Past Midway Ramblings on Business & Life

A Children’s Story for Adults

Imagine a world where money is nearly free. In this make-believe world, the citizens planted a magical tree whose fruit is money. Sure, the citizens needed to water the money tree, prune it and generally care for it. They also, of course, had to pick the money from the tree as it bloomed. So, it required some work, but generally, the tree produced money proportional to the care provided, with some minor yearly fluctuations. Not a bad deal, considering money literally grew on trees in this make-believe world.

For a long time, as long as anyone can remember, this system worked well. Care for the tree. Harvest the money. Simple. Until… one day… where our story begins…

One day, Gary, a brilliant accountant in our make-believe world, had what he thought was a magnificent idea to reduce the workload for the citizens and to save time, because it certainly required time to cultivate and nurture the money tree. In fact, it was real work.

“This is going to sound crazy,” Gary starts, “but I was thinking, maybe we should cut down the money tree.”


The citizens, flabbergasted, weren’t exactly sure how to respond. Gary had cast an idea without a shadow and no echo of support.

Subtle glances ricocheted through the crowd – social voting. Exchanged micro-expressions quickly tallied the ballots to confirm individual alignment with group-opinion. The silent consensus ended with communal shoelace inspections. In other words, everyone thought Gary was making crazy talk.

Such a radically absurd idea from someone otherwise intelligent, they thought.

“Hang on,” Gary resumed, “Put down your metaphorical pitchforks and hear me out.”

“If we cut down the money tree,” nervous pause…

“in its place, we can pretend to have a money tree.”

“Dumbest idea ever,” someone muttered. The surrounding silence amplified this comment, rendering it a little louder than intended. Citizens of a certain radius snickered. Now it was more awkward.

“I’ll be honest, I have a little secondhand embarrassment for Gary right now,” another citizen whispered to a friend.

Gary continued to explain his thesis, which mainly centered around this argument:

“An imaginary tree would be considerably less work than caring for a real tree.”

Even if the overall concept was preposterous – and it was – at least Gary had a valid point here. Imaginary trees would certainly require less work than real trees. The citizens found this point, at least, unarguable. Nevertheless, dinner conversations that evening, in homes across our make-believe world, centered around Gary and his outlandish idea. Good grief Gary!

In fact, the idea was so ridiculous, in the days to follow, Gary garnered some initial media attention. Viewers liked to watch Gary’s interviews, not because they agreed with him, but because it was entertaining to listen to someone so articulate discuss something so laughable, with a serious face.

Cut down the money tree. Pfffbt… What?!? Who is this guy? Honey, get the popcorn! Gary’s on TV again.

Gary possessed a curious blend of intellectual rigor with ludicrosity, which isn’t even a word.1 It was equivalent to Gary’s twin, Steve, a cosmologist and famed astronomer, arguing the make-believe world was flat (which he was not, because that is ridiculous and, more importantly, it would ruin his professional reputation).2

But increased viewers attracted sponsors, and “Gobbledygook Gary”, as he became known, got more media time.

Repetition in the media, no matter how outlandish the concept, attracts followers.

Early adopters to Gary’s vision agreed with the main premise: Taking care of a real tree… what a bore! That’s old school.

As Gobbledygook Gary continued to repeat his idea, populist sentiment began to shift. People began to identify as Pro-Imaginary-Tree, rebranded to “Promagination”. A tribe, with a cause.

Citizens supporting the traditional view (Pro-Real-Money Tree people) were quickly labeled Antimagination’ers. Although they preferred “Pro-Tree” language, the negative label stuck, through repetition in the media. Ratings were great.

With time, the Antimagination numbers dwindled as it became increasingly more difficult to counter the momentum of the no-longer-nascent Promagination crowd. It’s better to be for something than against something, they were reminded. And “Gobbledygook Gary” became, just “Gary”.

Language matters.

The Promagination tribe was progressive, according to their brochure:3

“But,” someone asked, “how much money should the imaginary money tree produce?”

Good question. Fortunately, Gary had considered this, and had a solution.

“Someone needs to oversee the imaginary money tree and the imaginary money harvesting. For this important position, we surely need someone with a good imagination. I know just the person for the job,” Gary said.

Gary simultaneously introduced and nominated Fred for the task.

“Fred is imaginative to academic proportions,” Gary said.

Gary, the father of the Promagination movement, was an intellectual visionary. Fred would be the CEO.

Everyone agreed. Fred was a good choice. He was hard-working, intelligent and imaginative.

Fred’s Imagination

Fred accepted the position, under one condition – in exchange for his imaginary money picking from the imaginary money tree, the citizens must promise to repay the imagined money at some future date, lest Fred’s imagination fully deplete. No one really knew what that meant, but clearly, it sounded bad, at least for Fred. And, potentially unhealthy for everyone else.

Although it wasn’t fully spelled out, everyone tacitly understood, if Fred’s imagination failed or became exhausted, the imaginary money might disappear. Fred’s imagination would sustain all the imaginary money. Well, that, plus everyone’s belief in Fred’s ability to continue imagining imaginary money for years to come. We must take care of Fred, present Fred and future Fred. This was something everyone agreed upon.

“That sounds fine,” the citizens replied, with one question left hanging…

“How much money can Fred imagine picking from the imaginary money tree before Fred’s imagination runs out?”

No one knew the answer to this question, not even Fred, but it seemed like a LOT, so they all decided to proceed, albeit cautiously at first.

For quite some time, this worked magnificently, beautifully you might say.

Fred Goes to Work

Every day, Fred would wake up and go to work, imagining the imaginary money tree blossoming with money, much like the original tree, but more spectacularly. In the brilliant sunshine, for everyday was sunny in Fred’s imagination, Fred would pluck bills from the imaginary money tree.

Fortunately, not only was Fred great with his imagination, he was brilliant at counting, and meticulous in recording and reporting every imaginary bill he picked from the imaginary money tree. This pleased the townsfolk. Fred was doing his job spectacularly, as predicted, and all was swell in make-believe land.

“Good job Fred,” Gary said, as he slapped Fred on the back in approval. Others did the same when they saw Fred around town. Fred was getting a bit of notoriety. He wasn’t accustomed to this.

“Turns out, this idea wasn’t so ridiculous after all. We were so naïve back in the Pre-Promagination era, weren’t we Fred… caring for a real money tree and all,” Gary was quoted as saying in a joint interview with Fred and other leading economists.

Fred’s Self-Worth

Some days, Fred felt a little more ambitious. In fact, for some entire seasons, Fred would imagine the money tree with limbs sagging under the load of abundant bills, especially the lower branches. These were fruitful days. Other times, Fred would imagine most of the bills higher up in the imaginary money tree and perhaps a little sparser in number and denomination, but he would offset this by working longer hours. In both cases, Fred recorded and reported harvesting sufficient imaginary bills.

Even though some months required more work from Fred, it seemed worthwhile because it pleased the citizens… and was good for the real-world economy in our make-believe land. For this, Fred was proud of himself, his work ethic, his meticulous record keeping and, most importantly, his imagination.

After some time, years, Fred noticed a curious thing. The more imaginary money he picked from the imaginary money tree, the more the real economy grew for his fellow citizens. And there was another correlation. The more the economy grew, the more people liked Fred.

Fred was now The Man. He was important.

Fred quite liked the idea that he was important and appreciated for his wonderful imagination by the citizens at large. What he did mattered, and people told him so. Fred got respect from his fellow citizens, and who doesn’t want that?

Consequently, Fred initiated periodic townhall meetings to discuss his plans for future imaginations. In doing so, the citizens came to expect Fred-guidance about what he might imagine for the coming days or weeks. Sometimes, Fred would even imagine what he might imagine a few months out. This gave the people comfort, knowing Fred continued to imagine picking more money from the money tree… because, at this point, Fred wasn’t the only one who had noticed the correlation between his imagination and the real economy.

That’s exactly how it is supposed to work, right… just like “back in the day”, Pre-Promagination style, when they had a real money tree. The main benefit – Fred could imagine more money than the old real tree could produce. Clearly a better monetary system. And, let’s not forget, LESS WORK.

So far, so good.

Citizens began to respect Fred so much, they listened intently to his musings about imaginary money. Specifically, they tried to decipher his mood as he spoke. Did Fred think the imaginary money was on the lower limbs, or mostly blooming on the hard-to-reach, upper branches? And if higher up, did Fred sound like he was still the kind of guy who would work a little harder on his imagination? These are good and important questions. It mattered to people’s livelihoods.

Imaginations are serious.

Many people began to anticipate and even speculate about what Fred might say he planned to imagine. And when Fred did speak, he was on the news. Not the live news, but the highlight reel, because, well, let’s be honest, it was pretty dull compared to the dating lives of celebrities. Of course, what Fred did was crucial. Everyone knew that. But still, it was a little boring and frankly, few citizens understood why Fred was picking imaginary money from the imaginary money tree in the first place. That’s just the way the economy worked. But they did know this: it was important, vital even. Suffice it to say, Fred was doing a great job, and most citizens were content to let Fred continue his work in the background.

This was all fine – for a while – mostly because the citizens began to accumulate more money. Well, at least many of them did, especially those who paid acute attention to Fred’s envisioned future imagination.4

With time, some of these imaginary money experts even suggested Fred should spend some of his time pruning the imaginary money tree, maybe even water it a little. Perhaps the imaginary money tree could produce greater sums, if cared for properly. If not, there might come a day when Fred’s imaginary tree doesn’t produce as expected.

Turns out, imaginary trees are not totally effort-free.

Accumulation of Wealth

As the citizens became wealthier, they encouraged Fred to imagine harvesting even more imaginary money. Now, that started to sound like a lot of work, at least for Fred. Besides, the real economy was humming along quite well. If anything, maybe too well, even a little exuberant in certain sectors.5

Eventually, some people began to question if there might come a day when Fred might not feel like working so hard to pick the imaginary money. Talk of this added more pressure to Fred and his imaginary job. As the pressure on Fred mounted, he noticed the weather had become a little cloudier than normal in his imagination.

Maybe I AM imagining picking too much money, Fred thought.

Fred Cautions, People React

Sure enough, one day, Fred mentioned he was thinking he might take a short break and, “consider reducing my imaginary money picking from the imaginary money tree for a season. Not a complete sabbatical, mind you, just a slowed pace, just a little.”

This absolutely set people off. Suddenly, literally overnight, Fred wasn’t as cool as he was before. People began to grumble. Some even said Fred wasn’t doing enough for the real economy.

Geez Fred, we’re out here working in the real world, getting our hands dirty. How hard can it be to just imagine picking a little more money from the imaginary money tree? Come on Fred! We’re all in this together. Take one for the team.

Political leaders also began to weigh in with suggestions on how much imaginary money Fred should imagine picking (“more”), because, well, let’s face it, grumbling amongst citizens does not favor political aspirations. It was an election year after all.

It’s strange how quickly people turned on me, Fred thought.

Meanwhile, Fred pondered if the citizens really did intend to repay the imaginary money in the future as promised, ensuring his imagination would not become depleted. At least for now, he seemed to have plenty of imagination left… but he had picked a lot of money and, well, it was a lot to pay back.

But they said they would pay me back. They promised. They’re good for it, Fred rationalized.

Besides, the real economy was going so well, thanks to Fred’s fantastic imagination, the citizens were certainly able to pay him back.

Nothing to worry about. Maybe I’m just tired this evening, Fred thought.

But to assuage Fred’s fears, the citizens of our make-believe world presented Fred with an idea.

“Hey Fred, we really appreciate all your hard work and your brilliant imagination. To date, you’ve been super diligent about picking imaginary money from the imaginary money tree. And we have been equally diligent about promising to pay you back, with interest, in time. This has been a wonderful, symbiotic relationship thus far. But, in order for us to ensure, without a doubt, that we can pay you back – and we intend to pay you back, don’t worry about that – what would really help, is if you imagined picking even more imaginary money. With this increase, the real economy should garner more momentum and we would be in a better position to pay you back in the future. So, here’s the idea…”

“What if you pick more imaginary money and, instead of us (the citizens) just giving you IOU notes, we let you invest some of the new imaginary money directly into the real economy. This is a little unprecedented. We understand that.”

“Geez, guys, I don’t know,” Fred said.

Gary, Promagination’s father, who had been silent in retirement for some time, chimed in, “I’m not sure that’s the way it’s supposed to work.”

A Real Bump in the Imaginary Road

“Fred, I’m going to level with you,” continued the townsfolk leadership, “We somehow got ourselves in a bit of a pickle, but it’s manageable. If you can just step up the imaginary money production, we will give you more IOU notes, but this time, not just from the citizens collectively as a government, but also some directly from the people. Well, technically, from the banks that own these IOU notes from the people. So, I guess, technically, you would pay the banks, but in doing so, you will be saving the people… and the banks.”6

“Here’s the problem, and frankly, how you can be part of the solution… THE solution Fred. The main issue is that these IOU notes aren’t worth what they used to be worth. This has caused a significant problem for our banks who now don’t have enough money in reserves to support them. This kind of got in front of us. So, Fred, we need you to buy them from the banks at prices higher than they’re actually worth. Once this straightens out the banks, we’re confident we’ll still be able to pay you back, even more, at a later date. Besides, it’s all imaginary anyway, right Fred?”

“Sounds like I don’t have much of a choice, do I?” Fred said.

“Fred, you’ll be The Man again.”

With that, Fred went back to his desk, (his hair a little thinner and a little grayer), and imagined planting a small orchard of money trees, each growing imaginary money. Production was up. Fred also had to imagine hiring imaginary employees to help pick all the new imaginary money from the imaginary money orchard… and a few real-world employees as well to help Fred record all the imaginary money transactions.

And, it worked. At least it seemed to work. Of course, it took some years to settle out. But once Fred and his trusted employees (both real and imagined) were able to manage the larger imaginary money orchard, the real economy stabilized. In fact, the real economy started to accelerate. All was good again. In fact, it was truly great. An extended season of unparalleled economic growth.7 Well, except an imaginary orchard was now considerably more work to manage compared to a single imaginary money tree.

Managing the Imaginary Orchard

As time rolled on, Fred alternated between imagining his imaginary staff harvesting a lot of imaginary money and scaling back his imagination and recording a lower daily haul.8 It was becoming a lot of work, but it was still worth it, because well, who wants to water and take care of a real money tree when the imaginary orchard is so much less effort? And besides, a perfect imaginary orchard of imaginary money trees can produce considerably more money than a single real money tree. It just takes a good imagination. And Fred was good with his imagination.

Gary, an intellectual, reminded Fred that the imaginary system technically required three conditions:

  1. Fred and his staff must be able to continue imagining his imaginary employees picking money from the imaginary money orchard, at precisely the proper rate, with the help of his large pool of real employees and his team of financial analysts.
  2. The citizens must agree that Fred is capable of imagining new money for the foreseeable future.
  3. Perhaps most importantly, although no one really wanted to talk about it, the citizens must truly intend (and be capable) to repay Fred, eventually. At the very least, they must pay the interest portion on the imaginary money… because Fred had a lot of imaginary employees to manage with real imaginary expenses for all this imaginary work. Without all this complex management of the imaginary money orchard, Fred’s imagination might become depleted. This would be sad for Fred, and for everyone… because without Fred’s imagination, the imaginary money Fred has already picked, evaporates. It was, after all, Fred’s imagination supporting all the imaginary money. And what a powerful force it had become. The citizens needed Fred to continue imagining the money orchard… with money on it. Lots of money on it. The citizens also needed the collective belief that Fred’s imagination was the new standard in imagining new money, money orchards and supporting all the imaginary money previously gathered, now circulating in the real economy.9

Fred’s Diminished Self-Worth

Most people didn’t notice at first, but there was a lag between Fred’s imagination and the impact on the real economy. Because of this offset in timing, Fred was frequently over-shooting and undershooting with his imagination. A rollercoaster of sorts, both in the real economy and in the hearts and minds of the citizens, relative to their approval of Fred. The obvious solution – expand the orchard.

Over time, people began to expect Fred would just imagine picking more imaginary money to boost the real economy anytime there was a hint of a decline.

But lately, Fred didn’t quite seem himself. He was feeling like maybe there were limits to how much he could imagine. Not because he lacked imagination, he was quite good at that. He was just becoming increasingly concerned the citizens had coerced his imagination to outpace their ability to grow the real economy. They were asking him to imagine entirely too much money in the orchard, more money than the real economy produced. Maybe considerably more than it was worth. It seemed unbalanced.

This introspection compelled Fred to ask himself,

Shouldn’t the real economy, on average, over the long-haul, only grow at the natural pace equivalent to increases in productivity? If my imaginary employees pick imaginary money at a pace consistently greater than the organic growth rate of the real economy, what happens to the value of the imaginary money?

Fred was becoming an intellectual, like Gary.

These were perplexing questions, no doubt complex. In theory, academics understood the accelerated growth from recent imaginary money picking shouldn’t technically be sustainable, but in practice, maybe it would be fine. No one knew the answer with certainty, and it seemed better to not talk about it, because the real economy was going great.

Fred also felt a subtle social undercurrent. People who spoke in pessimistic tones about the economy were considered less patriotic. Fred had noticed some citizens held fundamental beliefs that patriotism must be coupled with optimism, despite economic reality.

Mooring to illusions of perpetual economic optimism had replaced what was once grit and the slow-but-steady grind of hard work and innovation of previous generations… in our make-believe land.

Recall, Fred was excellent at counting and keeping accounts. And by his accounts, he was growing in his concern for the real economy. He was now less troubled that the citizens might not repay all his imagined money, and more concerned they might not be able to pay the very real interest on the imaginary money. Without interest payments, Fred feared his imaginary employees might tire of picking imaginary money without pay. With a sudden downturn in imaginary money, who knows what might happen to the real economy.

It’s not that they didn’t want to pay me back, Fred thought. It’s just that, maybe they can’t… the numbers being what they are now, astronomical. Well, if everything continues to go swimmingly, I suppose it’s not a real problem.

But what if, Fred continued his thought, what if something happens that negatively affects the real economy? There is an imaginable scenario where the citizens, as much as they may want to pay the interest, simply cannot repay me for my imaginary services. This scenario is truly catastrophic.

Fred let this thought linger, silently. Then he remembered what happened last time he uttered a concern that hinted of anything less than a solid, upward growth trajectory. Consequently, he confided in no one, swallowed the notion, and carried this burden alone.

Imaginary Money Isn’t What It Used To Be

Meanwhile, the real economy was booming. On the whole, citizens in our make-believe world were accumulating money. This was fantastic!

With their newfound wealth, they started buying more stuff. More buyers with more money created more demand for the goods the merchants were selling. More demand meant the merchants could charge higher prices for their goods. And they did. This was excellent for the merchants. They made more profits and could, in turn, buy more stuff for themselves as well… and employ more people, paying them more money. This was awesome! It seems like everyone was doing well, not just the merchants.

The employees hired by the merchants, now making more money, also started buying more stuff with their newfound wealth. This created even more demand for products and services, especially services.10

After a while, some citizens noticed merchants had increased prices on almost everything… and had done so several times. Wait. Now stuff is more expensive than it used to be. It takes more imaginary money to buy the same real stuff.


“Fred… you suck! Apparently, you over-imagined,” was the word on the street.

Reacting, Fred cut back on some of his imaginary money production. A lot in fact, because, well, prices were starting to get a little crazy.

And so, there were seasons when Fred asked his imaginary employees to cool off a little on the harvesting, and seasons when Fred expanded his imaginary orchard a little further.

The Jitters

After nearly a decade, Fred thought, It seems we are out of the woods with the previous crisis. Perhaps it’s time to sell some of these real-world IOU notes we bought during the last real-world crisis with our imaginary money. This would be a good time to reduce, albeit slowly, the size of the imaginary money orchard. It has, after all, grown difficult to maintain.11

For Fred and his sizeable team, monetary policy was now real, imaginary work of sizeable proportions.

Curiously, when Fred tried to sell small amounts of the IOU notes he previously gathered from the banks (for the citizens, of course); the market started to falter.

Oops. That won’t work.

Fred quickly reversed course and bought half of them back, providing “liquidity” into this market. Fred even announced he would continue to provide liquidity for several months to come, to calm any fears. This required a little more imagination than before. Fred was growing a bit tired, but he was still on it. In front of it even. So much so, most real-world citizens didn’t even realize this mini-crisis happened.12 Good on you Fred.

On a more personal note, Fred started to feel like his job was less creative and imaginative and more about doing what he was told. He no longer felt like a creative hero. He felt… well, less imaginative.


Eventually, the real-world economy in our make-believe land started to teeter. There were early signs of uncertainty and volatility, something Fred and the citizens of our make-believe world hadn’t seen in quite some time. Knowing the drill, Fred imagined telling his pool of imaginary employees, numbering in the hundreds, to pick more imaginary money from the imaginary money orchard, which stretched out into the distance like corn crops in Kansas.

“The market needs more liquidity, and we intend to provide it” Fred said, officially. Liquidity became the catchphrase Fred would use when he meant his team would need to imagine picking even more imaginary money.13

And imagine they did. Maybe too much even, because the market really started to take off. The upward trend defied the gravity of the underlying economics of make-believe land. Fred had over-imagined again!

Shocking the System

And then, the unthinkable happened. Something for which no one was prepared. The real economy experienced a real shock. This time, the citizen’s leadership asked Fred, against his better judgement, not just to double down on his imagination, but to really try hard.14

“Seriously, Fred, use your imagination like never before. We need a real jolt this time,” said the council members, “for the welfare and well-being of the citizens. We need you, Fred, to imagine the biggest possible orchard and the largest imaginary employee base you have ever imagined, picking enormous quantities of much-needed imaginary money. This is serious Fred. If we don’t pull this off…”

Leaving the sentence hanging seemed more ominous. Grave even, befitting the times. One thing was certain, these were uncertain times.

Fred mustered15 all his energy. He even deviated from his normal morning routine and ate an extra banana, knowing the magnitude of the imaginary work ahead of him. Off to work Fred went, imagining great fields of money trees, the likes of which he had never managed before.

But it still wasn’t enough. It was all happening so fast.

With the joint advice from the town council, Fred imagined planting three more imaginary orchards, each bigger than the first.

And it helped, for a while. It really helped. The citizens of our make-believe world could see their real-world markets pulling out of a nosedive… mostly because imaginary money was flying around everywhere.16

Imaginary money was allocated to businesses, to individuals, to entire industries, even into investments imaginary money never went to previously. Even though it was not allowed by law to go there, exceptions were made.

Imaginary money was even going to places that had nothing to do with the crisis at hand. That’s OK. Just get the money out. This was not the time to question the scale of the imaginary money that might be needed. These were special, exceptional times.

So, Fred kept going, doing his best with very little sleep.17 His team harvested wave after wave of imaginary money from the now-massive imaginary money orchards. It was the industrial revolution of imaginary money production, at scale. At least initially, this gave the citizens some confidence. Some citizens even saw a bit of their wealth return, strangely. Inexplicably really, but let’s not question why the fundamental economic reasons for this make no sense. Let’s just get through this immediate crisis for now.

The Other Shoe Drops

Everyone was so singularly focused on the crisis at hand; few considered another negative event could layer on top of it.18 But it did. The timing couldn’t have been worse.

That was it. There was simply no way Fred could keep up. Try as he might, in this uphill battle, gravity was winning. The hill had become too steep and the imaginary world too heavy to push. The underlying problems were greater than anything Fred and his team could imagine counteracting. The great day of reckoning was upon them.

Fred Goes All-In

In a last-ditch effort, Fred threw every ounce of imagination he had at it. He even recruited thousands of others to imagine with him and gave them a rallying speech,

“If everyone tries really hard, if we all imagine together…”

And the orchards grew titanically.19

Soon, nearly everyone was working on harvesting imaginary money and maintaining the imaginary orchards. In fact, so many real-world citizens were needed to help Fred manage the imaginary orchards, scarcely anyone was working in the real economy.

And then it dawned on Fred, and everyone else, seemingly all at once.

“Holy… CRAP!” said Fred.

“This can’t work!”

Fred, this is a children’s story, reminded the narrator.

“But you said it was for ADULTS!” Fred yelled back.

And with that, Fred collapsed from exhaustion and all the imaginary money disappeared.

. . .

Hopefully, someone kept a seed to replant a real money tree, maybe Gary.

Hopefully, someone remembers how to care for a real money tree for our make-believe friends.


That’s Not Really How It Works

True, this is not how it works. This is exactly how it does not work.20

An Alternate (Happier) Ending

Fred’s bailout worked. Just barely. But he pulled it off. It took some time, but the real economy in our make-believe world was once again on a more solid footing. That was a close call. They had almost gone back to bartering, without a fiat currency. That was close. Really close. And they all knew it.

It was then, after the dust settled, that the citizens all agreed they had an opportunity, no, a responsibility to band together and make some much needed changes. They owed it to their children and grandchildren, to leave the economy in a sustainable state.

All the citizens were unified in their determination to sacrifice a bit to mold the future make-believe world into a better place. To do so, they collectively agreed to a season of austerity.

They would work to trim the imaginary money orchards, over time, reducing them to a more manageable size. Year-by-year, slowly, with focused effort, the citizens planned to cut down the extra imaginary money orchards, perhaps scaling back to only one orchard. Of course, Fred was glad to hear this because his job had become entirely too complex. There were simply too many variables to consider, too many real and imaginary employees managing too many moving parts.

They would also work to repay Fred, not just interest, but some principle too. This seemed the prudent approach going forward to avoid the near calamity of the recent past.

The citizens came together as one, knuckled down and worked hard to pay Fred back over time. As a society, they were deleveraging and de-risking. It felt good. It felt like the right thing to do.

Several election cycles later, a new politician came to the forefront. He ran on a promise of less austerity and more entitlements… “like back in the good old days”… and less taxes too. The best of all worlds.

“Wow! Free money sounds great!” said the younger citizens.

“Free money is way more progressive than austerity. With austerity, we can’t even afford a nice house like the one we grew up in – like the one our parents bought when they were older than we are now. The interest on the mortgage alone would rival our monthly latte budget! That is completely unreasonable.”

They even printed a brochure… a progressive, equitable, inclusive society with free money, LESS WORK and more benefits.

Overwhelmed by how great that sounded, the majority of citizens elected the new face of free money, planted more orchards and marched collectively and blissfully toward the cliff again.

And they lived happily ever after in-the-near-term.


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  1. In make-believe land, narrators are permitted to make up words.
  2. Although, being a make-believe world, maybe it was flat, reader’s choice. But the point still stands about Steve and his desire for impeccable professional credentials.
  3. Sorry, this is the only one I had left, crumpled by a crusty old Antimaginationer.
  4. These people could drone on forever with their unending deliberations on Fred’s mood, his appetite for picking imaginary money and other techno-financial-nonsense that no one cared about. Their poor spouses!… sorry Sofie.
  5. Circa 1998-2000, for those who would like to follow analogously.
  6. 2008-2009, for those following the parallel.
  7. 2010-2019.
  8. A short-term debt cycle is formed in our make-believe world.
  9. Technical note – no, Gary did not think they should return to the gold standard. That’s not what Gary is saying. Don’t pick on Gary.
  10. With such high increases in wages, it became economical to outsource more and more manufacturing to other, less expensive make-believe worlds, but that is beyond the scope of this story. But, suffice it to say, accelerated growth from imaginary money led to increases in wages, which outpaced productivity growth, which lead to outsourcing of manufacturing first and, eventually, outsourcing of services to lower-cost make-believe places. It is difficult to continue manufacturing products and servicing customers economically when wages are too high.
  11. Early 2018.
  12. September 2019. Repo market, for those following the parallel.
  13. October 2019 through mid-February 2020.
  14. March 2020.
  15. Not to be confused with mustard.
  16. April 2020 for those following the thread.
  17. Fred was also running low on bananas.
  18. An unfortunate possible future… perhaps adding a natural disaster or political event, like turmoil and tension sparked by demanding reparations from other foreign make-believe lands, perhaps something else.
  19. which is also not a word, but somehow fitting.
  20. I believe it is patriotic to speak up when we see things going awry. I am waving this red flag. Nevertheless, I expect to be at least subtly shamed for telling such an unpatriotic story. Also, Fred’s real name has no “r”.
  21. Sorry, I really did try to write a happier ending, but this seemed more realistic… understanding the irony in aiming for realism in a make-believe world about imaginary money.


  • I like it. Wonder what would happen if “Fred” and his council just declared bankruptcy one time..?

    I had a fascinating Money & Banking class in college where I first realized that money is a collective fiction (as described incredibly well in the books Sapiens and Homo Deus.) It only has value if we collectively agree it has value, but if people decide it doesn’t then all value is wiped out instantly.

    For example, how many people would take seashells as currency these days? But we accept a digital reading of a cash balance that doesn’t exist and that’s not backed by any real world object. If you told someone that without context they’d say it’s crazy (or call it Bitcoin…) yet we all agree to imagine its valuable and accept U.S. dollars because we trust the Fed and U.S. government to back it. So the risk of too much money is that people start to imagine it’s not worth as much (inflation.)

    That’s the standard economist fear and why governments don’t just print a bunch of money to bail out their national debts. Everyone knows what happened in post-World War I Weimar Republic Germany and doesn’t want to repeat that. However, Germany had to pay its debts in foreign currency because nobody valued the German mark, especially as they kept printing more to buy foreign currency and pay off debts.
    U.S. debts are denominated in U.S. dollars though so technically…

    What would happen, if after spending trillions and trillions of dollars to get through the pandemic, the U.S. suddenly decided to print $25 trillion dollars to pay off ALL its debt and get back to zero? Obviously massive, massive inflation would wipe out everyone’s savings and retirement funds, people on fixed incomes would be devastated, etc. and more money would have to be printed to help them. However, wages would rise and any physical asset would increase in nominal value, which relatively benefits those who’s dominant financial asset is their home or don’t have any assets to be devalued and live paycheck to paycheck. We’d see massive interest rates on any future borrowing for a time, but probably not for that long as markets quickly forget if there’s money to be made (see Germany post-World War II.)

    What if instead the U.S. just declared bankruptcy on all its debts. It would largely hurt other nations and citizens holding that debt, but would also significantly impact pension funds, retirement funds, seniors with “safe” money-market accounts, and would greatly increase our borrowing interest rate going forward. However, we’d be saving trillions in interest every year that could be used to minimize some of the impacts for U.S citizens.

    Both are non-repeatable (“fool me once…” and would destroy the U.S. credit and all trust in our currency for a time, but could also reset the scales back to balance. Not recommending either option but I think it’s an interesting thought exercise to consider what would happen in a worst-case scenario. I’m sure economists have covered these topics somewhere so I’m going to see if I can find anything that does a better job explaining the risks of either of those last-ditch approaches.

    Thanks for the thought-starter!

  • This is a masterpiece.
    Depressing masterpiece.
    You might consider print. Rivaling the Brothers Grimm.

  • The entire scary thought provoking Oh-I-get-that! story needs to be told to a much wider audience than a blog, as Christy has suggested. The skeptic in me thinks it would fall on deaf ears. The unthinkable has happened & is too new, perhaps, for most to have the capacity to rise above the current happenings (wildly imaginative entrepreneurial mathematician investment banker types excluded, of course). And, the need for more monies to be thrown at the resultant problems has such momentum (plus media support), reversing course almost seems impossible. But, who is sounding the alarm? Can anyone swim up Niagara Falls? Great job, Andy. What is it they say about hurricanes being started by the flutter of tiny wings?

  • Thanks for the great story!
    These times we will probably see more central banks abandoning inflation targets altogether and focusing more on the real-world economy. But F(r)ed’s approach to growing its bond portfolio is not really an option for the worst affected European countries with already strained public finances, as it will also increase governments’ debt ratios. As the Eurozone tries to get out of the crisis, we might see the ECB going straight into a some kind of “helicopter money” policy…
    May you live in interesting times! (as a Chinese curse goes…)

    • Thank you for your comment Veronica. Good to hear from you… 20 years after writing our thesis together at the Stockholm School of Economics.

      • Thanks, Andy! Hope you and your family are doing well in these strange times. Would love to catch up, after all these years 🙂

  • Then Gary came up with another intellectual (or hallucinogenic) vision; the negative interest rate. Suddenly Fred’s job just got a lot easier. Problem solved. Sounds like a sequel.

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