Teaching about money

When it comes to money, maybe we all have a lot to learn

By Morf Morford

Tacoma Daily Index

There’s an old saying that the best way to test your knowledge of anything is to teach it to someone.

The ultimate test is teaching it to a child.

For better or worse, our children are always learning from us.

They learn good things and not-so-good things.

They learn things we deliberately teach them and they learn things we “accidentally” teach them.

They learn by what we say, but more importantly, they learn by what we do.

Few, if any, subjects are more important, and more influential in one’s life than money.

Money, beyond the clichés, jokes and stereotypes, is how value is represented.

Money is very strange when you think about it; it is valuable because of what it represents, not because of what it is.

Money, in virtually every culture, has little or no intrinsic value; you can’t eat it, wear it or, in most cases, do anything with it directly.

If you were stranded out in the wilderness, or choking on something, or with a fever-stricken child or even tossing and turning in the middle of the night, could there be anything less relevant than cash or even a bank account?

There was a time, a few centuries ago, when coins were made of silver or gold, even copper or brass, and they held a (relatively) stable value based on the agreed-upon value of those metals.

But that was the undoing of metal based coinage; individuals and businesses and nations – and individuals and businesses in other nations – and other nations themselves had to agree on the value of any given precious metal.

The only way for an economy to expand (beyond its gold reserves, for example) was to make currency purely abstract.

And in the 2020s, boy have we.

The US Federal Reserve System is looking into a central bank digital currency. (https://markets.businessinsider.com/currencies/news/fed-digital-dollar-jerome-powell-congress-issue-crypto-bitcoin-2021-2-1030114663)

Abandoning the gold standard, and all manner of beads, fur-pelts and sea-shells was strange enough, but leaving paper and coinage, even credit and debit cards, behind is a far leap.

In a way, it seems inevitable – no matter how disorienting and unsettling it might be. Money, after all, has made its way into more portable and transferable formats over the centuries if not millennia.

What could be more portable and transferable than cyber currencies?

And, perhaps in comparison, what could be clumsier than lugging around the proper amount of cash for any purchase?

Many years ago I was living in China, at a time when credit cards were rare and checks were essentially non-existent, a large purchase, for a refrigerator or a car for example, customers would accumulate a massive amount of cash and literally carry it to the store – often on a bus or in a taxi. And this was when the largest bill in circulation was worth about twelve US dollars.

As you might imagine, loss or theft was a continual problem with a near-pure cash economy. And the sheer logistics of such an economy were mind-boggling.

Banks had mounds of cash piled on every surface, and every transfer and process of storage required immense amounts of counting and record keeping.

And counterfeiting was rampant.

On a practical level, anything would be an improvement.

But why would the Chinese go from an abacus (used as quickly and accurately as mechanical calculators) to a check-based promissory note system?

They skipped checks, and even, to a large degree credit cards.

They went from cash to cyber-currencies virtually overnight.

As in many areas, from technology to the economy, they leapt from the 19th Century to the 21st.

If there is one principle the Chinese believe firmly, it is that the future is theirs.

And the future is denominated in cyber-currencies.

Traditionally there were three legitimate uses for money; to spend, to save or to invest it.

Maybe, when it comes to kids, and perhaps even a few adults, it might better to focus not on what money is, but on what can be done with it.

Having money in hand, can be fun, but even more fun is fantasizing about what can be done with it.

In fact many people have told me that the real fun of buying a lottery ticket is not the “winning” but the imaging of what we would do with that much money, essentially out of the blue.

We like the fantasy, but we also like the tangible feel of money.

There’s something primal, even comforting, about handling cash.

Yes, credit and debit cards are more “convenient” – and in many ways more secure – but as credit card hackers have learned, they are far more susceptible to unauthorized access.

And cyber-currencies are “out-there” in more ways than one.

Explaining nickels, dimes and quarters to kids is difficult enough, but cyber-currencies?

Who can even explain them to most adults?

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