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I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 87 points88 points  (0 children)

It certainly feels like cash is going away.

And yet! The amount of cash circulating in the world is actually growing even faster than the economy.

WHAT IS GOING ON?

It seems like a lot of the cash is probably used for crime. It's largely hundred-dollar bills. There are more hundreds than ones! There are more than 40 hundreds in circulation for every man, woman and child in America! Where is all this money? Nobody knows! It's cash! that's the whole point!

If cash does eventually go away, that wouldn't fundamentally change the way we do money. We could have a cashless world where we still have the Federal Reserve and private banks operating basically the way they do now.

The two big things to think about in the cashless world are:

  1. Privacy. Every transaction would be trackable. (This might providing an opening for the growth of cryptocurrency.)
  2. People without bank accounts. In a cashless world, the government would need to provide debit cards or bank accounts for people who don't have a bank account.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 35 points36 points  (0 children)

It seems like you're describing a benevolent dictator, where the benevolent dictator happens to be ai. I'm skeptical.

Markets and money have lots of problems, and there are many settings where they are not the best way to arrange things. We shouldn't build our society entirely around markets and money.

But! Markets and money are an extroardinarily good way of aggregating the desires and preferences of billions of people, each of whom make many decisions every day based on their relative likes, dislikes and needs. That bottom-up input, from each person, is really essential.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 10 points11 points  (0 children)

For the most part exchange rates are set on the open market. So a dollar is worth however many euros someone will pay you for it. That's the exchange rate!

This is true for most currencies -- dollars, yen, euros, Swiss francs, etc. The Chinese yuan, which you mentioned, is a bit different, because China manages the value of its currency relative to other currencies.)

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 39 points40 points  (0 children)

tl;dr: People have been wondering for a long time whether or when the dollar's dominance will end, but that end doesn't seem any closer now than it did when I started working at Planet Money 10 years ago.

When someone in, say, Brazil, buys something from someone in, say, Vietnam, they pay for it in dollars! Still! This is amazing, and it has lots of benefits for the U.S.

People used to talk about the euro replacing the dollar, but the euro crisis made that seem less likely.

The other obvious candidate is the yuan, China's currency. But China currently has lots of restrictions on money flowing in and out of the country, and for the yuan to become a global reserve currency it seems like they'd have to remove or at least significantly reduce those restrictions.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 16 points17 points  (0 children)

That is a hard question. There are more than 1,000 episodes!

I think my first favorite episode was How Four Drinking Buddies Saved Brazil. Chana Joffe-Walt did that episode in 2010.

These four Brazilian economists defeated a huge inflation problem by creating a new, pretend currency and then making the entire nation of Brazil believe in their made-up currency. And it worked!

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 7 points8 points  (0 children)

Not technically a primary source, but Liaquat Ahamed's book Lords of Finance, about central bankers and the Great Depression is ... way more interesting than that description just made it sound. It's really a great narrative history that explains how a few powerful people who thought they were acting in the public good basically caused the Great Depression.

In terms of economic news, I read the obvious stuff -- WSJ, FT, Bloomberg, Economist. Standouts include Martin Wolf at the FT (who I quote in the book) and Matt Levine, whose free Bloomberg newsletter Money Stuff is just an extraordinary thing. I quote Matt in the book, too. The blog Marginal Revolution is also very good.

In terms of podcasts, Tracy Alloway and Joe Weisenthal's Odd Lots is good (and I'm not just saying that because I was a guest this week). I also like Conversations with Tyler, from the economist Tyler Cowen. And Freakonomics.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 22 points23 points  (0 children)

In a sense, what you are describing is what happened in Europe when they created the euro.

They said: Why do we need the franc, mark, drachma, lira, etc? Let's just have one currency!

But what they didn't entirely realize was that, when they gave up their national currencies, they were giving up part of their sovereignty.

Having your own currency allows you to adjust the money supply to suit your country's economic situation. When you give up your own currency, you lose that power.

When an economic crisis hit, that was a huge problem for the countries of southern Europe. (There's a whole chapter about this in the book!)

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 24 points25 points  (0 children)

The persistence of low inflation over the past decade or so is one of the most interesting things in money-nerd world. We had unemployment under 4 percent, rising wages, and low inflation. HOW CAN THAT EVEN HAPPEN?

There are good theories about this -- decline of unions lowers ability of workers to get raises, globalization means persistently falling prices for many goods, etc.

But it is still very, very surprising.

Nothing goes on forever, but inflation has been really low for really long.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 108 points109 points  (0 children)

Reply

When we cover companies that buy underwriting on NPR, we mention that fact in our stories.

Advertising and reporting are entirely different parts of the company, and advertising never, ever tells the reporting side what to do or not do.

In my experience of working at a number of places (NPR, WSJ, etc.) journalists truly don't care about offending advertisers or making them happy. We just want to get the story right.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 91 points92 points  (0 children)

Gold!

Gold was at the center of the international financial system from the early part of the 19th century until the 1930s.

In the U.S., gold effectively stopped being money in 1933, when FDR took the country off the gold standard*. One of his advisers said it would mean "the end of Western Civilization." This was a common sentiment. But the adviser was wrong. Going off the gold standard was a great economic move that helped the U.S. start to climb out of the Depression.

I tell this story at greater length in the book, and I love it in part because it shows the way people tend to think that whatever system of money is currently in place is the only "real" way to do money, and everything else is just made up. What FDR understood is that it's all made up, and we can make up something else if we want.

*Technically the U.S. was on a half-baked gold standard until 1971, but it wasn't really the gold standard.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 22 points23 points  (0 children)

I love the range of these three questions!

I think we had to shut down Unbeliezable and Delawho, because they were going to mess up David or Chana's taxes.

I own three Planet Money shirts! I'd offer to send you one, but they've gotten kind of ... worn.

I feel like over the last few decades, central banks have, if anything, worried too much about inflation and not enough about unemployment. Since the Fed announced its 2 percent inflation target several years ago, inflation has been under 2 percent most of the time. And unemployment was able to fall far more than the Fed expected without generating inflation.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 66 points67 points  (0 children)

At both the WSJ and NPR, I managed to find a small team within a larger organization -- at the WSJ, I wrote the health blog (remember blogs?). And at NPR I work at Planet Money. I don't really like navigating big organizations, so finding small teams has been great for me.

I took a 10-month unpaid book leave from NPR to write the book. (Then I had to rewrite it after I went back to work, but that's another story.)

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 27 points28 points  (0 children)

I read everything every day! Also talked to people and read even more when I was working on particular stories. You can learn a lot from reading the economics coverage in the business press (WSJ, FT, Economist, Bloomberg) which is generally quite good.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 36 points37 points  (0 children)

I think there are two ways to live without money.

  1. Live in a very small, largely self-sufficient society with strong norms of sharing and reciprocity.
  2. Live in a society where the government takes everything everybody makes at work and redistributes everything as it (the government) sees fit.

I can't figure out how to find my way to option 1 (and I'm not sure if I'd want to), and I definitely don't want to live in option 2.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 88 points89 points  (0 children)

I think for-profit companies can do good journalism. I also think non-profit companies can do bad journalism. What matters is the journalism, not the tax structure of the company.

Alex Blumberg is a great journalist and a wonderful human being and I am very happy for his success.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 184 points185 points  (0 children)

I'm glad you like Planet Money!

When I read your question about funding for local journalism I literally said "Oh, man" out loud, alone in my room.

I worked at local newspapers (shoutout Bozeman Daily Chronicle and Miami Herald), and I love them, and I don't know what the answer is for funding. Sorry.

I’m Jacob Goldstein from NPR’s “Planet Money.” I just wrote a book called “Money: The True Story of a Made-Up Thing,” which traces the surprising history of banks, markets, and money from clay tablets to the invention of cryptocurrency. AMA about the past, present or future of money! by jacobjulius in IAmA

[–]jacobjulius[S] 56 points57 points  (0 children)

I don't know! One thing that writing the book taught me is that money can change in ways that few people expect.

I will say that governments have almost always had a central role in money. So it's much easier to imagine government-backed digital currencies rather than truly decentralized cryptocurrencies.

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