NPR and The Federal Reserve

NPR’s This American Life has produced an excellent piece on the origin of money and the Federal Reserve.

In the prologue they illustrate that money is an elaborate illusion (The Onion has seized upon this reality satirically—or perhaps not so satirically?)  Listen through 10 minutes.  Very interesting.

In act one (starting at 10:05) we learn that the Brazilian government, as all governments do, printed money to pay for their programs, and in the process destroyed all faith in the currency by devaluing it to the point of worthlessness.  To overcome this, they essentially rebranded the currency and convinced the population that this currency wouldn’t be so radically inflated.  And it wasn’t.

Act two, at 29:12, is the most fascinating part.  Listen to this if nothing else. They sum up all of the key facts about the Federal Reserve: that it is not a wing of the government, that it actually creates money from nothing, and that it operates in secret and basically under the radar.  They speak in terms of “magical” and “dangerous”.  Throughout the piece, a healthy tone of skepticism prevails regarding the wisdom of all of this.

After listening, I would highly suggest a visit to The Slideshow on the Federal Reserve and the economy, which this pieces leads into directly.

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