Money And The Game

Federal Reserve by ~Venar
Federal Reserve by ~Venar

After years of focusing on nano-economics (too small to call it micro) of my little family, I went on a pleasant trip down the macro-economics lane today. At the end of it I realized that I must have slept through the undergraduate class on Federal Reserve monetizing the nation’s debt because I was “surprised” to see almost a trillion dollars of Treasury obligations on the asset side of the Fed’s balance sheet. Its Annual Report is about 400 pages but the numbers on page 315 are fascinating when contrasted with the numbers on page 322. This video provides a very basic overview of what money is, how it’s created and destroyed.

These are some simple observations:

  1. The dollar is backed by debt obligation of our government – no debt > no dollars.
  2. Gold mining could not produce enough gold to sustain the growth we needed giving way to the current system.
  3. I understand the home mortgage deduction (and why it’s not a home mortgage full repayment deduction). Mortgages are good things as far as our system is concerned. The bank does not need a foreclosed house because that cannot be used as collateral with the Fed to meet the reserve requirements.
  4. All other governments are married to the almighty dollar. For example, Russia had to spend billions of dollars in foreign currency reserves to defend its Ruble.
  5. We pay thin air for the natural resources and efforts of other countries (oil from middle east, for example).
  6. Our current troubles are in part from bad loans getting in the way of the money multiplier.
  7. I would need another lifetime to begin to understand the current and past monetary systems, let alone make recommendations for changes.

In the meantime, I made the following comment in an e-mail yesterday:

I have come to think of money as some kind of a complex score in a game – and not much more. The higher the score, the better the player is at the game. Since the game rules are far out of my reach, I try to waste as few cycles as possible on changes I cannot implement but at least two elements bother me:

  1. The devastation brought upon many people who fail in the game (real suffering from game “score” issues)
  2. The incredible amounts of time (of our life – the real value which we cannot increase in any way) spent in playing the game for maintaining or increasing our scores

One more element bothers me but I did not mention it. People who are not the best at the game (myself in the list) sometimes feel that they are not good for anything. That could not be farther from the truth. My mother never had or paid attention to money and she was …. again searching for words to represent her true greatness.

When others say that time is money, I think the reverse. Money is time, actually. It’s the effort spent every day on earning a living. Here I have to say I feel bad for seniors who after decades of work got 50% cuts in their retirement accounts in the past year and are considering to continue working longer. They have every right to be mad at the system, the government, the brokers, the cheaters, the fund managers, and everyone else because time is what they have lost. Money can be created, but time cannot be created.

Unfortunately, time cannot be taxed (it would be a form of slavery). Therefore, it is converted to money which is then taxed. As a citizen of this great country, I actually like to pay taxes at all levels of government. The higher the tax bills, the higher our score and the better we’re playing the game. My earlier observation is not about the country but for the world as a whole.

Around the same topic, I must remember my uncles living in a small village where my father grew up. There was one little non-functioning store there at the time. Their basic existence revolved around the bounty of the land and their animals which were loved like family members – no money, no tax, no government, hardly a road, no shopping malls, no technological innovation, no Internet, no computer, no indoor plumbing (in the earlier years), no gym memberships, no stocks or bonds, no fancy cars or elaborate houses, but still a pretty happy life.


  1. I used to complain that I was always in tax trouble. It was pointed out to me that being in tax trouble is a good thing, that means you’re making money. People who don’t make money are never in tax trouble.

    Money is just a way of keeping score in the game, much like chips on the poker table.

    My idea of happiness is playing the game, surfing, and surrounding myself with beautiful art and music. Anything else is just noise.

    Great post.


  2. If there is one thing that this recent period has demonstrated it is that money is only one way to keep score, and the value of that scorecard is only what you want it to be.

    The problem that many people are now facing is that the only measure of their existence is related to the objects they have acquired as a way of displaying their success at the game. Money is a great creator of opportunity and exchange, even a score card, but I believe the trap is when that paper, the electronic numbers in an account decline, or are overladen with a negative number on the other side of the ledger. What then?

    I am more inclined to regard a man with integrity and character as a success than a man with copious amounts of “success” on display. When the money is gone a man with character and integrity still has something of value, the other man is lost. In other words the game of life has different scorecards. The difficult decision we all face is what one or ones we wish to measured by.

    And I agree with you about time. Time is one thing that you can take from someone and they will never get it back. To waste a persons time in my view is a matter of the highest disrespect.

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