Contributers

 

What is Money?

Eric Hovind January 7th, 2013

OK! I know this is not a post on Creation, but with our series Godonomics out there and the Godonomics book expected to be released July 16, 2013, I just couldn’t help share the following blog. In this seemingly complex world, it is amazing that an eight-year old has pretty much figured it out! Journalist, creationist, nutrition genius, economic strategist, and personal friend, Bill Sardi posted the following story of this conversation with his son.  Kudos to Bill and his brilliant son!

WHAT IS MONEY?

My 8-year old son, wondering where money comes from, inquired about the purchase of an island.  I said yes, we could purchase an island, if we had enough money.  He then wanted to know if that island could become a country.  I told him I didn’t know, but maybe that would be possible.  He then wanted to know, if he could print his own money on that island nation.  Well, yes, I said there are banknote companies that print money for countries or you could print them yourself.

My son thought, if he started the country and he printed the money, then he would be rich by virtue of having the license to print the money.  However, I then asked him what he was going to back the paper money with?  At his age, he did not have a concept of money beyond its printed paper value ($5, $10, $100).  I said paper money only represents something of value.

We were in the kitchen during this discussion, so I suggested he could back his paper money with tomatoes which were in a basket nearby.  My son said the tomatoes would spoil.  I replied, yes, whatever backs paper money needs to be durable and portable and generally recognized as valuable.

He asked if gold and silver would qualify, having heard me speak about this in the past.  I said, yes, gold and silver would be appropriate and that the US actually backed paper money with gold and silver in the past.

He then asked what America backs its money with now.  Hmmm.  I had to tell him nothing but the promise of the government to pay with paper dollars.  So my son wanted to know why his newly created island country couldn’t do the same thing.  – Posted at the Wall Street Journal, Bill Sardi, Dec. 31, 2012.

If you have not seen “Godonomics” you will want to check it out!

 

Thanks for reading,