Monetary Economics is sooo easy….

even a caveman 6-year old can do it.  From one of the newsletters I am subscribed to:

Over our ceremonial bowl of Cocoa Krispies, we hashed out a monetary system with our little nephew here in northern New Jersey:

“So what is money, anyway?” we randomly asked him between the snaps, crackles and pops.

“Well, do you mean dollars or quarters?” he needed to know.

“Hrm… I guess both…” we shrugged back.

“They’re both money” our nephew explained with certainty. “It’s stuff you go to the store and buy stuff with. You’ll just need more quarters if you want to use those…”

“Well, where can I get some money?” we wondered.

“The bank!” came back the obvious and annoyed answer.

“I can get as much as I want?” I asked for clarity.

“Yeah,” he confirmed, spilling chocolate milk down his face.

“Well, why isn’t this napkin money?” we asked, a little confused.

“‘Cause it doesn’t have numbers on it…”

“Oh…” We drew fives in the corners of the napkin and held it back up… “So now I can buy stuff with this?” we asked.

“Ha, ha, no! It needs to be green!”

“Ah, right. Of course…” we said, feeling slightly dumb. Reaching over for the green Crayola, we rectified the problem. “That better?”

“Well, it needs to be a rectangle…” he told us. “Then you can go and buy something with it. I thought you were an ecomonist.”

“Economist,” we corrected him. “And uh, no, we’re not a real economist…” Sensing we were about to lose credibility… we quickly changed subjects.

“Do you know what gold is?” we asked him.

“Yep…” he answered, looking down at his cereal.

“Well, say I offered you a piece of gold… this green napkin… or a dollar right now… Which would you take?”

He looked up… thought for a second… and then said: “The gold… because it’s shiny and pretty, and I could make a ring out of it.”

Hrmm… we thought quietly. This kid makes a lot of sense…

Gold is money.  It has been throughout human history, and it will be again.  The only reason we use green paper with numbers and pictures of dead men on it is because the government has fooled everyone into believing that the paper is as ‘good as gold’.

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Categories: Banksters, Economics, Hmm, Money

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