Silas Stingy

Media Type: Music Topic: Supply & Demand

The Who

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In "Silas Stingy", The Who describe a man so in love with his money that he cannot bear to be away from it. Silas even denies himself basic necessities, such as food, to keep as much money as possible. The song ends with a description of how Silas goes to great lengths to protect his existing money from thieves, only to discover that he spent it all in the process. Putting aside Silas' unhealthy obsession with currency, explain how the fractional reserve banking system can help him expand his supply of money through the system of required and excess reserves and loans. On the other hand, explain to Silas why FDIC insurance is necessary to guarantee his money, and how these conditions may make his money safer in a bank than under his mattress. Be sure to also explain inflation and how it can gradually erode the real purchasing power of Silas' money when stored in a bank, even when the money is protected by FDIC insurance and being expanded by the fractional reserve banking system. Finally, make a case for Silas to deposit his money in an FDIC-insured banking institution or keep his hard assets, based on your own opinion of the pros and cons for Silas of fractional reserve banking, FDIC insurance, and the accompanying inflation.

 

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