Alright, we’re almost done, but there’s still a lot more to cover. Perhaps you remember something called the French Revolution. A bunch of French people going berzerk because they were starving because their money couldn’t buy them anything. You see, for centuries, French kings had been very greedy. And, bathing in their greed, these kings decided to recall all of the gold in France; for simplicity’s sake, let’s say 1,000 one-ounce gold pieces. Then the king would set aside 100 pieces of the gold for himself, and then melt down the rest of the gold and add some kind of base metal like nickel to the batch. Then he’d reprint the 1,000 gold/nickel coins with his picture on it, and re-issue it to the people of France. This is called de-basing the money supply. And it inherently made the kings a lot richer and the French people a lot poorer. This went on for a few hundred years or so, and more and more money kept getting created, and yet the people were getting poorer. The more money that exists, the less valuable it becomes. So the people kept getting poorer and inflation kept going up until they got really pissed and had a revolution.

Why is any of this relevant? Because an organization working for the United States Government does this on a regular basis. It’s called the Federal Reserve, and they are the sole entity capable of producing new money in our economy. In October of 1933, Franklin Delano Roosevelt, recalled all of the gold in the United States of America. Every American was required to forfeit all of their gold to the United States Government or face large fines or jail time. The American people were reimbursed of course, with paper money. But unfortunately this was at a time in which the U.S. decided to stop using the gold standard (they decided to stop backing every U.S. dollar with some set amount of physical gold that is held in the U.S. Treasury). This was the switch to what is called “fiat” money. Money created from nothing, or in other words a big fat inflation bomb. I have no idea how much actual gold our government still has, but it’s my bet that it’s very little or none.

-Braden

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In response to Miche’s post about her wedding, for my wedding, I want this to be my cake.

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So I stumbled upon this article, http://www.nytimes.com/2008/07/28/opinion/28mon2.html?_r=1&oref=slogin, and I was like, I want to write about how gas prices are not increasing due to a decrease in the supply of a gas, but rather because of the inflation of the USD and because we are in/ entering what I believe is one of the biggest recessions we’ve had in a long time, and then I was like…well I can’t make any of that make sense unless I explain money. So here goes:

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So money, by definition is any medium of exchange that people agree to use as such. It could be anything, and it has been all kinds of things throughout history. It usually just ends up being something that is easily transported and exchanged, that can be easily divided into smaller amounts, and that has some inherent value, (also it tends to be something that we don’t have too much of or too little of). Money has been anything from salt, shells, leather, and possibly the most effective form of money: gold.

So, money usage basically arose out of simple barter, because it made things easier. Without money, people had to come up with proper exchange rates for every single good that they had. In other words, if I had a bag of rice I had to decide how much value it held in relation to every other good that I could possibly trade it for. With money, I only have to come up with the value of each of my goods to whatever money we’re using.

Anywho, we eventually got to the point where we started using precious metals, namely gold, as money. Because large amounts of gold were difficult to transport we had the creation of the first “banks.” Typically, these were blacksmiths who would keep the gold in their shops in specially marked spaces, like “James Brown’s Gold” and “Rick James’ Gold.” The blacksmith would give you a paper note with his signature that said, “This paper redeemable for 50 ounces of gold.” Now, James Brown could go around and trade his paper note for some shiny shoes from Michael Jackson, Michael Jackson could bring the note back to that blacksmith and he would either give Michael the 50 ounces or simply transfer the gold from James Brown’s section to Michael Jackson’s section. This process got bigger and bigger, and led to the growth of the first actual banks, accounts, etc. But, in this way, that’s how paper money was created. And it’s important to note that THE MONEY WAS ALWAYS BACKED UP BY PHYSICAL GOLD. I apologize for my capitalization obnoxiousness, but that’s really important.

- Braden

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We will be syndicating Bellen comics on Curious Tribe a few times a week. If you really like them, email the folks at the Gambit Weekly and let them know you want to see his comic there as well.

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My buddy at work showed me this video. Gave me the inspiration to follow my childhood passion of becoming an animator. I’ll keep you posted on the progress of my first little movie.

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