What the 'Star Wars' Movies Can Tell Us About Our Finances

"Star Wars" creator George Lucas carefully worked a lot of continuity into the series over the years, and he managed to succeed in tying all the stories together into a coherent universe that follows very familiar financial practices.

Let's take a look at five money lessons we can learn from Star Wars, starting with Episode 1. And — warning — there may be some spoilers.

1. Fiat currencies (like the US dollar) have risks

You may or may not remember the scene from Star Wars: Episode I — The Phantom Menace where Qui Gon Jinn and little Anakin's owner, Watto, are bartering over the cost of a ship on the planet Tatooine. We have to assume there are no credit cards.

Qui Gon: I have 20,000 Republic dactaries.

Watto: Republic credits? Republic credits are no good out here. I need something more real.

The dactaries are a "fiat currency." That's money that holds no intrinsic value but is valuable only because the government says so — as in the case of the U.S. dollar.

During inflation, fiat money can become worthless. That's what has happened to Venezuela's bolivar, which is a stark example of how fiat currency is not always the best way to go.

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2. Before choosing a bank, do your homework

In the Star Wars universe, fiat currency was introduced as the "Galactic Credit Standard" by the InterGalactic Banking Clan, which resides on the planet Muunilinst.

The Banking Clan gives loans to whomever they want, because all they care about is making a profit on interest payments.

This is similar to banks in the real world. When you apply for a mortgage, you won't get turned down simply because you're a Democrat or a Republican. All the bank cares about is if you pay your loans back on time.

In the war between the Republic and the Separatists, the Banking Clan uses loan payments from one side to lend to the other, while they pocket the interest. This is why customers (like you!) need to investigate banks before settling on one.

The bankers eventually are arrested for embezzlement, and Senator Palpatine gains control over the "corrupt banking system." At the time, everyone is very happy about Palpatine's rise to power, but anyone who has seen all of the movies knows that this is bad news.

3. In tough times, you do what you have to do

In Episode III — The Revenge of the Sith, Palpatine becomes the evil Emperor who manipulates Anakin to join the Dark Side and become Darth Vader.

Emperor Palpatine makes it mandatory for all of the planets in the galaxy to begin using the Galactic Credit Standard, now called "Imperial Credits." This is similar to when a nation takes control over another, and forces it into using the winner's fiat currency.

Though everyone is using Imperial Credits, the common people seem to struggle with money. The new economic system doesn't stop the little scavenging Jawas from trading the scraps they find in exchange for goods and money on Tatooine.

Han Solo has to resort to shady under-the-table deals in order to make a living, and finances seem to be a very tense topic of conversation on nearly every planet.

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4. 'Printing money' isn't as great as it sounds

With control over the banks, Palpatine is able to basically print his own money. This is how he could afford to build the Death Star and all of the other ships that were necessary for maintaining control.

Printing money out of nowhere causes inflation. As I mentioned earlier, inflation of fiat currency can seriously damage an economy, leading to a depression.

According to Zachary Feinstein, an assistant professor from Washington University of St. Louis, the Death Star would have cost the equivalent of $419 quintillion U.S. dollars ($419,000,000,000,000,000,000) based on the estimated cost of materials estimated from an analysis of the Star Wars economic system. Wow.

After the Battle of Endor in Episode VI — Return of the Jedi, the Empire is defeated. Luke, Leia, Han Solo and Chewbacca all stand and receive their awards, and they all live happily ever after, right? Well, not so much.

5. Income inequality is everywhere

After the fall of the evil Empire, the Galactic Credit Standard no longer exists. In order to prevent the economy from collapsing, Feinstein says, there would have had to be a bailout of 15 to 20% of the entire galactic economy to keep it afloat.

Planets begin distributing their own currencies. Without one big empire to unite them, this makes trade more difficult, and the economy of the entire galaxy suffers.

On Jakku, the planet where Rey lives in the opening of Episode VII — The Force Awakens, she scavenges for metal parts and trades them in for food.

And that brings us to the most recent installment, Episode VIII — The Last Jedi. The economy is starting to show signs of recovery, with a glittery casino city called Canto Bight drawing the wealthy and well-dressed. (Their investment accounts must be out-of-this-world. Bad pun?)

But it's located on a desert planet, suggesting it's a place for haves — surrounded by have-nots.

The lesson here might be that the current real-world debate about income inequality is going to be very difficult to resolve, because very poor people find themselves living alongside very rich people virtually everywhere — even in that galaxy far, far away. We'll have to stay tuned for what Episode IX brings!