So You Think Money Is Real

U.S. dollars is just an illusion more widely and fiercely believed Money is an illusion. It’s just numbers. Money is not backed by anything other than the faith of the people who buy it and of the people who buy it from these people. And you know? Fair enough. All this is true. What may be less easy to grasp is that all currencies are likewise an illusion. They consist mainly of numbers. Often being stored in paper or coins, but while the paper and coins are material, the dollars they represent are not. All monies are not backed by anything other than the faith of the people who accept it as payment and of other people who agree in turn to accept it as payment from them. The main difference is that, for the moment at least, the illusion, in the case of dollars, is more widely and more fiercely believed. In fact, almost all of our money, about 90 percent, are purely abstract. They do not exist in any tangible form. There is nothing stopping our banking system from creating more dollars whenever the mood strikes. The dollar is what is known as a “fiat” currency. The temptation for leaders of nation-states to manufacture money has historically been practically irresistible. One evident result of this wantonness is inflation: The purchasing power of $1 in 1959 is now a little under 12 cents. Money itself is an illusion, a mass hallucination. You’re working hard to make it, grow it, and keep it, but even so, the only real thing about it is its symbolic power. Which is indeed awesome, considered from a certain angle. Our shared understanding of the value of that piece of paper, is all that counts. And that shared understanding has no fixed meaning; it’s in eternal altering format. The “value” of all money, all stores of exchange, is unstable and abstract, even in the face of every attempt to secure it. With a set rate of exchange against various assets or to regulate its flow by setting interest rates. Money is only a shifting network of agreements made in and on behalf of the users, and that’s all it has ever been—a fragile thread in a web of humans The unfortunate fact is that monetary crises in unstable governments Our existing financial institutions are deeply flawed, in short, and permanently prone to corruption.