Modern Money: Much Ado About Nothing

Money is actually nothing. Did you know this?

In general, when people think of money, they either feel they don’t have enough, or fear that someone might take their wealth. One of the wisest things I’ve ever heard was that both the rich man and the poor man have nothing but a $1 at the end of the week. The poor man might have used his money to buy bread, while the rich man bought a third yacht, yet each only has $1 until the next payday.

No matter how much money we accumulate, we never feel we have enough. Thus, humans spend most of their lives fretting about money and most of the crimes against humanity and the planet are done in the name of money.

And yet, what exactly is money? In our imaginations, we often think it looks like this:

But the US dollar hasn’t been backed by gold since 1971, when the United States stopped selling gold to foreign official holders of dollars at the rate of $35 an ounce. As of now, there aren’t any currencies in the modern world completely backed by gold, or anything else, other than promises and goodwill.

In reality, modern money looks like this:

It’s kinda cool, all those 1’s and 0’s floating around in cyberspace. But it’s certainly not shiny and you can’t touch, taste, feel, or smell it. Money is now an extra-sensory experience.

This means that when we fret about the size of our bank account, we are fretting about a fictional number, one that has meaning only…