Tale of Dollarland
My granddaughters Sahana and Anagha wanted me to tell them another story. As soon as I started with “Once upon a time, there lived a King by name…”, Sahana interjected, saying, “Please tell us one more story of geopolitics; your last story, Utopia was more interesting than your usual ‘Once upon a time…’” stories[1].
I took a deep breath, thought for a few minutes, and came up with the following story:
In the vibrant playground of Nationsville, all the rulers of different lands looked up to King Greenback of Dollarland.
He walked around majestically in his green robes, holding up his glittering Greenback coins, proud to be the richest and strongest ruler in the entire land. And everyone believed him,… until one day, a story changed everything.
It began when a few rulers gathered under an old tree. King Yuan of Nicha, King Yen of Pajan, and King Yiradh of Dausi Kingdom were deep in discussion.
They had all stored huge piles of King Greenback’s shiny coins in their treasuries, but everyone felt something wasn’t adding up. They were beginning to suspect that the glitter of the Greenbacks might be hiding something darker.
As they were debating, the wise old Sage of Owltown, who had been listening quietly from a distance, stepped forward. “You all seem troubled, my friends,” he said softly.
“We are,” admitted King Yuan. “We have so many of King Greenback’s coins, but lately, we feel uneasy. What if they aren’t as valuable as they seem?”
The sage nodded knowingly. “It’s natural to feel that way when a kingdom’s wealth depends on borrowing and lending instead of real value.
“Let me tell you a story,… a story about a small village with monkeys. Maybe it will help you understand why your fears are not unfounded.”
The rulers leaned in closer as the sage began:
The Tale of the Monkey Business
There was once a small village where people lived simple lives, making a living through farming and trade.
One day, a wealthy merchant from a foreign country arrived with a bag full of gold coins and announced that he wanted to buy monkeys. “I will pay one gold coin for each monkey you bring me,” he declared.
The villagers were surprised. Monkeys? They thought the merchant must be crazy, but since monkeys were everywhere in the village and the adjoining forest, and had no value to them, they happily collected monkeys, left, right, and center, and sold them for gold coins.
The merchant left with the monkeys caged, offering to come again after a week to buy more monkeys.
But, the village had fewer monkeys left. The merchant came back every alternate week and kept buying for a couple of weeks.
The next week, when the merchant came again, there were hardly any more monkeys left. The disappointed merchant upped his offer. “I will now pay you five gold coins for each monkey you bring me!” he announced.
The villagers rushed into the forest, desperately hunting for the remaining monkeys. They found a few and sold them for five times the original price.
Soon, there were no monkeys left in the village as well as the forest.
Seeing the dwindling supply, the merchant made one final offer: “Now, I will pay ten gold coins for each monkey!” But no one could find any more monkeys.
Then, the merchant left, saying he would come again after a week.
After the merchant left, his assistant approached the villagers privately. “I have a deal for you,” he said slyly. “The merchant has left behind some monkeys in cages. Since you can’t find any in the wild, I will sell them to you for seven gold coins each. When the merchant returns, you can sell them back to him for ten gold coins and make a neat profit.”
The villagers were excited. This seemed like easy money!
They pooled all the gold coins they got from the merchant and all their own gold coins, bought back the monkeys for seven gold coins each, and waited eagerly for the merchant’s return.
The merchant never came back. Nor could they find the assistant.
The villagers were left holding a bunch of noisy monkeys. They realized they had been tricked into buying something completely worthless.
Their own precious gold coins were gone, and the monkeys that had once seemed so valuable were just… monkeys.
Back to the Dollarland story
When the sage finished, the rulers sat quietly, the tale of the monkey business ringing in their ears.
“That’s what’s happening with King Greenback,” King Yuan said slowly, the realization dawning on him. “His Greenbacks seem valuable now, just like those monkeys did to the villagers. But they are backed by nothing but promises and a growing mountain of debt.”
The sage nodded. “Exactly. When the villagers thought the monkeys were rare, they believed they were valuable. But in reality, the value was only what they imagined.
“King Greenback’s wealth works the same way. He keeps minting more Greenbacks, and you all keep buying them, believing they’re worth something. You don’t get to see his hidden Bag of Debt.”
“But what happens when King Greenback can’t keep up the act?” asked King Yiradh nervously. “What if other rulers stop believing in his Greenbacks?”
“Then, just like in the story, everyone holding his Greenbacks will be left with nothing but worthless coins, while the value they thought they had disappeared,” the sage replied gravely.
“That’s why you should start buying Gold instead of Greenback and mint your own coins jointly, backing these coins with real gold. You’ll then be hedging your bets. Slowly encash your Greenback coins with the King himself, so the King is still able to honour his own coins over time.” The rulers nodded thoughtfully.
The story opened their eyes to the dangers of relying too heavily on King Greenback’s promises.
From that day on, they began moving their treasures, preparing for the possibility that one day, King Greenback’s Hidden Bag of Debt would become too big to hide, just like the villagers realized the monkeys were never worth their gold.
And so, the whispers spread quietly but steadily through the playground of Nationsville, as the rulers secretly made new plans, just in case the mighty King Greenback’s castle crumbled under its own weight.
The story of the Monkey Business is a famous analogy that highlights how perceived value can mislead people into making risky investments.
This is not just a story, kids. This is happening right under our noses.
In the real world, the US Dollar has long been viewed as a reliable currency for global trade, similar to the villagers believing in the value of the monkeys.
However, the US kept printing Dollars and has accumulated over $30 trillion in debt, creating concerns about the sustainability of its economy and its currency value.
How much is US Dollars 30 Trillion? It’s almost what the US produces in a whole year currently.
Countries like China, Japan, Saudi Arabia, India, and many other countries that hold large reserves of US Dollars, are now seeking alternatives to the US Dollar.
This shift away from the dollar is being called de-dollarization.
When the debts that the US owes to others become too large to manage and other nations lose faith in the dollar, everyone would want their money back by dumping the dollars, but the US won’t be able to return either their money back or their gold equivalent, as the US doesn’t have enough gold.
The other countries should wake up early or else, they would end up like the villagers who were left with worthless monkeys.
Luckily, the world, including India, is waking up to this reality, even if only slowly.
Note:
1. Text in Blue points to additional data on the topic.
2. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.
Reference:
[1] Utopia (My maiden story… of geopolitics) – Sep 16, 2024, PGurus.com
For all the latest updates, download PGurus App.
- Story of geopolitics for kids: Dollarland & Monkey Business - September 27, 2024
- Utopia (My maiden story… of geopolitics) - September 16, 2024
- Strategies to counter engineered agitations - September 3, 2024
