Imagine being a pirate transported to 2026. One minute you’re sailing the high seas looking for adventure, rum, and gold. Suddenly you’re in the year 2026 and while the quest for rum isn’t that difficult suddenly adventure is too expensive and gold is much harder to find.
Through a slow process of observation and questioning you, the pirate, learn that not only do we use paper currency instead of gold coins you learn that this paper currency only has value because people believe it does. Furthermore you learn that less and less people are using the paper currency and instead opting to us digital currency.
Someone tells you it isn’t a problem because it is still finite as the banks all know exactly how much money is meant to be in circulation. In your pirate ways you start to see an opportunity. If banks can make money appear with loans and know how much extra not to put in then there must be a gap you can extract money from.
Through careful research and discovery you learn the banks don’t really have a clue as these are the same institutions who bet everything on CDOs, and that anybody can get a credit card and create money out of thin air. Once the money given out in these risky, unsecured loans is used it then enters the banking system and it is loaned out, and this process can repeat multiple times with loans being taken out from money borrowed from other loans.
You ask modern humans how they know how much money they have and all of them show you the small numbers displayed on their digital devices. You ask why they trust these numbers and they don’t have a real answer outside of that’s the way things are. They tell you that they get paid every other week and then the numbers change.
With the lack of gold and abundance of rum you decide to get a job as a tour guide of the open water and soon you’re no longer interested in gold or adventure but more in watching the little digital numbers move, and the rum, we can’t forget the rum.
David Huzzard Writes 