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My 7 Year Old Niece's Homework Assignment, A Lesson in Austrian Economics!

The PERFECT opportunity to discuss sound money with my 7 year old niece arose when she asked for help with her homework assignment. After we called and talked to Grandpa, I told her the following story:

"The reason Grandpa used to only have to pay $0.50 to go to the movies when he was a little kid like you was because he had special money! This special money was made of real gold and silver like mommy's necklaces and rings!

You know how daddy is a welder? He welds metal right? Well the money that daddy and Uncle Robbie use is made of regular metal like the kind Daddy welds.

Which money do you think was worth more, Grandpa's money that was made from gold and silver like mommy's jewelry OR Daddy's money that is made from regular metal like the kind he welds?

That's why it only cost Grandpa $0.50 to go to the movies when he was a kid. It's because his money was real money, not fake money. Just how pirates and leprechauns like treasure and gold coins, that is how all people used to buy things a long time ago, with real gold and silver coins!

Which would you rather have, a real silver coin like this (showed her a Silver Eagle and a 1964 quarter) or a metal coin like your Chuck E. Cheese tokens (showed her a Chuck E. Cheese token and a current quarter)?"

End of story...

How would you improve the story?

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scarcity

as people below have mentioned you can explain the reason that PM retain there value is because it can't be counterfeited.

Good job though.

That homework is a great illustration of how much the fed had devalued the currency. and it doesn't even factor in that those products should be cheaper due to increased efficiency.

Ducktales Lesson

All kids love cartoons! You can add in this great video at the end.

http://youtu.be/R_Jni0BBhpI

Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty. -Thomas Jefferson
www.brianronk.com

You did great! :)

I've used supply and demand as an example when talking to my kids about money... quick to explain and easy to understand.

Another term for preventive war is aggressive war- starting wars because someday somebody might do something to us. That is not part of the American tradition.
-Ron Paul

I posted this relevant comment below...

I tried to incorporate a simple lesson on the Federal Reserve's printing presses (or actually the Treasury Dept's), but yeah, that was a little too complex for her! I'm working on an analogy using the boardgame of Monopoly to simplify a small market economy complete with consumers, bankers, property, rules, price, supply, demand, and fiat currency. We're missing the production component though. It's a work in progress but I'm trying to show how rapidly introducing more units of Monopoly money into the game by the banker (behind a cardboard wall) will make all the prices on the board go up...

It's pretty fascinating if you just think about it in a small scale economy like a family game of Monopoly!

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+ 1

Thanks for posting.

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You did well. The only thing

You did well. The only thing I might add is how the printing of dollars devalues each dollar. This part might be a bit complex for a 7 year old though. Maybe start the example as : imagine if there were only 10 dollar bills on earth, and you wanted to buy product x, how much wold you be willing to spend... now imagine there are 1,000,000,000 now how much are you willing to spend. willing to spend=price.

I tried to incorporate a lesson....

I tried to incorporate a simple lesson on the Federal Reserve's printing presses (or actually the Treasury Dept's), but yeah, that was a little too complex for her! I'm working on an analogy using the boardgame of Monopoly to simplify a small market economy complete with consumers, bankers, property, rules, price, supply, demand, and fiat currency. We're missing the production component though. It's a work in progress but I'm trying to show how rapidly introducing more units of Monopoly money into the game by the banker (behind a cardboard wall) will make all the prices on the board go up...

It's pretty fascinating if you just think about it in a small scale economy like a family game of Monopoly!

I'm a serial entrepreneur and liberty activist from Texas!

www.RevolutionCarBadges.com
www.NonNetwork.com