Category: A01: Stone Money

Stone Money–pdqlover20

What is money, anyway? When I was younger I though money brought happiness. I also though money ruled the world. When someone would ask me where did I see myself in 10 years I would say “I hope to have a stable career so I can make a lot of money.” I use to compare money to success. As maturity set in I learned that money is not everything, we do not need money to be happy. I learned that happiness comes from within and that money is only a number.

If we all had the same amount of money the world would be a lot different. Money is what causes different social status in our country. For example some different social status are lower class, middle class and upper class.  Money can make people do evil things at times, money is a great tool for helping other but is nit needed at all times. If money could be controlled by the government America would be a calmer and stress free country. Many Americans work hard day to day but money is never currency as we get paid. Money has no actual value.

We can think of money as a spinning circle, circling from one person hand to the next. Discussed in NRP broadcast 423 The Invention of Money they question if “America really knows how much money is out there in dollars” and how could we ever find out the total amount each person owns. Back to my second paragraph if we all had an equal amount of money this would not be a topic to discus. I think America should money is not paying enough attentions to the amount of money that is out there.

The broadcast relates the Limestone wheel of the Yap community and the American dollar to having no physical value but having a value in faith. Another comparison is that a person does not have to physically have the stone in front of them but other automatically know they stone belongs to that person and they are wealthy. As in America I can relate this to famous people. Celebrities are know to have money with having to ask no questions. Money is what makes people who they are today which can be a good or negative result. My views on money have changed tremendously, they article “The Island of Stone Money” by Friedman Milton opened my eyes to the situations in France and Brazil that I knew anything about the text was very informational.

In the source I gather it states that the dollar bill has no real value other than iconic heros faces on them. The author explains that “money generally took the form of coins composed of precious metals such as gold and silver.” Which compares to the The Island of Stone Money article.

Works Cited

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

Moffatt, Mike. “Understanding Economics: Why Does Money Have Value?” 2017 https://www.thoughtco.com/why-paper-momey-has-value-1146309

“The Invention of Money.” This American Life. N.p., n.d. Web

Stone Money- NewEditionLover

Is money really fictional? As I listened to the story of the “Stone Money Of Yap ” from the planet money team i learned many new concepts in which I thought were very interesting. I spent a long time thinking were money goes and how people in the United States go about using it. How does money just disappear without anybody knowing where it went? I view money as a concept of life and without it you basically cant survive. Without money you cant do the things you want and live life without any worries. But in the end is money always there? Do we just work just to have the idea or thought of having money? If my mom goes to work just to pay bills and pays online she technically didn’t pay them the money from her pockets but from her debit or credit card. Now this has me thinking am I just another worthless person just thinking that money is gonna cause me happiness in the long run? I’ve learned through the broadcast that dollar bills represent the idea of money and money is never currency as you get paid. They say this because most of the money simply doesn’t exist and money is technically created out of nothing. That idea had me confused because how doesn’t money exist? Without money no ones daily routine would ever be the same again. Money comes and goes but it is a very beautiful sight to have when the money hits your account after tremendous amounts of working. When you make a purchase its basically like your signing your rights over and that’s it. Having money to me means that I can be happy and flourish with life. Money does exist and it shows how much status and “stain” you have in your town or city. What does money mean to you? Money gives me a feeling that I’ve never felt before !

In the article “The Island Of Stone Money” by Milton Friedman taught me a little more about wealth and supremacy. How can you and your family be known but not have anything to show for it? Is the idea of wealth a good thing generally speaking you basically have nothing but you just a known figure. To me money is very real. The bible claims that money is the route to all evil? But without money I wouldn’t have everything that I’ve ever wanted! Money has gotten me a car, food ,shelter and all my worlds greatest necessities. To me money makes you who you are without the money your nobody and your just another broke person, with money you can have all the nice things in the world and have all the power in your hand . You can clearly look at someone and tell whether or not they have money.

The source i gathered by Christopher S Penn article “The fictional nature of money” he describes lifes most precious values stating “without it ,you don’t eat,you dont have a place to live, no clothes to wear, unless it doesn’t involve money. Penn also stated  Money can be a tremendous amplifier of personal power. ” meaning you can basically break the rules and do what you want just because you have money.

Work 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.

Christopher Penn. “http://www.christopherspenn.com/2010/05/the-fictional-nature-of-money/”

Stone Money–PlethoraGaming

One thing I have known for a long time is that money has different value in every country. For example when I traveled last year one dollar would be equivalent to 70 of that country’s currency. Three dollars can get be a box of Oreo, while two hundred and ten of the other country’s currency can get me about five boxes of Oreo’s. I have no doubt that we believe in a sort of fake money, after hearing about the concept of Stone Money.

Friedman said that the acknowledgement of ownership and believing it is all that it took for them to have something of value the stone money, and that acknowledgement is passed down. This surprised me because how can generations of people put trust in something, and not question it? Then I recalled, there is religion people putting faith in something even it may not be real; as long as we add some value to it, there are going to be people who believe it

The US setting aside gold for the French is exactly like the German marking a number on the fei, by adding belief to it, it adds value. This created a lower monetary value for the US, while increasing the France’s monetary value even thou the gold was not even moved a few feet away. This goes back to show that money is not fluid, just because someone makes someone else perceive something.

The story of How Fake Money Saved Brazil by NPR also shows the effect of how we perceive money. Their story was that the value of money were not stable, and in order to stabilize and return faith into the economy they had to create a fake currency. By changing how much the old currency values compared to the new currency and keeping products at the new currency the same, it restored the value of the new money. Because the money was no longer varied, products maintained a value, which restored faith in the economy

This plan could have easily back fired if they did not believe in the new currency, this shows how the faith we put into currency can change the value.

And now in modern-day we have electronic currency. We can now get paid by having our money deposited directly into our bank account. And because it shows a number we believe in it, even though it’s just a set of number; we use it to buy other things that have numbers written down to show its value. Even though we didn’t pay physical money for it, the electronic money is treated as real physical money. Money that is not backed by something valuable like gold etc… we can consider it fiction.

We also have other fiction money, such as Etherium and Bitcoin known as cryptocurrencies. Even though they have an equivalent value for other non-electronic currency, what would happen if they stopped using cryptocurrency or say they get banned in a country? That might be what we will be facing soon as there are rumors about cryptocurrency ban in China. According to Josiah Wilmoth just rumors of the ban dropped values of the currency by ten percent or more. This proves that because we believe is some rumor we affect the cryptocurrency.

To sum this all up, just because we perceive or believe something, we are capable of making a value for it.

 

Work Cited

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

Wilmoth, Josiah. “Ethereum, Bitcoin Prices Lead $20 Billion Slump Amid Chinese Regulatory Turbulence.” CryptoCoinsNews, Cryptocoinsnews, 9 Sept. 2017, http://www.cryptocoinsnews.com/ethereum-bitcoin-prices-lead-20-billion-slump-amid-chinese-regulatory-turbulence/.

Joffe-Walt, Chana . “How Fake Money Saved Brazil.” NPR.org. 4 Oct. 2010. 9 Sept. 2017. <http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil&gt;&gt;

Stone Money–jadden14

Money plays a key role in today’s society. However, did you ever once consider the idea that the money you hold in your bank account or your wallet holds no value? What value does money hold? Upon reading the article The Island of Stone Money, I realized that money could very well be an idea, or just an acknowledgement of value. In the article, there is an island called yap in Micronesia that uses a large stone disk as their currency. The people would use these disks otherwise known as fei to buy houses and make other large purchases, and because they were so heavy they would sometimes just leave the stones where they were and acknowledge the owners.In one case, the yap set out on a mission to get a big fei stone. They went to an island, and created the massive fei out of stone from the island. It was said to be the biggest fei they have ever seen. Because of its massive size, it held much more wealth than the other fei. On the way back, there was some difficulties transporting the stone. The stone was lost at sea during a massive storm, and the entire island still acknowledged the wealth it held. I’m shocked by the idea that these people just kept track of who owned certain fei, as someone could have their entire savings out in front of someone else’s house. Friedman stated that later on, the Germans took control of the island, and found that the island badly needed new roads and requested that the district chiefs repair them. However, They wouldn’t listen, so the government painted black crossed on the fei, ultimately claiming the fei as their own. The people of yap saw this, and realized the situation they were in. Later on the roads were fixed, and the crosses were removed, restoring the people of yap’s wealth. To me this seems counterintuitive to accept that simply by marking one’s fei automatically they lose their wealth, however, they accepted it. I believe the people of the island of yap revealed to us that money is not a physical object, and that you can have wealth without any physical identity to show for it. The value of money can change, and has done so before.

Further research led me to look for current economies that can prove this. Upon reading the article How Fake Money Saved Brazil, I can never look at the dollar bill the same way anymore. In brazil, there currency has a rediculous inflation rate. At one point it was at 80%, which is astounding! If we had the same inflation rate in the United States, our economy would be in chaos! How people and shops in Brazil are able to operate is unbelievable, and the fact that the prices changed rapidly made it hard to buy goods at a consistent price. Holding onto money is useless in an economy like this, as the value of items will skyrocket and your money will hold no value. This makes it very intriguing to understand how the people in brazil save money, from what it sounds like, they don’t. Due to the rapidly fluxuating currency and price of goods going up, there is no reason to. The government tried to fix this, but in most cases it just made it worse. Many presidents in the past tried to freeze prices, print money, but all of their efforts have failed. There has always been inflation in brazil, and the people have learned to live with it.

Sometimes the best way to show how unpredictable money can be is to look at the digital kind, cryptocurrency. Bitcoin, otherwise known as BTC, is starting to become accepted as a new form of currency in the United States and in China. In the article The Bubble Bursts on e-Currency Bitcoin, I learned about how the crypto market experienced a significant crash in value. Right around April in 2013, Bitcoin reached an all time high of 266 USD, and was rocketing in value. Just three days later, it fell off a cliff. It went all the way down to 54$, and people were left with their devalued Bitcoins. This is very similar to our stock market crash, and because of that some investors were able to predict this event and didn’t buy. Some people sold their bitcoins and took their losses, others held theirs in hopes of a rise in value. Today, you can buy a bitcoin for 4187 USD, and it will probably change once your done reading this. Cryptocurrency, like stocks, can sporadically change in value in a moments notice. This currency is not quite like the USD, as it is much more susceptible to inflation. Think of cryptocurrency like a race car. It can take fast turns, accelerate and brake fast, and when in the wrong hands, can crash. The thing that’s interesting about bitcoins is, it’s just an icon on a screen, or a line of encrypted code. It has no physical backing, and is still widely traded to this day.

Even in the United States at one point their was an issue with our own currency. In Friedman’s article, he talks about the gold standard. France wanted to turn its dollars into gold, and at the time US currency was backed by a certain amount of gold, that was yours any time you asked for it. The United States didn’t want to have to ship all the gold overseas, so France agreed to just have them leave a note on a desk with the gold, kind of reserving it for them. This lowered the value of the US dollar, and helped raise the gold value in france. All over what may or may not be gold in the federal reserve. This acknowledgement of value, is what money in the world today is. The value in your account, the cash in your pocket, is no longer backed by anything. It’s crazy to think that our cash isn’t really worth anything physical, but it’s still there. We sleep soundly knowing that we have a set amount of value in an account somewhere, because the bank tells us we have it. When you look at all the currencies and how they are backed, you will find out that almost every one does not have a set value. They all run off what the government says they are worth. There is no more gold, or any sort of backing, just word or a stone in your yard. This idea that we call money is what paid for our house, food, and all our necessities. You may never get to even see your money, but you know it’s there.

 

Work Cited

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

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

Joffe-Walt, Chana . “How Fake Money Saved Brazil.” NPR.org. 4 Oct. 2010. 9 Sept. 2017. <http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil&gt;>

Stone Money–alaska

To me money is so important. We as a society need it to get by in life but money has so much power over everything we do. I have listened to the broadcast “The Invention of Money” and read the article “The Island of Stone Money” by Milton Friedman. Friedman says that The Island of Stone Money had no metal so they had to use stones. I thought that having a big stone to pay a person is kind of a ridiculous thing to do since you don’t move the stone if it’s too heavy. Everyone around you would know that you don’t have that stone anymore and it was someone else’s.

In the broadcast “The Invention of Money” the five reporters say that in the 1950’s a big limestone meant you can buy back a member that someone else has captive and trade that person for a stone. Saying you would get your member back while everyone knew the stone was not yours anymore. While a bank account is just numbers and the bank saying how much you have when the actual money isn’t there. To think a big limestone and a bank account are to mean the same thing but are so different from each other is crazy.

In The “The Invention Of ‘The Economy'” by Jacob Goldstein. Goldstein says that the GDP (Gross Domestic Product) is not a thing; it’s an idea. Also, That the U.S made the economy $500 billion dollars bigger just last year. The economy to me is just a big confusing thing. The Yap concept of money was way easier than it is today. They just had stones and you could trade them. If it could not be moved it would stay where it is all the time.

So, what is money? To society today it is just a number in your bank account and not actually in your pocket. To all of us there are many different definition of what money is. Money is just used to purchase certain items and pay our bills.

Works Cited

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

Goldstein, Jacob. “The Invention Of ‘The Economy’.” Npr.org, 28 Feb. 2014.

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

Stone Money—theadmiral

The Ambiguity of Money

 

The Ambiguity of Money

As you enter any mall, convenience store, or place of business in today’s age, you will see a swipe of a card to transfer finds, and not the handing over of paper money. If we take a look at the economic structures about one hundred years ago on the small island called Yap, depicted in the essay by Milton Freidman entitled “The Island of Stone Money” we see very similar habits. The only catch is, instead of swiping cards as use of currency, they use large pieces of limestone, shaped and brought over by “small bamboo boats” hundreds of miles away. These large pieces of limestone would change hands maybe two or three times in ones life, because they would not  use these for everyday things, like buying groceries, but for things such as a “dowry for their daughter’s weddings” and for buying a plot of land and having a house constructed on it. After the house was built, or the dowry was paid, the stone would not be moved, but the wealth would be exchanged from person to person. This could be compared to the swipe of said card, nothing physical exchanged, but the wealth was. After reviewing all of this material, one can conclude that the exchange of paper dollars is rather obsolete anymore, compared to the “old days” when “cash was king.”

To understand the transition of money, from something that went from having intrinsic value, to something that has none at all, let’s briefly dive into the history of how paper dollars got their worth. Way back when, when the United states had enough gold to back up the paper money, you could take a dollar to the bank, and get a dollars worth of gold. As the United States government kept printing money, the amount of gold you could get with that dollar declined, because there were more bills in circulation. This is what we know as inflation. On the island of Yap, they do not have this problem. As stated in Friedman’s essay, they do not have precious metals like gold and silver on their island, so they do not see value in material items like those metals, or a piece of paper. What they do see value in is the hard work to make the fei (the actual word for the stone money) and the long, dangerous journey involved with getting to the limestone quarries hundreds of miles away.

The transition from the dollar having worth, to people having to say and believe the dollar has worth is truly fascinating. Talking to my parents on the matter, they explained things from their point of view because they have had so much experience with money in their lives. They were in the jewelry business for quite some time, so they had a firsthand view on the relationship between gold and paper money. My father explained to me the gold market, and the relationship between the dollar bill and gold. He explained that back when gold was not regulated, you could get it for about two hundred dollars an ounce. Once it started to be traded like stocks, and was a regulated market, gold sky rocketed and the price doubled, bringing the price to about four hundred dollars an ounce in 1989 according to charts from onlygold.com. That is all well and good, but what really matters is when gold goes up, the price of the dollar goes down, making it from something that could have been valuable, to something that is a piece of paper.

After again speaking with my parents about this assignment, my dad posed such an important question. He asked “what exactly gives this big rock so much worth.” I looked in articles, and I thought about it long and hard. I came to the realization that realistically, the fei and the dollar bill in today’s society are exactly the same. If you get a one-dollar bill, and a one-hundred-dollar bill, and put them side to side, there is not much of a difference, except maybe a watermark, and the picture on the bill. Today, we don’t have nearly enough gold in depositories like Fort Knox to back up the actual worth of our bills, so they are basically pieces of paper, just like the fei is just a large piece of limesone. They both rely on word of mouth, and the thought that “this piece of paper is valuable”, where it really isn’t valuable at all.

In conclusion, the fei, and the dollar bill have a lot in common. Both, surprising invaluable in today’s society, but made valuable by word of mouth.

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

Nucci, Charles. Personal interview. 10 September 2017

Nucci Maria. Personal interview. 10 September 2017

“Historical Gold Prices Annual high and low Gold prices since 1972.” Historical spot gold prices, onlygold.com/Info/Gold-Price-History-Since-1972.asp. Accessed 10 Sept. 2017.

Stone Money—Flyerfan

Money is a vital factor in our society today. It buys houses, pays bills, and even can build cities. Money is also used in everyday business, being exchanged for products or services. Money may be vital to society, but is it vital for humans to live? Money physically cannot feed a family, it cannot clothe people, cannot be put together to build a house, so what is money all about? If I walked on the street and asked different people what money was, I would probably get different responses from each person. However, each response would be along the lines of “money is used to buy stuff.” Others may have to take time to think of their response. The official definition of money is a current medium of exchange between coins and bank notes. This is a definition defining money as a physical item, even before this assignment I too thought of money as a physical item. However, after thinking about it, I assure you that it is far from it.

When I head over to a gas station or convenience store, and use the ATM, you receive a slip of paper confirming your transaction, it gives you the balance of your account. If the balance of the account is for example $5,000 dollars, then that $5 grand isn’t right there in your hands on the slip of paper, and there is not a little compartment in the ATM that holds your 5 grand. The banks physically do not hold all of your money in a little room, your money is circulated all over the world. Here is a physical example to help you understand, say I get paid a 100 dollar bill. Holding this germ covered, green piece of paper with 100 written all over it, you see Ben Franklin looking at you with pride. Say I take this green piece of paper, draw a red X on it and deposit it in the bank, a week later I go and withdraw 100 dollars. Will I get my red X 100 dollar bill back, no I will not. When I deposited that 100 dollars the only thing that changed was a number on a computer system. That number can be viewed by the bank, by an ATM machine, and by me on a banking app. Our red X 100 dollar bill has now been taken into the banks safe where it is put into circulation. What does this mean, this means that if another person comes by to withdraw 100 dollars they may wind up getting my red X bill. Then they deposit it, and the cycle continues.  If you think about it, money is just an abstract concept. A long time ago in the early stages gold was the only currency of our country. To buy food, or water you would actually have to hand the clerk a piece of metal. Then the abstract concept of paper money was born. Due to the unfavorable test of lugging gold around, you could go to the bank and exchange cash for gold. You could get 1 dollars worth, or 1000 dollars worth, just as long as you had the cash. The money was just an abstract concept because it represented the gold sitting in the bank. If all the gold suddenly disappeared one day, then all the cash would be worthless. For example if I went to the bank and exchanged a little bit of gold for cash, but suddenly the gold disappeared, my cash wouldn’t be worth anything, the cash was just a convenience. It was almost like a title on a car, you can give another man the title, and yes he may own it, however if there is no car then he is just holding a piece of paper with a name of a car.

In the late 1800s and early 1900s there was an island near Germany called Yap. The people of Yap used fei as their currency. However, fei is very special because it is a large wheel like stone. The fei is made from limestone which can only be reached on another island. Milton Friedman talks about how these people on the island of Yap, use fei as their currency. “Their medium of exchange they call fei, and it consists of a large, solid, thick, stone wheels, ranging from a foot to twelve feet,” says Friedman. The people on Yap’s currency is enormous, it cannot fit in any wallet I own. The people on Yap had to go to another island which was 400 miles away, and had to carve the fei from limestone. Limestone was not found on Yap. The people used canoes and rafts to make the treacherous journey. With extremely heavy stones and flimsy canoes and rafts, something is eventually going to happen. When talking about the people of Yap and their currency the NPR broadcast states that,”You don’t actually have to have the stone to own the stone. The stone is sitting on a path or something, and everybody knows that I own it.” You physically do not have it, but in everyone’s mind you do. One day while sailing back to Yap, the canoes sank, sending all the fei to the bottom of the ocean. “They came back and told the people of Yap what happened, the people of Yap said that’s fine, thats no problem,” “the stones at the bottom of the ocean are still owned.(said in NPR broadcast)” So the people of Yap physically did not have the fei in their possession. They just had the possession of the idea of the fei. For example, say I’m on Yap and have 3 fei, ones in the ocean, ones on a path somewhere, and one is in front of my house. A random stranger from the US comes by and sees my house he would assume I have 1 fei, but my neighbors on Yap would know I have 3 fei.

While searching around about fake, abstract money I noticed an interesting article titled, “How Fake Money saved Brazil.” In the article, Channa Joffe-Walt talks about “how an economist and his buddies tricked the people of Brazil into saving the country from rampant inflation.” Joffe-Walt talks about the crippling inflation that had hit Brazil.” In Brazil, inflation was killing the economy. Milk, and eggs would be priced at a dollar one day, the two dollars the very next day. People would have to run faster than the clerk who would mark up the prices to get the lower prices from the previous day. With many factors like inflation, who knows what can happen? The stock market crash, and the housing market crash are all reminders how are economy can be crippled just like that.

What is money? This question has been asked forever, and is still being though about today. My definition is that money is fake, it is an illusion of our society today, it is a status symbol, a tool, and sometimes a savior. It does not accomplish anything physically, just metaphorically. You cannot build a house out of money, but you can pay for one. There may be physical items paper money, gold, coins, and fei, however money is just fake.

Work Cited

Work CitedFriedman, 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.

Joffe-Walt, Chana . “How Fake Money Saved Brazil.” NPR.org. 4 Oct. 2010. 9 Sept. 2017. <http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil>;.

 

Stone Money—LifeisSublime

P1. The first time I was exposed to this topic of money, my first thought was that money ruled the world. It has the power to give authority,  power to provide a desirable lifestyle, and is the one thing, that I believe, separates society.  So when I heard about the Island of Money and the concept they have on it, I was very intrigued to look deeper into it. I wanted to find the answer to the question, ‘is money just a concept?’ and compare it to the way that Americans see this “concept” or actuality of the paper dollar bill we all pass around. The first thing I looked into was the currency for a small island on the Pacific Ocean called Yap. Then I listened to a podcast of Brazil’s economic downfall and what they did to save it. After that I looked into the economy for America and compared it to what I have learned in order to answer the question while also relating it to what I know as an American.  Through all this research I was able to open my mind and see what money is really all about.

P2. The island of Yap is a small, barely visible island located in the middle of the Pacific Ocean. It gets a lot of attention, despite it’s size, because of their currency and how they operate their exchanges of money. People of this island don’t hold wallets with paper money on them, but instead use big carvings of rocks in the shape of circles as money. These rocks are carved from limestone and have been the islands currency for decades. No one when it started, but the people of this island have been using the possession of the stones to rank the wealthy. One story in particular comes to mind when discussing whether or not this may be something physical, like giant stones being traded throughout the island, or if it is in fact a concept that we can learn from Yap. There was stone, so beautiful and big that is was considered the nicest stone the island had. Apparently, on the way back to the land, from carving it, the men on the boat dropped it overboard and the stone suck to the bottom, unretrievable by anyone. The family that had this stone made did not fret over not having the stone in their possession, for everyone in the village knew it was theirs. This stone has been traded and owned many times, without actually being present to stand it’s own in these trades and payments. That’s where the concept part comes from. The fact that these people on this island are able to still use this currency without actually having the proof, because it’s at the bottom of the ocean, makes the question come alive. For this particular situation I would have to give it to the idea of money/currency rather than physical possession. “Yes I have the money, not with me, but you know I have it because I said so and all the people in the village know I do”. It honestly makes you think in depth about what money, whether it be a stone or paper, has to do with our society and everyday living. For the people of the island of Yap, money is no more than knowing what you have and what you don’t and to me that is a powerful point/concept to have.

P3. Very different from the people of Yap and their stone currency, Brazil was facing an economic downfall with 80 percent of inflation making it unbearable to support oneself/a family with the currency. It wasn’t until four men from graduate school came together and came up with a way to change the game of money exchange in Brazil. They came up with a way to literally trick the system and in the end saved the economy and stopped the inflation, allowing 20 million people to rise from poverty. The inflation was making all the prices rise on almost everything from essentials to groceries. The URV’s were created on a virtual base, valuing to the cruezeiros whenever the value went up. One URV could equal 10 cruezeiros or 20 depending on the inflation, but people didn’t know that. This system was created in order to install faith back in the currency in the people living through the inflation, and it worked. The URVs values eventually became stable and they became the new currency for Brazil. This was interesting because these people still had money in their hands, but they didn’t know the value of what they had. Like the people at Yap, they just knew that they had money to spend and pass around, focusing more on the trade concept and having faith in what was being exchanges. I took this as a concept as well because the value wasn’t always there, but they were worth the same every time. People grew to accept it, going off of something that wasn’t real. Brazil used a fake currency, that rock was on the ocean floor, same thing.

P4. To make this more relatable I looked up the economy that America has been facing for the past decade and tried to compare it to both Yap and Brazil. In America we pass around paper bills that supposably are worth, or were worth gold (gold being the most valuable thing on the Earth at one point). Paper versus gold. Then it occurred to me that not everyone gets paper dollars, physical, but paper checks that claim that money is known as yours, non-physical. That is the same as having a URV that is claiming to be something when you never actually see the physical worth of it, it’s just numbers on a piece of paper, or more recently, digits that change when you check your bank accounts. Having money “known as yours” sounds very similar to having that rock in the water but still knowing that the worth of it is yours. Comparing what I know from the island of Yap and Brazil, this isn’t an uncommon thing. I do believe that money is a concept.

P5. The way I thought of money has changed. I still think that money has power and does provide a certain social status, but after learning what I now know I believe money is a concept. The concept of money was created to replace physical trade making it more convenient and “reliable”. The people of Yap show us that no matter where the money is, in the ocean or in the bank, as long as we know it’s ours it’s worth something. The Brazilian people showed us that the value isn’t important unless you make it about that; that money is set but goes up and down so often that it might as well all be fake. I have changed my mind on money and do believe that the concept was something we as humans have created in order to set social status and property ownership.  

Works Cited

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

“The Invention of Money.” This American Life. N.p., n.d. Web

Thomas, M. (2014, October 13). What a stronger dollar means for the economy. Retrieved September 10, 2017, from https://www.cbsnews.com/news/how-will-a-strengthening-dollar-affect-the-us-economy/

Stone Money—rainbow

P1. As defined by the widely used and accepted dictionary Merriam-Webster, money is “something generally accepted as a medium of exchange, a measure of value, or a means of payment.” However, this textbook interpretation does not explain the abstract question as to why society accepts a flimsy piece of paper or a transfer of virtual numbers on a computer screen as a sign of growth. As a small child I can recall asking my father a very similar question. I frequently asked “Why is money worth anything? It is only paper. Why do people care how much paper they own?” My father struggled to provide an explanation that I found sufficient. I decided, with my decision being recently confirmed in a podcast entitled “The Invention of Money,” that the only thing that you need for money to work is for people to believe in it. If people believe that it is valuable, then it is valuable. As soon as trust is lost, the value is also lost. It is similar to a car. When a new model is released, everyone wants to get their hands on it. However, one year later, people no longer want the old car. Therefore, it loses value. This simple yet complex theory has been proven true in a variety of ways among many different societies.

P2. It is difficult to comprehend the simplicity of a currency system. The island of Yap, a small island located in the Pacific Ocean, has a monetary system comprised of large stones called Fei. In the United States, small paper bills called dollars are exchanged regularly. Although being physically extremely different, the Fei and the dollar are one in the same. The only source of security that either provide is their respective society’s trust in the object’s worth. In Yap, if ownership of a Fei is transferred from one person to another, the Fei is not physically transported to the new owner. Everyone in the community simply accepts that ownership has changed from one person to another. Milton Friedman’s essay entitled “The Island of Stone Money” chronicles this concept even further. In the 1800’s, Yap was a German colony. Upon inspection of the island, the German government insisted that the citizens of Yap work to fix the roads. The people refused, so the Germans used black paint to draw crosses on many of the Fei. The black cross represented German ownership. It was done to motivate the people of Yap to abide by the German’s wishes. This small action caused the citizens of Yap to quickly agree to fix the roads. Once the task was completed, the paint was washed away and the Fei once again belonged to the original owner. It is strange to think that a small action such as painting an object can cause an entire group to believe that they are losing wealth. The Fei was never moved from its location, yet to the people of Yap, the Fei was no longer theirs to own.

P3. This idea has been displayed throughout history many times. An example of this occurred during the span of time when the United States backed their money by gold. France did not want to depend on the pieces of paper that represented the gold, so the country asked the US Federal Reserve Bank for their supply of gold upfront. Instead of physically sending France their gold, the Bank chose to move the gold to a separate part of their office and essentially, label it as “France’s Gold.” No objects were physically traded. Although the gold was still in the United States, it was considered to belong to France because people believed that it belonged to France. In comparison, an article written by Anne Renaut for Yahoo! News discusses a virtual currency system called Bitcoin. The entirety of exchanges conducted through this resource are done on the internet. Physical objects are never traded. The only representation that ownership of funds changes is a number change on a computer screen. Although seeming trivial, the significance of this change is confirmed by the trust that people put into it. In every case discussed, the exchange of money is considered important and valuable because people believe that it is so. Without this faith, money would not succeed as a system of exchange.

P4. In the late 1900s, Brazil struggled with extremely high rates of inflation. At its highest, the inflation rate was eighty percent per month. It was the norm for people to spend their paycheck as soon as it was received because the money was losing its value. In comparison, it was as though someone was handed the equivalent of a US one hundred dollar bill on Friday night, and it would be worth significantly less 0n Saturday morning. Brazil’s problem with inflation originated in the 1950s when money was created to fund the building of a new capital to be called Brasilia. Due to the mass production of money in a short time period, all money lost value. This issue worsened for the remainder of the century until several economists implanted an entirely new form of currency. People had lost faith in the old system of currency. Therefore, it was no longer functioning properly. By creating a new system using the real, people once again trusted that their money was valuable. As the citizens of Brazil adapted to the new currency, inflation rates quickly returned to a reasonable level. This event further emphasizes on the point that trust and belief are the primary reasons that money is considered valuable.

P5. It has been proven in a multitude of settings and cultures that a successful economy is formed and maintained by trust. In order for money to be valuable, people have to believe in its value. Without trust, a dollar bill would be nothing more than a piece of paper, and a Fei would be nothing more than a large stone. It is important to realize how powerful the idea of trust truly is. Without it, a functioning currency system would not exist, along with many other concepts. Belief in an idea is what gives it its power and influence over a group. Because we as a society believe that money represents wealth and influence, we consider it valuable. Therefore, it is valuable. My perspective on this topic has not changed drastically since reading more about it, though I do appreciate the acquired knowledge. As a child, I often thought about topics of the like, and I still believe that if were people not to believe in the value of the dollar, the Fei, the real, or any other form of currency, that it would not exist as it does today.

Works Cited

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

“The Invention of Money.” This American Life. N.p., n.d. Web.

“Money.” Merriam-Webster. Merriam-Webster, n.d. Web.

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

Stone Money—Princess45

 

How do you answer the simple yet difficult question, what is money? Growing up I money was what you needed to do everything and anything. I always thought money was worth so much! I would ask my popop for dollars all the time and I thought I was rich! Then I realized my poppop had other kinds of dollars with larger numbers and I was confused as to why some things could be one or two dollars and something else could be five or ten and so on. As a little kid I would run around with the dollar showing everyone what I had received and then someone told me to save it so I could start a college fund. Confused, I said okay and put the dollar somewhere safe, not know that that dollar would decrease in value every day.

Now if you were to ask me that same question now, I would answer. Well the definition of money is a current medium of exchange in the form of coins and banknotes collectively. But how can that be true if we have things such as credit cards and electronic banking? In the stonemoneyessay.pdf it states “A noteworthy feature of this stone currency … is that it is not necessary for it’s owner to reduce it for possession. After completing a bargain which involves the price of a fei to large to be conveniently moved, it’s new owner is quite content to accept the bare acknowledgment without so much as a mark to indicate the exchange, the coin remains undisturbed on the former owner’s premises.”  But how can that money have a new owner if the old owner still technically owns it?

For example, again as it states in stoneymoneyessay.pdf  “When the German received ownership of the Caroline Islands, after the purchase of them from Spain in 1898 many of the paths and highways were in bad condition and the chiefs of the many districts were told that they have them repaired and put in good order. Coral was good for the natives and many were the repetitions of the command, which still remained unheated. At last it was decided to impose a fine of disobedience on the chiefs of the districts… The fine was extracted by sending a man to every failu and pabai throughout the disobedient districts, where he simply marked a number on the most valuable fei with a cross in black paint to show that the stones were owned by the government. This worked like a charm and the people thus dolefully impoverished… Then the government dispatched its agents and erased the cross and the fine is paid.

Stone money and numbers in your bank account are the exact same thing. Just because you do not have that money in your sight or touch doesn’t mean that that money is not yours. As long as everyone knows that you are now the rightful owner of the stone it is yours.

 

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.

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