Chet Francis

To the editor,

It's been many years since little Virginia asked if there really was a Santa Claus. Now her question might be, "Is there any real money?" In Virginia's day the government would exchange her paper dollars for something that she could see and feel. Something that had personal appeal and lasting value — silver or even gold coins. Today paper dollars can only be exchanged for more paper dollars. Silver and gold have become things of the past. Numbers have replaced them.

Yes, numbers, imaginary things like one, two, three. They can't be weighed, felt, or smelled and exist only where stored in digital records, inscribed on paper or in the minds of the inscribers. Yet these intangible non-entities have evolved into a complex system we call present-day economics. Numbers have become a major medium of exchange and their quantity a measure of wealth.

Of course there are still some paper dollars around but are used mainly for pocket change. Small-time bank robbers, foreign interests and drug dealers love to collect them, however most transactions are settled by an exchange of numbers. Credit cards and bank checks are popular mediums to convey the numbers.

A few simple rules must be observed for numbers to replace old-fashioned money. Any additions to your own stock of numbers must always come from someone else's stockpile. You cannot, increase your stock by merely dreaming up some new numbers. Such an action is reserved exclusively for the federal government. Federal numbers are created out of thin air and used to fund government programs. Copies of these numbers are kept in a special pile called the National Debt.

For instance, when you pay your federal taxes does the government expect you to send in that tenderloin steak in your freezer, a couple of pearls from the necklace Aunt Millie left or anything else of real value? Not at all. Just write some numbers down on a check and send them to Washington. Not directly of course as they must be funneled through the Internal Revenue Service which has an enormous staff for keeping track of the millions of numbers they receive. They have become so enamored of numbers as to devise a withholding scheme to ensure an influx throughout the year.

This incredible system had its origin when then President Roosevelt, desperately trying to relieve the economic ravages of the Great Depression, harkened to the counsel of John Maynard Keynes, a British economist of sorts who espoused the radical idea that governments should spend money they did not have in order to create jobs for the unemployed population. More recently we have learned to call that process deficit spending. In 1933 the US went off the gold standard to provide more money for financing social programs

Thus began the demise of the "good as gold" American dollar. After 1964 even the silver content of coins was removed. In 1966 came the final day silver certificate notes would be redeemed by the U.S. Treasury Department for actual silver. Even the lowly cent has become a zinc slug with a thin copper veneer. We found ourselves with a fiat currency. The only thing backing our dollars was the "faith and credit" of the US government. The intrinsic value of the last of our money had vanished but no one seemed to care. Numbers were working.

Not long thereafter, computers, with their ability to handle all sorts of large numbers, began to blossom throughout the land. Credit cards soon followed and were issued by countless banks and merchants eager to make a profit from the number business. A new age was dawning.

Numbers have no value if kept in a coffee can or under a mattress, but must be stored at a location where they are available for immediate re-distribution. Banks have risen to provide this service and keep meticulous records of numbers entrusted to their care. Advancements in computer science made it possible for banks to be interconnected to each other in vast networks to allow rapid transfer of numbers.

Unfortunately these networks spawned a new form of big time bank heists — cybertheft. Robbers no longer had to go through all the bother of getting a gun, arranging a get-away car, handing threatening notes to tellers, and other time honored essentials of bank robbing. A talented hacker could often break through security measures enter a banking network and transfer numbers from one account to another. Later when on-line banking appeared on the internet inter-continental transfers were even easier. Banks lost more numbers this way than they generally care to admit.

Despite numbers being light in weight, not deteriorating over time, or requiring an environmentally safe storage facility many people prefer to send their excess numbers to distant places for safe keeping and concealment. Numbers are usually transported by converting them into minute electrical impulses. They are then applied to a wire such as a telephone line or may travel by radio waves via satellite to their destinations where they are re-formed and no longer bear the slightest resemblance to the currency they represent.

Switzerland is a favored location where a flourishing industry has been built on the storing of numbers. Their banks hold numbers representing different currencies from all over the world.

The number system works so well it clouds its own future. As long as our governmental bureaucrats and bankers continue to exercise their inflationary propensity to create more numbers out of thin air there is sure to be a plentiful supply.

Keynes observed that if you gave people enough rope they would never get to the end of it. As long as the public continues to accept numbers as items of value he may be proven right.

However, in the face of the ever-increasing prices of everything we buy (reflecting the decreasing purchasing power of numbers), the compounding of the economic nightmare that besets international trade, general mistrust of government actions, and other discontentment, the public may soon awaken and question the true value of numbers.

That day may lead to the restoration of the dollar that is again backed by more than air and we can then tell Virginia yes, there is real money. If it doesn't happen that way our economy is destined to follow the path of every other fiat currency throughout history — to inflate and default itself into oblivion.

Numbers or not, the U.S.A. is headed down that sad road.

Chet Francis

Laconia