Stuff You Should Know - SYSK Selects: How Currency Works

Episode Date: December 14, 2019

Even if you entirely eschew the concept of money, we'll bet you'd be hard pressed not to trade in some form of currency. Learn how everything from cows to cacao beans to tiny shells from Maldives have served as currency at some time or another. Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

Hey everybody, when you're staying at an Airbnb, you might be like me wondering, could my place be an Airbnb? And if it could, what could it earn? So I was pretty surprised to hear about Lauren in Nova Scotia who realized she could Airbnb her cozy backyard treehouse and the extra income helps cover her bills and pays for her travel. So yeah, you might not realize it, but you might have an Airbnb too. Find out what your place could be earning at Airbnb.ca.host.

This season on Running the Break with CJ and Alex. For Meek Mill, so obviously huge ties to Philly was at a Sixers game recently. And in what seemed like a real life curb your enthusiasm as an episode, he accidentally tripped a ref sitting courtside as the ref was running back up court. You know what CJ? I gotta say, I feel like that should be a technical foul, one free throw for the opposing team. Yes, if you rep your town and your team as much as you do Meek Mill, he's a Sixer, right?

So the opposing team's got to take free throws or unless, you know, if we're going off of the curb episode, does Meek have the discography of that compares to like Seinfeld tapes that he could bring to the ref's, you know, hospital bed. Shout out to curb. That was one of the greatest episodes ever. Listen to Running the Break with CJ and Alex on the iHeart Radio app, Apple podcast or wherever you get your podcasts. Brought to you by FanDuel, make every moment more with FanDuel Sportsbook, an official

partner of the NBA. Hi everybody, this is Charles W. Chuck Bryant here to talk about currency, specifically the September 18th, 2014 Stuff You Should Know episode, How Currency Works. I think this one was really cool because it's not just money, all kinds of currency everybody. So that's why this is my pick. I hope you check it out and I hope you enjoy it all over again. Welcome to Stuff You Should Know, a production of iHeart Radio's How Stuff Works. Hey, and welcome to the podcast.

I'm Josh Clark with Charles W. Chuck Bryant and Jerry, all right? Yeah. That makes this Stuff You Should Know. You ever had one of those, I don't know why I wanted one, but when I was a kid, I wanted one of those coin things you want on your hip to make change. I wanted one of those worse than anything. Really? Yeah, I don't think I...

Do you want to be like a peanut vendor or something? I don't know. When I was at Six Wags or whatever and I saw those things, I just thought it was boss. That's really funny. And I don't think I knew that you could buy them for like three bucks or else I would have bought a bunch of them. Yeah, because there's not much to them. It's just like the thing's not counting anything when you press it with your thumb, it's just

releasing something. Yeah, it releases. But each one, you know, your quarters, they have different sizes. So you know, you can just without even looking, you could go, here's three quarters, buddy. I know what somebody's getting for Christmas this year. I just thought of that out of nowhere. I haven't remember that since I was a kid. I was obsessed with those things for a little while.

Well, you know what you were technically obsessed with? A dispenser of currency. How's that? Teed that one up. Yeah. Yeah. Knocked it out of the park. I collected banks too, which is a weird thing for a kid to do.

Banks like piggy banks? Yeah. Even though none of them were piggy banks. Oh, what was your favorite one? Oh, man. I still have the collection. My mom's got them. I wonder if they're worth any money.

No, I doubt it. I mean, it was like a Garfield Bank and an Opus the Penguin. Eric Davis? No. Was it Opus? From Bloom County? Why am I blanking out on that? That was my favorite comic.

I don't know. That sounds right. Man, I'm losing it, buddy. So the Penguin from Bloom County, we're going with that. I was obsessed with Bloom County and then Change Counters and Piggy Banks. That was my childhood and Dale Murphy. Not Eric Davis. No, who's that?

He was for the Reds. Oh, the Reds player? Yeah. No, I wouldn't. Number 44. He was great though. I love Eric Davis. Yeah, he was.

As a non-Reds fan, I was an Eric Davis fan. I'm with you. What were you obsessed with? I liked baseball, baseball cards. Did you collect anything? I did magazines. Yeah, me too. Those are still, I think, at my dad's house.

They better be. You still got them? What else did I collect? I saved up my sports illustrators for years too. I remember the first one I ever got had Muhammad Ali on the cover. That's how old I am. Wow. It was during his comeback when he was fat and mustachioed.

Don't call it a comeback. It was not. Not much of one. That's not how that goes. How's that for a sidetrack to get us going? I haven't even done the intro. Let's hear it. The intro is as follows, Chuck, in 2013, New York Magazine, not The New York Times, not

New Yorker, New York Magazine, which is an equally good publication. Not Time Out New York, not The Village Voice. Just New York Magazine, which is actually where the movie Saturday Night Fever came from. It came from an article that was later admitted to be completely fabricated by the author. Oh, really? Yeah, in that magazine. Awesome. New York Magazine ran a really interesting article in January 2013 called Suds for Drugs.

It talked about how there's a huge black market for tide laundry detergent, specifically liquid tide. In the United States? Yeah. What? They're not making it anymore? No. They make plenty of it, but tons of it gets stolen.

The reason why is tide is such an agreed upon, great laundry detergent. That tide, and only tide, like if you tried to use gain or all or anything like that, you would get turned away. But if you have a jug of tide liquid laundry detergent, you can buy drugs in the United States with it. Really? It is agreed upon as a currency. I had no idea.

Yes. Even though you can just buy it in the store? Yeah. That's the part I don't get. Because if you're a crackhead and you steal a carton of them, then all of a sudden, you didn't have to pay for this tide, and you can use it to buy drugs. Interesting. I don't use any of that stuff.

I don't mean to pick on just crackheads. If you're a junkie, same thing. Sure. If you have a gambling habit. Yeah. Man, we got a lot of crap from a couple of people about using the word junkie. Yeah. It's pretty derogatory if you think about it, I guess.

Well, but it's a word with a definition, which means something, and that's what it means. I mean, it's not like we were just like slagging people. Yeah, no. I get what they're saying, though. You're saying like, it's just such a dismissive term of anyone who's addicted. Right. It really kind of flies in the face of the disease model of addiction.

Yeah, yeah, yeah. So hats off to the people who call us out on that. I get it. But the point is, tide is now a currency. As like, remember our prison episode, where we talked about how honey buns are currency? Yeah. Same thing. Right.

Cigarettes? Yeah. Currency. So those were currency once? That's where we get the word bucks from. I think what you're getting at, ooh, I can't wait to get to that stuff later. Okay. Etymology.

I love that stuff. I do, too. I think what you're trying to say is that, or what you are saying is that currency is nothing more than a medium of exchange and a substitute for something, a good or a service. Yeah. It is an agreed upon, that's the key. Yeah. It's got to be agreed upon.

Yeah. I'm going to give you five Lincoln logs for that car. Well, that's what you do when you're a kid. Right. And you go, I don't think I want Lincoln logs in here, but he goes, oh, you do. Right. But if the other person says, I don't want Lincoln logs, then what you have are Lincoln logs, not a currency, because it has to be mutually agreed upon, like you say.

Like dollar bills. Yeah. Literally. I have gone off on this on our show about the amazing fact that this paper, we have all agreed is worth something, and that is the only reason it's worth something. That people dedicate their lives to pursuing paper is as ephemeral as a cloud almost. Yeah. Not the greatest analogy I've made, but it still kind of works.

All right. So let's talk on olden days, and currency is a substitute for things. What currency did was solve the problem. It allowed you to give change and make change. Yeah. That's a big one. Because back in the day, if you had a bushel of corn and you wanted a chicken, you would go to your neighbor.

Well, you had to find somebody that had a chicken that wanted corn. So that's the first problem. That's a problem. But what if you do find someone, you're like, great, my neighbor's got a chicken and I've got this corn. He wants this corn. He wants the corn, but he says, you know what? This chicken is worth a lot more than that corn.

Somebody's getting a bad deal until you can make change. Yeah. Because what if corn, you could, that's not the best example because you could take out some of the corn. Right. Let's say you can't chop a chicken. Cows. Yeah.

Well, you got a cow. Your neighbor has a chicken and it's not an even trade. But you just need one chicken and your neighbor just needs one cow. You can't make change like that. Can't make change. That's one of the first roles that currency fulfilled was a way to make change, to make trade more equal. Yeah.

Before that, I think there were a lot of bad deals going down out of desperation. You know, like if your family really needed that chicken for a reason, you might end up taking a bad deal just because you need that chicken. You give your cow away for that chicken and then your family would berate you. That's right. Where's the milk, honey? This is like the magic beans incident all over again. Can't milk a chicken, honey.

You get berated by your wife. Another reason that currency became popular is because it allowed you for the first time to really amass wealth because you can harvest all the corn you want, but that corn is going to go bad unless you can find a way to trade it. In a barn full of rotten corn, no one any good and it doesn't make you any richer. In practice, practically speaking, you would be an extraordinarily wealthy person if you had tons of corn. In theory, yeah.

But like you said, it's going to go bad so you could lose all your wealth would literally rot away. That's not the case with, say, a gold coin. Gold coins aren't going to go bad and deteriorate, so they're that stand-in for those enormous stocks of corn because you had all that corn and then you traded it for gold coins. What you did was you took your wealth of corn and stored it into something of equal value, in this case, gold coins. That had a huge impact on civilization because the most powerful people were not just the

ones who held the political and military influence all of a sudden. If you could accumulate wealth, then you could buy that junk. Yeah, it gave rise to the merchant class. It democratized the world. It did because before, it was like you were born into a wealthy noble family and that's how you gain power. If you weren't T.S., that meant that you worked the land for this wealthy family. But if you can sell something and get money in exchange for it instead of a cow for a

chicken, you save that junk up and you buy someone to go kill that landowner, then that's your land. Democracy. Democracy at work. There are generally considered to be four categories of currency. You have commodity currency, coins, paper money, and electronic currency these days. The commodity system, it is a placeholder, like we said, for purchasing power, but it is also has value as a thing because corn is valuable.

It's not just a piece of paper or in the case of the Aztecs or little cacao beans were valuable. They use those as money, but one of the problems with that is if the person you're trading with doesn't find that valuable, then it's worthless. Yeah. Usually within a society, everyone will find that commodity currency valuable like the Aztecs with cacao. Yeah, they love this stuff. They made chocolate out of it.

It was the elixir of the gods kind of stuff. They drank it, right? Yeah. Monazuma drank like 20 or 40 cups of it a day. Until he died. From drinking too much chocolate. But the conquistadors who came didn't value cacao beans at all. So rather than trade, they just took everything.

Yeah. And dumped the cacao beans because it was worthless to them. Yeah. So this is a good example of a commodity-based currency, like even if everything else falls apart, that cacao beans still has value in that you can make chocolate out of it. In the society, chocolate is valued, ergo, they value the cacao beans, so you can use it as currency. Plus, in this case, cacao beans are easy to carry, so they're portable and they're plentiful

and small, so you can make change with them. Yeah. The second thing was the cacao bean in commodity currency. A lot of stuff is perishable, more perishable. A lot of cattle is super bulky, you can't carry on a bunch of cows. Goats. Goats. But nevertheless, that is a form of commodity currency, it's just had its downsides.

Yeah. Like the goat has value in and of itself. Yeah. Cute. Cute. Milk. Meat. And cute.

Hair. And cute. And very cute. It's going to happen in one of these days. Yeah. It's going to happen. You're going to come over to my house and the little goat's going to bounce in the room, clip-clop.

You're going to go, what the? Have you ever seen bee, the lamb? I showed you that, right? Dude, that's probably my top five all the time favorite. It's one of the most adorable things ever. If you don't know bee, the lamb, just go type that into YouTube right now. Oh, is it a lamb? I think so.

I thought it was a pygmy goat. I think it's a lamb. Jerry says lamb. All right. I win. All right. Here's some cacao beans. Nice shot.

Hey, everybody, when you're staying at an Airbnb, you might be like me wondering, could my place be an Airbnb? And if it could, what could it earn? So I was pretty surprised to hear about Lauren in Nova Scotia who realized she could Airbnb her cozy backyard treehouse and the extra income helps cover her bills and pays for her travel. So yeah, you might not realize it, but you might have an Airbnb too. Find out what your place could be earning at airbnb.ca slash host. On the podcast, Hey Dude, the 90s called David Lasher and Christine Taylor, stars of the

cult classic show, Hey Dude, bring you back to the days of slip dresses and choker necklaces. We're going to use Hey Dude as our jumping off point, but we are going to unpack and dive back into the decade of the 90s. We lived it. And now we're calling on all of our friends to come back and relive it. It's a podcast packed with interviews, co-stars, friends, and non-stop references to the best decade ever. Do you remember going to Blockbuster?

Do you remember Nintendo 64? Do you remember getting frosted tips? Was that a cereal? No, it was hair. Do you remember AOL Instant Messenger and the dial-up sound like poltergeist? So leave a code on your best friend's beeper because you'll want to be there when the nostalgia starts flowing. Each episode will rival the feeling of taking out the cartridge from your Game Boy, blowing

on it and popping it back in as we take you back to the 90s. Listen to Hey Dude, the 90s called on the iHeart radio app, Apple Podcasts, or wherever you get your podcasts. Okay, we're back, let's see if we can get the mojo back again. All right, the mojo is still flowing because our message break in reality was only two seconds long. That's our dirty secret. Coins is our next form of currency, and they were first minted in Lydia, which is modern

Turkey, and they're King Croesus, or Croesus, said, you know what, I'm going to make these little small metal ingots. I'm going to stamp them with our emblem, and it's 640 BC, and this is called coins, and it's worth something. And the Greeks said, this is great, and the Romans said, this is great, and we're going to make ours out of silver and gold, so it's actually worth something, although when you think about it, that's just worth something because someone says this worth something. Gold?

Sure, all of it. There's a Forbes article that basically said, all currency is a fiat currency. So fiat currency means that it has value by fiat, like the fiat of the king, a decree, and it says the government or the king says this has value, it's 97% gold, it's valuable, so go trade it as such by fiat, right? Yeah, if you think about the only things that really have real value are food and water. Pretty much. You can make the case that a commodity-based currency like cacao beans isn't necessarily

a fiat currency because it does have inherent value that anybody can use, but gold is, it's not really that valuable, it's not really that useful, especially in like a pre-industrial society. I wonder if gold first became valuable because it was shiny, and literally yes. They could make pretty things with it. Honestly, yes. Interesting. Exactly why, because it's so malleable, you can't make tools out of it.

Even today, it's not that useful, I mean, they use it in some solid state electronics and things, but it's more valuable simply because it's gold. Crazy. Yeah. So even if it's backed with gold, it's technically still a fiat currency. I've never heard that term, FIAT. So what is the fiat car all about, does that mean it's just special because they say it is?

No. All right. In China, I thought the Chinese made the first coins, but did what? The Grabster says no. Yeah. The Grabster says that it happened about the same time it did in the West, 5th century BC. They started out oddly with tools like knife shapes as currency with little holes drilled

in them so they could keep it on a string, and they just shrank over the years till it was about the size of a coin, which I thought was odd. But they kept the hole in there. So even until the mid-19th century, the Chinese coins were just these little round coins with a hole in the middle, so you could string them on a string. Yeah. That's because they didn't have the little coin dispenser on the hip. No.

They would have thought of that. Which is surprising because the Chinese invented practically everything except the coin dispenser, the hip-mounted coin dispenser. Did they even still make those? Sure they do. I'll bet. All right. I'm going to buy one.

If not, Archie McPhee probably makes it in an ironic version. Who's that? You've seen all their stuff. They make funny... They were the original probably like bacon air freshener, car air freshener. They make stuff like that. They make... The horse head.

Gotcha. All their stuff's in Urban Outfitters. Probably. In the Chachki section. Yes. All right. I hate them then. One of the big impacts of coins was now the government actually controlled the money supply

and could manipulate it and say what it's worth. Roman emperors were dumb and said, you know what, we're just going to reduce the amount of precious metal in some of these because that makes us richer, but that devalued things such that it ended up being one of the factors in their downfall. Yeah. They didn't quite understand how it worked and it took thousands of years for anybody to figure out really how it worked, but basically if you have... Do we still know how it works?

Kind of. I think we have a better grasp than the early Roman emperors did. Yeah, that's true. Because they would say, hey man, I've got a ton of gold and my predecessors would make 10,000 gold coins out of a ton, but I, being as clever as I am, I'm going to make 20,000 gold coins out of this ton and double my money, but rather than double the money, it devalued the currency and led to the decline of the Roman Empire. That's right.

Like you said, but that's how. Yeah, and after that, it took a while for coins to come back in fashion all the way to the Renaissance because in the Dark Ages, because of a lot of that stuff, people didn't trust coins. Right, and for good reason because there was someone behind it who could decree the percentage of gold in that coin. The thing is, and we'll get to this later, the powers that be can decree value, but ultimately it's up to the general public, the people who are trading in these things to determine

really how valuable they are. There's something called perception of value that has to do with just how valuable a currency is or not. We'll talk about it in a minute, but that's what happened in Rome. Next up, we have paper money, or as they call it, folding money here in the south. Paper money was first developed by the Chinese as well, and they used, like you said, buckskin sometimes, bark, parchment, and it was a bill of payment. Leather was also used in Europe around 1100, which...

Didn't really catch on then. No, I think leather money would be kind of cool though. Leather money, sure. If you hate animals, what better way to kill more of them? I wonder how much a cow would have been worth then. Yeah, because you... Well, they were using the skin for other stuff anyway. Yeah. Good point though.

In Sweden in 1661, they issued paper money, but they didn't quite understand it either and flooded the market with it, which made it almost worthless as well. Still. Still hadn't figured it out. I get the desire though, like, oh, everyone says this stuff's worth something. Yeah. Let's just print a ton of it. Exactly.

Yeah. It didn't catch on after the Swedish experiment of the 17th century, but it didn't take too much longer. It was the 18th century when paper money finally did catch on, and it was based on the practice of Goldsmiths at the time, where if you gave them some gold, they'd give you basically an IOU, say they were making something out of the gold, or they were hanging onto the gold for you. You had what amounts to a promissory note saying, you bring this IOU back to me, and

I'll give you this amount of gold in return. It was basically the first what's called gold-backed paper currency. Once banks figured out just how that could work in theory and in practice, anybody could start issuing currency. When money was backed by gold, even right here in the US, all the way up until 1971, every dollar had gold somewhere. Not just dollars. Pretty much any paper currency in the world at the time was backed by gold, silver, some

sort of precious metal. That we all agreed was valuable because it's shiny. Yeah. There was a stock somewhere in the world that you could trade your paper money for that value in gold. Yeah. You could go somewhere to the gold tradery and say, here, I want all this money in gold. Did you know that's what the Wizard of Oz is about?

It's an allegory for the gold standard. Oh, man, it's, depending on who you ask, it's about 10 different things. It's a popular allegory for the gold standard. I just posted an article about like 10 different theories on what Wizard of Oz means on our Facebook page. Mine is right. Yours is right, and then everyone else is wrong. Thank you.

That's all I ever want to hear from you. I know. So now we're on to e-money, which seems like something super new, but it actually came about after World War II when banks started recording the information of the day onto magnetic reels and taking it to the Federal Reserve Bank. And all of a sudden, they said, you know, we don't need these silly $10,000 bills because we can just record this all electronically. And all it took then was a wire connection and trust for people to trust that this really

is money even though I'm not seeing any money. Right. Right. And that is the real distinction of it because with an electronic transfer, originally you're transferring information about money like, I have $100,000 over here that I officially give to you. And so that electronic transfer becomes a promissory note in and of itself. And they figured out that they can do this after they realized that money in and of itself

isn't valuable, so we can just do this whole thing electronically. And like you said, they did have $100,000 notes, and apparently there's some in circulation still. There's a couple hundred of them in circulation. They had $500,000, $1,000, $10,000, and $100,000 bills. There's a really neat mental floss article that you can read called $100,000 bill, the story behind large denomination currency. And it talks all about that, but it was prior to the magnetic tapes that were passed from

bank to bank or that recorded this information, this is how banks would settle up transfers through $10,000, $100,000 bills. Yeah, and the $100,000 has Woodrow Wilson on it, and they only made those for about three weeks, but that was never in the public. That was just between banks. Like no, it was never in circulation. They're still around from what I understand, though. Yeah, there was in 2009, there were less than $400, $500 bills, $1,000 bills, $5,000

bills, and $10,000 bills, all between like 3 and 400 still in circulation, which I thought was pretty interesting. Yeah. And they're usually worth... It's like some kind of frame now, you know. There were way more than their face value. This mental floss article points out that if you have a pristine $10,000 bill, it's worth at least 10 times that.

Wow. And they all had different presidents throughout the years. It wasn't like a single version of it. There was a bunch of different versions of all those, except for the $100,000. Yeah, that was always Wilson, right? Yeah, because they just printed it for three weeks. Wood, woody. I wonder why he got that honor.

Yeah, I don't know, because he was money. He didn't even know it. So with electronic money, another few things really helped submit that as a viable thing. One was the first credit card in 1950 Diners Club said, you know what, rich businessman, here's a piece of plastic, so you can impress your friends by not even carrying cash and pay for whatever you want with this thing, and then we'll charge you some interest, and then you'll pay us back. Yeah, and we got even further from the commodity by saying, now, you're not even using cash.

We're using electronic promissory notes. By charging this, that's the promissory note. And then they realize, hey, this shouldn't be just for rich dudes, because... We can financially cripple everybody. Exactly, this interesting is really neat. So everyone should have a credit card, and today there's over 200 million visas, which started in 1958. Then the Social Security Administration started doing e-deposits all the way back in 1975,

and people kind of got used to the idea that, all right, I see it's in my bank account now, so I trust it. Yeah. Which is a big step forward. Yeah, it took a little while to catch on, but then now it's like... The Grabster points out, people started paying bills, transferring money between accounts, and sending money electronically without ever even touching it, which is true, like I hadn't thought about that, but there's plenty of money that I earn and spend that it's never

physical ever. That's all my money. Yeah. I almost never have or use cash. Like I get paid electronically, it goes to a bank number, and then I have an American Express that I pay for things with, and then I pay for that electronically. And I'm just trusting that this is, as long as the lights are on, I guess everything's working out.

Right, exactly. And basically it's like the future, like what everybody talks about in the future, we're not going to have money, we're going to have a credit. Well the future's here. Apparently 8% of the world's currency is in hard currency. This all sounds so dangerous when you start talking about it like that. Like all it takes is one big crash of electronic crash, and what if they were like, all that money that you thought you had, it's not here now, and we don't know what happened to it.

It's entirely possible. That's why they have the FDIC though, in the United States at least. Remember the early days of internet purchases, how distrustful we all were, like I'm not putting my credit card, I'm not typing that thing in, and it never occurred to us that we hand it to a waiter or whoever that can do anything with it. And then it finally just became less important just because so many people were doing it, that the chances of your credit card being stolen were lower, coupled with the fact that it became evident that credit card companies were willing to just wipe clean debts accrued

like that illegally. People are a lot more trusting of it, I guess. Yeah, I had a lady in front of me at this grocery store the day that wrote a check, and I was just like... Oh, were you just like... I know. I felt like a jerk because I had to wait an extra minute, but I did want to say like, you know there's a better way of doing that now.

Yeah. Checks. And I can't remember the last check I wrote. It's been years and years and years since I've written a check. For me, it's usually like a government thing, like a tag or something, a tag, tax or something. Yeah, I do all that with my card, too. And then, of course, if you want to talk about the bleeding edge of electronic money, e.g. Bitcoin and that kind of thing, you should go listen to our Bitcoin episode, which we're

told was pretty good. Yeah. I think even the guys from Pod on Pod reviewed our show and they listened to the Bitcoin episode and said we did a good job of explaining it. Hey friends, when you're staying at an Airbnb, you might be like me wondering, could my place be an Airbnb? And if it could, what could it earn? So I was pretty surprised to hear about Lisa in Manitoba, who got the idea to Airbnb the

backyard guest house over childhood home, now the extra income helps pay her mortgage. So yeah, you might not realize it, but you might have an Airbnb, too. Find out what your place could be earning at airbnb.ca slash host. On the podcast, Hey Dude, the 90s called David Lasher and Christine Taylor, stars of the cult classic show, Hey Dude, bring you back to the days of slip dresses and choker necklaces. We're going to use Hey Dude as our jumping off point, but we are going to unpack and dive back into the decade of the 90s. We lived it, and now we're calling on all of our friends to come back and relive it.

It's a podcast packed with interviews, co-stars, friends, and non-stop references to the best decade ever. Do you remember going to Blockbuster? Do you remember Nintendo 64? Do you remember getting frosted tips? Was that a cereal? No, it was hair. Do you remember AOL Instant Messenger and the dial-up sound like poltergeist?

So leave a code on your best friend's beeper, because you'll want to be there when the nostalgia starts flowing. Each episode will rival the feeling of taking out the cartridge from your Game Boy, blowing on it and popping it back in as we take you back to the 90s. Listen to Hey Dude, the 90s called on the iHeart Radio app, Apple Podcasts, or wherever you get your podcasts. So Chuck, we were talking about the gold standard and how that's what the Wizard of Oz is about. And prior to that, with the gold standard, inflation happened, the price of gold fluctuated,

so therefore the price of anything pegged to it, like the dollar, would fluctuate too. When we abandoned the gold standard, officially in 1971, but prior to that, I think in the 30s is when it really started, we really took a huge leap of faith, because there's nothing backing it anymore, like there's a huge, it's a myth that you can take your dollar bill and turn it in for gold. They will, some guys in white coats will come and lock you up in a padded room for a little while. They said you can come and buy this gold ring with your cash.

Pretty much. You can buy gold bullion with it, but you can't. That's not a trade. Yeah, exactly. And we're going to charge you some fees for that too. So once we abandoned the gold standard, it was a big leap of faith, because as Milton Friedman put it, quote, the pieces of green paper have value because everybody thinks they have value.

And as long as we all think together and believe together, they will stay valuable. But there are certain times or certain occasions and events when we all believe that things become a little less valuable, that currency is a little less valuable than at other times. So this perception of value can have an impact on the value of currency. And the Grabster gives a pretty good example. It's when we deflate or devalue currency relative to other currencies, which we'll do sometimes because we want to attract that currency's native investors over here in the US. So like if right now you can buy five francs to the dollar, five euros to the dollar,

and we say, well, we want to encourage more investment in Europe. So we're going to let the dollar devalue, and we're going to make it so it's equal to three euros, and then we'll stabilize it. Well, that'll encourage more people in Europe to invest in the United States because the euro now has more buying power relative to the dollar, but everyone in the United States gets WTF. We got all these dollars, and now it's worthless because you just told us that you're going to make it worthless relative to the euro.

Nothing really happened to the dollar, but everybody agreed literally overnight that the dollar is less valuable now because it was devalued. That's one way that currency can fluctuate these days. Yeah. I wish I had a better understanding of when people say what the dollar is worth. Sometimes that just makes my head spin. I have one for you. You're going to love this, man.

Let's hear it. The Big Mac Index. Oh, God. It's exactly what you just said. If you want an understanding of it, there is a guy in 1986 who wrote in The Economist basically the Big Mac Index, and it says- Yeah, we've covered this in one of them. I'm on the Bitcoins, yeah.

We may have done it in their stuff, super stuff got into the economy then. That was 80 years ago, though. It was. Yeah. So we'll go over it again. The Big Mac Index says the price of a Big Mac relative to the price of a Big Mac in another country, right? So it's basically saying you can- and it's tongue-in-cheek, but it actually does kind

of work. Right. You can show the buying power, the purchasing power of one currency relative to another based on how much a Big Mac costs in each country. The Big Mac. And once you see it and look at it like that, you go to The Economist and type in the Big Mac Index and it'll bring this up and it's an interactive scale, which makes it awesome. And you understand relative purchasing power.

Well, I should spend some time on that side. Thank you. And it'll make me hungry. So then the other way that things can devalue is with supply, and that is just basically supply and demand. When there's a lot more money available, it by nature becomes less valuable. Yeah. So supply is high, prices go up, supply is high, prices go down.

Right. So that's inflation and deflation. Bet goes up, bet goes down. All right. Okay. I guess we should answer this. Are you watching The Simpsons every episode marathon? I've tuned in some here and there, but what I've really enjoyed is the influx of articles

about the best seasons, the best episodes. Yeah. It's really like a trip down memory lane. I do not have FXX, and so therefore I'm bereft. Yeah, but you've seen them all anyway. Yeah, but it'd be so nice to see them again like this. Yeah. I mean, they're running them nonstop like you wake up at 3 AM and it's on.

I know. Don't think I wake up at 3 AM and realize that I'm missing a Simpsons right then. Well, you caught, bet goes up, bet goes down. That's because I love the Simpsons. Exactly. So we talked about inflation and deflation, but if you want to know more about that, you should check out how much money is there in the world, our super stuff got to the economy, egg flation, those are all some good episodes we've done on that kind of thing.

Yeah, and we mentioned earlier, I talked about, I can see how you might be incentivized to just print loads of money if you want more of it, and we've covered in other shows why that's a bad idea, but never has it been more evident than in post-World War I Germany. They had, I mean, this is amazing stuff. I think Zimbabwe beat them eventually, didn't they? I couldn't remember. It's so staggering. Either Zimbabwe or Hungary.

Well, no, I think it was Zimbabwe. Okay. I don't know, maybe it was Hungary. Remember Hungary had a revolution in the 40s that was just staggering numbers of hyperinflation. Yeah, but this is a pretty good example of hyperinflation. Well, after World War I Germany owed and wore reparations about $33 billion. In like, $1919. Yeah, and they didn't have that kind of money.

So they said, well, let's just print a bunch of it and see what happened. It's not going to be backed by any kind of commodity, and it resulted in hyperinflation to the extent where in 1923 it was called the hyperinflation of the Weimar Republic from June 1921 to January 1924. It's because they funded the war through borrowing only. They didn't like raise taxes to pay for the war. They literally borrowed money to pay for World War I, and it resulted in eventually $42 billion with a B, German Marx, was equal to one penny of US money.

And I didn't think that could be right, but it's right. And it was so bad that there was something called a mental condition called zero stroke that it caused, which is when you're compelled to write endless rows of zeros, because when you see some of these numbers, you're like, is that even a number when you're trying to do these calculations, and those influx of zero stroke in Germany at the time. And so I was wondering how did Germany ever recover? They basically started over again and said, this isn't money anymore. We're going to start over, and we're going to have a new bank issue, something called...

Deutschmarks? No, the Rentomark, and this is our new money. All that money is no good. To start over from scratch. But this is actually back. There was a bank, the Deutsche Rentobank, mortgaged land and industrial goods to the tune of about $3.2 billion, like hard assets that were backing this money. And it worked, and it turned around almost overnight to the point where a US dollar was

worth 4.2 rentomarks, so that was $4.2 billion. And I guess everyone just got on board. So, all right, that old money is no good. Wallpaper your walls with it. And now we have new money. You know, a lot of historians credit that really difficult period that Germany was put through or put itself through depending on who you ask after World War I is the reason why fascism was allowed to take hold there.

I believe it. And the lead up to World War II. Because, I mean, when I say it's stabilized, it stabilized the money overnight, but it still wasn't. They were still in bad shape. It took a while to dig out of that. Did you see the thing I sent you on cowrie shells? Oh, yeah, a little bit.

Cowrie shells are sea snail shells, they're little tiny white shells that look porcelain. And literally for about 2,000 years, they were used as currency throughout the world. And they came almost exclusively from the Maldives. And if you were an Arab trader, you would go down to the Maldives, you would buy about a million cowrie shells for one gold dinar. Then you'd go back to India or go to India and you would sell 10,000 of them for a gold dinar. So you could just make a ton of money overnight.

And then the further and further away they got from the Maldives and the closer and closer to China they got, which is a country that used these things like crazy as currency, they were worth more and more. Oh, more. Yeah. And the Maldives, you just scoop up baskets full of them and they were not nearly as valuable. But as you got away from the Maldives, they grew more and more valuable and they were used as currency literally until the mid-19th century.

I mean, they started and we have the earliest reference in about 350 BCE. And in the 1850s is when the currency finally collapsed just because there were so many of them on the market. That's crazy. But they would pay using 500,000 cowrie shells and you'd have to count out 500,000 cowrie shells. And then they used them because they were pretty and they were hearty and didn't break real easy.

Yeah. They're portable. Yeah. Plentiful, small, so you could make change with them. Wow. Yeah. And people liked them. So therefore they became currency.

But they lasted as currency for like 2,000 years. Again, all you have to do is agree that something, although that's a weird thing because that's something you can just go out and find if you're in the right part of the world. If you're in the right... Exactly. Yeah. That's why they were less valuable and the Maldives more valuable like in China. Right.

So you want to talk etymology? Yeah. You said, what was the first one you said? The buck? The buck. Comes from buck skin and the sawbuck. I don't know where sawbuck is a tenor, right? I believe so.

The word phi comes from the German word for cattle, phi, V-I-E-H. Interesting. Right? Yeah. Speaking of shells, I believe Pacific Northwest tribes used wampum, which were white shells. And the phrase shell out comes from that. When you pay somebody in shells, you are shelling out. I wonder if that's where clams comes from?

Probably. What's your funny word for money? Beans, bones? Rocks? Somolians? Somolians. I tried to look up Somolian because I think everyone knows that's the cartoon currency, but I couldn't find anything.

It kept defaulting and saying, do you mean Somali money? I was like, no, I mean Somolians. I think it's... I even put cartoons and I couldn't find much of anything except, like I couldn't find an origin like who made that up. Right. Let's say Napoleon since it rhymes. Maybe Chuck Jones.

It's possible. We could ask our friend, Jessica, she might know. You saw Charles Schultz's granddaughter email this, huh? No, I didn't see that. Yeah. So now Chuck Jones' granddaughter and Charles Schultz's granddaughter are both stuff you should know fans, which is pretty awesome. Yes.

I'm waiting for a return email. I was like, you've got to give me some inside story here, please. About... About grandpa. Right, exactly. Do you want to know the etymology of Somolian? Do you have it? Yeah.

Man, how did my Google skills not pan out? I am proud of you, Chuck. Yeah. For not saying that. Yeah. So Somolian is spelled S-I-M-O-L-E-O-N. It's an English word. All right.

That's where I got sidetracked. They think that it is a late 19th century blend of Simone, which is apparently a French word for dollar, and Napoleon. Really? Yeah. And why was it exclusive to cartoons? I don't know, but they think it came from New Orleans in the late 19th century. So Simone was either dollar or six pence coin.

It was a British slang and Napoleon. So I guess that's where Somolian came from. Where'd you get that? What's the website? WordSense.eu. All right. I believe that. E-U, that says it all.

They have a clean look to their website, which makes me believe that they know what they're talking about. Yeah. When you look at a website, you can get a lot of information about its accuracy, just if it looks like a MySpace page from 1993. I hope MySpace is around in 1993 because the pedants will write in. Yeah. There wasn't MySpace then.

MySpace came about in 1994. In the word dollar itself, account in Czechoslovakia in a town called, well, it doesn't matter where it was. He started minting silver coins in 1519. Yakimov. And they were called, taller Groschen, which was shortened to tallers, and taller eventually became dollar in the United States. And we talked in the salt episode about how the word salary came from salt.

So I looked again, because I think you said that that wasn't true, that that's a myth. And it's not necessarily true that it's a myth from what I can tell. It's just unproven. Gotcha. So in the first century, Pliny the Elder, the Roman historian says that that's what the word salt came from was they used to pay soldiers in antiquity in salt, but he doesn't back it up and they can't verify it. That's a good story.

Yeah. The very least is about a 2,000 year old story. So let's go with, yeah, it's true. Yeah. I had a history teacher in college, my best history teacher ever that said, never let the facts get in the way of a good story. Yeah, I've heard that. He was a good guy.

I can't remember his name. He might have had him. He was, man, he was great. One of my first big inspirational teachers in college, that is. I got you. So much so that I don't remember his name. The one guy, if you want to learn more about currency, you should listen to any number of our episodes on currency, including this one again, or you can type currency into the

search bar at HowStuffWorks.com and it'll bring up this article. And since I said search bar, it's time for a listener mail. I'm going to call this rare shout out. We don't do this a lot, but I'm going to do it today because I like the cut of this dude's jib. My name is Jared Bagnall, exclamation point. I'm writing to see if you could do a tribute to my wife, Bree Bagnall, and your listener mail.

I'm a huge fan of you guys, but my wife is most definitely your number one fan. You can safely say that a few hundred of your listeners can be attributed to her alone. She has dozens of people hooked on YSK, and from them a dozen each. She's so excited every Tuesday and Thursday that your podcast comes out. She tells everyone about them. She's the nicest person in the world, caring, sweet, shy, and deserves some recognition for being so awesome. One year anniversary is coming up.

Got married in Jamaica, and though it was an amazing experience, she's still bummed that we couldn't go with our family. I would like to see if you could dedicate your listener portion to her and to our anniversary so everyone can know that she's great. That's pretty nice, Chuck. Thanks, Josh, Chuck, and Jerry. Did I spell that right? No, you did not.

How do you spell it? J-E-R-R-Y. Let's just get it on the record if we haven't before. J-E-R-R-I. That's right. For the 5% of people who listen to listener mail. Hey, guys. This would be a great surprise for her while running into your podcast to hear this tribute.

Jared, number two fan, riding on behalf of Bree, number one fan, happy anniversary. Way to go. Way to make it to the one-year mark. I wish you many, many more years of happiness to come. We both do. Yes. I'm speaking for Josh, although do you wish them happiness? Of course I do.

I'm glad for them. If you want to take your chances to see if Chuck will give you or your loved one a shout out on the episode, the podcast, that's what I meant. Good luck. Exactly. You can try tweeting it to us at S-Y-S-K Podcast. You can join us on facebook.com slash stuff you should know. You can send us an email to stuffpodcast.howstuffworks.com and, as always, join us at our home on the

web, stuffyoushouldknow.com. Stuff You Should Know is a production of iHeartRadio's How Stuff Works. For more podcasts from iHeartRadio, visit the iHeartRadio app. Apple podcasts are wherever you listen to your favorite shows. On the podcast, Hey Dude, the 90s called, David Lasher and Christine Taylor, stars of the cult classic show, Hey Dude, bring you back to the days of slip dresses and choker necklaces. We're going to use Hey Dude as our jumping off point, but we are going to unpack and

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And a different hot sexy teen crush boy bander each week to guide you through life. Tell everybody, ya everybody, about my new podcast and make sure to listen so we'll never ever have to say bye, bye, bye. Listen to Frosted Tips with Lance Bass on the iHeartRadio app, Apple podcasts, or wherever you listen to podcasts.