Goats and Money

[Nothing’s more fun than starting off with a bunch of disclaimers, right?]

[The following does not address the US and global credit-crunch/mortgage-backed-securities-meltdown/Three-Hundred-Billion-Card-Monte-Scheme that is ongoing even as I post; not because I don’t understand it (I don’t, but I’ve never let that stop me yet); but because I can think of nothing more outrageous or nonsensical to say about it than what is already being reported as hard fact in the New York Times.]

[Nor does the following, which is purely hypothetical, bear any relation to anyone’s real financial status and/or dealings. Unless, by purest coincidence, it does, because I know nothing about said statuses and dealings and wouldn’t be able to tell.]

[The same goes for livestock values.]

Delores Loves Hydrangeas

Delores Loves Hydrangeas

 

Okay, so –

My friend Alfie works in the greater Washington area, owns her own home, and does not particularly care for hydrangeas. 

Let’s say that her house is worth some number of items for potential barter, say, 2500 goats (unneutered yearling milking nannies in good health; for further details, see fine print). Since Alfie & Mr. Alfie had saved and traded carefully for several years, they had 500 goats to buy the house with, and they were able to borrow the other 2000 goats from the Bank Of Seat Pleasant (at a fixed interest rate of 200 goats per annum). Thus Alfie’s house payments are 20 goats per month, at which rate she will have paid off the mortgage sometime after all the present goats have gone to goatie heaven. 


Now, the Bank of Seat Pleasant gets 20 goats/mo. from Alfie, but it can only gainfully pasture and lend 10 goats per month itself. So it has a standing agreement with the Nutbury National Bank in Connecticut, whereby BOSP loans the other 10 goats to NNB at 5% per annum (i.e. one goat biennially), shipping them in armored livestock vans on some pre-arranged schedule. 

Turning our attention to my Connecticut-based friend Hay, who is extremely fond of hydrangeas but otherwise reasonably sane, we find him at the Nutbury Hydrangea Nursery. He only has 5 chickens (standard exchange rate = 8.5 chickens to the goat, see fine print op. cit.) in his portable wallet-coop, but he brought his On The Hoof™ debit card (fee-free thoughout the entire Goat Remote® system) along as well. 

And it’s a good thing, too, because they’ve just gotten in the hot new hybrid wonder-hydrangea H. x. ‘Stay-Puft Cumulus’. The nursery is charging a pricey 2-1/2 chickens apiece; but Hay, having learned of their existence and availability, will now not be able to survive until midnight without at least one.

He throws fiduciary prudence to the wind and buys three of them, and with state and local sales taxes (we won’t go there) he authorizes a debit totalling (ever-so-conveniently for us) exactly 8.5 chickens (and is glad he still has some chickens on him in cash when he stops by KFC on his way home).

After a trusted nursery employee totals out the day’s charges and credits and takes them to Nutbury National Bank the next morning, he returns with one goat in payment for Hay’s purchase. 

 

To review, let’s consider an individual goat, perhaps named “Delores”: 

Alfies recieves Delores; along with several other goats, a few chickens, and some chicken feed; in her pay packet. Delores is then bundled up with 19 other goats and sent to the Bank of Seat Pleasant to pay Alfie’s mortgage. 

After a brief stay at BOSP, D. is trucked up to Nutbury National Bank, where she joins, among others, a few goats that were in Hay’s pay packet and which he deposited in his checking account at NNB. 

A week or so later, Hay’s debit clears, and Delores finds herself at Nutbury Hydrangea Nursery, where there are lots and lots of large, billowy bushes with really tasty flowers. :) 

Thus, some monetary value from Alfie’s paycheck has covered the purchase of Hay’s hydrangeas. 

 

Now, Alfie has pointed out to me that while you can eat goats and chickens; should the worst come to the worst, and assuming that you’re not a vegetarian; they’re not very convenient for carrying discreetly about one’s person. Which is why her grandmother’s family kept all their money in the form of jewels, which are much more portable and less obvious than goats or chickens, and don’t take nearly the same sort of daily upkeep.

But you can’t eat jewels, either. Like small green pieces of paper, or little round disks of shiny metal, or certain sequences of 1’s & 0’s, they only have value because we all agree that they have value. If diamonds were to flood the market; as they did in the late nineteenth century after the huge diamond finds in Southern Africa; the value of diamonds would drop like, well, a rock.

It goes similarly for goes for the dollar or any other currency: it has value because we all say it does, and we all (more-or-less) agree on what that value is. If no one believes that the Elbonian MudDucat is worth any more than any other small mud-colored piece of paper, the Elbonian currency collapses. 

And if it turns out that Nutbury National Bank had a big goat-roast at their annual company picnic yesterday, and now there are nowhere near enough goats in NNB’s pen to cover all the promissary goat-notes they have out in circulation, there is a strong risk of a sharp decline in the value of the Nutbuck.  

(And something like that may turn out to be what’s been up lately with Fannie Mae & Freddie Mac, and with Bear Stearns and Merril Lynch and Lehmann Brothers…) (But now that I’ve thought that, tomorrow’s Wall Street Journal headline will probably read “Big Goat-Roast at NYSE.”) (With the subhead “Trading Floor Awash in Barbeque Sauce.”)

 

My friend Hay read most of the foregoing, and responded:

Please send all your worthless dollar bills to the Nutbury National Bank in Connnecticut for furthur deposit into the account of Nutbury Hydrangea Nursery and make a note to credit it to the account of Hay. Please feel free to throw in the family jewels (the glittering kinds), and, you’ve got any old pretty stock certificates around, you can send them along, too. Thanks. I hate to see you burdened. 

(Keep your goats away from my hydrangeas, though.)


If Evelyn would just go one step farther, I think we’d be right on the money, as they say. 

Instead of shipping all these goats and chickens around, why don’t we just put them all in a big pen somewhere and issue a receipt to anyone who wants to bring their goats in for safe keeping along with mine. Now, instead of having to ship these goats around, we could a lot easier just trade the little receipts around. Anybody that gets hungry can take their receipt in and get a chicken or goat. And because we don’t want to be looking at ugly receipts all day long, let’s put a nice picture of some of our outstanding presidents on them, color them green, and call them “money.” (And if you don’t have a goat, you’re allowed to put some part of your house in there, too. Say, your bathroom maybe. (You can still use it if you want, no problem.))

(But right away I can see that maybe you wouldn’t want to traipse out to the pen everytime you needed to tinkle, so I’m going to let you keep your bathroom with you, with the understanding that it really belongs in the pen.)

 

And money is indeed real, and valuable. Are stock certificates of any intrinsic value? Well, they’re usually very pretty, but beyond that, they’re your certificate representing your proportional interest in real buildings and the like. No one’s running around saying that their stock certificates aren’t real, that the deed to their house aren’t not real, that the coupons they clipped from the paper this morning aren’t real. Money is just as real.”

 

(Alright, Hay, maybe I would view all this differently if I owned any stock certificates, or a house; or if the coupons I clipped out of the paper last week weren’t already expired and worthless.

Then again, maybe not.)

Of course money is real and has value. It’s real just as long as enough of us believe it’s real, and it has value as long enough of us say it does. And since money is so handy for helping us exchange goats, chickens, hydrangeas, real estate,  & etc.; and keep track of all those exchanges; let’s hope that Ben Bernanke can get consistently better results than Tinkerbelle does.

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2 Responses to “Goats and Money”

  1. gentledove Says:

    They milk ’em for all they are worth

  2. Evelyn Says:

    (I truly never, ever thought of that, all the time I was writing this.)

    (Doesn’t the word “Duh!” mean anything to me at all? :) )

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