Stone Money – Doublea

When I first heard about the stone money on the island of Yap I thought it was insane. Then I realized it was pretty fascinating that they could trust each other like that. Then the thought came to my head, what really is currency? It is literally just a piece of cloth/paper that has a number on it. In the world we all have a price on everything but what constitutes the world even having currency. Everything could essentially be free and it could be a first come first serve basis.

Obviously, that couldn’t work but wouldn’t it be pretty interesting? The Federal Reserve just puts out a certain amount of money and they can just say how much a dollar is worth. But what really is the amount of money with inflation and all the other factors. We don’t even know anymore. Think about a bank and how they give loans how does that money even exist it goes from computer system to computer system and it just has a numerical value on a screen.

When I read Friedman’s essay it amazed me how people could just use a stone as a way of currency and they don’t even move it. They literally just pass ownership on and on through the memory of others but everyone on the island knows whose stone is whos. In his article Friedman talked about how the Germans “seized” their stones from them until they made roads. Automatically, even though it is a mediocre thought it made me think of the fact that your parents will take things away from you until they are done. It seems dumb to put it into that perspective but think about how a parent will take away your phone for not doing your homework. The phone is the currency everyone has a phone but when you take away the phone the person instantly does their work to get it back. ONce you get all the work done that you were supposed to and get your grade up you will get your phone back.

nother thing that caught me off guard was that even the people of Yap didn’t have the stone present they still counted it as a form of currency. The article went on to tell a story about how a limestone was brought back from a nearby island. The limestone was the biggest and the prettiest they have recovered. Unfortunately, a storm hit and they lost the limestone in the Pacific Ocean. Now the crazy part is that the people of Yap still considered that stone tradeable. Even though it was at the bottom of the ocean they considered it for trade. It reminds me giving someone something for a check. You have the money but you don’t have it on you at the moment. It’s almost like you’re trusting the person to have the money in their bank account and hope that their check doesn’t bounce. They have to trust that their money is in their account and that they will get the money someway somehow.

The NPR broadcast also caught me off guard too when they mentioned the online banking. They mentioned the fact that the money is just out there online but is it really there. It makes me think about the fact that you request for a parent plus loan for your kid to get a loan for college. The bank gives you the loan by transferring money into your checking account which then you can transfer that online money into the bank account of the University your kid is attending. Now really is there really a physical money present? No, there is not. You literally transferred an online amount of money from the bank to the Univeristy and you have to trust the bank to pay the Univeristy. Banks essentially themselves don’t even have real money. Yes they have money on hand but if you went and tried to withdrawal all 10,000 dollars out of your bank account they most likely wouldn’t front you all that money right away because then what if all they have figuratively in their safe is 10,000 dollars they wouldn’t have anymore money to give out for withdrawals. Banks rely on the constant flow of money from hand to hand in order to get their money to give out. Banks make all of their money from interest on the loans they give out and imagine if they didn’t approve some people’s loans they would have no money to give out because it is all accounted for and they would not make any profit.

After reading and listening to all of this it made me think of an article I read earlier this semester on Bitcoin. Bitcoin is essentially a cryptocurrency. It has a face value and can be bought but it has little to no value in the real world. You can buy stocks but they are essentially worth nothing because it is fake online money. Bitcoin is basically a currency for the black market to trade around. Bitcoin was brought here to become a new currency maybe for the US and the price of one Bitcoin rose tremendously very fast. Now that people know and figured out what it is and that it has no value people are selling their shares for very cheap and getting rid of their Bitcoins . It is basically an illegal form of currency because it is traded on the black market which we all know is illegal.

After reading all of these articles it really has opened my mind on this whole currency thing. What exactly is the currency we use? Yes it is dollars but do these dollars even have a worth? We all know they do to us but we honestly could live our lives with stones and just trade stones like the people of Yap. I will never know what money is now after reading these articles. As a finance major my eyes were opened widely to the fact that people could trade stones and not even care that much about ownership. It must be the most peaceful island in the world and I would like to research the role of currency even more now that I have the knowledge of the people of Yap.

 

Stone Money – PaulaJean5

When you think about money, you most likely picture dollar bills and coins. Picturing this means that you live in a society where money is exchanged for goods and put into a bank. This type of society consists of people who may not be able to comprehend the monetary system on the island of Yap. On the island of Yap, possession alone was more important than acquiring somebody’s possession. As long as it was known that somebody owned a large limestone wheel, which was the symbol of wealth, they were able to ‘purchase’ important goods. If the bank gives a loan to somebody after you put your money in your account, then what is the difference of our society and the people of Yap?

To think that money is a unit of measurement seemed bizarre to me before studying and researching these different societies and their fix to the flawed monetary system. It is a measurement of wealth and in some cases, happiness. Brazil was dealing with extreme economic issues for decades. The inflation was so bad that the price of goods were going up every day. It got to the point where many people were committing suicide. The solution they came up with was virtual money. Instead of being paid in physical currency, their wages were listed in units of real value, or URV’s.

“..they wrote a plan for a new currency, one that was stable, dependable, trustworthy. The only catch was this currency would not be real. It would not be printed. There would never be coins. It was fake. They called it a virtual currency.” (Joffe-Walt, 2011)

This compares to our monetary system in the aspect of placeholders. In Brazil, none of your money was tangible. If it was, it was not worth anything. In our society, the money in our bank is not actually ours. It is just a way to measure our wealth.

Another form of currency is Bitcoin. Bitcoin is a type of money that you can spend anonymously on the black market. “A form of “e-money,” Bitcoin is made of strings of dazzlingly complex code created by raw computing power — a process called “mining” that can in theory be carried out by anyone with a computer.” (Renaut, 2013) By buying and spending bitcoins, you can purchase things without the bank knowing or anybody for that matter. Today, bitcoins are worth a lot more than they were when they first came out. Using bitcoins, you will never had to trade them, only mine. Mining is the process of creating a complex code using a computer.

Essentially, money is not real. It is a fake concept that measures wealth. This in itself does not make sense. If the money is not real, this means that the wealth is fake as well. Once money is declared fake, everything that we use it for and everything that it stands for changes or becomes worthless in a way.

Works Cited

The Invention of Money. (2018, January 31). Retrieved February 07, 2018, from https://www.thisamericanlife.org/423/the-invention-of-moneyGoldstein, J., &

Kestenbaum, D. (2010, December 10). The Island Of Stone Money. Retrieved February 07, 2018, from https://www.npr.org/sections/money/2011/02/15/131934618/the-island-of-stone-money

Renaut, A. (2013, April 13). The bubble bursts on e-currency Bitcoin. Retrieved February 07, 2018, from https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html

 

Barter Explained, Poorly

Bartering is trading services or goods with another person when there is no money involved. This type of exchange was relied upon by early civilizations. There are even cultures within modern society who still rely on this type of exchange. Bartering has been around for a very long time, however, it’s not necessarily something that an economy or society has relied solely on.

A barter system is an old method of exchange. This system has been used for centuries and long before money was invented. People exchanged services and goods for other services and goods in return. In ancient times, this system involved people in the same area, however today bartering is global. The value of bartering items can be negotiated with the other party. Bartering doesn’t involve money which is one of the advantages. You can buy items by exchanging an item you have but no longer want or need. Generally, trading in this manner is done through Online auctions and swap markets.

The history of bartering dates all the way back to 6000 BC. Introduced by Mesopotamia tribes, bartering was adopted by Phoenicians. Phoenicians bartered goods to those located in various other cities across oceans. Babylonian’s also developed an improved bartering system. Goods were exchanged for food, tea, weapons, and spices. When money was invented, bartering did not end, it become more organized. Due to lack of money, bartering became popular in the 1930s during the Great Depression. It was used to obtain food and various other services. It was done through groups or between people who acted similar to banks. If any items were sold, the owner would receive credit and the buyer’s account would be debited.

Just as with most things, there are disadvantages and advantages of bartering. A complication of bartering is determining how trustworthy the person you are trading with is. The other person does not have any proof or certification that they are legitimate, and there is no consumer protection or warranties involved. This means that services and goods you are exchanging may be exchanged for poor or defective items. It may be a good idea to limit exchanges to family and friends in the beginning because good bartering requires skill and experience. At times, it is easy to think the item you desire is worth more than it actually is and underestimate the value of your own item.

On the positive side, there are great advantages to bartering. As mentioned earlier, you do not need money to barter. Another advantage is that there is flexibility in bartering. For instance, related products can be traded, or items that are completely different can be traded. Another advantage of bartering is that you do not have to part with material items. Instead, you can offer a service in exchange for an item. With bartering two parties can get something they want or need from each other

Stone Money- branxmad

If you were to ask a group of people what is money according to them, they would all probably give similar answers. One might say it is a measure of wealth, or a method of payment. But the concept of money is more abstract than just that. Money is only paper, but so is a birth certificate, or a high school or college diploma. Why is a piece of paper so important? What gives it it’s value and power?

Growing up, I remember receiving money in birthday and holiday cards, sometimes I would even be given a gift card with a limited balance on it that could be spent at a particular store. Being so young and not even really needing money, I never knew what to do with it so I would put it away in a piggy bank. I knew the money was important enough to save but I didn’t really know why. However, I understood the purpose of a gift card well enough to know to put it in my wallet and carry it with me next time I went shopping. As I got older, I began to realize that money takes on many forms, other than just a green, rectangular piece of paper.

While reading, “The Island of Stone Money”,  by Milton Friedman, I was introduced to a new idea of currency.  Yap currency consisted of large pieces of limestone, that was also known as fei, and were sometimes too large to even move. I initially thought it was strange because limestone isn’t something that an individual can keep safe at a bank or to even carry in their wallet. The people of Yap would make purchases with the stone, however the stone did not have to be physically exchanged or even present in order for the new owner to accept the possession. Before passing judgement too quickly, I began to think about the society we live in today. Funds can be transferred or exchanged without physically changing hands. For example, going into a grocery store and swiping a credit card, resulting in the purchase of your grocery items. No money was present or even visible, but the transaction was still able to be completed. Despite the similarities we may have to the people of Yap, it is almost assumed that today, if you do not have physical money in your possession, then you are not as wealthy as someone who does. A fei at the bottom of the ocean near the Yap islands still has value and can still be used as an exchange, but if you were to drop a dollar in the street, that dollar is no longer yours and has no value to you.

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

A01: Stone Money–collegegirl

P1. Although money may be a small, rectangular, green piece of paper, a magnetic strip on a card, or a coin, people around the world see it as a prized possession, something extremely valuable to their lives. Quick keystrokes on a mobile device are also forms of money, like the Venmo app, which allows people to transfer money to each others account with the touch of a button. Money can also been seen as a way of having power over others. Despite the fact that there are many forms of money in the world we live in today, money, as a whole, can have an impact on our wellbeing.

P2. Money can also be seen as an enormous sized disk like object. At first glance, it seemed bizarre to hear the story of the Yap an how they consider, gigantic, limestone disk to be as valuable as a home would be to us. In the Yap village, the villagers lived to believe that these gigantic stones ranging to 10 feet high with large holes cut out in the middle of each stone, was their form of currency which they called fei. Strange. We, see currency to be something that is paper like and easily transferred from hand to hand. Because of the large size of the stones, in most cases, the stones did not move locations when given to the next person for their services. The villagers would walk past stones and know who they belonged to and would go along with their day. While reading Milton Friedman’s article regarding the Yap villagers, I discovered that, years ago, a voyager was returning to the village after finding a massive stone, when all of a sudden came a storm that sank the stone to the bottom of the sea. When the voyager returned to the village, he explained to his family of the incident that happened regarding the fei. Shockingly, after years later, it was believed by the entire village that the stone at the bottom of the sea, that no one has ever seen, was still valuable to the owner as if it was in their physical possession. Although the stone remained at the bottom of the sea, it certainly had an impact on the family’s well being. The Yap in the village always acknowledged the families wealth and was never questioned.

P3. Unlike what the villagers believed in about the stones not being moved when possessions changed, people around the world believe that if we do not have physical possession of something, then it is not considered to be ours. Having physical possession of money is a necessity for us unlike there Yap.  For instance, there’s a ten dollar bill lying in the middle of the street on a sunny day, someone picks it up, puts it in their pocket and now it’s theirs. They can spend it wherever and however they’d like and no one will ask them or bother them as to where they got the money. Our concept of currency compared to the Yap’s concept of currency have differences for obvious reasons. Around the world, we need to have possession of our currency for obvious reasons. When money is in our possession, it allows us to buy things that are essential to our lives such as water and food. Meeting these needs are essential to our wellbeing because without them we will suffer from not being able to provide ourselves with things that we need to survive.

P4. Most surprisingly in the NPR Broadcast was the statement: “Money is fiction.” How can it be that a rectangular thin green piece of paper with small symbols be something other than real? Money being as powerful as we’re making it seem to be, it’s just buying power. Online, it’s just a number jumping back and forth from screen to screen and account to account. Money can be the root of all evil. It controls almost everyone in the world besides those who are wealthy enough to not desire it as much. Money is just a means of exchange for us to get something that we want or need.  Before coins and dollar, people used fish, tools or wood for example as a means of exchange for good and services. If the world revolted back to exchanging things like these instead of money, then money would lose its value. If money loses its value, and people used things such as services in exchange for things, less people would rely on money. But, this can affect our wellbeing being that people will actually have to provide services for other people in order to get something that they need. Compared to now, when people have money they can easily spend it on the things that are essential to life and essential to them. When governments don’t exist anymore, there will be no need for money itself because it will lose its value. Then, we’ll return to a more direct exchange of good and services for other goods and services.

P5. Also shocking, CBN made a statement claiming that money is not the root of all evil, in fact its the love for money that is the root of all things evil. A wealthy man may begin to feel superior to those who have to earn a living. Because the concept of money being as powerful as it s, we can spend millions of dollars on flashy watches and fancy cars which are thing we don’t particularly need but want. Imagine what the world would look like if people spent those millions of dollars, or even less than that, giving back to communities or other parts of the world that are in poverty such as victims who lose everything due to natural disasters. If we as humans rely on money for our wellbeing, why not try to help others well beings who are unfortunate instead of buying things that mean nothing or have no value to anyone but your own self. All in all, money has certainly made a huge impact in the world we live today. Whether for the good or for the bad.

 

Works Cited

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

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

CBN. “Is Money the Root Of All Evil.”  2017. Web.

Stone Money–todayistheday

P1. As a college student paying their way through school; money is so crucial. It seems to be the focus of all my thoughts. How much money is in my account? How much am I getting paid this week? I’m constantly checking my TD bank app, memorizing the numbers. Every person over the age of eighteen thinks about money at least once throughout their day. How can we, as civilized beings, not revolve around such an essential part of living in this modern world?  But we must ask ourselves what is money?

P2. Is money a crinkled stained piece of paper? Or is it a hefty limestone rock? Doesn’t the definition of money depend on an individual’s belief and culture?  As Americans, we are raised around the mindset that the paper in your wallet and the number on a ATM slip of paper makes your worth. As we learn in “Island of Stone Money” by Milton Friedman the Yaps, a small island made of five to six thousand people their wealth is based around a large limestone rock in their possession. Yaps are pre-industrial people who used massive stone sculptures as currency, this currency is known as fei. They collected this limestone from an island several hundreds of miles away and brought it to their home land to be used as currency.  The ownership and possession of the stone was known amongst the people.  The importance was unquestioned.

P3. To some the concept of hefty unmoving stones used as currency may seem ridiculous. But when a financial crisis occurs we ask where did those millions and trillions of dollars go? “Invention of Money” broadcasted by Planet Money the idea of disappearing money is questioned. As logical people who understand million and trillion is a very large number we must question how did it disappear and who got it? The answer is that money was only a concept and never a tangible thing. Money doesn’t exist as a thing but rather an idea. Money isn’t solid and its value could disappear.

P4. What’s so different between a stone at the bottom of the ocean and a number from the ATM? Both we cannot see, we simply trust they’re present. We depend on the rock at the bottom of the sea and the printed numbers from the bank. We never can hold or even lay our eyes on such measurements of wealth yet we believe in them. We believe so blindly, that our own blindness is unknown to us. We were born blind to the emptiness of money. The power of money is only registered and fueled by our unyielding belief.

P5. With belief, the Brazilian people knew their money had value again. In “Invention of Money” we learn that with no hard proof, the people had to be tricked into believing. Virtual currency was created which was basically imaginary money. The idea of virtual currency was created because Brazil had such high inflation and the economy was almost impossible to fix.  Four underdog economists created virtual currency in hopes that this would fix the economy.  People trusted this knew currency, the fake money became real money when the people believed in it. This brought Brazil into the eighth largest economic country. From nothing to everything, all in the belief of this new money. This idea relied heavily on the publics belief. Without their belief in this new money the idea would crumble like all the other ideas.

P6. As human beings, we prefer to be able to explain things rather than cast them away as phenomenon or chance. When the Great Depression crumbled America most people wondered how this could happen. “The Invention of ‘The Economy’” teaches us that before the Great Depression the economy never existed.  It wasn’t until the 20th century that the economy came into existence. The government started crunching numbers to figure out an official number for the value of goods and services within the nation’s year. This would be the national income. Soon enough everybody is talking about the economy. Something that had never existed before had now swept the nation and become something of great importance to every class in America. America soon wasn’t the only one keeping score. Eventually, other nations began calculating and measuring their wealth. Economy became a measuring tool for power and status. Which country was winning? Simply, check the economy.

P7. “Invention of Money” discusses in details that the Federal Reserve can create money out of nothing, can whip up pieces of paper and small coins, items that make the world go around. Federal Reserve is not a part of the government and doesn’t look to the government for any decisions. They decide every six weeks should there be more or less money in the US? More money which can mean more jobs and opportunities but also can mean high inflation.  Less money can slow down the economy too much.  This is a balancing act that if not done right can devastate. Federal Reserve gives money to banks in return for treasury bonds. Button pressing, that’s what it comes down too. Our money system is relied upon this magic trick. Magic of Central Banking is based on trust, without it Central Banking becomes nothing.

P8. Americans, Yaps and Brazilians are all on the same page. Americans believe in paper, Yaps believe in stones, and Brazilians in virtual currency. Each of these do not become currency without belief. We give meaning to our own currency’s. A dollar bill means nothing to the Yaps while the same goes for a large stone in America. And virtual currency would mean nothing without the Brazilians belief. Could we blame our belief or disintegrating belief on our economic status? If we believe our money is more than it currently is, would that change anything? I never knew anything about economics until this assignment. It’s quite alarming to see the differences in currency but mostly the interworking’s of currency. It reminds me of the Wizard of OZ and the great Wizard of Oz is nothing but one man hiding behind a curtain, pushing buttons. Millions out of mole hills. Money is what we make it. Money is both our rise and our fall.

Works Cited

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

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

Goldstein, Jacob. “The Invention Of ‘The Economy’.” NPR, NPR, 28 Feb. 2014, http://www.npr.org/sections/money/2014/02/28/283477546/the-invention-of-the-economy. Accessed 19 Sept. 2017.

Stone Money—jonhjelly

Webster defines money as a form or denomination of coin or paper money. After reading multiple articles about the creation of money, how other countries deal with there money problems , and how people from other cultures view and use money. I changed my views on money, I’ve realized that money isn’t worth as much as I treated it as. The value has changed since I was a child, because of inflation every year the value of money goes down little by little. In the 70s a dollar could go along way and could last you a week. Today you are lucky if you could purchase a water for a dollar. Now I views money as numbers in my checking account.

The NRP broadcast 423 The Invention of Money had discussed “that money is as real as the stones on the bottom of the ocean floor.”  They claim that money is fiction, Money value can disappear it is not set in stone. Back when we were on the gold standard each dollar correspond to a dollar of gold. Ever since we got off the gold standard the value of money is fluctuated. It has not been constant since.  Currency has changed into information, numbers and commas on a computer screen. Another interesting fact is that their are not even a trillion dollar bills in the world. Their aren’t even bills for most of the money that exits according to NRP broadcast. It is sad how much power this idea of money can make people do ridiculous and foolish things.

The way the money imported  into our economy is not as you imagine it would be. When I think our economy need money, I think the Federal Reserves sends freshly printed dollars bills to some of the biggest banks in our countries. Unfortunately that is not the case, what really occurs is the Federal Reserves type of how much money they think our economy needs and they put the number into the computer and buys how much of treasury bonds from banks. Just like that Money is sent into our economy according to NRP. They literarily make money out of nothing. Without printing any new bills or anything, they just type in numbers and with a click of a button money is created.

Money journey to come into our economy is still different. The federal reserves doesn’t  print a million bills and send into our encamp. Realistically they put numbers into a screen then they send it into a bank and  exchange the bank gives them bail bonds. No new money because most of the money out there doesn’t exists out there. So like a magican they make money out of nothing. Its a magical experience for the federal reserve to make money.

As I read other articles, My eyes were opened and  I realized that money value is all in our minds. At least it was in this small Island in Micronesia a Germany colony. This people on this very small Island had huge stones as there currency. Not even gold but stones that were round like big stone wheels. Now according to Milton Friedman there was a family on the island that was very wealthy but has never sen the money. But no one on the island has never questioned them about their wealth because of their ancestor. It was known that one of their ancestors went on a search for a stone that would have valuable in their currency.  But after coming across a deadly storm they had to let the valuable stone sink all the way to the bottom of the ocean. When he returned from his travels he told all of the people on the island about what he found and what happened when they ran into the deadly storm. Ever since than the family has been wealth because of their ancestors failures.  Its crazy to think that because of their ancestor failures the family is well off, with nothing to show for it. This just makes the augment on money being fiction even stronger.

Money has evolved into a fictional thing that people of our society fight, killer, and rob each other over. Recently on the internet the bitcoin has been making moves on the world in the last year. According to Jeff Reeves “the bitcoin has no federal bank to back its value. This means that there is no true value for this, its value is whatever the person is willing to pay for it.”. Every year money value goes’s down so who is to say that the idea of money won’t be relevant in a few more decades.

Work cited

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

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

Jeff ,Reeves . ”Bitcoin has no place in your -or any-portfolio” 31 Jan.2015.