In this episode of Saturday Morning Muse, Andy explores the concept of inflation, its historical context, and the implications of monetary policy on everyday life. He discusses the various types of inflation, including demand-pull, cost-push, monetary, and expectational inflation, and illustrates these concepts with historical examples, particularly the Great Recoinage of 1696. Andy emphasizes the importance of understanding inflation to make informed financial decisions and highlights the complexities of monetary policy.

In this episode of Saturday Morning Muse, Andy explores the historical tension between the moral objections to charging interest and the economic necessity for credit. It traces the evolution of interest from ancient civilizations, through religious prohibitions, to modern acceptance, highlighting the innovative financial practices that emerged to reconcile these conflicting views. The discussion emphasizes the ongoing challenge of balancing the need for credit markets with concerns about exploitation and inequality.

In this episode of Saturday Morning Muse, Andy discusses the concept of interest, exploring its fundamental role in economics as the price of time. He explains how interest rates are determined by factors such as inflation, real returns, and risk compensation. The discussion also covers the calculation of simple interest and the implications of understanding interest for personal financial decisions. Temte highlights the historical moral dilemmas surrounding interest and emphasizes its significance in modern economic systems.

In this episode of the Saturday Morning Muse, Andy explores the introduction of the banknote by the Bank of England in 1694, which revolutionized modern finance by standardizing currency and formally establishing government currency backing. This historical narrative connects the evolution of banking practices to the currency we use today.

In this episode of Saturday Morning Muse, Andrew Temte explores the evolution of currency, starting from ancient Rome's coinage to the introduction of paper currency through promissory notes. He discusses the significance of these financial instruments in facilitating trade and their role in economic systems. The conversation also touches on the transition to fiat money and the implications of trust in currency value.

In this episode of Saturday Morning Muse, Andrew Temte delves into the history of money, focusing on the evolution of coinage from ancient Rome to modern monetary policy. He discusses the significance of financial literacy, the role of governments in establishing trust in currency, and the implications of currency debasement and inflation. The episode concludes with a reflection on the responsibilities of modern central banks in managing economic activity.

You might be curious why we’re spending so much time on the history of trade, money, and other economic concepts at the outset of this financial literacy series. In finance and economics, having a basic understanding of the evolution and history of money and financial tools is key because “those that fail to learn from history are doomed to repeat it,” as Winston Churchill famously wrote.

So here’s the key point: if I hold money, I’m holding someone else’s debt. In our simple economy, in the spring, fur pelts and meat are sent to FruitLand in return for money. Then in the fall, fruits and grain are sent to ProteinLand in return for money. FruitLand has the fur pelts and meat they need, and ProteinLand has the fruits and grains they need. Money is the tool that has been used to solve the seasonality problem with trade between these two economies. The “money” used to enable trade flows back and forth between these economies as a medium of exchange, store of value, unit of account, and standard for deferred payment.

So what is money? Money is anything that acts as (a) a medium of exchange, (b) a measure of value, (c) a standard that can be used for credit or deferred payment, and (d) a store of value. Early coinage ticked each of these boxes.

Money also has the following properties. Money must be:

• Durable

• Fungible

• Divisible

• Portable

• Acceptable

• Scarce

The world you live in today is a direct outcome of advent of trade — of entrepreneurial humans recognizing that their lives can improve by trading with other groups who possess skills and/or resources that they do not. Making trade more efficient and effective has driven some of the most fundamental tools and advances we take for granted as modern humans.

In this episode of Saturday Morning Muse, Andrew Temte explores the foundational concepts of trade and macroeconomics through a hypothetical economy consisting of two regions: Fruit Land and Protein Land. He discusses the advantages of trade, the impact on societal well-being, and the necessity of education and retraining for those affected by economic changes. The conversation sets the stage for future discussions on currency and deeper economic principles.