Blog 12 Revisiting "Making Money: 1997

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          Blog 12  Revisiting "Making Money" (1997)


Below is a piece I wrote while learning to explain how bank-created money pops into existence, and goes on to take over the whole economy. You might compare it with recent, Blog 2, The Money Scene, to see if I have improved the explanation.

Making Money

When the cruise ship, Going for Broke, struck a reef, several hundred passengers were put ashore on a tropical island. They camped out for the night, waiting for the tide to lift the lightened ship off the reef. When they looked out in the morning, however, Going for Broke had GONE!

So what did they do? Well, they played "Gilligan's Island", but in earnest. They settled down to stay. Several became expert at hunting the wild pigs. A young couple set up shop making serviceable pigskin shoes. A few entertainers started a theatre. Some Dutchmen grew vegetables.

But this is a story about money. As the division of labour progressed, more money was needed. Everybody said they needed more, especially since the old bills they had brought with them were wearing out. 

Enter Bobbie the Geek. He wasn't too good at gardening; he was hopeless with a spear; and he cut his thumb trying to make himself a pair of shoes. But he knew that money was only paper. So Bobbie tore blank pages out of his diary and wrote on them "$20 Bobbiebucks. Redeemable on rescue. Bobbie." He seemed like a nice guy, so people took his "money" in exchange for shoes, bread and pork chops. In fact, they were soon using Bobbiebucks to buy goods and services from each other. Eventually bobbiebucks became the major medium of exchange. (Bobbie, by the way, always took his change in the old currency, and saved it.)

Still, more money was needed. So Bobbie obliged: he supplied "$20 Newbobbiebucks", which people could borrow simply for promising to pay him back twenty-ONE dollars. As newbobbiebucks in turn became the island currency, Bobbie the Banker became the island's most prominent and powerful citizen. You see, he owned all the money on the island. Everybody was in debt to him. Nice work, Bobbie.

Could it have been done any other way?   

"I always said

keeping a diary

would pay off"

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