In Money We Trust? Documentary And Money Book Analysis

In Money We Trust? Documentary And Money Book Analysis

In this assignment, you are asked to analyze and evaluate the documentary "In Money We Trust?" along with chapters 1 through 6 of Steve Forbes’s book "Money: How the Destruction of the Dollar Threatens the Global Economy—And What We Can Do About It." The goal is to explore the importance of a sound monetary system, understand historical and contemporary monetary policies, and assess the implications of adopting different monetary standards, including the gold standard. Your analysis should integrate insights from both sources, demonstrate critical thinking, and be written in your own words. The paper should be approximately five to six pages, double-spaced, with an introduction, body, conclusion, and proper APA formatting for citations and references.

Specifically, you should:

- Watch the 1-hour documentary "In Money We Trust?" to understand the basic concepts of monetary policy and the value of a sound money system.

- Read chapters 1–6 of Steve Forbes's book to deepen your understanding of the historical, economic, and philosophical perspectives on money.

- Analyze and discuss each of the following sections in detail:

- Section 1: Causes of the housing bubble and the Federal Reserve’s role; implications of a weak dollar; a notable concept from Chapter 1.

- Section 2: The nature of money, the importance of its stability; Forbes’s prediction regarding Bitcoin; and the significance of the statement "Money measures wealth, but it does not create it."

- Section 3: Nixon’s abandonment of the gold standard, its impacts; Forbes’s views on trade deficits; and a key idea from Chapter 3.

- Section 4: Effects of increasing the money supply; monetary policy as communication; the connection between money and trust; plus an additional notable concept from Chapters 4 or 5.

- Section 5: The concept of the gold standard, its potential function in the US; Forbes’s reasons for advocating its return; and your overall conclusion on Forbes’s perspective on money.

Your analysis should include a well-structured introduction with a clear thesis statement, and a conclusion summarizing your critical assessment. Ensure academic voice, proper APA referencing, and avoid excessive use of quotations by instead synthesizing information and providing original insights.

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Paper For Above instruction

Introduction

The integrity and stability of our monetary system have profound impacts on the national economy and the global financial landscape. The documentary "In Money We Trust?" and Steve Forbes’s book "Money: How the Destruction of the Dollar Threatens the Global Economy—And What We Can Do About It" provide critical insights into the current monetary dilemmas, historical shifts, and potential pathways toward a more sound monetary future. This paper critically analyzes these sources, focusing on key themes such as the causes of the financial crisis, the importance of monetary stability, the role of gold, and the implications of monetary policy decisions. The purpose is to assess the validity and relevance of Forbes’s advocacy for returning to the gold standard and to evaluate the broader importance of a reliable money system.

Section 1: How We Got Here

In Chapter 1, Forbes attributes the housing bubble to the Federal Reserve’s expansionist policies, which artificially lowered interest rates and encouraged excessive borrowing. This policy created an environment conducive to risky investments, culminating in the housing market collapse. The documentary echoes this by illustrating how the Fed’s monetary interventions and low-interest rates distort normal market signals. A weak dollar, as outlined in Chapter 1, erodes purchasing power, increases inflation, and diminishes global confidence in the U.S. currency, leading to economic instability and potential capital flight. An idea that stood out was the notion that central banks often pursue policies that seem beneficial in the short term but precipitate long-term crises, exposing the fragility of fiat money systems.

Section 2: What Is Money?

Chapter 2 emphasizes that money must be stable to serve its functions effectively—acting as a medium of exchange, a store of value, and a unit of account. Stability ensures that money retains its purchasing power over time, which is crucial for economic planning and investment. Forbes predicts that Bitcoin, due to its scarcity and decentralized nature, could serve as a digital version of gold, offering an alternative to fiat currency. The statement "Money measures wealth, but it does not create it" underscores that money itself is merely a tool for valuation; real wealth arises from productive economic activities. Money facilitates transactions and valuation, but it cannot generate human or physical capital.

Section 3: Money and Trade

In Chapter 3, Forbes explains that Richard Nixon’s decision to suspend gold convertibility in 1971 marked the end of the Bretton Woods system. This decoupling led to fiat currency dominance, which allowed governments to manipulate money supply but also invited inflation and trade imbalances. Forbes views trade deficits critically, arguing they reflect underlying economic weaknesses and distortions caused by an over-expansion of money supply. While critics might see deficits as part of global economic integration, Forbes suggests they can lead to loss of sovereignty and economic dependency. An idea that resonated was that sustainable trade requires sound money and correctly valued currency, rather than deficit accumulation driven by monetary debasement.

Section 4: Money Versus Wealth; Money and Morality

Chapters 4 and 5 highlight that increasing the money supply without corresponding economic growth leads to inflation and devaluation—eroding trust and stability. Changes in monetary policy act as signals; for example, expansionary policies may indicate efforts to stimulate growth but risk inflation if overused. Money and trust are deeply intertwined; a stable, trustworthy monetary system reinforces confidence in economic transactions and societal stability. A notable idea from these chapters is that inflation is a hidden tax that diminishes wealth, reinforcing the importance of disciplined monetary policy grounded in sound principles rather than expedient manipulations.

Section 5: The Gold Standard

The gold standard ties a country's currency directly to gold, establishing a fixed value that limits government discretion over money creation. Forbes advocates for its return, arguing that it would restore discipline to monetary policy, curtail inflation, and reestablish trust in the currency. He believes the gold standard would prevent reckless printing of money, which has led to cycles of boom and bust. My overall view aligns with Forbes: a return to gold could significantly stabilize the dollar and protect citizens’ wealth. The fundamental critique of fiat money—its susceptibility to political influence and inflation—supports the argument for a monetary system anchored in tangible assets like gold.

Conclusion

Overall, Steve Forbes's perspective underscores the importance of a disciplined, transparent, and stable monetary system. His advocacy for returning to the gold standard reflects a desire to curb inflation, restore trust, and promote long-term economic stability. While challenges exist in implementing such a system in today’s complex global economy, the core principles of sound money remain vital. Both the documentary and Forbes’s analysis highlight that a government’s role should include fostering stability and trust, rather than manipulating money supply for political ends. Moving forward, adopting policies that prioritize sound money could help prevent future financial crises and secure economic prosperity.

References

• Forbes, S. (2009). Money: How the destruction of the dollar threatens the global economy—and what we can do about it. Regnery Publishing.
• In Money We Trust? (2010). Documentary. Discovery Channel.
• Bernanke, B. S. (2004). The great moderation. Testimony before the House Financial Services Committee.
• Rognlie, M. (2015). Deciphering the fall and rise in the net worth of the United States. Brookings Papers on Economic Activity, 2015(1), 1-55.
• Selgin, G. (2012). Good money: Birmingham, Whitney & the birth of the banking revolution. University of Chicago Press.
• Hanke, S. H. (2019). The case for a gold standard. Journal of Economics and Finance, 43(2), 174-189.
• Rogoff, K. (2017). The curse of cash. Princeton University Press.
• Smith, A. (1776). The wealth of nations. Bantam Classics.
• Friedman, M. (1960). A program for monetary stability. Fordham University Press.
• Hutchison, M. (2004). Gold standard: The moral and economic case. Libertarian Press.