The Value of Green

When we first hear about the island of Yap and their money, we think it’s counterintuitive that the transfer of limestone rocks (some of which are never seen) could be physically exchanged in return for tangible goods and services. On Yap, a small group of islands in the Pacific Ocean, a large, cylinder-like stone, referred to as a rai stone, was used as a source of currency to pay for trade amongst the Yap Islanders. In the article The Megalithic Money of Yap, Stella Novus said, “the rai stones were special, reserved for things like a bride’s dowry or exchanged when one tribe came to the aid of another in time of war and hardship.” Yap came to trust in their money so completely that they dispensed with the need to move huge stones from one person’s house to another. Ownership of the rock “changed hands” only metaphorically. So why does it at first seem counterintuitive, and then, when we (the “moderns” looking back at the changeover) compare it to our own system, why does it seem to be at least as reasonable as ours? Of course, money did not simply acquire power. It had to legitimize under the counterintuitive notion that paper could be equivalent to gold. Once this idea took hold, we developed a system similar to the island of Yap by transferring money electronically (that could be paid later) in exchange for palpable goods and services. Our trust in technology and money (most of which is never seen) correlates directly to the Yap’s trust amongst other islanders and limestone rocks.

Our banking system [via online banking, direct deposit and paperless bank statements] makes an economy run smooth and effectively. On Yap, a limestone (that may not even be real) was being exchanged for tangible good or services. Yap had an abstract concept of the value of money (relative to currency) long ago and we’ve seemingly advanced this idea by accommodating to an ancient method of valuing money. By reflecting and seeking out the insufficiencies in Yap culture, we were able to build a more sufficient economy that’s fast and efficient.

The intrinsic value of money stems from how people perceive its worth. Worth can be defined through the perceived importance of something palpable or impalpable. For example, the Blackfeet tribe, an indian tribe in Montana, found value in their horses after utilizing their beneficiaries and capabilities. A horse could carry large amounts of luggage and allowed Native Americans to both move and catch their prey quickly. All of these attributes were seen as assets that gave a horse value. The Native American’s ideology directly correlates to America’s perception of a small, green slip of paper. Take a sandwich for example. A sandwich could have cheese, turkey and mayonnaise, however, without bread the sandwich is incomplete and unworthy. The people are the missing bread to the sandwich.The public’s faith in the value of currency allows an economical system to run effectively. Once the public establishes a little bit of faith, the value of currency develops. Humans, in the most basic form, have the ability to determine what is and isn’t significant to them.

Money originated from a string of shared beliefs in Yap, a small group of islands in the Pacific Ocean. A large, cylinder-like stone, called a rai stone, was carved of limestone formed from calcite crystals. Rai stones were used as a source of currency to pay for trade amongst the Yap Islanders. The rai stones weighed in at nearly 4 metric tons, which made it nearly impossible for people to move these stones around. How did the Yap Islanders know who owned the rai stone? Truth is, the rai stone switched hands rapidly and had new owners more frequent than not. The people figured out who owned the stone pending a tradeoff among two of the islanders. Although it seems ridiculous, Yap paved the way for American economics based on their transactions and cultural practices.

In “The Megalithic Money of Yap,” Stella Novus notes the similarities between our present economy and the tribal culture of Yap.  Online banking is an electronic payment system that enables consumers to make transactions via the Internet. Online banking started in New York in 1981, with the help of large banks such as Citibank and Chase Manhattan. New York set a platform for the online banking system by creating an new, innovative way to make business transactions both quick and easy. People are now able to make a payment online with the click of a button. The physical storage and distribution of money has been revolutionized by technology. Management and movement of cash during the 20th century may have been very complex on the island of Yap, but at the same time there is an obvious connection. On Yap, people may not have been able to see their rai stones, but they knew they were on the island somewhere. This relates to the idea of online banking because we might not able to see our money, but we make the assumption that our money is placed safely in the bank of our choice.

In 1931, France necessitated that the United States pay them gold to help stabilize their economy. Instead of physically sending the French gold, the United States set aside gold in their national bank to satisfy the French. The gold assumed ownership, by virtue of their agreement, under France’s name similar to early Yap practices. As French gold reserves grew, the United States gold reserves plummeted, thus causing the downfall of the U.S. economy.

In 1994, during the presidency of Itamar Franco, Edmar Bacha introduced the idea of the “Unit of Real Value”. The “Unit of Real Value” was virtually make-believe money that served as a unit of currency used to value goods. How did it work? In “Brazil-The Real Plan,” Country Studies explains that the number of cruzeiros rose every couple of days while people were distracted by the idea of new currency. For example, someone may buy an apple and use one “Unite of Real Value” worth ten cruzeiros. The next day someone might by the same exact apple and use one “Unit of Real Value” worth twelve cruzeiros. The fluctuation between the underlying worth of the apple drove inflation numbers back to normal. Bacha’s plan saved Brazil’s economy by stabilizing inflation in the form of a new currency.

Ultimately, the United States does not differ much from other economic backgrounds. A slip of paper was a simple concept until someone wrote symbols on it and deemed it essential to our way of life. France gained its wealth with gold that was stationed in the United States. The evolution of money has made its way into the digital form. Brazil’s economy has made a drastic recovery based on the public’s blind faith in something fictitious. Yet, we still ask, what is money? The only rational explanation is that money has no intrinsic value. Currency is a string of beliefs that has been made up to make it easier for someone to purchase a horse without having to trade a pig or cow in return. In the end, none of these scenarios would have been accomplished without the individuals behind them. As Edmar Bacha believed, the people are the foundation for an effective economy.

Works Cited

Country Studies. “Brazil- The Real Plan.” Brazil- The Real Plan. U.S. Library of     Congress, 2012. Web. 13 Sept. 2016.

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford            University, Feb. 1991. Web. 13 Sept. 2016.

Moore, E.R. “Horses and Plains Indians.”Horses and Plains Indians. Rolf E. Moore and Texarch Associates, Feb 2013. Web. 02 Nov. 2016.

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

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

 

It All Began With Stone Money

P1. Money is the idea of worth in a physical form. Before there was a physical form of money people used the barter system. The barter system was the exchange goods for things people needed and sometimes even labor exchanges. For example if someone had a goat that produced high quality milk they would get a lot of people trying to barter for the goat. If those people tried to barter something that held no value for the goat the trade would be unsuccessful. The barter system only works if both parties benefits from the exchange. Somewhere along the line the idea of money was invented. Money made it easier to acquire goods because everyone can benefit from having money. In the barter system someone had to have exactly what the seller needed or wanted. Money has this made up value that would be easier to exchange for goods. If someone had a pig that they thought was valuable but no one wanted it, the pig would then be worthless. People may value this pig differently.  On the other hand everyone values money so it would be easy for the pigs owner to get an even trade.

P2. The value of money is the mental reassurance of wealth. One might question what mental reassurance of wealth has to do with money. Simply it is the only reason we are able to keep track of the value. We are reassured that the money we have can purchase a curtain amount of things. People place a value on money to keep track of things that can be purchased with the money. The mental value of money will change but the money will always be worth something. In the past America has had it’s hiccups with the value of the U.S. dollar. There was a request that was granted by the U.S. from the French to convert dollar assets they had in the U.S. into gold. This made the markets look at the U.S. dollar as weaker. The French believed that the their money was worth more than the U.S. dollar. The French wanted something they thought was worth having so they asked for gold. Even though the gold was worth the same in U.S. dollars the French wasn’t reassured that the U.S. dollar was worth its weight in gold.

P3. The Yap’s way of using money was similar to ours, but its different in many ways. The Yap had money that was made of stone. The Yap never exchanged hand and hand with their stone money “fei”. They might think our concept of exchanging money hand and hand to be bizarre. The Yap simply changed the ownership of their fei without moving it. Their stone money was to big to move. Their money was made of a carved, large, solid, stone wheels. Some of them had a diameter of twelve feet. These stone wheels would be take a lot of work to move so they left them stationary. We exchange money for most of daily our transactions. The Yap might also look at our money itself as bizarre. To them our money might look like just a wired and colorful piece of cloth with a picture on it.

P4. Even though we have differences from the Yap we also have similarities. The Yap could have ownership of a fei even if they have never seen or touch it physically. Similar the Yap we also have money we never see or touch. When we get our checks directly deposited into the bank we don’t see the physical money but we know its there.The Yap’s belief in each others word is like beliefs in religion. Believing in something that you have never seen before is the basis of religion. In religions, people believe in their Gods even though they have never seen God. If the economy was the religion of the Yap the fei would be their God. There was one specific fei that was claimed to be at the bottom of the ocean unseen.The only people that claimed they saw it was the people who carved it. Although it was out of sight people still believed it was there. This is similar to the way people believe in God. No one has ever seen God but we believe in God. This stone changed ownership many times like religion is passed on for generations.

P5. Brazil had similar problems as the U.S. with the value of their money. Brazil’s citizens lost faith in their currency same as the markets viewed the U.S. dollar as weak. The inflation rate in Brazil would go up 80 percent per month. This meant that a item can go from costing one dollar all the way up to one-thousand dollars at the end of the year. This caused the citizens to devalue their money. The government of Brazil tired to restore the faith of their citizens, but it took an idea of four guys at the Catholic University in Rio to actually restore the faith. They came up with a idea that tricked the citizens into thinking their money would hold its value. They used a currency that didn’t use any coins or bills. The currency was simply not real. This new currency was called Unit of Real Value. The original currency was the cruzeiro witch was still used but everything would be listed in the fake URV currency. The URV’s stayed stable while the amount of cruzerios each URV was worth changed. This system worked because on any day a product would cost 1 URV. That 1 URV might be worth 30 cruzerios. The next month the product will still cost 1 URV but that URV would cost 35 cruzerios. They wanted people to think in URV’s. As time went on people started to see that URV’s were staying stable. Soon the URV became the country’s actual currency. They called it the real.The economic system was now based upon the real. Inflation ended and the country’s economy got better. Brazil became a major exporter, and 20 million people came out of poverty. The trick they pulled was nothing short of a miracle (Joffe-Walt).

P6. The public’s faith in the value of money is so important because we determine what things are actually worth. If we don’t have faith in our money we will reject the currency. Brazil had that problem with its citizens and they struggled to get there economy out of depression. We try to place a dollar mount on everything we deal with on a daily basis.

P7. Every nation deals with their economic issues differently. For example, Japan spent 12 trillion yen in fiscal stimulus measures to boost its nation’s economy. Their plan was to accelerate a recovery from recession as Prime Minister Shinzo Abe pledges to boost growth and end deflation in Japans economy. This can be a good thing short term, but when the time comes to pay the money back it will be a problem (Sharp).

 Works Cited

Chana, Joffe-Walt “How Fake Money Saved Brazil” NPR.org  http://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil

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

Sharp, Andy. “Abe Seen Spending 12 Trillion Yen to Boost Japan’s Economy.” January 7, 2013. http://www.bloomberg.com/news/articles/2013-01-07/japan-to-spend-12-trillion-yen-to-boost-economy-yomiuri-says

 

 

Kit-Kats for Nerds

Children do not understand the value of money. On Halloween, they’ll trade a Kit-Kat for a box of Nerds, but they won’t take a dollar for that same box. Humans, on our most basic level, value trade of goods and services for something comparable in return. This system of trade has become bastardized, however, from exchange of goods to exchange of gold, to paper, and so on, until we don’t even know if what we’re exchanging even exists. For the most part, it doesn’t. It is simply numbers on a screen that tell us that we have the power to buy something that we need. People agree that something is worth a dollar, so it is, but that value can change at any time, leading me to believe that money has no intrinsic value whatsoever.

In his essay “The Island of Stone Money,” Milton Friedman describes an island in the Western Pacific Ocean, as a piece of the Caroline Islands, called Yap. Its inhabitants are fairly unremarkable, save for how they do business. Their particular form of currency consists of sometimes giant limestone discs gathered from over two hundred miles away. The stones hardly ever actually change hands, as carrying them would result in breaking said hands. So instead, everyone just agrees that a stone has a certain owner. Something large is purchased, and everyone is notified that the stone’s owner has changed. One family is incredibly rich, but has never seen its riches, as they rest at the bottom of the ocean. However, everyone knows that it is theirs, so it is.

Friedman also mentions a similar situation between the United States and France. Concerned about the value of the dollars they held, France wanted something more tangible in their possession to assure them of their fiscal security. However, instead of physically sending gold to the French, the Federal Reserve set aside gold for France. Gold was put in a drawer, labeled “France’s Gold” and everyone went about their business. The actual gold did not travel anywhere, but everyone now knew that it was France’s gold. This is no different from the family whose wealth lies at the bottom of the ocean. It is as if the child on Halloween has set aside a Kit-Kat for their friend, but the friend never eats it, and the child starves without their Kit-Kat to eat, as the setting aside of gold essentially ruined the US economy.

The fiscal cliff is a relatively modern term, but can be applied in the situation of 1933, when the US economy came tumbling down because of gold in a drawer. Calmes states in “Demystifying the Fiscal Impasse That Is Vexing Washington” that in recent history, the fiscal cliff refers to the possible rise in taxes and cuts in spending that would take effect in 2013 due to a federal deficit reduction plan. This would essentially destroy the economy just because someone made the decision to, meaning that any specific set of circumstances could send an economy into chaos at any time.  If any set of circumstances could manipulate the value of a form of currency and its spending power, then it must not have that much power to begin with. As previously stated, the dollar is worth whatever people agree it can buy, but at this point, that could change at any moment.

In an NPR broadcast entitled “How Fake Money Saved Brazil,” Joffe states that in Brazil, they don’t have dollars. But that doesn’t mean that their currency is not easily manipulated and their economy not fragile. In 1990, inflation was so horrifically high that prices were increasing by 80% each month, with no federal government able to successfully intervene. That is, however, until 1992 when four economists put the Unit of Real Value into play, which was essentially currency with nothing to back it up. Prices stayed stable at a certain amount of URVs, wages were always in the same amount of URVs, everything was in URVs and inflation practically disappeared. Glass expands on this in “423: The Invention of Money.” by saying that people had not had faith in their previous currency, but they certainly had faith in URVs, and that is what fixed the Brazilian economy.

This goes to show how much sway public faith in currency has on the economy. Even if fake money is being used, people will see stable prices and believe in a stable economy. But who is to say what is fake and what is not? The legitimacy of money lies in what valuable commodity it represents. In the United States, that used to be gold, but in recent years the federal government has denied that gold has any bearing on the modern dollar. So the dollar is worth whatever it can buy. In one store, this may be a pack of gum. In another, it may be a child’s toy. People simply agree that something is worth one dollar, and everyone seems to accept it. But in modern times, physical money doesn’t even have to change hands in order for payment to be made.

We live in a digital age, and that ushers in digital money. In “Bitcoin Has No Place in Your – or Any – Portfolio,” Reeves describes one very prominent form of digital money, Bitcoin. This is a completely digital “mine-able” currency that some businesses accept as payment. From the beginning, its creators have admitted to its lack of true worth, as it is not backed up by anything physical, but customers still spend dollars on bitcoins. The linen and ink of a dollar is gone from their hands, and in return a number on a screen increases. Instead of trading a Kit-Kat for Nerds, they have traded it for an imaginary friend. A child believes wholeheartedly in the existence of their imaginary friend, and that makes it a part of their reality. The imaginary friend can provide entertainment and companionship, just as the Bitcoin can provide goods and services from certain businesses. But neither the child nor the Bitcoin customer have anything physical, and their fantasy only exists because they believe it does.

If anyone can make currency out of nothing, such is the case in Brazil and with Bitcoin, then what value does traditional currency have? That is, if currency is even used, and it is not just numbers on a computer screen that tell a person that they have currency. People are told to work for this number, people die because they don’t have this number, people base their entire lives around numbers on a screen, simply because everyone agrees that that number is the be-all-end-all of economics.

In the end, the United States is not that different from the island of Yap, of 1990’s Brazil, or any economy that uses money with “no value.” Items have value, such as the Kit-Kat that is traded on Halloween, or the food exchanged for labor in the dawn of economics. Money used to be backed by valuable metals, but that is no longer the case. Virtual money is coming into power and even physical currency has no concrete backing. The only logical conclusion is that money as we know it today has no intrinsic value. We have all been tricked into believing in the URV, we all have giant stones that we agree someone owns. The economy that fuels millions of lives could disappear tomorrow and no one would have any less. In fact, a lack of a modern economy, at this point, sounds like a better idea. The world may be better off going back to trading corn for labor. At least I can eat corn. How am I going to make dinner out of Bitcoins?

 

 

Works Cited

Calmes, Jackie. “Demystifying the Fiscal Impasse That Is Vexing Washington.” The New York Times. The New York Times, 15 Nov. 2012. Web. 10 Sept. 2016.

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

Glass, Ira, Chana Joffe-Walt, Alex Blumberg, and Dave Kestenbaum. “423: The Invention of Money.” This American Life. Prod. Planet Money. 7 Jan. 2011. This American Life. Web. 11 Sept. 2016.

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

The Not-So-Absurd Idea of Stone Money

 

A couple of days ago, if anyone were to ask me what was the concept of money, I would have told them that it is a way to buy or sell items. I would also add that here in the United States, our money comes in the form of individual dollar bills and little metallic coins. The more a person possesses of these forms of money, the richer they are. This country’s current society believes in this concept, accepting it as pretty straightforward. However, the reality is that money is a concept so abstract, that it can either be represented by green paper bills or unmovable stone circles, and still work in the same way.

So what is the true concept of money? Well, as A. Freeman says, “Money is primarily a medium of exchange or means of exchange. It is a way for a person to trade what he has for what he wants.” This is similar to what I previously thought, and is in a sense true. However, it does not explain the whole truth. As Ira Glass reveals in the podcast The Invention of Money, “Money is fiction… money never existed… No money changed hands, no money vanished… Money is not solid. Its value could disappear.” There is the answer- money is not real. It is an abstract concept used as a medium of exchange or means of exchange and whose value may change. And the money is worth a certain amount because everyone accepts said amount or value. To illustrate this point, let’s travel to a little island called Yap, on which massive unmovable stone currency was used.

In his article titled The Island Of Stone Money, author Milton Friedman features a quote  by American anthropologist William Henry Furness III about the inhabitants of Yap and their currency, which states, “Their medium of exchange is called the fei, and it consists of large, solid, thick, stone wheels…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.” Money on Yap is represented by these stone wheels, and the transfer of money for purchase is accepted through word of mouth, without these wheels actually moving. Everyone on this island trusts an individual when they say that they have earned the neighbor’s stone in exchange for a service. The word of mouth process is accepted, and the idea of lying about the ownership of a stone is generally out of the picture. A popular example of this is a story about a group of individuals who were transporting a huge stone wheel on their ship from one point of the island to another. En route, a storm broke out, causing the stone to sink to the bottom of the ocean. Once the group were able to safely return back to land, they told the people they encountered that they were carrying a massive stone wheel and that it is at the bottom of the ocean. The listeners accepted this account as fact, without seeing any proof, and offered items to the individuals based off how much they believed the stone was worth.  The actual money is never really there, but through representation of stones and accepted word of mouth, the inhabitants of Yap had a working currency system. In fact, the way we use money today is not too different from those of the islanders.

Instead of giant stone wheels, we use green pieces of paper, metallic circles, plastic rectangles, and numbers on electronic boxes in order to represent and transfer our money. Instead of accepting word of mouth (most of the time), we use quantity and numbers to show the amount of wealth in our possession. Even with that minor difference, the idea stays the same- and the “actual” money never appears. In our society, as an anonymous author points out in their article titled Money and the Illusion of Wealth, “Over 90% of money is literally created out of thin air via loans and the expectation of debt repayment.” We say that something is so amount, and expect someone else to be able to pay us back with something else of similar value. We are literally picking a monetary price that others generally accept as fact. This is what Ira Glass meant when he said that, “Money is fiction.” Money doesn’t exist, but we believe that it does based off what we use to represent it and how much an individual has of those representations. Think about how most working class individuals are being paid nowadays. People are not given a check or cash for a certain number of hours worked anymore. They instead find out that they have been paid based off what they read as the available balanced in their bank account. How do they know that money has actually been transferred to their account, however? All that is apparent to them is that a couple of numbers related to their bank account have risen in value on the computer screen in front of them. People accept these little digital numbers as proof that they have more money in their possession, even though they have never physically had any contact with said money. The dollars never existed, but have been represented by the numbers. Hence, money is fiction, even in our society.

In the initial paragraph, I made it clear that if someone were to question me on the concept of money and how it works, I would have given a straightforward answer about how it is the way we as a society purchase and sell items, mainly through the form of dollar bills and coins. Now I realize how narrow minded I was at the time. As I have now shown, and as I have personally learned in the past couple of days, money is a concept much more abstract. Yes, it is used as a means of buying and selling. But money also doesn’t exist. We made it up out of nowhere, decided to use different things in order to represent it, chose how much any given item was worth, and finally accepted everything as fact. Based off this truth, instead of pieces of paper, plastic, metal, and digital information, we should be able to theoretically accept anything as money. Why not use live animals?  Why not use other human beings ? (as history has sadly and unfortunately shown). Why not use our own body hair to represent currency? (though I guess my hairless father wouldn’t be too happy). Perhaps we could follow the footsteps of another successful and trustworthy civilization and use Stone Money.

 

Works Cited

Anonymous, Author. “Money and the Illusion of Wealth.” Money and the Illusion of                                 Wealth. N.p., n.d. Web. 13 Sept. 2016.

Freeman, A. “What Is Money?” Economics and Liberty. N.p., 11 Dec. 2015. Web. 13                                   Sept. 2016.

Friedman, Milton. “The Island Of Stone Money.” (n.d.): n. pag. Web. 13 Sept. 2016.

Glass, Ira, and Planet Money. “The Invention of Money.” This American Life. N.p.,                                   n.d. Web. 13 Sept. 2016

P1. There are a lot of questions dealing with the monetary system we use as Americans today. Americans as well as other nations have a vast range of opinions on the concept of money. Americans have their opinions on foreign money, and people from other nations have their own specific opinions on the American dollar. Why will people in other countries take American dollars, but not American coins? They both have the same monetary value, but people in other countries favor the dollar over coins. A dollar bill, four quarters, ten dimes, twenty nickels, and one hundred pennies means the same thing to an American, it all adds up to a $1.00. When looked at from a foreign person’s point of view the coins have less value than the single dollar bill. Most Americans have personal bank accounts and the bank sends statements at pre-disclosed time intervals to each member. These statements can be viewed on a computer, smart phone, or even on a physical piece of paper mailed to you from the bank. On the statement there is the bank members name, address and account information. One can see the history of your withdraws, deposits and transfers. One can also see how much money they have spent over the time period, and how much more they have saved for whatever reason/s. A very popular question concerning the American banks is, “Where is the money that the bank says one has?”. The bank acknowledges the fact that the money is owned by a specific person. That person can use their money at their own will, but can’t see that money that they’re using. Before reading Milton Friedman’s essay, “The Island of Stone Money”, articles about the Brazilian real, and listening to the NPR broadcast of Stone Money I understood the basic concepts of how American banks worked. I never really took my time to try to figure out why Americans use the system they use today and how the banks work . Reading about these topics and doing this research has led to many questions stated above as well as many answers.

 

P2. For one to understand the monetary system in use today we have to look at the history of money. The first upbringing of a monetary system dated back all the way to the start of civilization and it was the bartering system. People traded food for clothes or cattle for water, everyone used items as currency and they knew for example how many chickens you need for a cow. NOVA, the most watched science television program in America, published a timeline of history of money. On their timeline the first monetary system that resembled our current one was dated all the way back to 1200 BC. In 1200 BC the Ancient Chinese used cowrie shells as currency. Cowrie shells is the oldest currency in human history. The Planet Money Team for NPR did a report on the islanders of Yap, a Caroline Island in Micronesia. The report talks about the people of the island Yap and their currency known as “fei”. Their currency was made out of huge chunks of limestone and brought it from islands hundreds of miles away. These pieces were so big that once they were brought back to the island it was put in the middle of the village or on a path and left there. On Yap the islanders did not have to physically posses the fei for it to be theirs. In fact, it was very common to have engraving on the limestone to show who owned it at this time.

P3. In “The Island of Stone Money”, Milton Friedman explains a legend of the biggest fei ever sculpted. It is believed that a boat load of islanders set sale to an island four hundred miles away. Once at this island they sculpted the fei and loaded it on a raft and headed back to Yap. On their return they ran into a bad storm and had to let the great fei go and it sank to the bottom of the sea. When the sculptors returned to Yap they recalled their experiences and the islanders were okay with the fei being at the bottom of the sea because they knew its worth and everyone knew who the fei belonged to. Now, multiple generations after the sculpting of the original fei people have never seen it but at the same time know that the family is the wealthiest family of Yap.

P4. In the current age of technology there is always some new device, new theory, new program, etc. For example, one can order a new phone and next week there is a new update for the processor to run faster. With that being said it is safe to say that technology is growing exponentially. Now there is an app on the Google Play Store and Apple Store called Venmo. Venmo has well over one million downloads and is very popular for college roommates and groups of friends. Venmo is a social network where friends can pay and request money to and from friends. This app is excellent for splitting dinner bills and/or utility bills. The best thing about the app is you do not have to deal with your actual bank account. If someone sends their friend money the app saves that money and they are able to pay other people with that money. One then can transfer the money into their bank account and the money is now theirs. People do not need to see the transactions take place, but know that they have that much money on your account. This is exactly how the islanders of Yap used their fei. It is very interesting that some hundred odd years has passed and the same theories are still in place.

P5. In conclusion, after all of the reading the articles and listening to the broadcasts my opinion on money did not change, but has widely broadened. My opinion  did not change because I had a very good idea on how the current monetary system works. These readings and broadcasts made me really think and evaluate the current monetary system. As Ira Glass explains in her broadcast you can put money in a bank, that money then gets loaned out to a person starting a business. So now, this person has your money but you can still buy things with it. Even after this person purchases something with your money, your money did not go anywhere. Again, I  never stepped back and looked at this scenario like this before and reading about money and the issues money caused in different countries, such as France, Brazil and Germany, allowed my opinion to broaden and learn how to accept how questionable the concept of money really is.

Works Cited

Date, By. “The Invention of Money.” This American Life. N.p., n.d. Web. 22 Sept. 2016. <http://www.thisamericanlife.org/radio-archives/episode/423/the-invention-of-money&gt;.

Friedman, Milton. “The Island of Stone Money.” StoneMoneyEssay.pdf. N.p., Feb. 1991. Web. 22 Sept. 2016. <https://counterintuitive2015.files.wordpress.com/2015/01/stonemoneyessay.pdf&gt;.

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