Money Quotes

“Money feels cold and mathematical and outside the realm of fuzzy human relationships. It isn’t. Money is a made-up thing, a shared fiction. Money is fundamentally, unalterably social. The social part of money—the “shared” in “shared fiction”—is exactly what makes it money. Otherwise, it’s just a chunk of metal, or a piece of paper, or, in the case of most money today, just a number stored on a bank’s computers.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“The important question at the time—and, indeed, the question we should always be asking—is: How can we design a monetary system that channels that greed and selfishness and wile toward socially useful ends, and limits the potential harm inherent in finance?”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“The solution, Fisher thought, was obvious: redefine the meaning of money. Instead of defining the dollar as a fixed amount of gold, define it as a fixed basket of stuff. “We want a dollar which will always buy the same aggregate quantity of bread, butter, beef, bacon, beans, sugar, clothing, fuel, and the other essential things for which we spend it,” he wrote. Fisher’s idea was brilliant—and very close to the way the dollar works today.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“The essence of finance is time travel,” the banker-turned-writer Matt Levine wrote. “Saving is about moving resources from the present into the future; financing is about moving resources from the future back into the present.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“The thing that makes money money is trust—when we trust that we will be able to buy stuff with this piece of paper, or this lump of metal, tomorrow, and next month, and next year.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“Eventually, the Chinese government started developing its own digital currency. In other words, a technology originally conceived to “make Big Brother obsolete” was now being advanced by a state built on surveillance of its citizens.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“Our dollar is now simply a fixed weight of gold—a unit of weight, masquerading as a unit of value.… What good does it do us to be assured that our dollar weighs just as much as ever? Does this fact help us in the least to bear the high cost of living? What we really want to know is whether the dollar buys as much as ever.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“Shadow banking, and the shadow money it created, managed to get all of the safety net, after going decades without paying any of the cost. Shadow money was now real money.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“By 2007, shadow banking was bigger than traditional banking. And the depositors in the shadow banks—the corporate treasurers and money-market funds and pension funds that had trillions of dollars of cash—were starting to demand their money back. It was the start of the biggest bank run in history.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“The world did remain on a pseudo gold standard for decades; foreign governments could still trade dollars for gold (at a rate of $35 per ounce, as set by Roosevelt in 1934), but ordinary people could no longer do so. Finally, in 1971, the United States broke the link to gold entirely. It became the job of the Federal Reserve to manage the value of the dollar—not in terms of gold, but in terms of the stuff ordinary Americans buy. In other words, America (and every other country) finally started thinking of money the way Irving Fisher wanted us to.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“Roosevelt understood that money is money because we believe it’s money. When people lost confidence in their banks, they ceased to think of their deposits as money, so they withdrew their deposits in the form of paper bills. When they lost confidence in paper, they turned it into gold. These changes weren’t neutral. With each step—from deposits to paper, from paper to gold—America was sliding backward into a world with less money that worked less well. It was this slide that Roosevelt was trying to reverse.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“In 2012, a survey asked dozens of US economists from across the political spectrum about the gold standard. Thirty-nine economists opposed returning to the gold standard. Not a single one supported it. Among today’s economists, the gold standard is not a controversial issue. Almost all of them think it’s a terrible idea.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“the economists Milton Friedman and Anna Schwartz pieced together an extraordinarily detailed history of money in America. They showed that the Fed’s policy of making money scarcer and raising interest rates—that is to say, following the rules of the gold standard—turned what would have been a nasty but ordinary downturn into a cataclysm. The Fed, and the gold standard it managed, caused the Great Depression.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“By 1715, John Law had cooked up a plan to take what the Bank of England had done and push it much, much further. When Law closed his eyes, he could see a whole financial system that linked together all of the hot new things—a bank, a stock market, a trading company, a new way for the government to get money.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“Law won because he discovered an intellectual discipline—a way of looking at the world—that was emerging during his lifetime and that would eventually shape the way millions of people thought about God, money, death, and the unknown future. The discipline is probability theory. It’s the basis of much of modern finance and, for that matter, much of modern thought. It was invented by gamblers.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“What counts as money (and what doesn’t) is the result of choices we make, and those choices have a profound effect on who gets more stuff and who gets less, who gets to take risks when times are good, and who gets screwed when things go bad. Our choices about money gave us the world we live in now: the world where, when a pandemic hit in the spring of 2020, central banks could create trillions of dollars and euros and yen out of thin air in an effort to fight an economic collapse. In the future we’ll make different choices, and money will change again.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“A pretty good working definition of money is: it’s the thing you pay taxes with.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“The money changers sat on benches on a busy bridge over the Grand Canal, so they were called banchieri, which translates as “bench-sitters,” and which is the root of our words banker and bank.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“This is called fractional-reserve banking, and it’s how the vast majority of money in the world is created.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“Of course banks are greedy! Of course corporations are selfish, and Wall Street is wily! Blaming a financial crisis on these qualities is like blaming a flood on the wetness of water. A twenty-first-century economist pointed out that if Wall Street greed caused financial crises, we’d have a crisis every week. The important question at the time—and, indeed, the question we should always be asking—is: How can we design a monetary system that channels that greed and selfishness and wile toward socially useful ends, and limits the potential harm inherent in finance?”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“Of course banks are greedy! Of course corporations are selfish, and Wall Street is wily! Blaming a financial crisis on these qualities is like blaming a flood on the wetness of water. A twenty-first-century economist pointed out that if Wall Street greed caused financial crises, we’d have a crisis every week. The important question at the time—and, indeed, the question we should always be asking—is: How can we design a monetary system that channels that greed and selfishness and wile toward socially useful ends, and limits the potential harm inherent in finance”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“The first writers weren’t poets; they were accountants. For a long time, that’s all writing was. No love notes. No eulogies. No stories. Just IOU six sheep.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“In Venice, money changers had started storing gold for people in the fourteenth century—and lending that gold out to other people. The money changers sat on benches on a busy bridge over the Grand Canal, so they were called banchieri, which translates as “bench-sitters,” and which is the root of our words banker and bank.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“Some of these coins developed huge followings and billion-dollar valuations. Most failed and became known as shitcoins.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“The cypherpunks’ digital cash wouldn’t have the threat of state violence to scare counterfeiters away. And most ordinary digital files can be counterfeited by anyone who can type ctrl-c, ctrl-v.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“The technology was in place. Massive financial institutions were behind it. All DigiCash needed was for people to use it. But despite what ordinary people said when you asked them about privacy (“We’re for it!”), people’s actions revealed they didn’t really care all that much about privacy. As people started buying stuff online, they didn’t bother with private digital cash. Instead, they used their credit cards. Eminently traceable, completely not secret, subject to significant fees. Also profoundly convenient.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“Instead of trying to hoard gold, Hume said, countries should create the conditions for people to do good work and create things of value.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“Technology means everyone can have more money in the long run. But one thing the Luddites have to teach us is the long run can be really, really long. IV MODERN MONEY The world where productivity took off and the Luddites got hosed was also the world where the international gold standard was born.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“There are infinite versions of this need-money-to-make-money problem: I want to buy a car, so I can drive to my new job, so I can make more money. But I need the money that I’m going to make at my new job now, so I can pay for the car, so I can drive to work, so I can make the money.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing

“The Incas had rivers full of gold and mountains full of silver, and they used gold and silver for art and for worship. But they never invented money because it was a fiction they had no use for.”
― Jacob Goldstein, Money: The True Story of a Made-Up Thing