What would you pack in your time machine to travel back and also possibly forward in time?
In the UK, 97% of our money exists only as squiggles on a computer screen. Governments effectively wave the magic wand of belief to give value to otherwise worthless pieces of paper and metal, and in another step removed, to their electronic incarnations, in what is akin to the biggest confidence trick of all time. Think of this as financial abracadabra.
Without the magic spell of belief, fiat money is worthless. If we travelled back in time to the 18th century armed with one of our twenty-pound notes and a debit card and attempted to buy a pail of milk, we’d likely be thrown in the stocks and pelted with potatoes. The note and the card would be useless because they’d have no context: neither king, government nor citizens would recognise them. No one would believe in them and this lack of belief would render them worthless. And as for the Swedes with their payment-enabled embedded microchips, paying for public transport with a wand-like wave of their hands, they’d likely be burned at the stake.
But if we took back a few gold coins, we’d be received with glad cries because gold is a recognised, useful and coveted commodity. Everyone in 18th Century Britain would know all about gold, they’d all believe it could be used to buy goods and services as well as to make valuable jewellery.
So thinking of what we might arm ourselves with, what we might pack in our time machine, can give us insights into the value that humankind has placed and may continue to place on different asset classes. Find out more in my latest book: discover it at bit.ly/10thingsmoney
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Linda Davies 