.
- Yes, there’s a reason you want ice cream.
- What, you thought that was impartial?
- “The Arctic will be ice free by 2013,” – Al Gore. Hmm. Trust me. Next time it really will be.
- Asking them to do you a small favor. Oddly, this creates a pattern where people are much more likely to do a big favor for you later. Oh, while you’re at it, hit the subscribe button. Don’t cost nothin’.
- Never trust a flatterer. I had a boss that, one month after he joined the company, wrote a performance review that would have made me think that I needed to apply for the job of Messiah. Except in my case it made me never trust him. I was right.
- Peer Pressure. People like to do what other people consider acceptable, since being socially acceptable is important. If everyone is doing it, well, I should, too. I went against the grain, and now Wal-Mart® insists that I wear pants from now on.
Number Five – The person proposing the bet may not have your best interest at heart. In the example above, I ended up getting a few beverages. The person involved got an equal exchange. No one was ever mad – if they had been, I’d have told them to ignore the bet.
But.
I used the name “Mark” for a reason. It’s what conmen (ever notice that the Politically Correct Police don’t object to that one?) call the object of their scam. I’ve even been at carnivals where a guy running a game called out, “hey, Mark” to someone walking by to try to get them to break a balloon and win a poster of Gillian Anderson. Only five dollars a dart!
I wonder if the aliens believed in her?
There are probably a few other examples that I could bring up, but it’s late, and I have to go practice not singing. Bonus points if you can tell what two impersonations I did in third grade in the comments.
See, I told you this post would be awesome.
Along this line of magic and the importance of belief systems in the foundations of society, I distinctly remember when I started seriously wondering if Christianity was started by a magician and not a parthenogenic supernatural extraterrestrial transdimensional zombie. (And this was before I had ever heard of Occam’s Razor!) I saw The Sting one Saturday night (with Lisa Headrick, if I remember correctly, hi Lisa!) before squirming for what seemed like hours in a church pew the next morning. As they passed around the collection plate, I remembered Paul Newman’s line (yeah, which I have looked up just now): “You have to keep this con even after you take his money. He can’t know you took him.” and thought of the pirate motto: Dead Men Tell No Tales. Maybe all those good folks on the other side of the road who had put money in this very collection plate were at this very moment just lying around six feet under instead of walking around on streets of gold?
Belief is stronger than steel. Steel builds cities. Belief builds civilizations.
Speaking of magic tricks and money, ever hear of this one?
http://www.antiquemoney.com/misprinted-black-federal-reserve-seal/
The power of belief as taught by The Riddle of Steel from Conan:
https://youtu.be/wgN1sLcAQnw
I haven’t. It’s funny those are showing up . . . !
Before 2009, I had occasionally wondered how currency was created and what backed it. I had imagined it was gold. Once correct, but dated by 38 years. Probably a great deal of the population assumed the same.
After the Lehman explosion or my red pill moment, I did a lot of research, discovered our currency is backed by nothing, its creation is outsourced by Congress to the Federal Reserve and currency is created by debt. And when our currency was backed by gold, from 1933-1974, only foreigners could get gold for dollars. Who deigned that??? Ugh.
Learning this was a sad moment for me. What if you’re not a fan of debt? What if you think debt (except for homeowner debt until around age 50) is a bad thing? Just great…
Then it turns out we have something de Gaulle called an ‘exorbitant privilege’.
Our government can print currency backed by nothing and buy tangible goods and services because the dollar is the reserve currency and it was supposed to be backed by gold, but as of 1971 it’s backed by nothing except our economic and military power.
Talk about slight of hand…
Oops. What I meant to say was gold ownership outlawed for US citizens from 1933-1974. That would never work today. We were a different country then.
Foreigners could get gold for dollars until 1971.
If you think the currency is depressing, you need to learn how reserve banking works.
A 5% reserve doesn’t mean the bank can lend out 95% of deposits. It means a bank can lend out 19 times what they have on deposit. Banks create money out of nothing but ledger entries, and then charge interest on the money they created.
Reserve rate is now 0%.
Yup. We’ve been sending them pieces of paper for decades. They’ve been sending us stuff. For Paper.
That we just printed.
There is a terrible side effect to this.
This “privilege” is like a drug, it eviscerates our infrastructure, expands the ranks of the money manipulators and makes us weak because we cannot produce many goods or services by ourselves. It also denigrates the value of physical labor.
We can recover but it will be a very difficult road.
The weakness is a real thing. It’s a rot.
The great magicians in our time as it pertains to money are the people who have figured out how to siphon money out of the system without doing anything, owning anything or adding an value whatsoever. They are just private toll takers who get a piece of everything that happens.
Horribly common. And rich. Like Bloomberg.
We obey the law because we have a little policeman in our heads that tells us to obey. In reality, there aren’t enough police in the entire country to patrol just New York City if the people didn’t want to obey.
You are very correct – I think that’s why civilization can exist. But it’s breaking down. Fast.
What sorts of tricks are out in the world?
“We the People of the United States,” instead of “We the 1% of the 1%,” the founding lawyers who swore themselves to secrecy for life about their constitutional deliberations. Real transparent, those guys.
our money is entirely made up
That’s not correct. Americans do their transactions in dollars and surrender a portion thereof each year, because if they don’t government employees kill them. US Treasury bonds and the dollars they back are extortion futures. That’s why US Federal Reserve Notes (dollars) have a privileged legal position over Ithaca Hours.
The US national currency has hyperinflated to worthlessness twice, did you know that? Here’s a US monetary history book: https://mises.org/library/mystery-banking
Ricky: I started seriously wondering if Christianity was started by a magician and not a parthenogenic supernatural extraterrestrial transdimensional zombie.
Oh, the monster in the sky, pull my other leg. Give me your wealth to build this pyramid, otherwise the king will lose favor with the gods and can’t make the Nile flood each year to renew your fields.
But it is made up. The fact that everyone is playing the game doesn’t make it less of a game.
It’s just a popular game.
“When the institutions of money rule the world, it is perhaps inevitable that the interests of money will take precedence over the interests of people. What we are experiencing might best be described as a case of money colonizing life. To accept this absurd distortion of human institutions and purpose should be considered nothing less than an act of collective, suicidal insanity.” – David Korten
Excellent, excellent quote.
The best explanation of “What gives money value?” I’ve ever heard is if the government that issues it will take it for payment of taxes. When California issued IOUs to vendors during the financial shenanigans of 2008 and took them in payment of taxes those same vendors owed, they were issuing their own currency. Was it unconstitutional? Silly peasant, we live in a post-constitution country. And be wary of eCoins. Governments *hate* competition.
Yes. Post-constitution. Words mean . . . nothing to the great bringers of light.
Wild guess…William Shatner and Howard Cosell
Cosell is one of the two.
Johnny Carson
No.
Redd Foxx
Well, Lamont . . . No.
I was originally going to say Richard Nixon and Dean Martin. If Cosell is one, then maybe Mo’ ham, Ed?. “I want Joe Frazier!” Ali?
None of those listed.
Ed McMahon? Heeerrrreee’s Johnny
Nope. That was after my bedtime!
I was going g to pick Nixon as he was the only famous person I knew of ’round about 3rd grade). But no.
So… Hmmm… John Wayne? Batman and/or Robin? I’m thing Mr. Rogers or the cast of Sesame Street are right out.
Yup, It was John Wayne.
“CNN – The Most Trusted Name in News.”
Now, I get it. It was a warning all along.
John Wayne
Winner!!!!
Hah! So not Big Bird.
Maybe you could make all that gold from the WTC vaults magically Reappear !!!
How much is gone? They never say.
Gold certificates. Just paper.
That really took me back to an ancient world, very long ago (mid-1960s) in which I was just a little-bitty physicist. My elementary school was K-8, and the grade 7-8 science teacher ran an after-school Science Club into which he’d admit even younger kids, if they were bold enough to ask, and I was. In my fifth-grade year, he and I electrolyzed water into its constituent hydrogen and oxygen and stored the resulting gases in a well-stoppered glass Coke bottle, the heavy-duty returnable kind that were popular then. Two-thirds hydrogen by volume, one-third oxygen, a nicely explosive mixture. We took this bottle to the PTA meeting that evening, where he was scheduled to demonstrate some Science Club kind of stuff. He got an alcohol lamp going on a table up on the platform, and I unstoppered the bottle and quickly held it up to the lamp flame. A very satisfying BANG! resulted. This was followed by my telling the startled parents what we’d done, and showing them the water droplets inside the bottle, explaining that those particular water molecules had just come into existence, brand-new ones, although assembled from the constituent atoms of the “old” water molecules supplied by the Indianapolis Water Company.
Point being: this (I) was a kid holding on to a heavy glass bottle while an explosion took place inside, not so awfully far from a small crowd of parent types. I suppose now that Mr. Bertalan had probably already done this a bunch of times and had reason to think the bottle itself wasn’t going to be converted into high-speed glass shrapnel. And it wasn’t as if no precautions were taken: he did make me wear safety goggles, and he also required me to wear his heavy winter coat during the demonstration. But still … can you imagine this being allowed to happen today?
All right, maybe it shouldn’t. Sure was cool, though!
Yup. We now live in a danger-free zone. It’s mandated, of course.
Too late now, but my guess was Rich Little, as that would cover nearly every celebrity of our childhood.
To be fair, I was doing impressions of Rich Little doing impressions.
Smoke and mirrors, duct tape, baling wire, rubber bands, they don’t last forever. Plan accordingly.
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. Or protect.”
F.A. Hayek
Excellent name and quote. And it all comes crashing down in the end. Every time.
Thank you for talking about the Federal Reserve most people don’t realize how much control they have up to a point and that they are the working man’s only real nemesis. I think they will pull it (start raising rates) if Trump elected.
Eliminating the Fed is the best thing we could do for our economy . . . except . . . who picks the money then?