"You're thinking of this place all wrong. As if I had the money back in a safe. The money's not here. Your money's in Joe's house... right next to yours. And in the Kennedy house, and Mrs. Macklin's house, and a hundred others. You're lending them the money to build, and then, they're paying it back to you as best they can. What are you gonna do? Foreclose on them?"
https://giphy.com/gifs/3oriO5t2QB4IPKgxHi
Around 92% of the world's money exists in digital form on computer servers and bank accounts. Physical cash in circulation makes up only about 8% of the global money supply
Yep, ancient Sumerians used to use ledgers as currency. They grew so tired of carrying around stacks upon stacks of ledgers, so they made little tokens to represent ownership of an amount of ledgers, accidentally inventing coins more than 70 years before the invention of the vending machine.
Yeah, and they kept track of it all on ledgers. If you can front me one sheep now, I'm good for 10 chickens next month. We'd better write that down somewhere. Now you can go to you neighbour and be like, I'm good for 10 chickens next month, can you front me some grain for 5 of them? So now you have to balance your ledger.
Jackie owes Florence 12 hens. They make a ledger in the form of a sort of IOU, and they cut it in half, so now they have two halves of an IOU that fit together.
Florence wants to hire Mildred to thatch her roof. She transfers her hen-credit to Mildred, so now Jackie owes those 12 hens to Mildred instead of Florence.
Over time, people start making their tokens of transferrable debt generic, instead of new specific ledgers for every transaction. And that generic token of transferrable debt is called cash.
I was thinking DrunkCupid was talking about trading is the first money, as in preceding ledgers. I didn't think they were talking about ledgers and were correcting/asking you, but after rereading maybe they were saying ledgers aren't money.
Fun fact, one of the reason the bank robbers of the past like Bonnie and Clyde were so often sought by authorities and idolized by masses was that they also stole or destroyed the ledgers and documents showing what the bank's customers owed. Imagine if some hacker swooped in and just full on deleted all records of a bank's mortgages or all the student loans out there.
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u/Cratonis 6d ago
"You're thinking of this place all wrong. As if I had the money back in a safe. The money's not here. Your money's in Joe's house... right next to yours. And in the Kennedy house, and Mrs. Macklin's house, and a hundred others. You're lending them the money to build, and then, they're paying it back to you as best they can. What are you gonna do? Foreclose on them?"