Imaginary Realities

Just imagine. When some of the settlers moving west got out here, they were told that as much land as they could walk around in a day was theirs to keep. Other people watching them do this might have been descended from people who had been hunting, gathering, farming and camping on this same piece of land for generations. In the future someone will have to pay this person hundreds of thousands of dollars to transfer ownership to this same piece of land.

Another imaginary reality. Once upon a time less than 100 years ago, dollars were backed by a certain amount of gold or silver. (This was also true of the currency of other nations.) Theoretically, a person could go to a bank and ask to trade in their paper dollars for gold or silver. Then the law changed and we now have fiat currency. What does that mean? Fiat currency (fiat money) is money that exists because an authority or custom declares it to be money. (From the Latin fiat, which means "let it be done"). Today all nations use fiat currency. How's that for reality? This is money because we say it is money.

We have agreed that the person who walked around in a circle and declared the land inside it to be his to be the real owner of the land. We have agreed that these dollars we will buy it with are really worth something. Our acts of imagination have, by agreement, become realities.

I feel the same way today when I hear talk about the so-called banking crisis. We are giving these people billions of dollars to fix the problem. But now they are in the news again a few months later, saying that they need more billions of dollars to fix the problem again. In between, the top dogs have all given each other millions of dollars in bonuses and gifts for being such good performers. We are told that if we do not do this, our monetary system will collapse, or be seriously damaged.

Yet the sky is still blue, the earth is still made of dirt, the sun is still shining and the wind is still blowing. At night the moon and the stars are where they should be up in the sky.

Some businesses are closing because people are not shopping there much any more. But some other businesses are doing very well. The auction of Yves Saint Laurent's art collection brought in $484 million. A blue chip stock that less than three years ago was over $110 per share is now trading at $5 per share and a gourmet food store is trying to reposition itself as a "value priced grocery store." But business is way up at Netflix as people watch more and more movies. The prices of chickens and apples remains unchanged.

What is real, and what is imaginary?