So because Redwood is having technical difficulties, they asked me that if I would just give my presentation. So my name is Fred Gottman and I’m an English professor. And if that’s a we have the author, you are poor quality. OK, well, thank you. I’m an English professor. And I guess in some ways that might be a strange person to write a book about money.
But it’s actually even stranger than that. I was actually writing about food. That’s what got me into this book about money. I was writing about food and investigating global hunger and global grain and Wall Street’s relationship to it. And this got me into trying to understand the global derivatives market, which was based on grain and livestock and everything we eat.
And I came to this conclusion, having studied this for about a year for this magazine article and this book I wrote called Bet the Farm, the last book, that money was a fiction. I was very excited when I realized that money, this thing that we think is so real, is actually something we’ve made up.
And so I met with some economist friends of mine. I live in New York, and so I’m surrounded by bankers and economists. I said, you know what I discovered? Money is a fiction. And they were like, yeah, we know that.
And so that got me thinking as an English professor, if money is a fiction and they were like yeah we know that um and so that got me thinking as an english professor if if money is a fiction and i’m an english professor i should know more about it than the bankers because i am an expert i am an expert in plots in characters in metaphors and so i thought i would press money a little bit like this i would say okay if money is a fiction it should have a plot it should have characters it. It should have metaphors. And I started looking at the history of money all the way from the first money from about 65,000 years ago to money as it is today. And what I found is something wildly uncanny, which is that the history of story and how people told stories parallel kind of went in lockstep with the history of money and
that’s when i really smelled the book that was like i get it this could be very interesting money is a lot more mysterious than i thought it is and i than i thought it was and i thought i would pursue it um so i’m gonna i’m gonna give a little slideshow here uh about some of the things i discovered and I can go on screen and I one of the first things I one of the first things I’m sharing my screen now application window chrome tap oh my god this is like so here it is share can you guys can you see see my shared screen, people? Can you see it? Can somebody tell me in the chat if they can see it? Because we have had so many technical glitches. Yay! Okay, so there’s the money plot. Perfect. So let’s do this.
that um money was a lot more mysterious i was wondering why i thought it was not mysterious and part of the reason is that we’ve all been living in another person’s money plot the other person’s money plot is this gentleman with the white hair at the top his name is adam smith and he was really the first great modern economist and he wrote this book called the wealth of nations in 1776 and his money plot he conjectured that money had begun with barter and you can see I was talking about barter in the chat a little bit earlier only half kidding about the
future of money but he conjectured that money had come from barter people trading carrots for scissors obviously um now this was probably a good conjecture on his part because he lived in England at the time of a lot of shopkeepers and everybody was trading madly all the time uh but in fact as ethnologists and anthropologists and archaeologists uh started looking into this theory this story he had made up they found absolutely no evidence whatsoever that there that before there was a money economy there was a bartering economy. In fact, quite the opposite.
What they found is this richness of what’s called pre-market money and pre-market economy. And so the story of money really begins about 65,000 years ago in the coastal hinterlands of Kenya. And so what we’re looking at is a very fancy resort where you can spend probably five or six hundred dollars a night but just imagine it’s not that imagine that this is a prehistoric community of very ancient people we don’t really call them primitive because in some ways they perhaps were more advanced than we are and one of the things that archaeologists
discovered at this site not too far from here were um these uh these are they kind of look like beads and each one is about half the diameter of a penny and they were uh marked all these strange i know they kind of look like bagels but they’re much smaller and they were not edible And they were each marked with all sorts of like like like designs and strange filigree, almost like you would see around the edges of a dollar bill.
And nobody knew what it was. They were trying to figure out what this stuff was. And so they did a chemical analysis of it and they found it was all calcium carbonate. And they were like, OK, it’s calcium and they found it was all calcium carbonate and they’re like okay it’s calcium carbonate what else is calcium carbonate well yes the the eggs of the giant black-necked African ostrich were also entirely calcium carbonate and so clearly these ancient people were making what was increasingly appearing to be some sort of very early symbolic token of value out of the eggs of the ancient black-necked ostrich.
Okay. And then they also found something else they were doing with the eggs. These eggs were huge. Each can hold about a quart and a half of anything you like. And clearly these were storage containers. And one of the first things, you know, as an English professor, I think about when I see a container is that money is also a kind of a container in the sense that money can contain anything.
can contain anything. Anything you like can contain a trip to the Galapagos. It can contain some toothpaste. It is what Karl Marx called the general equivalent. It can contain anything. And these containers contain food. They contain water, right? And so they were like very early ways to ensure against awfulness of the future, chaos of the future. They were a sign of security.
And they were also a way, if we have a lot of these storage containers full of all sorts of things we’re going to need, they’re a way that allows people to project a narrative or a story of themselves into the future, as opposed to always being, you know, frightened and shocked by everything that happens minute by minute so instead of living this kind of animal like existence we can begin to live the human existence based on a narrative in a story that we create about ourselves and in fact what we see here is money’s first metaphorical leap came from those
ostrich egg containers made through a lot of labor and a lot of energy encrypted into a bead that’s right so we’re encrypting kind of like a metaphor encrypts meeting meaning encrypting the meaning of security encrypting the meaning of risk aversion encrypting the meaning of defining who we are going forward into the future into a bead and uh these beads of course were as i say took a lot of energy and were most likely worn around the body but something happened something happened somebody must have said to somebody somebody else
if you wear these beads that somehow this idea of security will be translated to your body and this is called the anthropologist called this sympathetic magic it’s the same thing that happens with a voodoo doll with somebody you know you take some air from somebody and put it on the doll well there’s sympathetic Mac magic between the container this is what the anthropologist tell this and the bead and in fact that got me thinking about that money is a kind of a ghost story that in other words these beads are possessed by some sort of spirit
and in fact that is the case with a lot of primitive money we have tooth money up here on the left and bone money up here on the right and of course we have ancient gong money from burma and vietnamese money that actually can sing and so we see a lot of primitive money is personified in the sense that it is from there’s skull money but the idea that money can sing that it can dance that there’s some sort of spirit inside the money what is that spirit that is the essential nature of money the spirit of money is that which is supposed
to give us security give us a pathway into the future and protect us and protect the society okay so around the 19th and 20th century a lot of anthropologists and ethnologists got really fascinated by this and started to go out into the into the world uh and try to discover what they could about primitive money and the most famous of these guys is this polish gentleman who uh graduated from the london school of economics and his name was bronislaw malinowski and right around the time that world
war one broke out and europe was a complete disaster he left town he took off and ended up here I’m sure you can recognize him he was the one in the middle and he is here among the Trobriand Islanders of New Guinea he went to Micronesia and he lived with these ladies and gentlemen of the boyola group and he lived with them for more than 10 years and he wrote a book called the Argonauts of the South Pacific, a very famous book that he published in 1925. And he was trying to understand their economy. He was trying to understand their economy. And what they kept on telling him is just wait, just wait, Mr. Malinowski, wait till you see the magic of plenty.
Malinowski, wait till you see the magic of plenty. And of course, you know, as any economist wants to see the magic of plenty, I’d love to see the magic of plenty. And so he waited and the magic of plenty, they called it Kula. And Kula happened to be a journey. And if you can see, if you can see my cursor here, this was Malinowski, this is from Malinowski’s book the Argonauts of the Western Pacific and he actually made this map of the so-called Kula ring and the uh the boyoas where he was the the group he was with were here in New Guinea and these are actually fairly
large distances uh hundreds of miles and um what he watched were these islanders felling great trees casting magic spells into the trees making outrear canoes and leaving. And they would go from one island to the next and to the next. And the entire journey would take more than 10 years. It was the most epic journey he had ever witnessed.
And what were they doing? Well, they weren’t buying and selling things. witnessed and what were they doing well they weren’t buying and selling things what they were doing is they were taking white shell armbands from one our island and trading them from for red shell island red shell necklaces and armbands and collars on another island which they would in turn go backwards and forth from island to island exchanging exchanging shells it’s what I call the shell game because like as I say that that money
is a ghost story money is also a shell game and the shell was the first great reserve currency on earth it spanned from Micronesia to Africa toicas to asia but malinowski for all of his brilliance could not see the money why would men risk in fact somebody is saying here shells are also calcium carbonate yes that must be that must be the chemist among you indeed um and he asked why would men risk life and limb to travel across huge expanses of dangerous ocean to give away what appeared to be worthless trinkets he
couldn’t see the money and in fact this this reminded me that that most money is invisible anyway just like it’s a ghost story and just like shell games hide what’s beneath them really most money on earth is invisible only about five to ten percent of all money on earth is in only about five to ten percent of all money on earth is in any material form anyway the rest of it just kind of flickers on a screen in front of you so in fact one of the major characteristics of money is its invisibility just as one of the
major characteristics of the future of course is invisibility. But what the shell game was showing was the people who finally returned from the cooler ring showed that they had status, that they had gone through chaos and danger and returned safely. That they had some security now that they did not have before, and also that they had speculated, that they had gambled.
and also that they had speculated that they had gambled and of course the history of money is very closely related to the history of gambling which is of course a form of prognosticating the future and in fact a lot of these shells a lot of these early shells were used in games of chance and trying to predict the future just like you would ask your investment advisor what do I invest in what’s the market going to do a lot of people always ask me questions when about this book what’s going to happen next and in fact i say
to them well you’re that’s exactly the essential question about money and some ancient soothsayer some ancient seer some ancient poet had cast some sort of language onto these shells to give them some sort of essential spirit of money that could help us make our way through the future and in fact what we see is the greatest currency in prehistoric times is made of the snail shell the cowrie currency and we can see it in different manifestations here including wampum at the bottom that of course in Rhode Island were very familiar with with
wampum which of course told a story wampum not only was wrapped around the body and a form of protection and security but it actually was a form of using language in order to memorialize treaties and areas and narratives about who owned what and whose territory was what so language and money have always been very very closely related and you can see also here that the wampum and the shells are very often worn around the body as an emblem of safety encrypted with this notion that in that you are contained by these shells,
by this money, that you will then be safe, magically made safe. So this was a very popular form of currency. And of course, the other thing we have to remember about it, which is important in terms of the history of money, is one of the reasons they used shells was because there were so many of them. So this is not scarce.
Money from the beginning is not a scarce resource. Quite the opposite. It is an infinite resource. And so this works for a very, very long time. And particularly among what we generally think of as the hunter-gatherers, those people who wandered about the earth right maybe staying someplace for a while moving someplace else right um until something else happened about 10 000 years ago and people started staying put uh and the first great inland civilizations were in ancient sumer and they depended upon grain and grain as we all know also has spent a great
deal of world history as money grain and livestock both have been have been used as significantly as money and in fact they are still today the underlying values of the great commodity markets in this country and across you know across the earth the underlying value the first derivatives markets were ingrained now imagine you’re a hunter-gatherer and you’re walking along and all of a sudden you see some other guy he’s figured something else out he is engineering kind of like bitcoin he is farming his own money he’s enclosed in area he’s got he’s making his own grain and he
also has cattle right and he’s also he’s not only domesticating wild grain he’s domesticating wild beasts and he’s programming them kind of the way people program and mine and farm for Bitcoin. You can see these two animals are in lockstep and they are programmed to go back and forth and back and forth in straight lines. And their lives are programmed. Their lives are programmed from the time of their birth to their death, to their mating, to everything about it and so once again we have a different
kind of money story a different kind of money plot more control over the future through money through grain money which is domesticated and through livestock money and this makes a great kingdom and a great king and one of the first great kings of all is of course the great Asher Bonipal the great sumerian king he’s so great you can see that he’s so much bigger he’s so much bigger than these these little people here he’s you know he’s the great king and these people are just so small compared to him and who are
these people anyway well maybe these people have something to we ever see those kinds of strange signs because that programming of the future and that great wealth led to the first writing cuneiform writing and here’s some samples of it here’s some samples of cuneiform we can see uh this kind of a very beautiful uh set of it here and it’s kind of half pictogram and uh and half alphabetical and there’s proto cuneiform and then it gets more advanced as you go on and here’s a big chunk of it and literally they the archaeologists in ancient sumar sumer uh found
hundreds of thousands of these clay tablets and it’s apparent that that um well one of the things that’s apparent they found is that if you look down vertically the first image in each of these lines of cuneiform is the same and so this ancient uh not ancient this 19th century bishop of zealand uh bishop munter uh suggested that that meant king and at that point all the philologists in the 19th century started madly translating uh this ancient cuneiform script thinking for sure they were going to get the
history of king ashurbanipal and the great epic of King Ashurbanipal. The other thing I want to point out is that the early cuneiform, of course, the conjecture is that before they were writing in two dimensions, the great wealth of the king was in tiny little figurines, three dimensions. So in other words, for each cow we had, there’d be like a little cow face like this Egyptian hieroglyphic down here of the ox head but then somebody realized all they had to do is press that three-dimensional figure onto the flat clay and there you have it and it can be
infinitely replicated and so a was for money you can still see for instance a lot of the linguists and archaeologists have noted that the a in fact is you can still see the instance a lot of the linguists and archaeologists have noted that the a in fact is you can still see the ancient relic of the ox head turned upside down what was on what what was written they finally they finally translated it and what they discovered was the whole thing was a list it was just a big list the great Ashurbanipal has 27,000 bushels of grain. The great Ashurbanipal has 87 goats. There is no story in the first writing. There is no plot. It was a list.
There is a whole intellectual and scholarly field among the Germans called List in a Shop, in which they studied the ancient lists. And in fact, we can still see that lists are very closely related to money, right? These are hieroglyphics, a list of accounting. And this here in the middle is the first double entry bookkeeping lists of medieval money.
And of course, we still call stocks listings. And then, then of course we have BuzzFeed which is all about the lists and and I don’t mean this jocularly I mean the list still has cash value as BuzzFeed was valued for one and a half billion dollars and it’s and it’s it’s a company made almost entirely of listing so before there were great epics before there were great histories the first money I mean sorry the first the first writing was accounting and that is a very deep idea the first thing that
people wrote about was money and the first writers and poets were accountants and that blew my mind totally blew my mind and then something else blew my mind but in a different way and in a kind of a dark and unsettling way which is among among the lists and among the things lists are the the great Ashher Bonaparte has concubines he owns women and this led me down a whole other track it had never it well of course I knew such a thing that there’s such a thing as concubines but it never really occurred to me and I never really fully embraced this disturbing idea that
a woman’s body was money that a form of ancient money is woman’s body and here are concubines and you see that they are in fact they have their shells or their ostrich necklaces they are covered in different ways with for instance their price ancient slave traders uh in uh the east coast of africa before the the later west coast slave trade would actually price female slaves concubines with the ornamentation that contained them that was their price and you can see and what I followed was that in fact many of the rites and metaphors of marriage are ways of perhaps obscuring or hiding or civilizing these ancient ornamentations and pricings of women’s bodies.
in a modern malaysian woman a modern malaysian wedding with a modern malaysian uh bride and groom the husband as part of the ceremony is actually harnessing the wife uh as though she were cattle or chattel or capital and so we can see this unsettling history coming all the way through in fact to this 20th century idea of the go-go 1980s with this idea of the trophy wife that the wife still to many people many very rich men in fact stands for their status their security going forward and i spend some time in the book an entire chapter talking about the history of the
trophy wife and where the word trophy comes from and the word trophy actually originates from the ancient greek word uh for trope which means turning it’s also part of the history of the word metaphor which turns one thing into the other and it was when you had a battle when the other side turned and took off what was left after they turned away were their trophies the flags the Spears and of course the ultimate thing these people left behind were their wives who became the coffee concubines of those that had been conquered and so you can see a very sad history here of women being used as money and women standing for a certain kind of
money what we’re seeing here are four versions of a woman known in ancient mythography as Persephone and she is the daughter of Demeter and she is the goddess of grain and so again we can see this the the relationship of domesticated grain domesticated cattle and also the idea of possessing many wives perhaps in prehistory and an archaic history and what we see here is another God is abducting her and raping her and the God that is doing this is the heavy metal God and his name is Pluto pluto and i i don’t use the name
hades i use the word pluto because pluto gives us words such as plutocracy and plutonomist because the god of the underworld pluto was the richest god and of course there’s great there’s a great history of underworld gods and they are always the gods, and they are always the gods of metal. And here what we see is one way of looking at this rape, this mythological scene, is one kind of money giving way to another kind of money.
In the sense that the older money, the grain money, is being subsumed by a newer kind of money. A money that we still recognize very commonly today, and that’s coinage. We see this most clearly, and I think most commonly, in the myth of Midas, in the myth of Midas, who of course is a tragic myth tragic myth and again in this very strange uh conjunction and lockstep of money and story tragedy appears in ancient greece around 500 bc that’s the exact same time as precious metal coinage appears so this idea of a tragic rape and a tragic scene occurs at the same time as there is this other mythological figure, Midas. And we understand his tragedy, too. You know, the Midas touch turns everything into gold and Midas is very greedy. There is only one thing Midas loves in the world, and that is his daughter. And of course, when he touches her, she unfortunately turns to gold.
her she unfortunately turns to gold now Midas in one version of the myth eventually is able to wash his hands of the Midas curse and he washes his hands in this river the the pactolus river on Turkey’s Aegean coast in ancient Lydia and this river flows with a substance called electrum maybe that’s why they thought that Midas washed his golden touch off in this ancient river and electrum is a mixture of gold and silver and it was out of this that the first precious metal coin was minted again around the middle of the
5th century BC with this figure of the lion which is the figure of an ancient Lydian King his name was all yacht ease and his son was the great creases as of course we all know the expression rich as creases because he was the richest of all the ancients and of course you know precious metal coinage is is perhaps the most tragic form of money why do I I say that? Well, of course, Croesus had all these coins with his face on it until Darius came up from Assyria and made a barbecue and cooked Croesus
and took all of his coins and melted them down and put his face on it. And then, of course, Alexander the Great melted all of Cyrus’s and Darius’s coins and put his own face on them so you have the model of tragedy a great man a great king who is then completely brought low and destroyed and of course the the Romans loved this idea and the Romans just really put all their faces yeah that’s why I call it ancient Facebook this was their way of communicating and not only communicating but spreading their political power and
their story because you had all these different ancient Roman coins with all these different treaties and houses and commemorations and now as I say you said you have a political story which has been firmly ensconced in money. It’s been completely politicized. And the Romans are the first to make money into a form of political propaganda.
But, of course, this leads to another problem in the history of money having to do with metal. And this really comes to a head around 34 B.C. And we can see these ancient Romans here. Hollywood has a way of knowing exactly how Antony and Cleopatra looked.
They looked exactly like Elizabeth Taylor and Richard Burton. And so we can see ancient Cleopatra here, who is, you know, I don’t know how they could get away with this today. Clearly she was not a white woman, but you know, that’s, I guess, Hollywood in the 1950s. But you can do you it is true though that she was covered with gold that Cleopatra and Egypt had tremendous stores of gold and there is Richard Burton there good old Anthony covered with gold so around 34 BC the Roman triumvirate led by Octavian declare war on Cleopatra. They want pretty much, you know, they want money. Anthony, of course, sides with Cleopatra. Civil war breaks out. You have these famous battles in which hundreds of boats are sunk. Anthony runs and Cleopatra go to Africa. They commit suicide together.
runs in in Cleopatra go to Africa they commit suicide together and then of course Octavian declares himself Augustus the first great ruler he brings all the metal back to Rome and Rome is rich as creases Rome builds aqueducts and Rome builds spas and they import all sorts of elephants and animals and fresh grapes and oysters from England and orgies and of course any economist knows what comes next from boom you go to bust and that is exactly what happened a decade or two later when Augustus was no longer the Emperor Emperor but his stepson Tiberius was and
Tiberius was famous for being depressed and he looks depressed again in this famous bust of his and Rome was in turmoil their economy was in tatters they had gone from boom to bust and the plebeians were threatening to burn the senators alive because they had nothing to eat and so they the senators went went to one of uh tiberius’s 20 villas in capri here’s one of them with an artist rendering so what do we do emperor and he said uh get me marius sextus and marius sextus was a an ancient mining magnate in spain
and so they brought him to rome and this was was his welcome they brought him to the tarpian rock which you can visit today if you go to Rome if we ever can get out of our homes and they brought this is not Marius Sextus but it’s one of the many people they brought to the edge of the tarpian rock and then you can see what they did you get flung off ceremoniously and executed and soon thereafter Tiberius took all of wealth the mining wealth of Sextus Marius and minted a million gold what were called sesterces at the time and the Roman
economy got back to go to in order But that was a problem with metal, which is that it turned boom into bust, and you always needed more. And this was a problem the Romans had increasingly as the empire failed. And we go to the Middle Ages, where there’s a very new story of money, which is really based on the apocalypse another a new kind of story takes hold in the medieval times and that is the end is near and of course there was the bubonic plague Europe was kind of a lousy place at the time the reason I
focus on Europe and not Ethiopia and Asia is because the Europe of 500 was a primitive savage place. Yet the Europe a thousand years later was the most advanced and nasty and violent, you know, world dominating violent place in the world. And that was because of their mastery of money, the commercial revolution.
I spend a lot of time in the book talking about apocalyptic thinking and what it did for finance because of course there’s that hidden word in finance theme which means the end finance and this happened in the Middle Ages and the commercial revolution of the Middle Ages finance is the art of the end so think about for instance your IRA you’re thinking in Reverse You’re not looking forward into a future that goes nowhere.
You have an idea of there will be the end, and you start counting backwards from that. The same thing is with a mortgage. The same thing is with a line of credit. A mortgage is interesting because it has that little word mort in it, death, right? And so in the medieval times, we realized you can start counting backwards. And this is what the great commercial innovators of the Middle Ages do.
They start an incredible credit economy based on calculations of what things will be worth when the transactions are finished. And so you have the great wealth of the Medici’s. And in fact here is one of their great palaces I mean these guys were rich they were rich as hell and this gentleman here who looks not very happy is Pope Innocent IV and in 1250 I know we all know what was going on in 1250 you know I got fascinated I really went down the rabbit hole here on medieval time and um in 1250 there was a big council and that was the time they they declared that all
cardinals wear red hats and he also declared something else which has had unbelievable reverberations into modern corporate history and that is he declared that the church was a, a what’s called a personae ficta. In other words, the corporation was a person and that anything, like if you defaulted on a mortgage for the church, you were actually harming the body of Christ by doing that.
And so you could you know you could be anathematized for doing such a thing this idea of corporate personhood has of course come down to us you know the idea that corporations can have freedom of speech that they can have political speech and that they have all sorts of powers and this is a complete fiction of course this idea of the corporate body being the same as an individual body and it comes from the middle ages the medieval period is the real turning point in the history of money from small money to big money and of course they can’t get
over gold though even with this tremendous credit economy they still can’t get over the fact that they need some sort of gold as an underlying value. And so of course we here see in the left the greatest medieval merchant adventurer of them all, Columbus. And then here we have Mr. Cortez and Mr. Pizarro.
And in both the case of Cortez and Pizarro, they are about to take the king of Tenochtitlan and the king of the Incas captive so that they can trade them for gold. Of course, Cortes knew that the currency of the ancient Mexicans of Tenochtitlan, their currency wasn’t gold. Their currency was cocoa beans.
But they didn’t care. All they wanted was the gold because gold was the key to the mercantilist economy um and a little bit later people showed up in america and they had a very different idea there’s uh there’s john smith the virginia virginia colonies up here and then down here we have plymouth and one of the things the pilgrims forgot when they left the evil flesh pots of Europe, right, that what had now come to be seen as this sinful agglomeration of politics, church and gold.
They fled. They came to the new world and they forgot to bring enough money. And this is a key essential part of the history of American money, which is from the start they realized that money was a fiction. Money could be something that they simply agreed would be money.
And so I have two samples of colonial money here, South Carolina $60 bill and here’s a Pennsylvania one third of a dollar bill. And these had no underlying value or perhaps they had an underlying value in rice maybe or whiskey or something like this but there is no sense of what that dollar actually was worth and one of the big issues pre revolution was traveling from one colony to the next how did you exchange money what were the exchange rates nobody could ever figure that one out until this gentleman came along Alexander Hamilton and he created what would be the greatest metaphor in the history of
the world and and I I’m not kidding and that’s not hyperbole the greatest fiction in the history of the world is the United States dollar more people believe in the dollar than believe in Jesus more people believe in the history of the world is the united states dollar more people believe in the dollar than believe in jesus more people believe in the dollar than they believe in there are jews or then there are muslims or any everybody believes in the dollar and it’s a fiction and alexander created it alexander hamilton created it out of nothing from the first coinage act of 1792
and of course we see the ancient personification uh of of of ham of course we see the ancient personification of Hamilton and we see the ancient emblems of eagles and pyramids and filigree right and we also see it we also see ambiguity here and this was one of the great innovations of Alexander Hamilton because he understood that money was not any one individual thing money was not gold money had a spirit that was beyond metal and in fact the original dollar uh was bimetallic it could be based on either gold or silver and it was half credit and it was half debt it was based
on taxes and it was based on tariffs and it was this wildly ambiguous extraordinarily complicated fiction and that is one of the reasons it’s lasted so long and that is also one of the reasons why when for instance ulysses s grant put us back on the gold standard after the civil war we went through boom and bust.
Again, terrible feeling, terrible cycles of the United States currency dying because money wants to be free. It doesn’t want to be free in and of itself. It wants to be free of gold. It wants to be free of any underlying value. And that’s because money in its most elemental form is this idea, it’s a spiritual idea of security, of figuring out our way into the future.
And so, of course, William Jennings Bryan is pictured here at the Democratic National Convention of 1896. And of course, he uses this very interesting Christian language that’s very popular in America when we are talking about money, which is that you shall not crucify mankind upon a cross of gold. He wanted money to be more than gold.
He wanted it to include silver so that there would be more of it even if and he didn’t care about the idea of inflation because he figured inflated money money that was worth less would allow farmers to pay off their debt more easily a very simple idea very popular he lost twice he lost two times in a row to mckinley and the boom and bus cycles continued and the united states economy almost completely evaporated in 1906 at which point it was clear that something had to be done and at the top we see what was done which is christmas eve 1913 that’s woodrow Wilson sitting down and the Christmas present he
gave to the United States in 1913 was the creation of the Federal Reserve pictured here it’s the third National Bank in the history of United States and is one that remains until this to until this day and then what we’re seeing beneath it is on January 30th, 1934, FDR signing an act basically saying there would be no more gold circulated as money in the United States.
all the gold up in cages, locking all the gold up in cages, never again to be used as currency, only to be there as a underlying value of the dollar. And that was such a successful idea that the dollar became the world’s reserve currency, particularly after World War II. In 1944, when Europe was in a shambles and the German mark was worth nothing and the Japanese yen was worth nothing and a lira was worth nothing and a franc was worth nothing America had more gold than any other country in the history of the world and they said okay we will we will peg the United States dollar to gold and we’ll say that every ounce of gold is worth 35 bucks that’s it and then everybody else could peg their money to the dollar and so all
this other paper money was pegged to the dollar and the dollar was pegged to gold and this allowed the world to flourish economically right this idea of stability guaranteed by the United States dollar and money increased and multiplied as never before. And of course, this created a problem in 1971, yet another apocalyptic time.
Yet another apocalyptic time people were convinced of the the atom bomb was going to go off Jesus freaks were going across the country there is a very strong sense again that the that that the 60s were going to be a new the age of Aquarius was going to be new and money also transformed because I’ll try and put it really quickly i’m running out of time here money transformed there were too many dollars for the gold there are too many dollars for the gold that we had and at that point england and france and switzerland they wanted to test the dollar they were getting their own economies were getting stronger. And so they said I’m gonna trade the dollars that we’re holding in our own sovereign banks
Through the magical gold window of the Federal Reserve and transform our dollars into gold And the other words get that money get that money out of those cages back to Europe and John Connolly who’s sitting right here next to Nixon who had been the ex-governor of Texas? I spent a lot of time with Connolly, who’s sitting right here next to Nixon, who had been the ex-governor of Texas. I spent a lot of time with Connolly.
He, of course, had been in the jump seat with JFK when he was assassinated. He had been a Democrat, the only Democrat in the Nixon administration at this point, his treasury secretary. Right. Connolly said, well, just just float the dollar. And Nixon was like, what? Connolly said, yeah, just detach it from gold.
dollar and Nixon was like what Connolly said yeah just detach it from gold and a lot of people including Arthur Burns the head of the uh the head of the Federal Reserve were convinced that if they detached the dollar from gold you would see hyperinflation the dollar would be worth nothing and there would be parties in Moscow we can see by the way also another figure here we see is Paul Volcker with the bald head who would become eventually the next head of the federal reserve bank and be there for a long time um
but nixon had no choice because he was about to lose all the gold so two days later on sunday night august the 15th 1971 he went on national television and he gave a speech and in the speech he said by the way uh we are suspending the convertibility of the dollar. And what he meant by that was the dollar would no longer have any underlying value other than a story.
And that story is called full faith and credit of the United States. And that is what the dollar is today. And again, people thought this would be a horrible, terrible thing. It led to the greatest profits on Wall Street in the history of Wall Street. It led to the go-go 80s. And of course, you know, there was a lot of damage too. We saw $250 billion disappear in the S&L crisis.
We see hedge funds whose profits are really not related to any underlying value whatsoever in terms of the culture and society. But that is really where we find ourselves today. That’s the most recent inheritance we have. And what that led to, of course, is this massive idea that, well, if the dollar is a story story maybe we can make up some other stories so here is this gentleman named Craig Wright and he is an expert in mythology he said if you ever need to know of Dionysus Vesta Minerva series or other mythological creatures I am your man and he made
that myth worth 10 billion dollars for himself because he created a new myth he first he made a pseudonym he called himself Satoshi Nakamoto and then he in 2009 delivered well if you can believe Craig Wright a lot of people say he’s a he’s not telling the truth but if you can believe him that was the first bitcoins that was the the the Genesis block of Bitcoin that emerged and And right here, this strange encryption, again, this almost magical encryption creating this invisible emblem, this Bitcoin, this algorithm, this form of security and speculation into the future.
Really, it’s the same as primitive money. Here is the magic code that Craig Wright says is the first Bitcoin or the first Satoshi. So I’m getting close to the end of my presentation. We’re kind of taking just a quick look. These are all the plots, characters, and metaphors of money that we have seen over time.
And that is the money plot. And so I’m going to stop my share right now. Can you guys see me again? Am I back on screen? Can somebody let me know if I’m here? A quick, yeah. Yeah, I’m here. Okay, good. So I do not know about these. Oh, yeah, good. Thank you. I do not know about these very kind ladies and gentlemen at the Redwood Library and I’m thanking them again for this opportunity.
But I am happy, I’m happy that, thank you, I’m saying nice things in the chat. I’m looking at the chat now. The original idea was that I was not going to take questions from the chat that somebody else would look at them but i’m happy if you if anybody wants to throw a couple of questions up there uh i’m happy to talk uh for a while longer and answer questions anything having to do with the future of money the past the money whatever you guys like so throw throw a few questions up there oh what’s next yeah well that’s a big question. We can see that there are more than 2,000 cryptos out there.
So that’s certainly next. And there’s also airline miles and all sorts of different currencies and artisanal currencies that are out there. But really what we’re facing now is a different kind of moment in the history of money. And it is, again, an apocalyptic moment. And I think we can see that with COVID.
And I think we can see it with Congress debating if they’re going to emit yet another trillion dollars. And people being very concerned that that trillion dollar emission would, again, spark hyperinflation and that the dollar would be worth nothing. I really don’t believe that.
I do believe that once again, that money has always been magical. Money has always been infinite and money is required to get us through what we’re going through right now. And so I do not believe that these trillion dollar emissions are going to destroy the dollar, far from it. Obviously, we’re gonna see more blockchain currencies listed. In other words, the blockchain of crypto is specifically a list which guarantees the integrity of the Bitcoin.
We’re going to see more of this and we’re going to see more art this and we’re going to see more artisanal currencies we’re also going to see more fraudulent currencies there is a growing scam economy out there as everybody knows and ultimately i want to say one other thing about it and then i’ll go on to the next questions um which is that barter was not the past of money.
But it is conceivable that as we work in a positive way, and I’m hoping for a better and more equitable society, that we are going to see barter in post marketplace economies, like prison economies, as I said before, like wartime economies, barter economies, our post market economies. And maybe what we’re going to see are smaller groups of people getting together, working together, and creating more equitable economies.
The only other thing I’ll say about it before I get to other questions is consider the candidacy of Andrew Yang, who is trying to you know get the democratic nomination and his idea of universal basic income you know 40 years ago in the 1980s this would have been labeled communistic and he would have been just thrown out you know that’s out of bounds andrew but that got serious consideration got serious consideration and people are really unders looking at money very differently now they’re seeing money maybe they’re looking at everybody’s right to food everybody’s right to education everybody’s right to
a basic shelter right Social Security we understand public schooling we understand Medicare and Medicaid we understand so maybe the future of money is hopefully going back to this idea of insurance and security and that we’ll see what helps us get there it doesn’t have to be a dollar it can be any it can be all sorts of different ideas okay so let’s see now there are um let me I’m just gonna read some of these okay let’s see this one you said there was no a this from Timothy you said there was no underlying value of the currency in the south in the south before the civil war but there was an underlying value in grain what’s the
difference and why was there any convertibility between uh currencies okay let me let me so there the south and the north before the civil war of course were both con they were confederated in the united states of america and at that point, the underlying value of the dollar was gold at that point. It is also interesting to note that when the slaves were emancipated, that the bodies of those black and brown people were the largest single asset in all of the United States. They were worth more than $3 billion in money of that period of
time. That is a sobering idea. That is a very sobering idea about money and what money was and what money can be in its most awful and horrifying incarnation. incarnation um so this in order to win the civil war uh lincoln had to go to congress when the country was split and asked for money with no underlying value and maybe this is getting to the heart of your question the the so-called greenback dollar and then he he said that he needed 250 million or quarter of a billion dollars with greenback dollars to be issued in order to
win the civil war and congress went nuts and they were again convinced this was the apocalypse this was the end of money this would be it uh. But of course, they had no choice. They delivered him the greenbacks. He won the war and the economy continued. So, again, I think there’s a lesson for today that we can’t be too scared about these large emissions of money with no, quote unquote, underlying value.
Money, we have to understand, is a poetic and spiritual idea. It’s a fiction we’ve created. we have to understand is a poetic and spiritual idea it’s a fiction we’ve created and I don’t mean that in that kind of like oh you know my love is like a red red rose or all the worlds of play you know I’m not talking about this kind of cliche idea of metaphor I’m talking about the dollar this fiction that everybody is convinced is real and so we know it’s real we believe it’s real the problem is being under the thumb of that fiction we’ve created it it does not have to control us we
should not be controlled by our own fictions we are able to take control of it and emit it if we need more of it um let’s see what else is there um Berkshire bucks exactly Western masses their own currency indeed we’re seeing a real growth of our chiseled currencies and it’s money there’s no question let’s see what is why is money related to hourly work okay that’s a that’s a great question and this goes back to the medieval this medieval time this idea of money being measured from the end money
of course we get our wages at the end of the hour we give our quarterly reports at the end of the quarter right we file taxes at the end of the year so that is this medieval thinking of this apocalyptic thinking of time being measured in a different way not just kind of going flowing forward into an amorphous future but coming back in lockstep from a specific past and of course it’s during the medieval period when we when we start to see the first gigantic clocks being built on cathedrals because the
the early Christian not the early Christians but the medieval Christians are obsessed by the passage of time and what we see here is this this kind of very interesting relationship of time and money people say time is money you know Benjamin Franklin you know most famously in this country equated equated the two this begins in the Middle Ages and we can see it in the quants of Wall Street when they’re actually you know the hedge fund magnates employ mathematical mathematical brains who do quant who’s do quantitative finance and
they have all sorts of shorthand Greek letters for different kinds of elements as they calculate how to make the most money and of course one of the key and most long-standing is an element called theta and theta means time Rho is the interest rate Vega means the volatility of the market and these are all these oddly allegorical figures almost like out of some medieval allegory.
So let’s see now. Peter, did we do you before? I think we have time for one, maybe one last, one last question. I like this one. You mentioned, oh, any interesting references from medieval time obsession? Yeah, they’re in the book, but there is a book called The Commercial Revolution of the Middle Ages.
And there’s a guy named Raymond de Roover, R-O-O-V-E-R, who’s a very, very strong medieval thinker. Let’s just do this one. You mentioned the first money began 30,000 years ago. However, private property didn’t exist until at least 8,000, 6,000 years ago with property in cattle and grain.
So how can money exist 20,000 years earlier when private ownership did not exist? Precisely. That’s exactly what I’m trying to get at. I’m trying to kind of expand your mind out of this idea that all money is based on enclosing and farming. That in fact, before there was farming and enclosure and livestock and grain, there was this thing called primitive money.
And it was snail shells. And it was the skulls of your enemy, perhaps. They were amulets. They were tooth, teeth and bones and gongs. And it’s not 30,000 years ago. It’s back to the 65,000 years ago it’s the back to these 65,000 years ago ostrich egg shells because the original meaning of money in pre-market economies is not simply exchange and unit of account and uh media of exchange it’s token of value which is still one of the modern definitions of money.
And what was that value? Was that clearly some sort of a magical token as is a dollar, as is a Bitcoin, which is going to protect you, to ensure you, to define a storyline for yourself other than the slings and arrows of outrageous fortune right we are trying to make our way and gamble our way and speculate our way through the future with this kind of primitive money and that element of money is before market and before farming and translates beyond really until today and into the future um yeah sacred talismans
exactly and that is why poets and writers and liberal arts majors understand money as well as the bankers and that is also why the bankers and i say this not jocularly are the greatest poets that we have today they’re the ones who really are spending their entire life and livelihood in this ethereal realm of matter fiction so um i think that’s about it i’ve gone uh considering the uh the delay we had at the start gone about an hour and so there’s the book the money plot if you buy it on Amazon my Amazon stuff
will go up but you can buy it anywhere buy it at your local independent bookstore and thank you thank you for being here I really appreciate it and thanks again to the library all hail lady Vinnie Venus and well the goddess of money was Juno Moneta that was the Roman goddess of money and of course Juno Moneta Moneta that comes from goddess of money.
And of course, Juno Moneta, Moneta comes from the Latin word for warning. And so I think we should, whenever we use our money, we should just remember buyer beware. Thank you so much. Thank you so much and good night.
