This is a HeadGum podcast.

Hello and welcome to Factually, I'm a

Adam Conn over here for joining me once again as I talk to an incredible expert about all the amazing shit that they know that I don't know and that you probably don't know to my mind is going to be blown your mind is going to be blown we're going to have a hell of a time together.

Let's start with this fun fact did you know that nobody really knows what money is seriously we're all carrying it in our pockets but none of us know what the hell it actually we know we can do with it but we don't really know how to define it.

How to define it I've listened to a lot of podcast episodes I've read books I've read articles that try to explain it and when it comes down to it if you corner economists they will tell you that well you know they know it has something to do with value they know that something to do with trust they know that debt plays some kind of role but none of these explanations add up to a single concrete definition that stands up to every kind of scrutiny we apply to it that is why we have an

entire field of human inquiry called economics that is basically devoted just trying to explain what the hell this shit is what we do know for certain though is that money has changed a lot over time you know it seems pretty solid and simple to us now sure at many points in history money has come in the form of coins or precious metals but it's also existed in the form of cattle like actual cows and seashells and even strips of white deer skin leather.

Money used by entire countries didn't always come from a central bank run by the government because those haven't always existed in the 1800s much of the paper money in America was actually issued by private banks or individual states even something like the gold standard where every bill corresponds to a piece of gold sitting in a vault somewhere

well that didn't even come along until 1816 when Britain fixed the amount of pounds in circulation to a finite amount of gold to stop inflation and that lasted over a century but then disappeared we don't have the gold standard in America today.

So this idea of money that we grew up with that the state issues money that exists in the form of a piece of paper in your hand with the signature of an old guy on it to prove its authority well that's actually very recent and

the future of money is quickly overtaking us money is about to become something else entirely take crypto currencies for example they act in some ways like money in some ways not there's a lot of complicated math involved and no one can agree on if they're the future of money or a Ponzi scheme perpetrated on the foolish or look at mobile money where in countries like China or Kenya you've got entire economies that exist by people sending money back and forth via cell phones without the intervention of a bank or cash at all.

Money right now is in a moment of transformation and transition more than at any time in our lives and talk about it and tell us what the future of money holds we have a fascinating guest on the show today his name is Eswar Prasad he's an economist at Cornell and he's the author of a book called the future of money how the digital revolution is transforming currencies and finance if you are interested in money crypto or just I don't know the future of life on earth I think you're going to love this interview.

Please welcome Eswar Prasad Eswar thank you so much for being here it's my pleasure I don't thank you very much for having me tell me a little bit about yourself before we get started what do you do what do you study what do you teach.

So I teach economics at Cornell University I used to work for this big international financial institution called the International Monetary Fund for a long time but I always wanted to be a professor

and then Cornell came along gave me the software I'm now living my dream being a professor and I largely work in issues related to international finance which means exchange rates between currencies capital flows across countries and issues related to monetary policy.

You know it was my dream to be a professor too but I backed off before applying to grad school I want to be a philosophy professor and I was like everyone was like yeah maybe you should do comedy instead that might actually be an easier.

Career path to get a job in then academia than the liberal arts but let's talk about let's talk about money you wrote a book called the future of money what it what do you feel the future money is that's a big question to start with but let's go for it.

So you know I've written other books in the past I had a book about the US dollar and then I had a book about the Chinese currency called the renminbi but in the last three or four years it became apparent to me that something funky was going on in the world of money.

We've all heard about Bitcoin of course but this notion that you might have money that was issued not by a central bank set up by government but by some mysterious computer algorithm and the people could actually use this money and value it sounded remarkable to me.

So I started reading up and I realized there wasn't much to read upon so I started writing about this because it's the best way to understand what it's going on and then I started writing about it I also realized that there is much more that is connected to this there are lots of revolutionary developments in the field of finance which go under the broad rubric of FinTech or new financial technologies.

You know most of us now use digital payments in some form or the other but these could have pretty big implications for not just money but for the world of finance for money flowing across countries for central banks for investors.

So what is going to be a small little book turned into a 500 page dome that tries to show the connections between all of these financial technology developments and what it might mean for money for finance and for all of us.

Wow okay well we talked about cryptocurrency on the show a little bit before we did a past episode of Everest Pipkin that was our introduction to the topic folks can go listen to that.

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