In a society where monetary payment is the one thing that is asked of individuals in return for their acquisition of goods and utilization of services, it can be argued that sooner or later those individuals will eventually develop a desire, if only strictly need-based, to get their hands on as much money as circumstantially possible in order to provide for themselves in terms of both everyday necessity and, if fortunate enough, materialistic desire. The United States is a perfect example of a nation in which the above claim might hold true, except for one major flaw; most Americans, be they impoverished, wealthy, or somewhere in between, rarely “get their hands on” the full extent of the wealth they believe lies in their possession, or physically see the stacks of bills they understand are sitting in a vault somewhere with their names on them. In today’s society the dollar, a rectangular piece of cotton fiber and linen that was once used to represent the value of a certain amount of gold, is no longer backed by any commodity or resource of worth. As NPR News’ Jacob Goldstein would argue, money is nothing but fiction, and the dollar is only worth something as long as the federal government says it is; the fictional quality of money is inherent in the very idea of money, in any system of currency, no matter how simple it may be.  

For centuries the Islanders of Yap, which is the “most westerly” of Micronesia’s Caroline Islands, have used a system of currency that is far less complex and sophisticated than the one Americans are accustomed to today. According to William Henry Furness III, an American anthropologist who spent several months living amongst the natives of Yap in 1903 and who wrote a book detailing the customs of its people titled The Island of Stone Money: Uap of the Carolines, their currency is called “fei, and it consists of large, solid, thick, stone wheels, ranging in diameter from a foot to twelve feet, having in the centre a hole varying in size with the diameter of the stone, wherein a pole may be inserted sufficiently large and strong to bear the weight and facilitate transportation.” Along with the physical peculiarity and impracticality of the fei, which can individually outweigh a car, Furness noted other interesting characteristics of the stone currency, including that it is not actually necessary for the owner of fei to physically possess their limestone money to claim it belongs to them. He wrote that after “concluding a bargain which involves the price of a fei too large to be conveniently moved, its new owner is quite content to accept the bare acknowledgment of ownership and without so much as a mark to indicate the exchange, the coin remains undisturbed on the former owner’s premises.” To further illustrate the culture’s strange concept of monetary ownership, Furness retold in his book a strange story he heard on the island that involved an enormous fei of incomparable quality and value that, supposedly, was lost at sea by the same men who crafted it.

As the story goes according to Furness, these men encountered a violent storm while sailing back from this particular fei’s island of origin (limestone cannot be found anywhere on Yap), and were left with no choice but to untie the immense piece of stone from their rudimentary raft in order to stay afloat. When they returned home empty handed, “they all testified that their fei was of magnificent proportions and of extraordinary quality, and… it was universally conceded…that the mere accident… ought not to affect its marketable value, since it was all chipped out in proper form.” This event occurred decades before Furness visited Yap, however the man who told him the story assured him that the descendants of the same men who lost the fei to the depths of the ocean were still rich because of that very stone; the family’s wealth remained unquestioned and was known to everyone on the island, almost as if the limestone was “leaning visibly against the side of the owner’s house” for all to see.

The story above along with other bits and pieces of Furness’ book can be found within the first chapter of an essay written in 1991, also titled “The Island of Stone Money,” by a man named Milton Friedman. In this essay Friedman reveals to his audience that his initial reaction to the story above was: “How silly. How can people be so illogical?” He makes the assumption that his audience will react in the same way he did, and in my case his assumption held true because I found myself thinking the exact same thing about the Islanders of Yap. However, when I stopped reading and seriously considered how strongly the islander’s currency system relies on their own faith in abstract concepts, such as the unquestioned purchasing power of a stone lying at the bottom of the ocean that never even made it back to Yap, I realized that Americans in the present day are really no different than those islanders. In today’s society we almost never see the monetary income we earn from the jobs we work; the only compensation most people receive for their efforts in the workplace is a growing number on their monthly bank account statements, a figure that soon falls when it comes time to make regular bill payments online and through the mail. These changing digits on computer screens and pieces of paper are meant to represent tangible dollars changing hands from one individual or entity to the other, yet in reality nothing is actually changing in the physical world. If this is not a perfect illustration of unwavering faith in abstract financial concepts then I do not know what is.

My point is, whether you’re an Islander of Yap buying a house with limestone or a middle class American paying for airplane tickets online, the fiction that is money is apparent in all systems of currency and finance. According to AFP News’ journalist Anne Renaut, there is now a type of digital “e-money” in existence “that is made of strings of dazzlingly complex code created by raw computing power.” This impressive and complex computer currency was developed in 2009 and has soared in value since, however it is still considered “a very uncertain, speculative venture” to invest in as reported within Renaut’s article “The bubble bursts on e-currency Bitcoin” because it is not backed by a commodity, providing further evidence for my argument that the value and worth seen in money is often nothing more than a figment mankind’s imagination. Not even the American dollar is backed by a scarce commodity or resource anymore, and the cotton fiber and linen that makes the fabric of our greenbacks has practically no intrinsic value, making our tangible currency as well as the ink on paper checks that often represents it worth only what people are willing to trade for that currency. On any given day a food vendor on the street might be willing to trade one bag of chips for a dollar bill, and on that same day a different food vendor down the road might be willing to trade two bags of chips for that same dollar, indicating that our currency is only worth the most we can possibly get in return for handing it over to others. I believe that deep down most people understand that money is just a fairy tale, a fiction that keeps the economy going; my own concept of money did not change much at all after doing research for this assignment, the only thing that did was my previously unquestioned belief in its worth through the eyes of society.

Works Cited

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

“The Invention of Stone Money.” 423: The Invention of Stone Money. This Is American Life, WBEZ. Chicago . 7 Jan. 2011.

Furness, William Henry. The Island of Stone Money: Uap of the Carolines. N.p.: J.B. Lippincott, 1910. Print.

Renaut, Anne. “The Bubble Bursts on E-currency Bitcoin.” Yahoo! News. Yahoo!, 13 Apr. 2013. Web. 23 Oct. 2016.

Money isn’t something that has worth it is something that has value. Any kind of currency that is used to purchase something has no worth it is a place holder  for something that does have worth. There in lies the value of money, it can be traded for something because it represents something of worth. The US dollar and most currencies are backed by a precious metal such as gold or silver. The gold or silver is what has the worth and that is why it’s accepted. However it is now believed by many that the US has no gold or silver to back the money. Now it’s a mystery why the US dollar is still accepted.

The answer to that mystery could lie within an ancient civilization on an island in the pacific called Yap. The Yapese people used a currency called Rai which is literally just big circular stones. These stones were’t backed by anything however they were accepted as a currency. The value of them lied within nothing other than the fact that people wanted them. They were big shiny special things that people would trade anything for depending on the size. The Rai were acquired by explorers who would travel to an island far away and would bring home huge chunks of limestones shaped like circles with a hole through the center. The wholes through the center were to help with transporting the large stones. The stones increase in value based of of size, how hard it was to get, and the number of lives lost while retrieving it.

Basically, the reason why any money has value now is because other people want it. The value of money is mostly if not all the way based off of how much other people wanted it. This is why you can literally trade a big rock for a car. If the other person wants a big rock that rock has value in the form of a car. Money is a very strange thing and it’s a strange concept that we even need it. In the end money is worthless, but something will always have value as long as it is desirable to somebody.

Works Cited

Friedman, Milton. “The Island of Stone Money.” The Island of Stone Money(1991): 3-7. Web. 13 Sept. 2016.

Moffatt, Mike. “Why Does Money Have Value?” About Education. About Education, n.d. Web.

“Stone Money.” BBC News. BBC, n.d. Web.

Worthless Money

The idea that money has any value, is a myth.  Money is simply the physical representation of a person’s wealth. No matter the object used as currency, it will always be a placeholder for something imaginary. It’s important to remember that there’s a difference between value and worth. As Americans, we use dollar bills as our form of money. The literal dollar bill is nothing but a piece of paper, yet we measure our worth using it. The idea that we are either rich or poor based on how many pieces of paper we have, is quite odd on the surface, but it works. Our idea of money is similar to that of the people of Yap, as well as Brazil. Money is given power by people, and can only exist when a person believes it has value.

The exchange of goods from person to person has existed from the beginning of time. The only thing that has changed, is the object various people use as currency. On the island of Yap, large stones were used as money. A person in possession of a stone, would hand over their stone, in exchange for other goods. In many cases, these stones were too large to actually be exchanged, and transactions were essentially made on “good faith”. An example of this is shown in “The Island of Stone Money” by Milton Friedman. Friedman tells the story about a family that lost a very large stone due to a shipwreck overseas. The people of Yap acted as if the stone was never lost, and treated the family accordingly. This practice was accepted as a logical means of trade for the people of Yap, regardless of physical possession of stone. To the modern person, the people of Yap, probably seem like fools. I myself even questioned their logic, until I compared stones to dollar bills. American methods of trade are surprisingly very similar to those of the Yap. We trade pieces of paper for other goods, given that another person believes our paper is worth the exchange. With the use of banks and credit cards, money is not necessarily physically seen or given, yet it is accepted as gospel. Current monetary systems may be more modernized, but at its core, is just as “crazy” as trading stones for actual goods.

In the 1990’s, Brazil faced one of their worst economic problems, inflation. The president at the time printed an excess of money, which resulted in the downfall of the cruzeiro. In the blink of an eye, the price of an item would change. In “How Fake Money Saved Brazil”, Chana Joffe-Walt says people would have to run ahead of grocery store employees just to get the previous days prices. Many stores changed prices daily, leading people to believe nothing could be done to control inflation. This trend continued, until four men introduced a fake currency, Units of Real Value, or URVs. Unlike the cruzeiro, this fake currency, URVs, gave the illusion of stable prices. For example, a car would be priced at 10 bags of chips. Instead of that same car costing 20 bags of chips the next day as previously expected, the price of 10 bags of chips remained. The only thing that changed was how many cruzeiros a single URV was actually worth. When people noticed the stability of URVs, their fear of rampant price changing began to dissipate. This lead to Brazil’s economy stabilizing, and the cruzeiro being replaced with the real. Like the people of Yap, Brazilians had to believe in their currency for it to flourish. The use of URVs gave people the idea that prices had stopped rising, when really they rose and fell like any other currency.

Prior to my research, I thought my $1 was actually worth $1. In reality, that $1 could be worth more or less than the value printed on the bill. Someone may be willing to sell me a car for $1, just as another person may want more for a bag of chips. I never realized how we operate on a system of good faith, especially in our modern lives. If my failed tomorrow, I’d have little to no physical items to prove that I’m worth what I say I’m worth. We’re simply trading pieces of paper, given value by the government, as representations of worth. As long as someone wants another person’s dollar bills, they’ll have some sort of worth, but the second they change their minds, that same person becomes worthless. Don’t get me wrong, this system is needed in order to make transactions, but if we as a society stopped believing in the dollar, are we really worth anything?

 

 

Works Cited

 

Friedman, Milton. “The Island of Stone Money.” The Island of Stone Money(1991): 3-7. Web. 10 Sept. 2016.

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” NPR. NPR, 4 Oct. 2010. Web.

 

 

Invisible Currency

Money, the extremely complex foundation of our economy. I always wondered growing up how did a piece of paper with some inscriptions and fancy images become the social fabric of our world? A child could put a U.S dollar bill side by side to monopoly money and can understand that one is worth something and the other isn’t, even though monopoly money-like “real” money- is simply paper from our trees. Therefore, we must question, why is money valuable? Tangible property is any property that a human can touch. Therefore, why is it disputed in some legal systems that money is intangible or tangible property? Money is so complex because though the dollar may be tangible its worth isn’t, its nothing more than an idea, a concept and a troublesome one at that. In early history we traded among each other valuables that everyone needed. We valued precious and rare metals or jewels such as diamond, gold and silver. We valued goods as currency and only cared about items which every colony needed. If a man had a pig but needed a cow he would search for a man that needed a pig and had a cow. This exchange of goods was logical and never involved a paper bill with a complex system of valuing that bill. Money in its self has no real value to it, it isn’t rare and its not hard to get to. We the people make money valuable, we make the value “real”; but should we?

When I came across the article by Milton Friedman titled “The Island of Stone Money,” I was intrigued. The island of Yap is extremely underdeveloped lacking most valuable metals and gems.  However, when they discovered what seemed to them a precious rock called Limestone on a neighboring island they began using it as their form of “currency.” Their system of exchange comes off as odd to most Americans; it shouldn’t. According to Friedman these men and women could trade these large pieces of stone for other valuables they needed or important services such as the retrieval of a fallen soldier. Here was the catch; technically you never had to physically have the rock in your possession. The craziest part that Friedman further explained was a Yap natives didn’t even have to see the rock . Reading this made a light bulb shine bright inside my head. I soon realized that this ridiculous form of “currency” is a lot like civilized countries in the world. The point is not the physical aspect of money that gives it value, its simply the idea of money and what it represents that makes it valuable.

Friedman further demonstrated the loose lines of ownership with the example of the Frenches possession of their gold, however they didn’t physically possess any gold, a matter of fact their gold was on U.S territory in a drawer titled “France.”  This further explains the concept of that which is called money. Like the Yeps the French never moved their valuables but it was understood that it was theirs. I believe this system is just as flawed as that of the Yeps. Precious gold sitting in a drawer holds no true value or use, why should the French be granted hypothetical millions for it? Some outstanding examples of made-up money is Bitcoin and URV. When we use bitcoin we are essentially transferring images and codes over to our bank through a network of computer systems. In no way, shape or form is this real money. But, we except it as real money with real value! How is something intangible in an exchange of goods essentially, valuable? We aren’t physically handing anything over to the bank but they still accept it.  Presented in the article “How Fake Money Saved Brazil” by Chana Joffe-walt is the system called URV.  URV is essentially made up currency. Chana Joffe-walt explains Brazil’s state of high inflation rate which in turn practically made the price of items go up either everyday or week. The country was in turmoil. Two finance men came up with the idea of replacing cruzeiro (Brazil currency) with a virtually “fake” currency and they called it URV. The worst part is this idea was accepted, used and succeeded. This new currency had 0 worth but worked as a point system to drop the price of goods. Still, how was this possible and did Brazil really even change much? If all money is essentially worthless Brazil basically replaced fake money with more fake money but a better executed plan. These two examples prove my point that money just seems to be an idea. It seems crazy to me that much of peoples’ happiness and status in this world is based solely of off an idea with no true value.

Recessions or economic depressions effect everyone. The way the economy is set up values this idea of money over true goods and resources. After reading these articles my perception on money has changed tremendously. It raised the question, is this the right way to go about it? Was the old way of trading goods and food and resources more useful? This isn’t just for me to decide.  Although, it is sad to see people lose their happiness and parts of their lives struggling over the obtainment of technically a purely intangible idea.

Works Cited

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

Joffe-Walt, Chana . “How Fake Money Saved Brazil.” NPR.org. 4 Oct. 2010. 30 Jan. 2015. <http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil&gt;.

Renaut, Anne . “The bubble bursts on e-currency Bitcoin.” Yahoo.com. 13 Apr. 2013. 30 Jan. 2015. <https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html&gt;.

“The Invention of Stone Money.” 423: The Invention of Stone Money. This Is American Life, WBEZ. Chicago . 7 Jan. 2011.

Money is a broad concept and can define in so many ways. It is used in our everyday lives and we can list all the scenarios how money is used.  For example, if you wanted to travel around the world, you would need money in order to do so, or buy a car, along with many other situations. Like the saying goes, “Money does bring happiness”.  In society, people portray money as distinguishing someone’s social status. People look at how much one is worth due to their specific income. Furthermore, people generally think money has value, but the money made from reality TV shows doesn’t have any inherent value, it is simply pieces of paper or numbers in a ledger. In the Milton Friedman’s piece The Island of Stone Money, I noticed the idea of how the Yaps monetary system and concluded the American monetary system is identical, but is a different concept of how it’s being used. The Yaps used stones to make a higher purchase like if a warriors dead body was being kept held it at another village and the village requested it they would buy the body using the stone. And then people would know that this he or she has claimed the stone. Americans use paper bills for purchases and seems cliché, but the Yaps certainly had creative manner to use money.

 

The NPR broadcast was very interesting, and what surprised me was that the claims were correct in my opinion. I never realized that money had changed so drastically over time. In the past, we used gold as a currency, then paper bills, and now electronic transactions. Today, although we claim to use paper bills and coins for small matters, we have already progressed to digital cash. We pay our bills by computer; those transactions consist of information only. At any time, all or part of a bill can be paid off or transferred without any money being involved. The only way we use paper now is to send checks through the mail, but that’s highly rare nowadays.

 

The next most intriguing topic was Bitcoin. Bitcoin basically changed how traditional currency is being used. Bitcoin shared database between of computers all keeping track of accounts and their associated balances secured by mathematically encrypted password.  And people are so consumed in buying bitcoin that they don’t realize it does not have a true value.  Yes, virtual banking sounds amazing because it is so easy and accessible, but there are some tweaks that could be issued.  Bitcoin is just like the stock market, the value changes every day. And the money you spend might not have the equal value as the price drops or arises. Money comes and goes there is not a financial base structure to accommodate users; it is simply the game of chance. NPR broadcast mentions how money is now just information and Bitcoin is prime example.

P4. Fake money to the rescue! I just wonder if America should do this or not. The Brazilians used fake money, such as URV, to save the economy from falling. The idea of fake money baffled me because of how easy it seemed to raise the economy using fake money that didn’t have sentimental value. You would think the opposite because it did not make any sense as to how the whole country would use this. As soon the URV arose the Brazilian inflation ended.

P5. I completely changed my mindset over how simple as money can change drastically. Every time I look at dollar bill my perspective will change and I will realize this dollar has no internal value. And I did not know how money grew overtime from our hands to the computer. I will certainly have a different view of how money works and the general idea of why we have this monetary system.

Works Cited

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

Renaut, Anne . “The bubble bursts on e-currency Bitcoin.” Yahoo.com. 13 Apr. 2013. 30 Jan. 2015. <https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html&gt;.

Date, By. “The Invention of Money.” This American Life. N.p., n.d. Web. 13 Sept. 2016.

“How Fake Money Saved Brazil.” NPR. NPR, n.d. Web. 13 Sept. 2016.

P1. What is wealth? To some, wealth may mean money or possessions but to others it may mean power. Prior to reading about Stone Money I viewed wealth as money. Now I am having mixed feelings toward the idea of money. I always used to think of money as a physical object. I also believed that the more money you had, the wealthier you are. In reality money is not even a factor in being wealthy. Money is just what we use to trade for goods. You dont even need a physical dollar bill to buy most things. You can just swipe a card that has money tied to it and the item is yours. If somebody really liked cheerios, you could trade them a box of cheerios for something in return and it would have the same effect as a dollar bill.

P2. When the NPR stated that there is a giant ball of limestone sitting in the middle of the ocean somewhere still being claimed by someone who is deceased is unsettling to me. Donald Trump has created a value for his own name. Unlike banks that pay huge naming fees to have NFL stadiums named for them, Trump can get developers to pay him millions to attach his name to a project. His name is not an object like the sunken fei. Its insubstantialable doesn’t matter at all. And neither could anybody steal it and be richer. If he’s a billionaire, it’s because he can sell his name for a billion dollars whenever he wants to. Like in the island of Yap, we use this object that we do not have possesion of to make trades for other goods. Where they had a big ball of limestone to trade for food and supplies. We trade money Physically or electronically for our goods in today’s world.

P3. Brazil’s idea of money was that it literally grew on trees. They figured if you just print more money, there will be more wealth in the country. If it weren’t for the four brothers, they would still be using that form of economics and their country would eventually fold. Money needs to have some sort of value. If you just print out more, it would not be worth anything. It would be the same thing as picking leaves off of a tree and buying a car with them. Money needs to have value. You then would have to convince the people that the money is now worth much more than it did before and they need to value it more.

P4. Once a country is in debt they will do anything to try and get back on track. For Japan, this means an increase on inflation says the New York Times. As if the people are not paying enough already, they are about to get hit with an increase on everything they buy just to pay off the country’s debt. The Japanese government will announce around 12 trillion yen ($136 billion) in fiscal stimulus measures to boost the nation’s shrinking economy (Bloomberg). I could see the United Stated implement a similar strategy to try and fix our nations debt problem as well. It is a shame that the people who did not create the issue are paying to fix it. The civilian’s hard earned paychecks are being hit hard by taxes for the government’s debt.

P5. Every country has their own various methods to regulate their economy. One thing that is common between them all is the use of a made up object of value called money. Every economy is based on money and every person believes that the more money they have, the wealthier they are. If the money has no value to it, then there is no wealth associated with the green paper. Look at it like this; lets say for example you sell your car in exchange for 10,000 dollars. That 10,000 dollars has value. Where if you just printed out 10,000 dollars with nothing in exchange, it would have no value. Luckily here in America we have a pretty good sense of value when it comes to money. We just have too big of a problem with spending more than what we have.
Works Cited
“Abe Seen Spending 12 Trillion Yen to Boost Japan’s Economy.” Bloomberg.com. Bloomberg, n.d. Web. 13 Sept. 2016.

“How Fake Money Saved Brazil.” NPR. NPR, n.d. Web. 13 Sept. 2016.

“Japan Tries to Ease Fears That Its Policies Will Lead to Currency Wars.” The New York Times. The New York Times, 25 Jan. 2013. Web. 13 Sept. 2016.

Forms of currency come in all different shapes and sizes but in the end they all have one thing in common. All forms of money with a few exceptions for example Gold. Money is used to buy, trade or even rent all types of different goods. As I got older I started to question the actual value of money. Besides the written number located on the paper or coin what makes the logic valid or verified? In my opinion American currency makes more sense than the bitcoin which is used by the Island of Yap. Money is a man made fallacy but it is important because it allows us to obtain things others do not. As malicious as this sounds it is true. You either have it or you don’t but I’ve never spent a dollar that I did not want back.

When comparing the gigantic boulders aka the bitcoin the Yep used to a dollar bill at first it did not make sense to me. This enormous piece of limestone the Yep is actually worth something? The more I read and researched I started to realize the Yep due to their culture are so different but also have some similarities for example such as bitcoins can not be carried around in a wallet like a bill or in your pocket like change. From my knowledge the people from the Island of Yap did not wheel barrow their boulders around and chip pieces off of it to negotiate for goods but that is what made sense to them. Trading a house for the boulder made complete sense to them. They gave these boulders or bitcoins value just as Brazil did with their form of made up money.

America would go on to piggy back on Brazil and replicated their form of currency. America did this using Brazil as it’s prime example to help the citizens better understand why this would be better for the American people and the rest of the world. America did this because at one point Brazil was nation wide a country that was looked at as one of the most stable economies. America fell victim to the idea and before you knew it Gold was a thing of the past. Yes, Gold is still worth money but no one is walking into the grocery store with Gold bricks exchanging for their groceries. The need to go mining for Gold or Limestone was a thing of the past. People began to move away from Gold and started adding more focus towards the much more easily acquired dollar bills. It seemed that the governments plan worked.

After acknowledging the fact I grew up with a much more different situation and system due to culture bitcoins started but still did not really make as much sense to me as the dollar bill did. Maybe to the people of Yap the idea of knowing you have money when you need it made sense to them but I would not be able to go out with my friends or on vacation knowing my money is sitting outside of my house and able to be stolen at any minute. That to me is the same as leaving your wallet at home with your doors unlocked in a bad neighborhood. Maybe the people of Yap had more respect for each other than we do as Americans but I can not go anywhere without knowing I have money on me. The fact remains without money you have nothing to show for your hard work. I like being able to buy stuff when I can.

Money is an illusion it to this day in a sense is not real. We just like Brazil made the dollar significant as it became the new Gold. It is in a better sense a figment of our imaginations. Money is real in the sense of it can be used to purchase good but money is only worth something because we made gave it value. Money made trading for goods easier and America like Brazil did this because it benefited technically only us. Money can be produced much easier than Gold. Instead of having to barter an item you maybe did not want too for something you needed money gave you the opportunity to exchange without having to do that. Money is important because people want they don’t have. Some blame the bible but I just believe when people don’t have something or are told they can’t the greed and jealousy begins to eat away and people begin to find ways to obtain it. Money in any culture is the reason for violence and evil.

Works Cited

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

Renaut, Anne . “The bubble bursts on e-currency Bitcoin.” Yahoo.com. 13 Apr. 2013. 30 Jan. 2015. <https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html&gt;.

“The Invention of Money.” 423: The Invention of Stone Money. This Is American Life, WBEZ. Chicago. 7 Jan. 2011. Web. 13 Sept. 2016.

Novus, Stella. “The Megalithic Money of Yap.” Ancient Origins. Ancient Origins, 04 Jan. 2013. Web. 12 Sept. 2016.

The Almighty Semi-Ripped Piece of Paper

Since the early days of mankind, humans have traded precious items and commodities for other commodities and services. These items could have ranged from small shells to large stones carved by man. But what made these items valuable was the agreement of the people that these items held value and were worth something. We call these things today money. Today money is a small piece of paper with a portrait of a dead man on it that was a written amount much higher than what that little green piece of paper is actually worth, but where does this value come from? To find out we must look back through the history of currency and monetary systems to figure out why people give objects, like the green crumpled piece of paper, value.

One of the earlier accounts of people using money were the people of the island of Yap. The people of this tiny island in the South Pacific Ocean created a monetary system with giant stone wheels called fei. The fei were created by man on an island 400 miles away from Yap, in which crews would have to take a small raft or kayak to this island and quarry the stone and shape it and then transport it back to their home . Once at home these stones where so large and heavy, some of them stayed in place. However everyone knew who owned what fei and who held all the wealth on the island. The stones never moved but the transfer of wealth still occurred. A much similar event happened in the 1930’s between America and France. Due to the looming economic collapse in America, France asked the Federal Reserve to convert dollar assets that it had in the U.S into gold (Friedman). The only thing the Federal Reserve did was take some of the gold, put it in some drawers, and labeled that this gold belongs to France. The U.S gold reserves went down and France’s went up. There was never a physical transfer of gold to France yet people knew and understood that the gold now belongs to France. Today we now have our own drawer of gold called the Bitcoin. The Bitcoin is a digital currency with no central bank and its value is determined by whomever is willing to pay for the bitcoin. As of today 9/13/2016, one Bitcoin is worth 609.10 USD. While once again there is no actual coin the bitcoin is an idea that people have agreed on that holds value, same as the US dollar. in actuality the paper the dollar isn’t even worth the amount printed on it’s face yet people accept and agree that the piece of paper that cost 5.7 cents to make is worth 100 dollars.

Money is nothing more than an idea that people agree upon that regulates the flow of an economy and gives value to commodities and labor. That little green piece of paper in your pocket holds no actual value other than the cost it took to produce it, and yet you will work your whole life just to acquire more of those little green pieces of paper just so you can take them and stick them in a bank. Some people don’t even use physical money anymore and now rely on a electronic pulse sent through a computer to tell them that they have the money in the bank. So just remember the next time you read a bank statement or look at dollar bill that you’re holding an made up value that someone decided to make up. As crazy as it all sounds, that idea has been one of the most important creations in mankind by revolutionizing trade. Just think you could still be having to trade with goods like livestock and produce

WORKS CITED

Friedman, Milton. “The Island of Stone Money.” The Island of Stone Money(1991): 3-7. Web. 13 Sept. 2016.

“The Invention of Stone Money.” 423: The Invention of Stone Money. This Is American Life, WBEZ. Chicago . 7 Jan. 2011. 13 Sept. 2016

Renaut, Anne . “The bubble bursts on e-currency Bitcoin.” Yahoo.com. 13 Apr. 2013. 13 Sept. 2016.

While at the beach wasting the day away with a hand full of sand, the wind quickly carries it through the slips of the fingers, and away with the wind before there was ever the opportunity to glance at it. This in the eyes of many is the harsh concept of money. What is money and the concept behind it? This is a major question for everyone around the world. As the famous “Stone Money” story stated, money is an item worth value for trade. In order to further explain the concept of money, we will look into how the US currency differs from the Yap’s and the public’s faith in the value of currency.

Between the United States and the Yap’s, each had a similarity with the concept of money. Each used a significant item for value for trade, but what makes an item valuable? Each nation has its own unique and interesting way of trading currency. The Yap’s may have had the most intriguing of them all, giant carved stone. With the hard work and labor to create such an item it therefore had significant value. These stones had huge structures that soon raised questions on how each individual would possess such an item, or even transport it. Quickly enough, the Yap’s soon stopped the transportation of huge stones and rather turned it into property. An individual could leave the stone wherever, knowing that he is the sole owner of that stone. This concept works hand-in-hand with the system of US currency. In today’s society, we have bank accounts with simply a number and as we spend “money”, the simple digits switch around. Although that money is not currently one our person, we still own it. With such an influence, the US adapted this similar concept.

How much faith does one have in the value of currency? After the gold standard was eliminated, the only faith we have in currency is the faith in our government and their power to manipulate us into believing such a thing. The US dollar bill is nothing more than a thing worthless piece of paper labeled by a number, but yet again it is suppose to be worth a whole lot more. How is something so worthless able to be traded for a new car, a laptop, or even education on how our faith in money could be distraught? We work days on end to earn such a thing but yet we are still seeking the faith behind this concept. The only reason we believe this concept is because it is the ONLY true way to make a living. We are forced upon believing that such a worthless piece of paper isn’t so worthless after all. The public’s faith in the value of currency is only present because it is the only trading system that we are able to engage in.

The concept of money can be rather confusing. How can we have so must trust into a worthless, cheap green slip of paper? Whether we want to trust it or not, our only choice is to believe that this system will not fail. We may question why we use paper money, but in reality it is a simpler method to trade. Between our currency to the Yap’s and the faith we have in our system, it is safe to say that we may never fully understand the concept of money.

Cows and Chips:

The beach is often a popular vacation destination on the East Coast. One of the many popular activities for children on the beach is building sand castles, but how long do those sand castles last? The cool, calm waves creep up and wash away each and every sand castle before we know it. They come and go just as quick as money does. We slave to build a sand castle that is something worth while just to see it dissappear shortly after and we are left to build it again. This is the same way with money. We work extremely hard to earn something that we instantly spend and we are left to continue working to earn more money. This in the eyes of many is the harsh concept of money. Many questions that arise is what is money and the concept behind it? This is a major question for everyone around the world. As the famous “Stone Money” story stated, money is an item worth value for trade. In order to further explain the concept of money, we will look into how the US currency differs from the Yap’s and the public’s faith in the value of currency.

Works Cited

http://dailyreckoning.com/the-real-reason-the-u-s-dollar-has-value/

http://www.ushistory.org/us/48.asp

Complicated Currency

P1. Money truly is a crazy concept when it is broken down. In its most common form, it is simply just a piece of paper. Yet, these pieces of paper run the world and all of those who inhabit it. They can make or break the quality of a person’s life. All of the power around the world is derived from it. It is such a simple thing that serves a far more versatile and important purpose.

P2. In the past couple of days my viewpoint on this concept has been swayed. I never really looked into it or broke down the whole idea of money prior to last week. Now, I understand that a dollar is only worth what you can receive in exchange for it. It is a simple way of breaking down what seems to be such a complex thing, but it is true.

P3. Large stones quarried and shaped on a distant island were used as money on the island of Yap (Friedman 2). In relation to their giant stone currency, I found an interesting quote to be “You don’t need to have the stone, to own the stone” (NPR). It is funny to think about because it just seems like a more barbaric, yet identical, way of banking. My money can be loaned out to others from a bank, but if I ever had to withdraw everything, it would all be available to me. It is the same concept as not having to be in possession of the stone, for it to still be my property.

P4. Seeing as how Brazil’s inflation came to an end with fake money (Joffe-Walt), I do not see how the public can have faith in the value of currency. It also leads me to think the same thing about our government here in America. Money can be printed out to easily on a daily basis, so how much is a dollar really worth? Public faith in the value of money is so important for many different reasons. A main reason would be that order in society is ensured by the fact that the cost and value of money is understood by everyone. So if that understanding and trusting of the government is taken away then the value of money can be interpreted as anything. Order would be lost if a society could not maintain that faith.

P5. Now, a concept like Bitcoin shows how far we have truly come. It is a completely digital currency that certain places of business accept as a form of payment (Reeves). This virtual means of currency is not to be undermined, though. The physical portrayal of the word “bitcoin” may lead certain people to believe that they are of a lesser value, because they almost sound like credits in a video game. To settle any confusion, these coins spend the same as a five dollar bill or handful of quarter. It is overwhelming to imagine that we can be wealthy and have currency that we can spend but never touch. One million dollars in cash in a briefcase is equal to one million dollars in bitcoins. Being able to walk around with money without holding the money in your hand brings me back around to the idea of the stone, because just like stone currency, I don’t need to be in physical possession of these Bitcoins to own them. Yet another way of the same thing taking different form.

P6. Between cash, coins, credit cards, checks, or any other form of electronic currency, money comes in many different forms. Whether it is a hundred dollar bill or a penny, all of it has worth, regardless of how it is presented. And no matter how significant the worth, it should never be taken for granted, because I know that money makes the world go round.

Works Cited

Friedman, Milton. “The Island of Stone Money”. Hoover Institution. February 1991. Web.

Planet Money, By. “The Invention of Money.” This American Life. NPR., 7 Jan. 11.

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” NPR, 10 Oct. 2010. Web. 13 Sept. 2016.

Reeves, Jeff. “Bitcoin Has No Place in Your – or Any – Portfolio.” MarketWatch. MarketWatch, 31 Jan. 2015. Web. 10 Sept. 2016.