forgive the typos
Hello all it’s Nathan again in this video I want to talk a little bit about currency and economics and specifically addressing what makes money valuable so obviously numerous substances have been used as money throughout history and there are lots of lots of implications from what substances you use as money and so I want to start this will be the first video in a few videos I make that really dig into this concept which I find incredibly interesting and also incredibly important to understand especially where other issues like policy-making and social good and how do we make this world into the world that we all want to live in all of these things there is definitely an economic component to them and a very large component of Economics is currency and so that's why I want to address this topic so the first thing I want to talk about it what makes currency valuable so the most basic level of this is that there are certain properties that we really like to have in a currency to the first of these would be divisibility let's talk about gold for instance if I've got a big gold nugget right and I cut it in half resulting halves are equally size each of those is exactly half of what the original gold nugget was worth no value was lost in the cutting so that's called the visibility and that's a property we really like the contrast that with diamonds for instance if I have a big diamond and I cut that in half then the two halves or word for far less than half of the original Diamond was worth more a half of the original worth of the big duck so you lost an enormous amount of value simply by cutting it in half we prefer substances which are still considered valuable even though they are half as big they're considered half as much as elusive as the bigger one and so that's the visibility another another probably would be fun to Billy which sort of follows from the visibility if I cut the big gold nugget in half and there's two gold nuggets now and I have one and you have the other than if we swap those across neither of us gains or loses any value it break completely even and that's basically it means that given two units of the Cross and no value is gained or lost to either party and part of that is just that you can find two equivalent units again if we look at diamonds diamonds and it is incredibly difficult to find two diamonds that have exactly the same value and even if you can it's a lot of work but they are exactly the same Really disrupt the economy because there's so much more going through all of this up so it's got a relatively predictable Supply and an implication of that is I want to point out an idea which I have not seen anyone else to discuss which is the all currencies subsidize something all currencies pay for some action simply because people are using it as a currency now in the case of gold use of gold of the currency subsidizes gold mining it's expensive to pull gold out of the ground and refine it and according to them actually get people get that out there for people to use as currency why do people bother doing that well because the gold is valuable there for the fact that people are using gold as currency means that they are as an economy subsidizing the pulling of gold up out of the ground in the case of dollars the creation of dollars is something that most people don't think about but that's controlled entirely by the Federal Reserve and they don't have any formal rules on when they get to create dollars what they create dollars for how many dollars they can create and I will argue this is a huge problem because we as an economy by using dollars are subsidizing the Federal Reserve to do whatever the heck they want and we don't know what exactly they're doing more than that we don't even know who is doing it we don't know who owns the Federal Reserve a private bank it happens to be the bank that controls all of dollars but it's a fact we don't even know who the owners are and that's the point I want to make is using currency or the fact that you use something is currently subsidizes somebody to produce that currency and you are paying them to do it now you as an individual or paying that much but collectively across the entire economy we're paying a great deal for them to do things and I think it's so it's wise for people to pay attention to what the what we're subsidizing with our use of a certain commodity as a currency and that really plays back into those social issues that I talked about at the beginning of this video and because if you just don't want to think about how currency words when it gets created when it gets destroyed and as an indication of that what are you subsidizing when you were willing to accept this substance is currency for your work if you don't want to think about that that does not change the fact that your actions have an effect and that you are in fact subsidizing certain activities and so I encourage people to question what exactly am I such that I think when I accept something as a currency so that's the point I wanted to make in this video let me know in the comments see if you if you have any interesting thought to come from this or any remarks and especially let me know if you have any requests for other videos you would like me to do in the future thank you for watching and have a great day