 Welcome, everyone. Thank you for joining us for our program, Mechanics Institute Online for the Money Plot, a history of currency's power to enchant, control and manipulate. With author Frederick Kaufman from New York and wealth advisor and playwright, John Bunzels from Los Angeles. I'm Laura Shepherd, director of events at the Mechanics Institute. For those of you who are new, and I think we've got quite a few new covers today, Mechanics Institute was founded in 1854 and is one of San Francisco's most vital and literary cultural centers in the heart of the city. And we hope that at some time in the near future, you can come and see us in person. We feature a general interest library and international chess club, ongoing author and literary programs and our Friday night cinema-lit film series. So please visit our website. The library is offering books to go and you can order those books online. So about tonight's program, yes, money does make the world go round as we know, but how did the dollar get its name? Does Bitcoin mystify you? Are you a penny pincher or a big spender? And are you grappling between Wall Street versus Main Street? And what does it all mean? Well, fortunately, and fortune is the key word here, two experts are here to be in conversation about the history, myth and symbolism of money, as well as its value and importance throughout civilization and how it has been a way of community engagement and exchange, as well as a component of how we view our personal self-worth. I'd like to introduce our guest tonight, a Frederick Kauffman and English professor by training and profession has for the past decade focused his attention on the fiction that is money. His unorthodox insights into the ways Wall Street has resulted in numerous articles for publications such as Scientific American, to Wired, to Ford policy, to Harper's, as well as to TV and other media appearances on NBC, Bloomberg, Fox Business Network, Democracy Now, and with other invitations including an address at the General Assembly of the United Nations. And John Bunzel is a critically acclaimed playwright his play Boxing Lessons had its world premiere at the New American Theater in Hollywood in April 2019 and was an LA Times critics choice of that year. His past productions include 63 trillion, which was at the New American Theater and also West of Lennon Theater in Seattle, Washington. Also Death of a Buick, which was produced by the well-known Manhattan Theater Club in New York and the Pasadena Playhouse and just to name a few of his productions. He's also a screenwriter for Born to Be Wild by Warner Brothers and a TV writer for STAT and also the Wonder Years. And he served as the film executive for Convent and the Spreading Ground. So he also has a background in finance, which we'll hear about as well. So please welcome Frederick Kauffman and John Bunzel. Well, thank you very much, Laura. And I am thrilled to be here tonight to be able to lead this conversation to talk with Frederick Kauffman about his fantastic book, The Money Plot. Fred, how you doing tonight? Hey John, how are you? I'm doing great. So glad to be here. I know. Thank you so much for asking me to participate tonight and thank you Mechanics Institute for giving me this opportunity. I just wanna say before we get going, I hope everyone on the Zoom tonight is safe and staying safe, that their families are safe, that you have a happy holiday season and that 2021 is a better year for all of us and for our country, let's hope so. Let's talk about the book though. I mean, what timing, Fred, to come out with a book about money? I mean, this is something that is really on everybody's lips right now. I mean, everyone is talking about stimulus, money, the dollar, so I mean, the timing's fantastic. I really, I love this book. I just think what you're able to do, what you achieve in this book is not only is it entertaining, it's funny, there's a lot of great anecdotes and historical characters, but you really manage to give the reader a three-dimensional perspective on money, right? I mean, I think most of us, we look at money very literally, like just transactionally, like $20 buys me this at the grocery store, but you sort of give us this sense of, well, what does it really mean, right? And like, why does that little piece of paper bias those groceries and the same thing at this grocery store and that grocery store? And isn't that really the main point that you're trying to make in your book, that to really understand money, you have to understand the story and the metaphor of money? Well, thank you, John. I'm really flattered by that introduction. And I would say, absolutely, I spend a great deal of time in this book in what's called pre-market economies and pre-market money, dealing with shells and beads and skulls and feathers and all sorts of things that people have exchanged for tens of thousands of years before there was a market economy. And for a long time, the anthropologists and ethnologists of like late 19th and early 20th century did not understand what these beads were and what these shells were and what these gongs were and what these stones were. And they could not see the money. And I think it's so odd because today it's the exact same thing. We still can't see the money. Money is always something we believe in without seeing. I think it was like only 5% of the money on earth actually has any physical form whatsoever. And certainly this is more and more true every day, not only in derivatives trading on Wall Street, which is clearly invisible, but in the increasing commonality of cryptocurrencies there are more than 2,000 of them out there right now, not to mention the Fed coming out with a digital dollar. And I mean, who's seen an airline mile lately? That's really fascinating. 5% is just a, that is a startling number, right? So I think you have an excerpt from the book, right? That I'd love you to give us just a flavor of the book. And I think, although I don't know exactly what you're gonna read, I think it's something about Herbert Hoover, right? Okay, in the 20s, right? President Hoover who definitely was a character, right? In the money plot of the 20th century. So please give us a little excerpt from the money plot. You know, reading is always, I'm sorry, I hate to say this, I shouldn't say it. They always bore me, so I will try to keep it really short, but I was thinking I might read three or four minutes. And of course, you know, we were dealing with an economic crisis today. And I think, you know, all jocularity aside, this is a pretty serious business we're dealing with. And when I was writing this book, I got obviously very interested in the Great Depression. And what was most surprising to me is how interested I became in Herbert Hoover. And I actually spent an inordinate amount of time with Hoover, who for all of his faults was in many ways a genius. So let me, with no further ado, I'll read three or four minutes of the money plot. Some say that President Herbert Hoover was unlucky. After all, he had been an orphan and spent his childhood shuddling across the country from one relative to the next, looking for something solid and stable to latch on to. Perhaps that was why he fixated on rocks, which tended to stay in one place. He failed his entrance exams for college, all except for math. But that was good enough to gain admission to a school in Northern California that had just opened for business and was willing to accept just about anyone. It was called Stanford. He graduated with a degree in geology, but he couldn't find a job. So the future president entered the workforce at a Northern California mine, pushing an ore cart for 70 hours a week. Friends in San Francisco eventually told him about an opening for someone willing to survey geological sites in the deserts of Australia and Asia. Someone who would trek into wastelands without food or water in order to tell others where to dig and drill and blast the planet open to extract its treasures. After a few years overseas, Hoover was fluent in Mandarin, had opened his own consulting business and had taken stakes in silver and lead mines. But it was Burmese zinc that made his fortune. Zinc lends itself to commercial applications, batteries, deodorants, dander shampoos, paint, toothpaste, galvanized nails, drope losages. Before his 40th birthday, the poor boy was rich as creases. He was worth north of $100 million in 1928. Hoover believed that a dollar was no more nor less than its weight in gold, and that weight was 23.22 grains. He believed that the dollar linked all the world's currencies and ratios, $4.86 for each pound sterling. And so on down the line of Marx and Franks and Rubles and a great chain of being 59 countries on earth bound together in metal, which was itself bound by the laws of mechanics, which were in turn bound by the laws of reason. Hoover had the best intentions to combat the Great Depression with every ounce of scientific, technological, engineering and mathematical know-how and can do. He summoned captains of industry to the White House. He insisted that business owners maintain wages. He increased lending to banks, farmers and construction companies. He raised taxes. None of it worked. Between 1929, 1933, 5,000 American banks collapsed. And it looked to many as though Karl Marx had been right after all, the gold was a fetish as worthy of full faith and credit as a snail shell. In desperation, the Federal Reserve recalled $300 million in bullion from across the Atlantic to be socked away in its underground vaults, as though a return of Montezuma's treasures might reverse the plot. The British economist John Maynard Keynes ridiculed the tactic as a holdover from the days of primitive money. Money was not bullion to be unloaded, packed up and shipped from one place to another. The Federal Reserve's recall of metal was like recalling a little household gods, he wrote, to be swallowed by a single golden image which lives underground and is not seen. Hoover may have possessed more money than even he could count, but it never occurred to him, he didn't know what it was. The soul of money wasn't metal and it wasn't mashed. That was what Franklin Delano Roosevelt understood. On his first day in office, he closed every bank in the United States. Then he declared gold would no longer be street legal in order that all gold coins be turned into the central banking system to be melted down into bullion, cooled into ingots and locked in cages in the sub basements of the Federal Reserve. As per the Gold Reserve Act of January 30th, 1934, no gold coin shall thereafter be coined, no gold coin shall hereafter be paid out or delivered by the United States. 11 years later, FDR died in office. Five months after that, as radioactive clouds hovered over the ruins of Hiroshima and Nagasaki, the economic dust of the American money plot had settled into irony. A dollar that could not be made of gold had endowed its sovereign state with more gold than any other country in the history of the world. The hoard amounted to more than 500 million physical ounces unambiguously corralled within the underground caverns of the Federal Reserve. And it does bring us today to today, John, with COVID and the Federal Reserve and the Treasury Department. How can we emit a trillion dollars? How can we deliver that to the American people? Where does that money come from? How do we make it out of nothing? It's also interesting that you pick Hoover, right? And so the 20s was this decade of excess that came after a horrible confrontation and a pandemic. So, it's interesting that maybe the setup is a little different, but we are coming out of this period of austerity, right? And now we're gonna have to print money, right? So are we looking at perhaps history repeating itself in some way? What do they say? Everything old is new again. I think, I guess the hope in a way is that we, I think a lot of people are having the sense that these are apocalyptic times, that we're looking at the end of money, that we're looking at the end of the dollar. One of the things that I learned by going back 65,000 years is the end has happened many times, that the apocalypse has come and gone many times. I think I was most interested in this regard in the medieval period, when everybody was really concerned that doomsday was coming and the bubonic plague killed what would be the equivalent of a billion people on planet Earth today, a bit worse than COVID. And what happened and what came from that period, that very apocalyptic period was a transformation of ideas about money and the incredible growth of money and the incredible growth of commercial culture and a transformation. And so that gives me hope today. It gives me hope that we are going to come out of this strong and that money will go back to more of its original purpose. It'll no longer be something where everybody's at each other's throats about it, but it'll go back to its original purpose, which is to give us security, to give us some way that we can try and figure out how to control our future. And at the same time increase our status and among other people. So you have a, I wanted to read a quote from your book, right? So there's a passage in your book where you say, quote, economists and bankers are well aware that money possesses the power to transfer its form into any shape, but they are reluctant to follow this to its logical conclusion, end quote. What is that logical conclusion, Frank? Well, I started writing this book 10 years ago. It's been a long 10 years and a lot of writing and a lot of rewriting, but the original idea has remained and that's something which is a given among economists and that's that money is a fiction. This is not new to me. It's not even a new idea among economists. People have known this really for about three or 400 years, the term imaginary money, money of account has been in our vocabulary. So money is a fiction. Therefore it should act like one. And the bankers and the wealth managers don't really want to admit that they are in the tradition of soothsayers and shaman and people who tell the future. They're not, they're so convinced of the truth of their fiction that they have created really an alt universe for themselves. And that's fine as long as we believe, you know, the origin of the word credit is credo. It's something that we believe in. As long as we all believe in it, it certainly is going to kind of work. But I think many people out there would say that, oh, metaphor, that's something so silly in English majories. Like my love is like a red, red rose or like all the world's a stage, like that kind of metaphor. That's not really, that is what we're talking about. It really isn't what we're talking about. It's how everything in the world has been monetized. Everything in the world has its price. Everything in the world can be transformed into money. And money is that transformative engine. And if we really want to understand that transformative engine, we have to understand how metaphor works. And the people who think about metaphor most of all are the English professors. And so I applied a lot of what we understand about metaphor to money. And oddly enough, it worked. And the development of money and the development of symbol and character and story and narrative all progressed together through time from all the way from 65,000 years ago to the present and to the future. And like Hoover though, a lot of the bankers don't want to admit that it's actually not about the math. It's, if you really think about the interest rate, it makes no sense. How does money accrue? This is an imaginary idea. And it's fine. I'm happy to have my money accrue, but we have to see it for what it is. So you really, you talk about this. I know you spend, the portion of the book where you talk about this relationship between language and money, right? This is something that literature and meta fiction, right? Which is what you're touching on here, okay? So this is where you talk about Don Quixote and how that was the creation of meta fiction in literature. And it's a fascinating concept, right? To be thinking of, and for those, right? The definition of meta fiction, right? Is a character in a fiction knowing they're in a fiction, right? Okay, so aren't we all, you're really saying that we're really all in this meta fiction today, right? And we know we are. Yeah, the reason that Don Quixote is so interesting and why it's called the first modern novel. And of course, it appears in Spain at the very beginning of the 16th century. And why Cervantes was the only author that Shakespeare ever really considered a rival. Cervantes was actually working for bankers in Spain during this period. And he was collecting debts and he was moving money around for them. And he'd noticed that a lot of these Spanish grandees, you know, with their fabulous sashes and ceremonial swords, they were bankrupt. They literally had no money and he saw that they were living a dream. And out of this came this idea of this character, Don Quixote, who reads too many books and starts believing he's a knight and who believes that the whore down the block is his lady in waiting, right? And the book is a hit, it's a smash hit. It sells hundreds of thousands of copies, makes them a lot of money, so much so that the next edition comes out 10 years later. And in this edition, Cervantes pulls this trick that's been copied ever since by Nautilus, which is Don Quixote says, yes, I know I'm famous, he says in the book. I read the first book. So now you have a character in the fiction saying that he's read about himself, a character in fiction who's become the character because he's already read too many other books and it's just this kind of crazy, endlessly reticulating logic. And that's exactly what's going on with the money plot in the sense that this fiction, this idea of this symbol is created thousands and thousands of years ago. But ever since Adam Smith in 1776 comes out with the wealth of nations and comes up with his own creation myth of money, which is subsequently proven incorrect. The idea that money comes from barter. And we start thinking about money as kind of the essential unit of exchange, unit of account, right? Essential media. We, what English professors say is that we've naturalized it, that this is an imaginary concept that we have then naturalized. We think it's real. And hey, I'm all willing to accept that it's real, but what the bankers do is then they start playing on this playing field of the unreal. And it's not just about investing, but it's about the more arcane forms of investing in derivatives and in futures and in indices, like stock indices. Well, now you have a metaphor of a metaphor of a metaphor. Yeah. And so that's really interesting. You talked about that in the book of indices where I think you say money has kind of swallowed itself in a way where... But when you have the first index funds and electronic traded products and all of a sudden the index fund of the S&P 500 is traded on the S&P 500, that's a dizzying effect. And all of a sudden, where is the money? What is the money? Well, the money is the metaphor of the metaphor of the metaphor does not make it any less money, but it certainly comments on a lot of people who were insisting that money is a material, that it's gold, that it's silver, that it's oil, that it's grain, that it's livestock, that it's lumber. And we're realizing that's not at all the case. Right. It's more the fiction, right? It's beyond that, the physical commodity. I mean, you mentioned Barter, right? The money came long before Barter. You know, there's another quote I wanna read from the book where you say, quote, before truck and Barter economies, currency was a matter of personification and metonymy. Money that had a face could be worn, could speak, sing, and swear. And this whole concept of metonymy, you give the example of the crown, right? That the crown that became war, then came to be imbued with the power of the royals, right? And talk about that concept because it's really, you know, it's an eye-opening concept to really understanding how money abuses itself into, you know, different articles like the crown. Well, I always try, you know, in these conferences, John, I always try to stay away from the technical language of tropology and metonymy and synecdoche and catechresis. And the stuff that my girlfriend says to me, Kaufman, don't mention that stuff. You will drive that audience right away. But now you're leading me to metonymy and metonymy. So there are different kinds of metaphor. Let's just make it simple. And metonymy is what's called the metaphor of contiguity. And what that means is like, if you would say, you go to a room full of businessmen and somebody say, well, how is the party? You say, well, nothing but suits in that room. That's like the classic metonymy. Well, the suits are standing for the businessmen. So they're metaphors for the businessmen, but they're not the businessmen. They're clothing. Clothing, and in fact, they are vestments or investments. So the clothing has been invested with this magical power of the businessman. Very interesting. And so, John, you're bringing up this idea of the crown. And so often, instead of paying taxes to the king, to the individual, one might say, you must pay taxes to the crown because the crown has been invested with the power of the king. And of course, the king is also invested with the power of the crown. And this goes back to the earliest money of all, this metaphor, and of course, our minds, our human minds work through metaphor. That's how we work. That's our symbolic imagination, which makes language possible. Language, you know, every word stands for something else, just like all money stands for something else. And so this goes way back in human consciousness. And the first, really the first beginnings we can find are about 65,000 years ago in the coastal hinterlands of Kenya, where these tiny little beads were discovered. They were made of calcium carbonate and they were marked and etched with strange designs. And the scientists and the archeologists were like, what are these beads? What are they doing? And they discovered that they were actually made from ostrich eggs. The great blackneck ancient African ostrich. And they're like, what the hell? And well, as it turns out that these ostrich eggs each held about a quart and a half. They're the hugest eggs of any animal on earth. And the calcium carbonate that they're made of is non-reactive. So these ancient peoples were using these eggs as storage containers, as storage containers. And of course, another origin of the word metonymy is container, just like the suit contains the businessman. These huge ostrich eggs were containing fresh water, berries. And so when they were crushed, and then we were transformed into these tiny little beads, one of the great ancient forms of money is the circle with the hole in the middle. All of a sudden, that which could contain and give you security for the future became a symbol of what could give you security for the future. And contained its value. That's right. And so then, of course, you put it on your body. You cover your body in those beads, your girdles, your collars, your armbands. And that is the earliest money. That's fascinating. I'll just stop right there. But that metaphor of contiguity, the idea is that the thing which contains the precious liquid water, when it's, that itself is imbued through what's called sympathetic magic. It's what the anthropologist called sympathetic magic with the qualities of security and safety into the future. And that's what money is. Money keeps us safe. Money keeps us clothed. Money keeps us in food. And money gives us status. So you said that in the book, that here's another quote that money humanizes the non-human world. End quote. So what do you mean by that? Talk a little bit more about what you're saying exactly. Look, we wanna be safe, right? We definitely wanna be safe. And so we have to figure out what this universe is around us. How can we, as human beings, and certainly if we're talking about human beings, 30,000, 40,000, 50,000, world is less safe than that it is now. So once again, we think we're living in terrible times. It's been bad before. And so how do we control the world? How do we take control of it? And of course today, one of the ways we take control is through money. And this has been so clear with COVID and the income inequality is that those people who are rich well, back in March, they weren't worried about a ventilator because they bought their own, right? These hedge fund magnets that, you know, some of whom I know sitting here out on Long Island, right? They had their own ventilators and they were safe. And they had their own personal shoppers and they had their own stores of food, you know, primitive money. So money has always been a way to keep the chaos of the universe at bay, right? And the way that you're doing that is of course by naming things so that you can categorize them and naming is a form of control and it's a form of actually diminishing something. You say the word like sky. We all know what the sky is, but the word sky, like the sky is a million different things every moment of the day, but we just call it sky. We diminish it, we bring it down, we reduce it. The brain is a reducing valve and money is a reducing valve. Everything on earth has its price. This is called, you know, the neoliberalization, dollarization of the world, much criticized, right? But it also has served traditionally the purpose of allowing us a measure of control over the world. And that is why so much of the so-called primitive money has a face, has a voice. It can dance. It can stand in for the groom at marriage ceremonies. That's why there are faces on coins. Again and again and again, we are seeing money being a projection of human desires. And that's why the epigraph from the book, a lot of my kids laugh is from Billie Eilish. I had a dream. I got everything I wanted. That's what money is. Money is the dream that you might have everything you want. So you also talk about in the book at length about the connection between money and God. Okay, I don't want to really talk about it. And, you know, how doomsday in the end of days, right, is intertwined with money. And that, you know, there's certain financial concepts, right, that you have to know the end to understand the plot, right? And understand what it means like a mortgage or a lease or life insurance or an annuity, right? They're all about, well, where does it end? And- John's experience in money management is coming through now, but honestly, we should have a full disclosure now, John. We should have a full disclosure and really help the audience. The fact that, you know, John and I, we went to junior high school together and high school together, and we actually sat in chapel together. A good Jew myself, I sat in chapel. And so we spent a lot of time, as kids, thinking about what is this? What is going on here in chapel? And I particularly was like, this is very strange to me. And so I started really thinking a lot about the corporate body of Christ. And this is a concept, not my concept. This is the Christian concept. And I was delighted to find that the beginnings of corporate culture and the first corporation and the idea of corporate personhood, which of course we all know now in terms of corporations having a voice in terms of political advertisement. This whole notion of corporate personhood, we can date it. We can date it to the year 1250 and Pope innocent the fourth. And in one of his laddering councils, I believe it actually was the fourth ladder, you know, the kind of people really care, the fourth laddering council. It is interesting that at this laddering council, they made the law that all cardinals have to wear red hats. That's probably the most long-standing law. But other than that, he decided that the church was a corporate body. It was a fictitious body, that anybody who harmed anything in the church would actually harm the entirety of the living body of Christ on earth. And so what's interesting here is that for many years, the Christian church throughout the Middle Ages was perceived to be at loggerheads with the growth of capitalism. But since about the 1970s, it's been clear that such is not at all the case. And this goes back to what we were discussing earlier, John, which is it's an apocalyptic time, just like we're living in apocalyptic times now. And all the monks and the church fathers were thoroughly convinced that the end was near. It was obvious, the plague had hit, all sorts of horrible things were going on, the vandals were invading, the Ostrogoths were stealing their daughters, the monks were working all and praying for the end. And they started defining their world, not looking forward into an indefinite future, but saying there is the end and we're counting backwards from the end. And this inspired the medieval merchants to follow them in this kind of counting from the end going due dates, expiration dates, the entire notion that you say of the mortgage, how do we calculate money anyway? Quarterly reports at the end of the quarter, wages at the end of the hour or the month, taxes at the end of the year, 401ks, retirement funds, every wealth manager is thinking, it's called the technical term is anagogically, from the end coming towards us in the beginning. If you get a mortgage, the person who sells it to you can tell you what the last payment will be when your redemption will come. And this is the great contribution of the church to finance. And of course, the word finance enters English at the height of the middle ages. And it's related to this Latin word, finis, F-I-N-I-S is related to finance. And of course, finis, fin, it means the end, we see at the end of books. So finance is really the art and science of endings. It's the art and science of doomsday. So one other thing I wanted to chat about metaphor again, I think it's just important for people to understand part of what you talk about in the book is this idea also another subset of metaphor of where one thing represents the whole, right? And the idea of stock ownership or equity, right? Is an example of that, right? And in fact, the dollar is an example of that. Where the dollar, one dollar represents this much larger currency system, right? And this financial system. And that's a very powerful concept also, right? Isn't it in the fiction? Well, okay, so again, you're bringing me to the technical terms. Yes, so parts for whole is a big part of our metaphorical imagination. The technical term is synactic, right? And the technical ownership. Fractional ownership. So again, what we'll say is like, why did this happen? We'll say it was the hand of God. The hand of God is in other words, is standing for all of God, even though we're just mentioning the hand of God. That's a form of part for whole. You'll notice on every coin, it says E pluribus, I don't know, of many one. And the power of money and particularly the power of coinage. Like when we start moving a little bit forward and we see the first precious metal coinage appear in ancient Greece and the Peloponnese around 500 BC, oddly enough at the birth of tragedy. We have what we're seeing is this idea of the coins being all these tiny little replicants all indicating a larger power, a larger political power. And so there are many ways that this is then exploited. Certainly the Romans exploited this a lot using the coin to expand their political power. But of course this happens at the same time as the birth of tragedy in ancient Greece. And oddly enough, what is more tragic than a coin? It has the emperor's face on it, maybe 20, 30 years, then it gets melted down, thrown into the heap and they just stamp on another emperor's face. And what's very strange to me is that this is embedded in all of the myths of the ancient heavy metal gods, the gods of bronze and silver and gold, all of which had their moments ruling the earth in the golden age and the silver age and all of whom reached terrible endings and they're torn apart and ripped to pieces. And of course that's how they get scattered into the mountains and across the globe and in the rivers. And then the magicians who were the ancient mineralogists and chemists and soothsayers had magic formula through fire and high heat to bring these metals back together and to form them again into these kind of perfect little things, these golden circles, right? And that indicated that they were part of a much larger mysterious whole. And what's even more interesting, I think, is how you were talking about fractional banking. Every hedge fund, every investment bank has what's called a credit desk, and their job is to say, okay, I got a million bucks worth of capital on hand today, but I really want to trade 15 million. So in other words, how do I take that money and make it stand for a lot more money? Exactly. How can I make that part become a much larger whole? And that is the way that Wall Street does its business. Absolutely. And I think this idea too is, helps us understand brand. Doesn't it? I mean, you know, like the Amazon box, right? You look at a box, it's like you think of the whole company, right? And the power of the brand of Amazon, but you're just looking at the box, right? So I mean, it's a very powerful transference, right? Of meaning and value, right? That is essential to our modern financial system. I spend a lot of time, I spend a lot of, I can't tell you the amount of time I spent over the past decade thinking about branding. And to me, what was fascinating is that this branding is essential to one of the earlier forms of money in pre-market economies again. And that is the branding of cattle, right? Because cattle is a form of money and has been a form of money. And of course, cattle can obviously bear interest. Cattle can provide you with all sorts of goods. And it's violent. The domestication of cattle, there is an underlying current of violence. The transformation of a wild animal into a domesticated animal happened about 10,000 years ago at the same time as we have wild grains becoming domesticated grains. And this is all a very violent act. You have to get the, you have to harness those animals. And again, you are now controlling their future in a way that we want money to help us harness and control our future. We have total control over domesticated animal. The moment of its birth, right? Because we breed them to its slaughter. When we put the yolk on its neck, we make it travel back and forth exactly the way we want it to go. Let's add an element about certainty that you talk about, right? Is it? Yeah. Give us a sense of security for the future. Imagine the first hunter-gatherers wandering about and stumbling upon the first farm. Here are these people with shell emblems, helping them move their way through a dangerous and epic future. And all of a sudden, here are some dude who has fenced in this area and it's kind of like Bitcoin. He's making his own money. He's making his own grain. He's making his own livestock. And- His own ecosystem. Unfortunately, or unfortunately, he probably has a bevy of wives, right? So he's creating his own labor force at the same time as he's creating more mouths to feed. He's creating his own economy right there on this farm through these branded animals that are clearly his. And one of the earliest definitions of economy comes from Aristotle, the idea of what's called the Oikos, which is related to the word economy. And that was the combination of the household, the house itself and the land around it. And that is the original economy. And that can only happen when livestock is domesticated and branded and owned. That's a whole- Thomas, you're saying this correlation between language, agriculture and money, right? Yeah. And that's a really fascinating thing. I want to, you know, because I know where our time is important here. I want to make sure to talk a little bit about gold. Okay. Because I know you mentioned gold and gold is very prominent in your book, right? And, you know, the, here's a quote from your book. You say, quote, money's most persistent captor has been gold. End quote. And that, quote, money wants to be free, right? So we know that in 1971, right? The dollar was floated, right? And this was a, and you and I particularly know this because we... You've been talking about it. Right, right, about this event. But this was the Nixon and his administration floating the dollar in 1971 closing the gold window where foreign countries who had gold reserves, right? Could have them converted into gold, right? And they shut that down and really freed money. So how important was that event? And when I talk about, you know, that event and sort of what it opened up and made possible after that, but also this character of John Connolly, right? Who was Treasury Secretary, right? He was former governor of Texas, survivor of the Kennedy assassination. And he went on to play this pivotal role, right? In this floating of the dollar. So talk about what happened then, how critical that was. Well, the dollar was, you know, when Hamilton's dollar, when he created it in the Coinage Act of 1792, right? It was originally bimetallic, right? In other words, it could be defined either as silver or as gold. And really for the next hundred years or so after that, there was a real conflict as to what would be the quote unquote underlying value of the dollar, right? What would be the underlying value? And the gold standard as it turns out in terms of history using gold as an underlying value has increasingly led to many booms and many busts and business cycles which go up and down and are essentially out of control. And that is not what government likes and that is not what economists like. People ask me a lot about gold and the greatest struggle of the dollar, just as you can say the greatest struggle in many ways of America is one of liberation. It's one of liberation from captivity. Other people trying to keep you captive I'm talking about obviously slaves to a great part. When the slaves were freed, they were the largest single entity of capital in America at the time. So money locked in gold was a longstanding problem for this country. And in 1913 Woodrow Wilson signs the Federal Reserve Act, which is a very complicated act if you really- Creating Fed, right? Yeah, creating the modern Fed that's the third central bank in the history of the United States where the dollar is both gold and not gold that the central bank does control and not control monetary policy. So there is this incredible given taken sympathy intention about what the dollar is. And then as you point out in 1971 for various reasons, not various reasons for one simple reason which is that we did not have enough gold to cover all the dollars in the banks and all the paper dollars that were being held in the other- We were beginning to print too much money, right? We were printing too much money and they were gonna, and if France and England and Germany had demanded to go to the gold window and change the dollars into gold, we would have run out of gold. And that was part of what Vietnam and the great society, right? And the cost of that, right? Ended up where our budget we ended up debt financing a little bit. And that was part of what Nixon was dealing with, right? And he had just a poor economy and the dollar was getting all whacked around, right? And John Connolly, and John Connolly was this amazing clear, yeah. And Connolly was, had been also he'd been secretary of the Navy. And he had also been LBJ's bag man. He had been the one to deliver all the money for LBJ for all these years, cash here, cash there. And he had a rather strange relationship to cash. He had a very strong sense that he could just be made to appear and disappear just like a classic Texas oil man's attitude towards it. And he was the one who basically said to Nixon, if you listen to the tapes on, particularly on Thursday, just saying on Thursday, August 12th, 1971, he basically says to Nixon, it's gotta happen. And Nixon's a little bit concerned and Connolly was like, don't worry about it. We're just gonna say no more gold. And on Friday the 13th of August, 1971, Nixon and Connolly and Paul Volcker and George Schultz and a bunch of guys went to Camp David. William Sapphire wrote the speech which Nixon then delivered on Sunday the 15th. And he basically just said, no, closing the gold window, the dollar is floating. And everybody had suspected that the world would freak out, that the dollar would collapse, that they'd be celebrating in Russia. Nothing like that happened. Dow went straight up, Wall Street was like, this is great. I love the idea, money is free. It's been set free, it no longer is locked in. And John Connolly subsequently raised, after Nixon resigned, raised 12 million bucks for himself, not his own money, just kind of made it appear out of nowhere, walled into the 1980 Republican Convention and his $12 million dollars bottom, one delegate. He graduated Ronald Reagan, walked out of there and decided, well, now I'm gonna be rich. And he died, he died bankrupt. Yeah, he died bankrupt. He's the only secretary of ever had who went completely belly up. Guy who was one of the architects of freeing money ended up its captive at the end of his life. Well, he set his classic line to the group of 10 when they floated the dollar was, the dollar is our currency, but it's your problem. And the great irony was it certainly became his problem. And he ended up having to sell dollar bills, the dollar bill hasn't changed. Right, he wrote his signature on top of his signature. Right, and he fell off into 20 bucks, that was pretty sad. That is sad. So I know that I could ask so many more questions. I know that people have questions here and we'd probably run to the end. I just wanna ask one more, which is at the end of your book, all right? You say, here's the last sentence of your book, which is quote, if we cannot decrypt how the 1% are controlling and containing the fiction, we run the risk of becoming pawns and shills ourselves. End quote. What do we need to decrypt exactly, Fred? How urgent is this warning that you're making? Well, I think that this is really an old, again, it's an old story. I mean, you could call it capital versus labor. You could call it wife versus husband. You could call it sons versus parents. Where is this power struggle happening? Who becomes the money for somebody else, right? And we're at a point, I think, where when it comes to income inequality, which is so great, I think many people feel completely disenfranchised from money. And they're forgetting that money is a human creation. We created it, and the reason we created it was not to push people down, but to give us a sense of security moving forward into the future. And as long as we remember that and we understand that, we can use that politically if we want to, to move forward. It's kind of the whole notion, for instance, the most obvious one recently is Andrew Yang and his candidacy for the Democratic nomination. And he's talking about universal income. And I mean, really think about it. In the 1980s, you know, with this all of a sudden with Margaret Thatcher and Ronald Reagan and this fall, the Berlin Wall, and there's a sense that, oh my God, global capitalism is the best. It's going to take over everything. Everything's going to be a market economy. That idea of universal basic income would have been just, nobody would have considered it, right? And here's a guy who's a presidential candidate who got a lot of interest. He got a real, you know, that's an interesting idea, a universal basic income. And I do think that with cryptos and with also just kind of a general sense of suspicion about what money has become with malware and the global phishing economy and the global scam economy, all of these things are making people reassess the value of money, what it's originally there for. And we can see a growth of artisanal currencies. We can even see this kind of strange interest in post-money economies. Barter economies in which people... So it's a democratization of money. Is that sort of what you're talking about? I think the whole... Reaction in a reaction to the income inequality. In other words, we're sort of bouncing the other way or trying to address that. I think people are increasingly aware of and disgusted by the actions of the plutocrats. I think for a while in the 1980s, there was very strong sense of, you know, greed is good, man with the most toys wins. I wanna be that man. I think at this point, people are like, that's not right. Somebody's cheating here. And so I think that instead of it, people are looking towards different models. And I think that as I once again, when we look at Doomsday, when Doomsday is staring us down, that's the time when we actually start considering different models and different models of money. This is a pathway then to really where money truly becomes a humanizing. Yeah, and it'll go back to what's original, right? Remember the original money is an ostrich egg shell with fresh water with nuts and berries. So your children can survive. That's the money. And that's the original meaning of money. And maybe we can somehow redeem that meaning. That's my hope. Well, it's so great. I mean, I could just, you know, I could talk all night. I got more questions we'll get to, but Pam, I know that you have a number of people in the queue that want to ask, have some questions for Fred. So I'll hand it back to you to sort through those. Okay. Well, the first question we have is from Jo-Leen Huey. Is the subject taught in school in either economics or finance? And if not, why not? That is a great question. And that I think is in some ways the greatest, just to put all modesty aside. That's the greatest thing about my book, but it's also the worst thing about my book, which is that what I'm delivering here is a fairly new way of thinking about money. For a long time in scholarly circles, people have been trying to use money and language and fuse them. Recently we're seeing books that are a little bit more popular about how money is a made up thing and then how we can then take ownership of it again. But the fact of the matter is that there is no strict curriculum about this at this point. I would love there to be, absolutely. And that's one of the reasons I wrote the book. I really had a very strong sense. A lot of people are saying, and I hear it all the time at cocktail parties when there were cocktail parties, I don't understand money. Like I would say, I'm writing a book about money and people say, I don't understand money. And then I would say to them, well, that's the whole point of this book. The whole point of this book is that you might be an English major, you might be interested in history, you might be interested in humanities. You understand money as well as any banker, if not even better. And I think that we've really relinquished that sense of ownership and understanding and control of money to those quote unquote experts. But that's just like giving shaman and soothsayers, that's what their poets, these bankers, I respect them, but that's not all that money is. And I think that's the goal of the book is for a lot of people who is to once again to understand that they can understand it, that they already do understand it. Next question. Yes, the next question is from William Driscoll. With the upcoming additional stimulus in the US and even more stimulus around other countries, will the dollar and other currencies lose value? If so, what do you think about having some portion of one's investment portfolio in gold or Bitcoin? Yeah, so this is the classic, again, the apocalyptic scenario of hyperinflation and the dollar and other paper currencies, other fiat currencies losing their value and where is the safe haven, particularly as interest rates tank? And so what do we do? Oddly enough, what we're seeing is a lot of volatility in the market, we're seeing a real bull market in equities. The dollar is historically weak right now, but on the other level that obviously, as we all know, that's going to help United States manufacturing and exports. So what we're seeing is a web of a sympathetic web of push and pull, give and take. And I do not really believe there's going to be hyperinflation even if there is a huge stimulus, another trillion dollars. I think that money is simply going to enter the economy. It's going to be spent as soon as it's received as people, they owe a lot of money, they need a lot of money, people are out of work. So I don't possess those fears, but what you can see with those fears is that those fears are actually leading to extraordinary profits on Wall Street, that the Dow has reached extraordinary levels, gone over 30,000, fortunes have been made in the past, during the pandemic, literal fortunes. And a lot of the great hedge fund traders have been saying that if you're a macro trader, this has been the greatest time in your life. And if you really are a sophisticated investor, you make money off of panic, you make money off of fear. And the classic example here is the index, a lot of these macro traders are working on, which is the VIX, the so-called fear index on Wall Street. And there have been days during the pandemic where the VIX has doubled in value. So if you're a person who can actually leverage your money, your million bucks into a couple of million bucks, and then you invest in the, not the VIX, but the double VIX, you can quadruple your money in a day. People have been doing that. And so again, it's a real mix in terms of what we're looking at in the future, what we're looking at now. And I don't necessarily see, again, I don't really see doomsday, I see transformation, but I don't see doomsday. And gold and Bitcoin, certainly those are the classic, say, havens. And so if you are an investor and you're concerned about your portfolio, I would simply say, talk to John Bunzel, not the government. Well, I would respond to that. I mean, I was gonna chime in as a financial advisor that there is this phenomenon called financial repression, which has, our governments have basically been putting in place now for a number of years, which is keeping interest rates low. And as long as interest rates are low, that's a positive for assets. And it also, even if the dollar weakens, it's going to be a positive for our debt. So that's a really critical component here. As long as we keep rates low, we can print more money and we can keep the economy going. As long as there's that growth pattern, if that falters, if long-term rates get out of control, then we probably have some problems. Well, it's what Nixon said back in 1971. We're in a crisis. Yeah, right. I would say about gold and Bitcoin, I think gold has become more correlated to the equity market these days. And Bitcoin is more of that alternative currency. And of course, gold itself is as Bunzel probably knows well, is a highly fragmented business that in terms of investing in gold, I mean, it's one thing to invest in the actual material. It's another thing to invest in the index. It's an, you know, Yeah, something else. Like in terms of iron, like think about iron ore. I know we're all thinking about iron ore all the time, but the iron ore market, 50% of it is controlled by three companies. Three companies control 50% of it. If you're looking at the global marketing gold and mining and exploration, if you want to get 50% of that market, you're looking at almost 100 companies. So it's a wildly fragmented market. So caveat emptor, buyer beware. It's not a simple equation. And Bitcoin is obviously highly speculative itself. And now you can buy indices of Ethereum and Bitcoin and other cryptos. I'm not afraid of cryptos. Right now there's a lot of volatility. It's the same as primitive money. It really is. It's a way to keep us safe in the future. It's an algorithm, which is kind of a pathway through the future. We haven't really discussed that too much, but that's exactly what primitive money is, is this pathway that we can follow to keep us safe as we go forward. And it's an emblem that we hold. And of course, you mine for it, you farm it, you input energy. There's not too much difference between a crypto and a dollar. A lot of people would ask me when I was writing this book, are you gonna talk about cryptocurrency? And it's like the dollar is a cryptocurrency. And crypto also has that end to it, right? We know how many Bitcoin there are. Right, so the Genesis block of cryptocurrency is brought out in December of 2009. And the last block will be released in 2140. So again, there's anagogical quality to it. The end is in the beginning. There's a set amount of it. So watch out in 2140. Yeah, be careful about 2140. Careful, yeah, right. So another question, this is from ASA. In modern times, the idea that everything has a monetary value is Judeo-Christian and hence Western. It is certainly pervasive in our country. Does your book address the fact this idea isn't as pervasive in the rest of the world as it is in ours? Yeah, I talk a lot about the problems that European men in particular had in understanding other cultures and other money systems. And the clash and what I call money blindness. So I do spend quite a bit of time talking about this lack of understanding and then of course, the exploitation and the ways in which, I mean, for instance, Europe, the Europe of the year 500 was, this was a primitive and savage place compared to the great civilizations of Asia and Ethiopia. But the Europe of 1500, 1000 years later, watch out, right? They were the nastiest people on earth and a big part of that nastiness had come from their perfection of accounting, counting and money system, right? And so when they land in the quote unquote new world and they say, where's the gold, right? And Montezuma doesn't quite know the deal here, their currency is actually cocoa beans. That's really what the great Mexican currency was, not gold. They don't know what they're getting into. And the next thing you know, we were looking at genocide and tragedy. And so a lot of the book is not jocular. A lot of it is very serious in terms of how people have actually exploited other people as money. And this is what John was pointing to earlier about the fear that this could happen again. The fear that we do not want to allow ourselves to become exploited in that way. And there's a long history, not only of other indigenous people, but also again, this opens up a huge, huge idea. The idea that women were often a long time ago used as elements of exchange, that women's bodies were actually exploited as money. And I spend a lot of time looking at marriage ritual and the metaphors of marriage ritual and how that relates cross-culturally to the relative use or non-use of human bodies as forms of currency. So the next questions from Ryan Orsini. How do you foresee cryptocurrency, digitalization of currency, changing narratives about money? And do you think it will be useful or productive in some way in shaping regulation? That's a great question. That's a great question. I think that, I think we don't know yet. I think it's kind of like a fish swimming in water, right? The fish doesn't really understand that's what it's in. I think it's much easier for somebody like me to look back in history and to be able to show, oh, narrative developed this way at this point, money at the same time. It's very hard at this point to see it, the one thing that I think is clear though is that the crypto algorithms are all form, they're all indexical forms of money. In other words, they're disembodied, many steps removed from anything that actually has a physical body, right? And so what we're looking at increasingly are in terms of text is the end of the story and what I call the index to the story. And you can see that some of the greatest purveyors of wealth today create that wealth through indexes, indices like Google. Google is one big index, Amazon, one big index. This is how they are creating their money. This is how they're selling themselves. This is the true data that's being collected about all of us. So the future of money is going to be, and the next step in that story is something we don't quite understand yet. But just at the same, and likewise, we don't really know how to regulate it yet. Regulation generally comes late in the game. I'm sorry, John. No, you're kind of saying that data is gonna play some role or information, right? Yeah, and regulation comes late in the game because people don't know, they don't understand what crypto is. Is crypto an investment? Is it an asset? Where does it belong in corporate law, right? We're still not understanding that and those are still areas, but that's a very good point. We're only going to be able to regulate it once we define what it is. And so far, nobody has been able to do that. So the next question's from Pamela Crawford. How do you reckon thieves and bezlers, con artists and cyber criminals think of money? Supposedly the amount of cyber theft outstrips the GNP and national debt? Yeah, I think that I talk a lot about, I talk a lot about what is going on digitally in terms of global scam economy and malware and phishing. And I think the overall effect has been a general suspicion of money itself and flight from the dollar and the sense that we have to figure out another way of putting a firewall between ourselves and our assets and what is out there. And so this adds to clearly a sense of paranoia about our money, paranoia about what's going on online. But I think most of all it gives us a very strong sense of there's got to be a next step here. In other words, that money itself is suspect that money I think will be, why do I write this book? It's not like I'm the only one who had this idea. The fictionality of money is becoming more and more evident every day and it's most clear in scams. CJ Verberg has a question from your point of view. What's the difference between money and currency? That's a really interesting question. It makes me, when I think about currency, I think about currents, right? I think about rivers and currents and something that did not make the book. Sometimes people ask me, what didn't make the book? I spent a lot of time, like way too much time talking about river trade and things going up and down rivers and boats and how money was made through that travel through rivers and the currency and that the movement itself is the money, right? And what is current and what has that movement? And I think that currency is a particularly kind of manifestation of money, right? It's a subset of money. I think money is the thing again, which gives you a sense of control about the future, gives you a sense of status and then can be used in many ways as a unit of account, as a media of exchange, right? As a store of value and currency is precisely that. When we're talking about currency, we're talking about the speed of the exchange of money. And of course, that speed of currency has gone up and up and up to the point that a lot of high-speed trading on Wall Street is based on literally the speed of your connection so that you can arbitrage. And so currency comes much later in the history of money and is a subset of money. That's how I would think about it. That's how I would think about the difference between money and currency. So the next question is from John Brunson. Scarcity is natural and real. Does money just glamorize and serve as a beard for the harsh reality of scarcity? I've come from John Brunson. Hey, John, how are you? I think that when we're talking about scarcity, right? Then we're really talking about modern ideas of money. And when I mean modern ideas of money, I mean post 1776, when the wealth of nations is published. And scarcity, the idea of something, the price of something going up, the scarcer it is, that is really only going to happen in a market, in a market economy. If you look at pre-market economies, for instance, economies based on beads or shells, the whole point about money from the beginning is it's infinitude. So why were shells the first global reserve currency? Because there were an infinite number of them. A lot of them, right? Yeah, there are a lot of them. And so it's kind of like, we're afraid. So many people are afraid of money being infinite. We should not be afraid of that. Money is, in its essence, our connection to the infinite. We need to understand the infinite in order to have a conception of money. And so now we're kind of stuck in this idea of what is scarce, the Birkenbag. Therefore I must pay $40,000 for my Birkenbag because it's so scarce, it's so rare, right? And this leads to boom and bust. It leads to income inequality and all sorts of misconceptions about what money is, what our life is, what our life has to be, right? So I think that scarcity is one of those excuses that we have that a lot of modern economists have for keeping their fiction intact. So final question from David Petersil. Fred and John, hello from 1978. Does money as a myth have properties that could never exist in the 3D physical world? Can it, as a mental construct that has no direct physical representation, do things indirectly, like defy gravity, walls of water, or transform itself into gold? It seems that some of the narratives of money speak to those properties of money. Yeah, wow, why aren't you writing this book? Yeah, I mean, I think that money is uncanny and money is magic and that's its origin. How did that ostrich egg shell become a bead that worn on your body is going to give you status and security? Somebody cast a spell. Somebody said, somebody told a story about it. Somebody made it up, exactly. And so the same can be said, I don't want to offend anybody, but being an atheist myself, I'll just put it out there. The same can be said for God. God is a story that we tell and either we believe it or not. I'm not judging anybody for their belief in it, certainly not, but absolutely. And so there is no doubt that among the sex gods and the war gods, money was one of the ancient gods, money in the ancient Roman pantheon, there was Juno Moneta. And it's so interesting, what's interesting about this uncanny quality of money as this super normal figure is the way in which the elements of it, which actually are normalized. And what I mean by that is for many years, this super normal figure of money was female, right? Lady Liberty, for instance, or Juno Moneta or Lady Credit. Fortune is herself blind and female. It's only much later in the game that money becomes male, right? Money becomes male and in particular in the go-go 1980s, you know, in that long 1980s Wall Street era, money becomes very male with Gordon Gekko and the junk bond kings. And these are the, well, what are they? They're the masters of the universe, right? And so even though money is then considered godlike, again, we are constantly reducing it to that which we can understand and that which can give us what we desire for ourselves. Well, on that note, I would like to thank our two guests tonight, Frederick Kaufman and John Bunzel for the most erudite esoteric view of money and economy. Just spectacular. So thank you so much for joining us for this conversation. Everyone, please run out, not run out. Go online and purchase this incredible book, The Money Plot. I put in the chat, alexanderbook.com is our favorite bookstore downtown, but I'm sure you can find an independent bookstore near you and they can get it to your doorway. So thank you for Mechanics Institute. Thank you all for participating and your great questions. We hope to see you again at our next program and we wish you all a good night and a safe and healthy tomorrow and the next day. Thank you so much and we hope to see you again for your next book. How about that? Thank you so much. A real pleasure and thank you to John too. Thank you. Have a lot of fun, Fred. Thanks for you, John. Thanks, Fred. Thanks, John. Gerard, good to see you. Michelle Brunson. Yeah. Wonderful seeing everybody. Thank you. And I will close the doors in just a minute. So long, everyone. Bye-bye. Thank you.