WEBVTT 00:00:00.000 --> 00:00:02.259 You know, usually when you think about a dollar, 00:00:02.419 --> 00:00:04.500 you're just thinking about, well, buying a coffee 00:00:04.500 --> 00:00:06.660 or maybe checking your bank app. Yeah, exactly. 00:00:06.740 --> 00:00:08.939 It's just a digital number on a screen or, you 00:00:08.939 --> 00:00:10.919 know, a piece of green paper with a dead president 00:00:10.919 --> 00:00:14.839 on it. To most of us, it feels completely uniquely 00:00:14.839 --> 00:00:17.579 American. It really does. It feels like a foundational 00:00:17.579 --> 00:00:20.679 law of modern physics. It just exists and the 00:00:20.679 --> 00:00:22.769 entire world revolves around it. But what if 00:00:22.769 --> 00:00:25.190 I told you that the origin story of the world's 00:00:25.190 --> 00:00:28.710 most recognizable currency, the money you likely 00:00:28.710 --> 00:00:31.649 use, earn or hear about every single day, has 00:00:31.649 --> 00:00:34.770 absolutely nothing to do with America? It's wild 00:00:34.770 --> 00:00:37.890 to think about. It is. So today, our mission 00:00:37.890 --> 00:00:40.729 is to deconstruct something you use every single 00:00:40.729 --> 00:00:43.630 day. We are taking a deep dive into the Wikipedia 00:00:43.630 --> 00:00:45.789 article on the dollar. And looking at the source, 00:00:45.990 --> 00:00:48.670 it turns out the origin story involves a 16th 00:00:48.670 --> 00:00:51.689 century Bohemian Valley. centuries of linguistic 00:00:51.689 --> 00:00:55.009 games of telephone, illegal Caribbean smuggling 00:00:55.009 --> 00:00:59.810 rings, and some truly bizarre mathematical coincidences. 00:01:00.189 --> 00:01:02.929 Yeah, it really is the ultimate story of a global 00:01:02.929 --> 00:01:06.750 butterfly effect. Just a single action centuries 00:01:06.750 --> 00:01:08.829 ago that completely shaped the money in your 00:01:08.829 --> 00:01:11.230 pocket today. Completely. OK, let's unpack this 00:01:11.230 --> 00:01:12.790 because we are going to completely deconstruct 00:01:12.790 --> 00:01:16.310 the source for you. How does a literal piece 00:01:16.310 --> 00:01:19.849 of metal from a random European town become a 00:01:19.849 --> 00:01:23.750 global, almost invisible concept? Well, to understand 00:01:23.750 --> 00:01:26.129 modern global finance, we first have to travel 00:01:26.129 --> 00:01:29.290 all the way back to the year 1519. Wow, okay. 00:01:29.390 --> 00:01:32.450 Yeah, 1519. We are going to a place called Joachimstal, 00:01:32.670 --> 00:01:35.150 which was a mining town in the Kingdom of Bohemia. 00:01:35.230 --> 00:01:37.049 If you're looking at a modern map, that's in 00:01:37.049 --> 00:01:38.870 the Czech Republic. Wait, hold on. So we're nowhere 00:01:38.870 --> 00:01:41.750 near Wall Street. We're in a 16th century central 00:01:41.750 --> 00:01:44.390 European valley. Far from it, yeah. So in 1519, 00:01:44.489 --> 00:01:46.730 the Kingdom of Bohemia started minting these 00:01:46.730 --> 00:01:50.510 heavy 29 -gram silver coins from their local 00:01:50.510 --> 00:01:52.549 mines. Okay. Now let's look at the name of the 00:01:52.549 --> 00:01:54.870 town Joachimstal. It is a combination of St. 00:01:55.109 --> 00:01:57.840 Joachim and the German word thou. Thal. Yeah, 00:01:58.040 --> 00:02:01.159 spelled T -H -A -L, which translates to valley. 00:02:01.659 --> 00:02:03.719 If you think of the English word dale, it's very 00:02:03.719 --> 00:02:05.900 similar. Oh, right, like a hill and dale. Exactly. 00:02:06.379 --> 00:02:10.199 So this new silver coin was literally named after 00:02:10.199 --> 00:02:12.900 the geographic location it came from. The coin 00:02:12.900 --> 00:02:16.379 from the valley of Joachim. Joachim Stahler. 00:02:16.879 --> 00:02:20.599 Joachim Stahler. I mean, I can't imagine trying 00:02:20.599 --> 00:02:22.979 to casually say that to a merchant when I'm just 00:02:22.979 --> 00:02:25.949 trying to buy a loaf of bread or like. A pint 00:02:25.949 --> 00:02:28.509 of ale. You wouldn't, and neither do they. Oh. 00:02:28.930 --> 00:02:31.250 Human beings naturally look for linguistic shortcuts. 00:02:31.449 --> 00:02:34.210 We hate saying long words. True. So in common, 00:02:35.009 --> 00:02:37.129 everyday usage, the people of Europe just dropped 00:02:37.129 --> 00:02:38.810 the first half of the name. They started calling 00:02:38.810 --> 00:02:41.009 the coin the tholer, or tallor. And this is where 00:02:41.009 --> 00:02:43.009 it spreads like a linguistic virus across the 00:02:43.009 --> 00:02:45.169 continent, right? Yes, exactly. Because as the 00:02:45.169 --> 00:02:47.610 specific coin travels along trade routes, different 00:02:47.610 --> 00:02:50.610 languages adopt and... you know, warp the word 00:02:50.610 --> 00:02:53.330 to fit their own tongues. In Czech, the source 00:02:53.330 --> 00:02:55.889 notes, it became the taller. Right. In Dutch, 00:02:56.009 --> 00:02:58.370 it became the rietstalder, or just dollar. The 00:02:58.370 --> 00:03:00.469 Spanish called it the dollar. And eventually 00:03:00.469 --> 00:03:03.210 in English, it morphs into the word dollar. What's 00:03:03.210 --> 00:03:05.669 fascinating here is how the physical mechanics 00:03:05.669 --> 00:03:09.069 of trade completely dictate our language. The 00:03:09.069 --> 00:03:11.550 Bohemian coin was heavily trusted by merchants. 00:03:11.849 --> 00:03:14.469 Because of the silver content. Yes. It had a 00:03:14.469 --> 00:03:17.050 highly consistent, reliable weight of silver. 00:03:17.869 --> 00:03:20.969 Because the physical coin was so reliable, the 00:03:20.969 --> 00:03:23.530 word for that kind became entirely synonymous 00:03:23.530 --> 00:03:26.650 with value across completely different empires, 00:03:26.969 --> 00:03:28.509 regardless of what language they were speaking. 00:03:28.729 --> 00:03:31.849 So the word basically outgrew the coin. It did. 00:03:32.069 --> 00:03:34.669 I was thinking about this, and that is like if 00:03:34.810 --> 00:03:37.770 Hundreds of years from now, people universally 00:03:37.770 --> 00:03:41.229 called all smartphones Cupertino's just because 00:03:41.229 --> 00:03:43.669 Apple was originally based in Cupertino, California. 00:03:43.750 --> 00:03:46.009 Oh, that's a great analogy. It's taking a highly 00:03:46.009 --> 00:03:49.569 specific local geographic name and turning it 00:03:49.569 --> 00:03:53.009 into a universal noun for an object. That is 00:03:53.009 --> 00:03:55.849 a perfect way to look at it. The brand became 00:03:55.849 --> 00:03:58.520 the product. Though I should point out one wonderfully 00:03:58.520 --> 00:04:00.800 contrarian detail from the source material. Oh, 00:04:00.800 --> 00:04:03.280 what's that? The Russians also adopted a word 00:04:03.280 --> 00:04:05.580 for this coin, but instead of taking the second 00:04:05.580 --> 00:04:07.979 half of Joachim Stahler like everyone else, they 00:04:07.979 --> 00:04:09.939 took the first half. Of course they did. Yeah, 00:04:09.939 --> 00:04:11.800 they started calling their coins the Yiffy Mock. 00:04:12.259 --> 00:04:14.780 Leave it to the Russians to take the exact opposite 00:04:14.780 --> 00:04:17.019 half of the word just to be different. Right. 00:04:17.160 --> 00:04:19.899 But for the rest of Europe, the word thaler or 00:04:19.899 --> 00:04:23.740 dollar stuck. But here's what I don't get. Knowing 00:04:23.740 --> 00:04:26.240 how the English got the word doesn't explain 00:04:26.240 --> 00:04:28.480 how it became the bedrock of the United States 00:04:28.480 --> 00:04:30.660 economy. Right. The connection isn't obvious. 00:04:30.939 --> 00:04:33.519 If the American colonists were British subjects, 00:04:33.800 --> 00:04:35.420 shouldn't they just be using British pounds? 00:04:35.800 --> 00:04:37.879 They absolutely should have been. To bridge that 00:04:37.879 --> 00:04:40.379 gap, we have to look at the Spanish Empire and 00:04:40.379 --> 00:04:43.079 a very deliberate policy of financial suppression 00:04:43.079 --> 00:04:45.600 by the British government. Financial suppression? 00:04:45.920 --> 00:04:49.079 Yeah. Bretton operated under strict mercantilist 00:04:49.079 --> 00:04:51.339 policies. Okay, let me stop you there, because 00:04:51.339 --> 00:04:53.540 mercantilist policies sounds like something from 00:04:53.540 --> 00:04:56.819 a dry economics textbook. What exactly does that 00:04:56.819 --> 00:04:59.660 mean for an average colonist trying to buy a 00:04:59.660 --> 00:05:02.959 hammer or some seeds? Simply put, mercantilism 00:05:02.959 --> 00:05:05.259 is an economic system where a country tries to 00:05:05.259 --> 00:05:08.000 hoard as much wealth as possible. usually at 00:05:08.000 --> 00:05:10.740 the expense of its colonies. The British crown 00:05:10.740 --> 00:05:13.579 wanted to keep all the hard currency, the actual 00:05:13.579 --> 00:05:16.060 physical silver and gold coinage, centered back 00:05:16.060 --> 00:05:18.759 in Britain. They actively prevented British pounds 00:05:18.759 --> 00:05:21.180 from circulating in the American colonies. Wait, 00:05:21.259 --> 00:05:24.180 so the colonists had no actual money? They had 00:05:24.180 --> 00:05:27.019 a severe liquidity crisis. I mean, you can't 00:05:27.019 --> 00:05:29.899 run a daily economy purely on bartering chickens 00:05:29.899 --> 00:05:32.750 for shoes. They desperately needed physical coins 00:05:32.750 --> 00:05:35.689 to facilitate trade. So out of sheer necessity, 00:05:36.009 --> 00:05:38.910 the colonists had to rely on a massive, illegal, 00:05:39.410 --> 00:05:41.670 but incredibly widespread network of commerce 00:05:41.670 --> 00:05:44.389 with the West Indies. Smuggling, basically. Exactly. 00:05:44.470 --> 00:05:47.069 They traded goods to get their hands on Spanish 00:05:47.069 --> 00:05:50.569 silver. Specifically, the Spanish peso, famously 00:05:50.569 --> 00:05:52.829 known as the Piece of Eight. So let me get this 00:05:52.829 --> 00:05:54.790 straight. The American colonists were essentially 00:05:54.790 --> 00:05:57.889 forced to use smuggled Spanish money to fund 00:05:57.889 --> 00:06:00.410 their daily lives because their own government 00:06:00.410 --> 00:06:02.550 in London wouldn't let them have British pounds. 00:06:02.670 --> 00:06:06.449 Yes. And as early as 1581, English colonists 00:06:06.449 --> 00:06:08.250 were already referring to these Spanish pesos 00:06:08.250 --> 00:06:12.389 as dollars. Wow. 1581. Yeah. Spanish silver was 00:06:12.389 --> 00:06:14.209 heavily distributed all throughout the New World, 00:06:14.610 --> 00:06:16.850 and the American colonists became completely 00:06:16.850 --> 00:06:19.259 reliant on it. The source mentions it was so 00:06:19.259 --> 00:06:21.939 common that Spanish dollars were actually recognized 00:06:21.939 --> 00:06:25.139 as legal tender in the colony of Virginia. The 00:06:25.139 --> 00:06:28.180 British tried to starve them of cash and the 00:06:28.180 --> 00:06:31.100 colonists just built a shadow economy to bypass 00:06:31.100 --> 00:06:34.660 them completely. And that shadow economy is crucial. 00:06:35.220 --> 00:06:37.639 The reliance on the Spanish dollar wasn't just 00:06:37.639 --> 00:06:40.800 a matter of convenience. It was an early form 00:06:40.800 --> 00:06:43.850 of economic rebellion. Oh, interesting. They 00:06:43.850 --> 00:06:45.810 were declaring financial independence before 00:06:45.810 --> 00:06:48.490 they ever declared political independence. And 00:06:48.490 --> 00:06:50.750 speaking of that shadow economy, I want to talk 00:06:50.750 --> 00:06:53.870 about the symbol it gave birth to. The dollar 00:06:53.870 --> 00:06:56.370 sign. The family symbol. Yeah, the S with the 00:06:56.370 --> 00:06:57.910 vertical line through it. I'm not gonna lie, 00:06:57.910 --> 00:07:00.050 I always assumed the dollar sign was just a U 00:07:00.050 --> 00:07:03.769 and an S overlapping. U .S. People do. But looking 00:07:03.769 --> 00:07:06.110 at these sources, is it really just bad handwriting? 00:07:06.290 --> 00:07:08.870 It genuinely is. It has absolutely nothing to 00:07:08.870 --> 00:07:10.750 do with the United States. That's hilarious. 00:07:10.889 --> 00:07:13.569 In the 1770s, when merchants were doing business 00:07:13.569 --> 00:07:16.009 correspondence, they needed a quick shorthand, 00:07:16.329 --> 00:07:18.829 a scribal abbreviation, for the Spanish peso. 00:07:19.079 --> 00:07:22.180 They used a P and an S. Over time, as merchants 00:07:22.180 --> 00:07:24.899 were rushing to write down ledgers and receipts, 00:07:25.199 --> 00:07:28.259 their handwriting became sloppier. The S started 00:07:28.259 --> 00:07:30.860 being written directly over the P. So the loop 00:07:30.860 --> 00:07:33.240 of the P eventually disappears and you're just 00:07:33.240 --> 00:07:35.379 left with an S with a vertical line through it, 00:07:35.459 --> 00:07:37.939 the dollar sign. Exactly. So the official symbol 00:07:37.939 --> 00:07:41.680 for the American dollar is literally just bad 00:07:41.680 --> 00:07:44.279 18th century handwriting of the abbreviation 00:07:44.279 --> 00:07:47.040 for a Spanish coin. That is brilliant. And the 00:07:47.040 --> 00:07:49.480 United States just kept that messy abbreviation 00:07:49.480 --> 00:07:51.459 when they officially adopted the currency in 00:07:51.459 --> 00:07:56.360 1785. Wow. But here is the challenge. Once the 00:07:56.360 --> 00:07:59.139 United States became an independent nation, they 00:07:59.139 --> 00:08:01.939 couldn't just casually use random Spanish coins 00:08:01.939 --> 00:08:04.180 of varying quality that had been smuggled in 00:08:04.180 --> 00:08:05.540 from the Caribbean. Right. They need their own 00:08:05.540 --> 00:08:08.680 money. They needed a strictly defined, mathematically 00:08:08.680 --> 00:08:12.000 precise national standard. And that task fell 00:08:12.000 --> 00:08:14.560 to the first Secretary of the Treasury, Alexander 00:08:14.560 --> 00:08:16.980 Hamilton. Here's where it's really interesting. 00:08:17.300 --> 00:08:20.699 In 1792, Alexander Hamilton literally gathers 00:08:20.699 --> 00:08:23.120 up the Spanish coins that are in common circulation. 00:08:23.240 --> 00:08:25.959 He does. He weighs them, calculates the average 00:08:25.959 --> 00:08:27.899 wear and tear from them bouncing around in people's 00:08:27.899 --> 00:08:30.540 pockets, and officially defines the brand new 00:08:30.540 --> 00:08:33.639 United States dollar. He dictates that one U 00:08:33.639 --> 00:08:37.820 .S. dollar is exactly 371 .25 grains of pure 00:08:37.820 --> 00:08:42.399 silver. And that highly specific number 371 .25 00:08:42.399 --> 00:08:45.519 grains opens up a rabbit hole of what we might 00:08:45.519 --> 00:08:48.639 call cosmic math. Yeah, the source goes deep 00:08:48.639 --> 00:08:50.460 on this. And honestly, my eyes kind of glazed 00:08:50.460 --> 00:08:54.320 over at first. It says 371 .25 grains is incredibly 00:08:54.320 --> 00:08:56.759 close to the geometric mean of a standard troy 00:08:56.759 --> 00:08:58.700 pound in a penny way. It is. I'll be honest. 00:08:58.820 --> 00:09:01.360 I need an ELI -5 here. Explain it like I'm five. 00:09:01.529 --> 00:09:04.049 What does a geometric mean, and why on earth 00:09:04.049 --> 00:09:06.809 is Alexander Hamilton using random medieval measurements 00:09:06.809 --> 00:09:09.909 to build a brand new country's currency? It sounds 00:09:09.909 --> 00:09:11.710 dense, I know, but it's actually a beautiful 00:09:11.710 --> 00:09:14.029 piece of engineering. First, let's define the 00:09:14.029 --> 00:09:16.549 weights. A grain is an ancient unit of measurement, 00:09:16.669 --> 00:09:18.350 originally based on the weight of a single grain 00:09:18.350 --> 00:09:21.110 of barley. A troy pound was the heavy standard 00:09:21.110 --> 00:09:24.590 merchants used for bulk silver. That's 5760 grains. 00:09:24.710 --> 00:09:26.870 Got it. A penny weight was the tiny standard 00:09:26.870 --> 00:09:29.549 used for fractions of gold. That's 24 grains. 00:09:29.820 --> 00:09:32.360 OK, so you have a massive weight for silver and 00:09:32.360 --> 00:09:35.440 a tiny weight for gold. Right. Now, a geometric 00:09:35.440 --> 00:09:38.100 mean is essentially finding the exact mathematical 00:09:38.100 --> 00:09:40.340 center of gravity between two different numbers. 00:09:40.720 --> 00:09:43.519 If you take the standard troy pound and the standard 00:09:43.519 --> 00:09:46.159 penny weight and find their geometric mean, the 00:09:46.159 --> 00:09:50.659 answer is 371 .81. OK. Hamilton set the dollar 00:09:50.659 --> 00:09:55.620 at 371 .25. It's almost an exact match to the 00:09:55.620 --> 00:09:57.720 center of gravity between the two most important 00:09:57.720 --> 00:10:00.639 weights in global commerce Wow, so he didn't 00:10:00.639 --> 00:10:03.139 just pick a number out of thin air He anchored 00:10:03.139 --> 00:10:05.200 the dollar dead center between the gold standard 00:10:05.200 --> 00:10:07.460 weight and the silver standard weight Exactly 00:10:07.460 --> 00:10:10.360 and because of that proximity the ratios create 00:10:10.360 --> 00:10:12.320 an incredible harmony in the economic system 00:10:12.539 --> 00:10:15.120 The ratio of a Troy pound to a dollar is roughly 00:10:15.120 --> 00:10:18.539 15 .52. Okay. The ratio of a dollar to a pennyweight 00:10:18.539 --> 00:10:22.299 is 15 .47. And let me guess, that 15 .5 number 00:10:22.299 --> 00:10:24.860 isn't a coincidence either. Not at all. That 00:10:24.860 --> 00:10:27.279 mirrors the historical ratio of the value of 00:10:27.279 --> 00:10:29.799 gold to silver. During this period, gold was 00:10:29.799 --> 00:10:32.759 generally valued at about 15 .5 times more than 00:10:32.759 --> 00:10:35.759 silver. Oh. Yeah. A ratio famously determined 00:10:35.759 --> 00:10:38.480 decades earlier by Sir Isaac Newton when he was 00:10:38.480 --> 00:10:41.000 master of the mint in England. Ah, so it's a 00:10:41.000 --> 00:10:44.320 perfectly balanced scale. Because of Hamilton's 00:10:44.320 --> 00:10:46.759 exact weight for the dollar, one pennyweight 00:10:46.759 --> 00:10:49.759 of gold was almost exactly equal in value to 00:10:49.759 --> 00:10:53.340 one silver dollar. Yes. And one gold dollar was 00:10:53.340 --> 00:10:57.200 equal to about one troy pound of silver. Plus, 00:10:57.519 --> 00:10:59.679 the number of grains in a dollar roughly equals 00:10:59.679 --> 00:11:02.399 the number of grams in a troy pound. It's like 00:11:02.399 --> 00:11:04.980 he built an interlocking puzzle of weights, elements, 00:11:05.159 --> 00:11:07.980 and value. If we connect this to the bigger picture, 00:11:08.159 --> 00:11:10.539 You have to realize how people viewed money back 00:11:10.539 --> 00:11:13.460 then. Today, we use fiat money. Right, paper 00:11:13.460 --> 00:11:16.440 money. Fiat just means currency has value purely 00:11:16.440 --> 00:11:18.600 because the government says it does, and we all 00:11:18.600 --> 00:11:21.919 collectively agree to trust them. But in 1792, 00:11:22.320 --> 00:11:24.659 early economies relied on the literal physical 00:11:24.659 --> 00:11:27.100 weight of the commodity. Hamilton wasn't just 00:11:27.100 --> 00:11:29.220 creating a digital unit of account. He was making 00:11:29.220 --> 00:11:32.120 a physical tool. He was engineering an intricate, 00:11:32.500 --> 00:11:34.360 scientifically sound system of weights and measures 00:11:34.360 --> 00:11:36.759 that connected American commerce to the physical 00:11:36.759 --> 00:11:38.860 laws of the universe as they understood them 00:11:38.860 --> 00:11:41.169 through gold and silver. Hamilton built this 00:11:41.169 --> 00:11:44.549 beautiful, mathematically perfect system. But 00:11:44.549 --> 00:11:46.889 reading further into the source, it had a fatal 00:11:46.889 --> 00:11:50.129 flaw. It was entirely dependent on a rock pulled 00:11:50.129 --> 00:11:52.529 out of the ground. Yes, silver. If the global 00:11:52.529 --> 00:11:55.769 supply of that rock suddenly changes, the math 00:11:55.769 --> 00:11:58.450 shatters. And that is exactly what happened in 00:11:58.450 --> 00:12:01.850 1871. Yes. Hamilton's dollar hummed along for 00:12:01.850 --> 00:12:04.149 decades, but across the Atlantic, the global 00:12:04.149 --> 00:12:08.279 landscape shifted. In 1871, following the Franco 00:12:08.279 --> 00:12:10.879 -Prussian War, the new German Empire makes a 00:12:10.879 --> 00:12:13.360 massive policy decision. What did they do? They 00:12:13.360 --> 00:12:16.220 decide to stop minting silver thaler coins, and 00:12:16.220 --> 00:12:18.340 they dump their silver to move to a gold standard. 00:12:18.700 --> 00:12:21.500 How exactly does one country changing its mind 00:12:21.500 --> 00:12:24.019 completely crash a global currency? It comes 00:12:24.019 --> 00:12:26.820 down to basic supply and demand. When a global 00:12:26.820 --> 00:12:28.799 superpower suddenly decides they don't want to 00:12:28.799 --> 00:12:31.179 play the silver game anymore, they offload their 00:12:31.179 --> 00:12:33.840 massive stockpile. Oh, I see. That floods the 00:12:33.840 --> 00:12:36.419 global market with silver. Suddenly, silver isn't 00:12:36.419 --> 00:12:39.159 scarce anymore. And when supply skyrockets, the 00:12:39.159 --> 00:12:41.799 price plummets. So the global definition of a 00:12:41.799 --> 00:12:45.169 dollar completely fractures. Because the U .S. 00:12:45.350 --> 00:12:48.190 dollar was tied by Hamilton's math directly to 00:12:48.190 --> 00:12:51.029 the price of silver, this crash forced the United 00:12:51.029 --> 00:12:53.389 States to effectively abandon silver and move 00:12:53.389 --> 00:12:56.370 to a gold standard with the Coinage Act of 1873. 00:12:56.830 --> 00:12:58.850 Correct. But here is the ripple effect I found 00:12:58.850 --> 00:13:01.450 fascinating, the Canadian dollar. Oh yeah, Canada 00:13:01.450 --> 00:13:03.490 is a perfect example of how chaotic this became. 00:13:03.909 --> 00:13:06.450 Canada was already strictly on a gold standard. 00:13:06.629 --> 00:13:09.490 So it's like a seesaw. If the US dollar is anchored 00:13:09.490 --> 00:13:12.149 to silver and the value of silver plummets, the 00:13:12.149 --> 00:13:14.730 US dollar sinks. Right. But because Canada was 00:13:14.730 --> 00:13:16.970 anchored to gold, which was holding steady or 00:13:16.970 --> 00:13:19.710 rising, the Canadian dollar suddenly shoots up 00:13:19.710 --> 00:13:21.889 in the air relative to the US dollar. That's 00:13:21.889 --> 00:13:23.570 exactly how the mechanics worked. And it wasn't 00:13:23.570 --> 00:13:26.509 just Canada. By the year 1900, silver dollars 00:13:26.509 --> 00:13:28.590 around the world like those used in Latin America 00:13:28.590 --> 00:13:31.500 and the Far East. were worth 50 % less than gold 00:13:31.500 --> 00:13:34.679 dollars. Wow. The concept of a dollar fractured 00:13:34.679 --> 00:13:36.899 into entirely different realities depending on 00:13:36.899 --> 00:13:39.039 what metal a specific country backed it with. 00:13:39.179 --> 00:13:41.379 So if you've ever crossed the border or bought 00:13:41.379 --> 00:13:43.759 something online from another country and you've 00:13:43.759 --> 00:13:46.019 had to do that annoying currency conversion in 00:13:46.019 --> 00:13:48.659 your head, figuring out how much Canadian dollar 00:13:48.659 --> 00:13:51.679 is worse versus a U .S. dollar, you are literally 00:13:51.679 --> 00:13:54.240 paying the price for a German policy decision 00:13:54.240 --> 00:13:58.259 from 1871. That is wild. It perfectly illustrates 00:13:58.259 --> 00:14:01.330 how inter... connected global finance was long 00:14:01.330 --> 00:14:04.570 before the internet. A single policy change in 00:14:04.570 --> 00:14:07.970 Europe. the ending of the original failure, completely 00:14:07.970 --> 00:14:10.049 disrupted the money in the pockets of merchants 00:14:10.049 --> 00:14:12.850 in Hong Kong, miners in Mexico, and bakers in 00:14:12.850 --> 00:14:14.889 New York. Everything was tied together. It really 00:14:14.889 --> 00:14:17.529 was. This historic split is why the Canadian 00:14:17.529 --> 00:14:19.549 dollar, the Straits dollar in Southeast Asia, 00:14:19.730 --> 00:14:22.370 the Hong Kong dollar, and the U .S. dollar all 00:14:22.370 --> 00:14:24.850 began floating at completely different disconnected 00:14:24.850 --> 00:14:27.029 exchange rates. They no longer share the same 00:14:27.029 --> 00:14:29.629 physical value, but they all kept the name? Yes. 00:14:29.929 --> 00:14:32.049 The value of these dollars diverged dramatically, 00:14:32.049 --> 00:14:35.240 but the word itself was so psychologically powerful, 00:14:35.720 --> 00:14:39.019 so deeply ingrained in global trade that it survives 00:14:39.019 --> 00:14:41.960 the crash. It just kept showing up in the strangest 00:14:41.960 --> 00:14:44.580 places throughout history. It transitioned from 00:14:44.580 --> 00:14:48.559 being a specific weight of metal to being an 00:14:48.559 --> 00:14:51.379 idea, a brand. And once it's a brand, it starts 00:14:51.379 --> 00:14:53.580 showing up where it technically doesn't belong. 00:14:53.919 --> 00:14:56.360 Yes. My favorite piece of trivia from our source 00:14:56.360 --> 00:14:59.129 material today is about William Shakespeare. 00:14:59.429 --> 00:15:02.809 Oh, the Macbeth reference. Yes. In his play Macbeth, 00:15:03.149 --> 00:15:05.029 there is a line where a character references 00:15:05.029 --> 00:15:09.000 collecting a sum of $10 ,000. But... The real 00:15:09.000 --> 00:15:11.440 historical Macbeth lived in the 11th century. 00:15:12.000 --> 00:15:14.759 That is hundreds of years before the very first 00:15:14.759 --> 00:15:17.360 Joachim Stahler was ever minted in that Bohemian 00:15:17.360 --> 00:15:20.299 Valley. It's a massive historical anachronism. 00:15:20.519 --> 00:15:23.759 It is. Shakespeare was writing in the early 1600s 00:15:23.759 --> 00:15:26.179 when the word was buzzing around European trade 00:15:26.179 --> 00:15:29.039 routes and he just lazily dropped it into 11th 00:15:29.039 --> 00:15:30.759 century Scotland because his audience knew the 00:15:30.759 --> 00:15:33.509 word meant money. That's so funny. But the British 00:15:33.509 --> 00:15:35.110 didn't just borrow the word for theater. They 00:15:35.110 --> 00:15:37.090 literally stamped it onto other countries' money 00:15:37.090 --> 00:15:40.549 to solve their own crises. The 1804 U .K. over 00:15:40.549 --> 00:15:42.889 -strike, this is unhinged monetary policy. It 00:15:42.889 --> 00:15:45.889 really is. During the Napoleonic Wars, the Bank 00:15:45.889 --> 00:15:49.009 of England is desperately short on silver. So 00:15:49.009 --> 00:15:52.230 what do they do? They take captured Spanish pieces 00:15:52.230 --> 00:15:56.309 of eight Spanish dollars. They physically stamp 00:15:56.309 --> 00:15:58.850 the image of the British king right over the 00:15:58.850 --> 00:16:01.889 Spanish design and they circulate them as British 00:16:01.889 --> 00:16:05.129 five shilling pieces. And the official name they 00:16:05.129 --> 00:16:08.570 gave to these recycled stamped over Spanish coins, 00:16:09.409 --> 00:16:12.700 dollars. It was incredibly brazen. That is like 00:16:12.700 --> 00:16:15.019 taking your biggest rival's product, slapping 00:16:15.019 --> 00:16:17.220 your own brand sticker right over their logo, 00:16:17.539 --> 00:16:19.799 and selling it at a premium to your own citizens. 00:16:20.100 --> 00:16:22.580 They hijack the physical silver and the branding 00:16:22.580 --> 00:16:25.120 all at once, and that branding has never stopped. 00:16:25.620 --> 00:16:28.440 Today, there are more than 25 separate currencies 00:16:28.440 --> 00:16:31.639 around the world called the dollar. Really? 25? 00:16:31.960 --> 00:16:35.799 Yeah. Australia, New Zealand, Jamaica, Fiji, 00:16:36.080 --> 00:16:39.379 Namibia, they all use dollars. Often, they adopted 00:16:39.379 --> 00:16:41.840 the name when they switched to decimalized monetary 00:16:41.840 --> 00:16:44.600 systems, leaving behind the old complicated British 00:16:44.600 --> 00:16:46.700 pounds and shillings. But the word hasn't always 00:16:46.700 --> 00:16:49.100 been a symbol of stability. The Zimbabwean dollar 00:16:49.100 --> 00:16:52.059 is a prime example of the brand collapsing. They 00:16:52.059 --> 00:16:55.039 experienced hyperinflation so severe that the 00:16:55.039 --> 00:16:57.940 value of their money evaporated. At one point, 00:16:58.019 --> 00:17:00.440 the government had to issue a special agro check. 00:17:00.720 --> 00:17:03.759 basically a banknote for a hundred billion dollars. 00:17:03.779 --> 00:17:05.839 It's hard to even fathom that number. The word 00:17:05.839 --> 00:17:08.000 dollar was printed on a piece of paper that became 00:17:08.000 --> 00:17:11.220 virtually worthless overnight. And yet simultaneously, 00:17:11.859 --> 00:17:14.420 the United States dollar remains the anchor of 00:17:14.420 --> 00:17:16.680 the global economy, even though it hasn't had 00:17:16.680 --> 00:17:19.819 any actual silver backing it since 1965. Right. 00:17:20.200 --> 00:17:22.920 As we defined earlier, it is a completely fiat 00:17:22.920 --> 00:17:25.769 currency now. Just paper and trust. Although 00:17:25.769 --> 00:17:29.009 there is this quirky anachronistic piece of modern 00:17:29.009 --> 00:17:31.369 U .S. trivia buried in the legal code that the 00:17:31.369 --> 00:17:33.289 source points out. Oh, the silver code. Yeah. 00:17:33.609 --> 00:17:35.970 Even though the dollar is fiat and not backed 00:17:35.970 --> 00:17:38.029 by physical silver anymore, United States Code 00:17:38.029 --> 00:17:40.890 Title 31 still technically dictates that the 00:17:40.890 --> 00:17:43.349 Treasury shall sell silver for at least one dollar 00:17:43.349 --> 00:17:45.650 and twenty nine point two nine two nine two nine 00:17:45.650 --> 00:17:48.970 two cents a fine troy ounce. It's like this bizarre 00:17:48.970 --> 00:17:51.529 mathematical ghost of Alexander Hamilton is still 00:17:51.529 --> 00:17:53.710 haunting the modern legal books. It really is. 00:17:53.950 --> 00:17:56.069 This raises an important question about the modern 00:17:56.069 --> 00:17:59.109 era, though, because today the US dollar isn't 00:17:59.109 --> 00:18:02.109 just used by the United States. It's officially 00:18:02.109 --> 00:18:04.890 the currency of sovereign nations like Ecuador 00:18:04.890 --> 00:18:08.410 and El Salvador. OK. And unofficially, it is 00:18:08.410 --> 00:18:11.450 widely accepted and utilized in places like Cuba, 00:18:11.750 --> 00:18:14.400 North Korea and Afghanistan. And just to be clear 00:18:14.400 --> 00:18:17.480 for you listening, we are simply stating the 00:18:17.480 --> 00:18:20.079 economic reality on the ground based on the sources. 00:18:20.200 --> 00:18:22.920 We're not taking sides here. A country's leadership 00:18:22.920 --> 00:18:25.180 might have severe political friction with the 00:18:25.180 --> 00:18:28.059 United States, but on a street level, the citizens 00:18:28.059 --> 00:18:30.980 still use the U .S. dollar for trade. Exactly. 00:18:31.200 --> 00:18:33.779 We're looking purely at the mechanics of trust. 00:18:34.299 --> 00:18:37.200 It speaks to the absolute power of a brand. A 00:18:37.200 --> 00:18:40.099 government might reject U .S. politics, but the 00:18:40.099 --> 00:18:42.660 people still fundamentally trust the stability 00:18:42.660 --> 00:18:44.839 of the U .S. dollar over their own domestic currency. 00:18:45.559 --> 00:18:48.599 The concept of the dollar has entirely transcended 00:18:48.599 --> 00:18:50.970 national borders. So what does this all mean? 00:18:51.210 --> 00:18:53.529 We started by pulling a dollar out of our wallets 00:18:53.529 --> 00:18:55.549 and look at the incredible journey we've taken 00:18:55.549 --> 00:18:57.849 you on today. It's been a long trip. We started 00:18:57.849 --> 00:19:01.769 with a heavy 29 gram physical silver coin pulled 00:19:01.769 --> 00:19:05.529 from a 16th century bohemian mining valley. We 00:19:05.529 --> 00:19:08.410 watched that word warp and spread like a virus 00:19:08.410 --> 00:19:11.450 across oceans. From failure to dollar. We saw 00:19:11.450 --> 00:19:14.029 it become the lifeblood of American colonists 00:19:14.029 --> 00:19:16.269 actively defying the British crown through smuggling. 00:19:16.589 --> 00:19:19.890 We saw Alexander Hamilton turn it into a mathematically 00:19:19.890 --> 00:19:22.970 perfect American ideal, linking it to the cosmos 00:19:22.970 --> 00:19:24.930 of weights and measures. And then the German 00:19:24.930 --> 00:19:27.910 silver crash. Exactly. We watched that perfect 00:19:27.910 --> 00:19:31.230 math shatter, leaving us with a globally fragmented 00:19:31.230 --> 00:19:33.849 fiat currency that is trusted by rival nations, 00:19:34.210 --> 00:19:37.769 and yet printed on a 100 billion note in Zimbabwe. 00:19:38.029 --> 00:19:40.490 It is a remarkable evolution, and I think it 00:19:40.490 --> 00:19:42.369 leaves you with something quite profound to consider. 00:19:42.470 --> 00:19:45.170 What's that? We have traced the dollar from heavy, 00:19:45.470 --> 00:19:48.690 undeniable physical silver to entirely unbacked 00:19:48.690 --> 00:19:51.490 paper fiat that requires our collective imagination 00:19:51.490 --> 00:19:53.869 to have value. Right, it's all trust now. But 00:19:53.869 --> 00:19:56.109 right now, we are moving rapidly into a world 00:19:56.109 --> 00:19:58.650 of completely invisible borderless digital currencies 00:19:58.650 --> 00:20:01.390 and decentralized ledgers. The ultimate abstract 00:20:01.390 --> 00:20:05.200 money. No silver, no paper, just code. Precisely. 00:20:05.680 --> 00:20:08.299 So the question is, as physical cash disappears 00:20:08.299 --> 00:20:11.160 entirely from our daily lives, will the ghost 00:20:11.160 --> 00:20:14.299 of that 16th century bohemian mining valley finally 00:20:14.299 --> 00:20:16.700 fade away? That's a good question. Or is the 00:20:16.700 --> 00:20:19.319 word dollar so deeply embedded in the human psyche 00:20:19.319 --> 00:20:21.779 that it will somehow outlive physical money altogether?