Stossel: Money, Money, Money

I’ve got a $20 bill here, I can buy stuff! But, wait. This is just a piece of paper. Who says anyone will trust that this is worth $20? Money is only useful if at least two people agree that it can be trusted. A new documentary asks, what makes money trustworthy? It has to be reliable, like a clock, says Steve Forbes. It has to be fixed in value. Sixty minutes in an hour; sixty seconds in a minute. Imagine if that floated each day, that would make life chaotic. So throughout history, people needed a way to assign a fixed value to money. The best mechanism for this would be some kind of commodity that’s permanent, easily transported, easily understood by everyone. And that medium was, of course, gold. Not “of course,” people have pegged money to agricultural crops, or salt, that’s where we got the word “salary,” but gold was more reliable. And once it was accepted as currency Money begins to create a kind of mobility in people’s lives that they never had before. But gold is heavy! It’s hard to carry around. That limited trade. So people invented banks. The Knights Templar developed a system where they said, well, you can just deposit your money here with us and then, when you need some, you can withdraw it from your account. This enabled the peasants to travel Europe without being a danger of being robbed. That enabled much more trade. You could sell a bond in London, and build a railroad in India. And, as a result, this seemingly resource poor speck of Europe became the financial center of the world. Then, in the US Alexander Hamilton fixed the dollar to gold. The dollar became to be seen as a rock solid currency where you could go anywhere in the world and they would accept that dollar. and the world boomed. Wages soared. It was an incredible period of wealth creation. Don’t get me wrong, there were examples of terrible deprivation and hunger. But it was a time of great material progress. And the monetary foundation of that progress lay in the Gold Standard. But as usual, rulers would debase the currency, The Emperor Nero They would call in all the coins, melt them down, reissue them, of course, with his picture on them. But with less gold Rome’s decline was very closely associated with the decline of its money. When you change the value of money, you’re stealing property That happened to Germany after WWI To print money to pay for the conflict, Europe and the U.S. went off gold. And after losing the war, Germany suffered the infamous Weimar hyperinflation. We said to Germany, “You have to pay back the world.” The nation’s government certainly couldn’t pay that much money. So, Germany began to print and printed too much. You go to a restaurant and you find that your meal is going to cost eight thousand marks, say, and you order it, you eat it, and by the time the bill comes, that eight thousand Marks becomes sixteen thousand Marks. In the United States, around that time, politicians created our own crisis. President Herbert Hoover signed into law the Smoot Hawley Tariff. Its sweeping taxes on thousands of foreign products triggered a global trade war. This set in motion events leading to the Great Depression. With millions unemployed, governments searched for solutions. They tightened the money and the country literally ran out of money. So, in some towns, there was no money left. The bank closed. I am going to establish a government market for gold. Franklin Roosevelt, in an attempt to revive a struggling US economy, confiscated private holdings of gold and devalued the dollar. So, all kinds of constitutional freedoms and this moral commitment to maintain the value of the money were swept out Roosevelt really didn’t know what to do. so he kind of tried every theory, the way people will do, like a cook in a kitchen, trying different spices. Near the end of World War II, Western governments met to try to stabilize currencies. The world returned to gold-based money. And it was enormously successful. Those two decades, from 1950 to 1960, were the most successful economically of any time. But then, again, a President abandoned the Gold Standard. I directed Secretary Connelly to suspend temporarily the convertibility of the dollar. The value of the dollar plunged. Since then the dollar lost more than 80% of its value. That’s one reason that today Some believe the future lies in cryptocurrencies like Bitcoin. Bitcoin is both a currency and a payment system, so it’s like PayPal and U.S. dollars combined into one. But so far, crypto-currencies’s price changes make them hard to use as currency. Can we transact with Bitcoin today? Oh, I’ll pay you twenty Bitcoin if you come to work for me. That will be your annual salary. Was it the Bitcoin that was worth 980 at the beginning of 2017? Or, the Bitcoin that was worth 22,000 when 2018 began? So what does the future hold? Here’s the documentary’s concluding argument: The only way to restore trust is for the United States to return to the system that worked for most of its history. Gold has proven to be the preferred monetary standard. These days, most economists oppose a gold standard. Milton Friedman opposed it. But this documentary will give you background to help you decide what you think. After all, we do need sound money with a stable value. All this is the struggle for trust. And money, ultimately, does depend on trust. You can see the full documentary on some PBS stations, or stream it at:

100 thoughts on “Stossel: Money, Money, Money

  1. Governments didn't create money; they simply took over the production of money after it was developed. We need to get government out of the production of money.

    I don't regret the development of cryptocurrencies, because even if they aren't the best choice for a currency, they help to illustrate what money actually is and how it works. This kind of experimentation is prevented if governments simply outlaw alternative, private currencies. Sure, precious metals like gold and silver may be the best money, but people need to see this for themselves. Simply telling them so isn't convincing.

  2. How can the United States return to a gold standard when it is addicted to an additional 1 trillion dollars of debt every year? The gold standard became impossible in 1973 and it's even less possible today.

  3. 5:30 "Milton friedman OPPOSED the gold standard. But this documentary, put together by a guy with no background in economics, will give you a background to help those of you whose entire understanding of the subject matter is based on a 30 minute tv segment, decide what YOU think."

  4. 2:45 the Mark was losing value BECAUSE of the treaty of Versailles, they had to print more money as the prices increased, they had no other choice.

  5. I was really getting worried you were making an entire video about money and inflation without mentioning Bitcoin.

    US dollar has value because it is backed by debt. New fiat money enters the economy as debt starting at the lowest interest rate from Fed Reserve to commercial banks and ends at the very highest rates with credit cards and pay day lenders. Fiat money exits the economy when debts are not repaid. Sometimes there is collateral to confiscate and sometimes there is not.

    Bitcoin has value because it is limited in supply and distributed fairly and transparently. Everyone can participate equally and the free market gives it value. The price of a Bitcoin will fluctuate relative to real world products, but it will continue to appreciate because people don't like their money to be devalued and because the price of traditional assets (i.e stock market, real estate) continue to rise in search for even the most modest returns due to all time low interest rates. #BuyBitcoin 🙂

  6. Bottom line: Bitcoin's volatility has been getting smaller in a very predictable way as adoption grows. You can almost guarantee by 2025 or so that BTC will be less volatile than the USD.
    Does anyone think for one second that the USD will go back on a gold standard by 2025?
    If not, then you'd have to be a moron to back gold anymore.

  7. Fiat currency in the modern era allows the state to secretly and systematically rob the population blind. And it’s about the least progressive system possible- punishing savers and funneling savings into the stock market. Yes, the market has been at all time highs, but at a high cost to the general standard of living

  8. Amazes me how the change from 1$ silver certificates to 1$ fed reserve notes seemed to happen without any uproar and nobody I know who was an adult when it happened ever mentions it. Equally disappointing is how history classes never mentions how much of a filthy socialist FDR turned out to be.
    I'll just keep converting my paper money into junk silver or something else more stable and tradeable until things change.

  9. I'm not sure about gold standards, it would require a massive amount of gold in the modern world and isn't necessarily flexible enough for modern economies. Free banking for me is the best of the middle – where fiat, gold, crypto and so on currencies could compete, but without the Government being able to mess with it too much. Also considering how long we have been off gold standards i'm not sure going full free banking would be a harder change.

  10. Article 1 section 10 of the constitution: "no state…shall make any Thing but gold and silver Coin a Tender in Payment of Debts."

    Thomas Jefferson would be advocating for violent revolution if he saw the banking system today

  11. Federal Reserve is the main problem that was approved by Democratic Party contributed to many failures.  Currency debasement is happening again, this time it's China against US dollar.

  12. Obviously, a gold standard is not viable. This documentary must be the product of people who sell gold to the suckers.

  13. I lost my "Trust" in Paper money when I see how hard good people work and still can't make ends meet yet, at the same time, scoundrels in mega fortune companies run amok, choking us all to death with advertisements to but usless trinkets that are Garanteed to make life "easier"

  14. Gold is a terrible way to grow economies. Wealth is only created by the amount of gold that can be dug out of the ground. The current system of flexibility allows the economy to grow and for governments to effectively help the economy when needed. Gold blocks intervention and halts growth.

  15. They always premise FDR's actions with some altruistic noble intension. Depressions and economic crises had been short lived until FDR's policies made a bad situation worse and extended the Depression for more than a decade.

  16. This is incredibly simplistic. Go ask a real economist what they think of the gold standard, even a conservative one, and they'll tell you it's an old fashioned joke.

  17. thank you. Though i doubt i trust money.. it is in money i trade.. I trust.. people.. and morality. money seems to grease a wheel..

  18. Wow, this video demonstrates stunning ignorance of economics and history, and doesn't even follow its own logic. Pegging currency to gold, when the gold supply is increasing far slower than total economic output, leads to deflation, not stable prices. This means prices drop, people squirrel away their money instead of buying things or investing, total economic output drops, business incomes drop, individual incomes drop, debts become harder to repay, and society starts to collapse with throngs of hopeless unemployed men gathering in the streets ready to support a tyrant. The only people who benefit are the tiny cohort of wicked old scrooges with their own pile of cash and gold that they've buried somewhere instead of doing anything useful with it, and various parasitical rent-extractors.

    The gold standard largely caused the great depression, FDR's lifting of the standard didn't make the depression worse. Germany was done in by the impossible reparations payments imposed on them by the French, regardless of the hyperinflation. The economic boom after WWII had a lot to do with the fact that much of the world had been destroyed during the war. There was an economic boom following the black death in Europe too.

    There is zero problem of trust in the US dollar. It continues to reign as the only global reserve currency, and people all over the world happily buy US treasury bonds at zero or even effectively negative interest rates due to the perception of it being the safest way to store one's wealth – even safer than hording precious metals. Peter Schiff and other goldbugs have been predicting catastrophic inflation from our monetary policy for ages and they've been proven wrong over and over again – yet they keep whistling the same tune. Will they admit they were wrong, or are they just fundamentally dishonest men? Complaining that Bitcoin is useless because it is so wildly unstable compared to the US dollar just proves how much better fiat currency functions in the real world than fixed-supply deflationary currency.

    We're flooded with dirt-cheap high-quality products, they keep getting better and better and cheaper and cheaper, the "poor" live like kings, we have low unemployment, controlled inflation… The Fed and current US monetary policy are an essential part of this. What the hell are these crusty old windbags complaining about? Can they actually specify a problem? They sound like religious nuts crying that the end is near.

  19. John Stossel you are why I’m not a socialist anymore, thank you.
    This is why I love libertarianism,
    I’ve learned about the federal reserve, an evil system that has put young people into ever growing debt,
    I’ve learned about countless regulations that have stifled scientific and economic progress and allowed other countries (like China) to push ahead of us and leave us in the dust,
    I’m sick and tired of both party’s red and blue,
    It’s gotten to the point where it might as well be a coin toss,
    Both party’s don’t know how to fix our problems the free market works 99.9 percent of the time and government works only 2% of the time,
    I’m only 16 but I’m still learning and
    Refining my views,
    I hope young people will wake up and realize that politicians are power hungry, controlling and they want to run our lives,
    They do not have our best interest at mind when they make laws.
    All of them have their pockets lined with money from corporations trying to put out the little guy,
    Not only this but we actually PAY these idiots to do such a terrible job…
    So I want to thank you…

  20. Won't happen. The Gold standard prevents government from printing money at will to fund wars, and the endless line of people and feminists wanting stuff for free.

  21. If we went to the gold standard wouldn't it limited the amount of wealth a nation can have because there's a finite amount of Gold?

  22. If you really want a holistic understanding of the history of money I highly suggest reading "Debt: The First 5,000 Years" by David Graeber. Most of what we think we know about money, credit, barter system, etc. is historically inaccurate.

  23. This video is a joke. Everything is oversimplified, and economics is shown to be a problem with a single factor. It is easy to trick people when you find a link between two hardly related concepts and make general conclusions about the whole system. More details and research needs to be presented to persuade the audience.

  24. reagan brought a boom but didnt bring back gold standard. believing that the gold standard is the cause of prosperity is misunderstanding what causes prosperity.

  25. If only we could trust our governments… Currency tied to gold limits economic expansion, and leads to deflation, which is much worse than inflation. Rising prices is just a symptom of inflation, which is the increase in the money supply. A severe tightening of the money supply causes much worse hardship, and it can't be easily rectified if currency is tied to a commodity such as gold. Interestingly, the inflation rate in 1800 was exactly the same as 2018: 2.44%. We in the US have not had greater than 5% deflation since 1933, and have not had inflation greater than 10% since 1981. 2009 was the only year since 1955 that we had any deflation at all, and it was only 0.36%. Do you remember what the economy was like in 1933 and 2009? Deflation is much more painful than inflation.

  26. Money is just a belief system. Water, freeze dried food and ammunition will assure your survival! Lol , (only half kidding. )

  27. Personally speaking, I believe gold is no better than fiat currency because it too has no intrinsic value, you can't do much with it other than jewellery or electronic components. In an apocalyptic world, both paper money and gold will be equally useless because they really don't have intrinsic value, but food, water, clothing, they all have intrinsic value.

    And the point about government being able to just print out money, back when Spain discovered gold in Central America, Europe experienced hyperinflation due to the new influx of gold. The thing is: A new influx of either type of currency would result in hyperinflation, so if some country were to discover a large gold mine, the value of gold would decrease. Gold wasn't always completely stable in history.

    And the point with cryptocurrency, in my opinion, just no. Cryptocurrency is just fiat currency but the trust is on nothing. With fiat currency, there is some level of trust with the government, but Bitcoin? Just no. That is why Bitcoin is so unstable.

    Now before you call me "—" for being so naive, I'm naive, that's why I want your opinion, to correct my viewpoint.

  28. It may be the US has already started to go back to the gold standard.. first big step was to grab Libya's gold (disappeared after that country was destroyed) now we have grabbed Venezuela's gold (holding it for unelected Guaido).. The UK and the Swiss have been doing some of the same stuff, refusing to allow the repatriation of foreign gold holdings for one pretense or another. Ever wonder if there really is any gold in Fort Knox?

  29. I used to like John Stossel, but this video has made me lose a lot of respect for him. The only thing he got right in this video was that most modern economists don't like a gold standard, that is true, and there's a reason they don't. The gold standard is incompatible with the modern world, do some research you dummy. Instead, you just say "durrr, watch this documentary I watched because I can't explain my dumb ideas".

  30. Check out best explanation on real sound money and what has happened over time.

  31. Shame on you for your lies and deceit . "You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, will rout you out." Andrew Jackson .

  32. China is pushing for everyone there to use non cash pay apps that bypass the banks altogether. Banks are freaking out they could lose $43 billion annually.

  33. Gold is finite and has no intrinsic value. It does no good if society collapses and people are hungry.

  34. Now I've watched the entire documentary Stossel asked us to watch. I didn't learn much. Some of the video was propaganda. Some of it was ignorance. Most of it was accurate. Basically it wants to take us back to the gold standard. A gold standard would have prevented much of our troubles and Nixon would not have been able to wage his hidden wars in Vietnam. Otherwise we would have gone bankrupt like the USSR did in the late 80s. Nixon realized the world's currency was the dollar and he could screw the world by simply printing up more money. Too much money for a greedy politician to turn down. Actually it's the default move for any politician. The movie also got wrong claiming it was the gold standard that was responsible for our economic growth in the 50s and 60s. No, it was because Europe was bombed back to the stone age and we acted like a banker giving them loans to rebuild. With the audacity to say they had to buy their supplies from us with the money we loaned them. It was a fluke of geography. Now though nobody trusts any printed money because everybody knows how worthless politicians who control things are. Now the only solution is to make use of math tricks and use crypto currencies. Unfortunately there are a lot of very stupid crypto currencies out there and none of them are ready. There are even stupid people who want to make crypto currencies traceable so governments can interfere with future world currencies. It's amazing watching the idiocy. The documentary doesn't understand the math and stops short saying they don't trust anything they don't understand. Fair enough. The rest of the world though must continue ad crypto currencies are the only long term solution.

  35. The people in the video don't get crypto. (And this is coming from a gold bug, who believes in 100% gold backed currency and no fractional banking).

  36. I think the reason fiat currency hasnt collapsed, its all gone digital. Barely anything about money is real anymore

  37. Our entire system is "debt based." The Bankster's will never leave it. They will stack gold, however. They may be crooks, but they aren't stupid.

  38. Why are libertarians so concerned with money? It’s just a political construct. Gold is also a meaningless place holder as it only had value because of its scarcity. Deflation can actually be worse than deflation as credit needs to exist for modern capitalism to work. This is moron economics from reason. “Printing money” has nothing to do with inflation. The value of money is in a nations war power and ability to tax its citizens. Gold is not a currency, it’s a commodity. The only reason anyone gives a shit about bit coin is it’s a value in a dollar or euros or any other government standard currency. You libertarian dipshits have your economics degree from Prager U.

  39. Our money is backed by oil. As soon as it runs out our money is useless unless we managed to get back to gold

  40. A lead bullet controls the physics of our political system in the very end. Lead controls all of humanity.

  41. We the people, already have a commodity in the market that can replace gold. And anybody with a mathematics degree, cannot deny that, the hemp dollar, has the power to replace the petrodollar. And since the amount of gold on the planet, is severely limited. A new crop of marijuana can be harvested every 9 weeks. Takes thousands of years for gold to come out of the ground. Gold and petroleum only benefit a handful of Industries. Marijuana, as identified by Michigan State University, will benefit 48 different Industries. Do the math. Not even Bitcoin can compete with a renewable resource. That everybody can grow. Investment in marijuana has already beat the pet industry in annual income. Because more people care about making money, then they do about your pets. It's capitalism. In its purest form. Literally, salt-of-the-earth stuff. I mean wouldn't it be nice if your grandma could grow her own medication, right in her living room? And you are already seen how marijuana is affecting the pharmaceutical industry. Politicians have nothing to do with prices coming down. Competition does. And the farmer suitical industry is competing with something that works. And those billionaires, are literally shaking in their boots to stay in power. Because they know. Marijuana is a force to be reckoned with. And they will attempt to do anything in their power, to stop it. The future looks green all right. And if there is a so-called, Green New Deal, it will be the people, taking back the power of the purse. Farming, is your future. At a personal level.

    But believe you me… The controllers of oil and gold, are not going down without a fight. Even if it means another hundred years of war against, you.

  42. Its not money we need to figure out, its how we transact, its our perception of money we need to figure out.

  43. Currency was never stable. It is a free market system. The problem nowadays is governments try to control the value of money either by printing more or determining the rates of inflation.

  44. 00:50 – Salt is where we got the word "Salary." – I remember learning that from a Disney cartoon from the 60's where Uncle Scroog teaches the nephews about money, what it is, where it came from, how it works, etc.
    Watch it here:

  45. Good video. I don't consider myself researched enough in this topic to really take a stance. I think going back to gold or using cryptocurrency is a bit unrealistic though.

  46. Ok, a money standard…think…think…think..uranium?..thorium…lithium…graphene…hydrogel…, wait!…platinum…cadmium…oil shale..????…think..think..think…

  47. Trust plays a great role in any business, trust means a lot to me that's why I invest in crypto with Mr Stephan Briggs. He has proven to be trustworthy beyond reasonable doubts

  48. "if you were shipwrecked on a desert island, what would you prefer a bag of potatoes or a bag of gold?
    "Yes but a desert island isn't Ankh-Morpork!"
    "And that proves gold is only valuable because we agree it is, right? It's just a dream. But a potato is always worth a potato, anywhere. Add a knob of butter and a pinch of salt and you've got a meal, anywhere. Bury gold in the ground and you'll be worrying about thieves forever. Bury a potato and in due season you could be looking at a dividend of a thousand percent."

  49. Gold is actually not that practically valuable.
    Attaching money to precious metals is not smart. Same goes for crypto currency and the stock market.
    If money is attached to actual things of value then currency will be extremely stable and thrive. Food, clean water, energy, structural material is what currency should primarily be based on.

  50. The more bitcoin gets adopted, the more stable it will become. When there are no more bitcoin lotteries, fluctuations like that of 2017-2018 will never happen again. Same with many other crypto currencies.
    Gold is great… until asteroid mining becomes a thing. Deflation would destroy it's value rapidly.

  51. The private Federal Reserve Bank only made the Great Depression worse for all its hamfisted incompetence. Or was it incompetence? What if it was planned that way? Money based on debt instead of something of positive value is one thing that has devalued the dollar over the last 106 years.

  52. Switching back to gold now would be stupid. There's a decent chance that in the next couple of decades we're going to start mining it from asteroids and its value plummet.

  53. But if you want stability of currency, hasn't the dollar fluctuated less than gold in the last 30 years?

  54. Banks have done more injury to religion, tranquility, property, and even wealth of the nation than they can have done or will do good. John Adams

  55. Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.
    George Washington letter to Thomas Jefferson 08/01/1786

  56. If ever again our nation stumbles upon unfunded paper, it shall surely be like death to our body politics, this country will crash. George Washington

  57. Patrick Henry anti federalist (addressing the Virginian delegates against the U.S. Constitution) Excerpts from his speech 06/05/1788

    When i thus profess myself an advocate for the liberty of the people, I shall be told, I am a designing man, that I am to be a great man, that I am a demagogue: and any similar illiberal insinuations will be things with me: I see great jeopardy in this new government. I see none from our present one: I hope some gentleman or other will bring forth, in full array, those dangers, if there be any, that we may see and touch them.

  58. Who misses the old days when the dollar was backed by something of value, like gold? Now we are stuck with this weird, debt base, peteo dollar, with nothing behind it..Fiat currencies fail and ours will fail all the same.

  59. There are other factors for the economic boom after WWII. I mean, we were one of the only industrious nations that weren't utterly destroyed by war, so that helped lol..I despise the fact that our dollar is not backed by anything..

Leave a Reply

Your email address will not be published. Required fields are marked *