Rowan Counterintuitive

Whether its Stone Money, Dollars, Euros or any other form of regional currency, these are all just placeholders. A place holder for what you may ask? It is a placeholder for energy or a right of passage that humans seek throughout their lives. What makes this concept tricky to understand is the abstract concept of money. To start, one needs to travel to the island of Uap in the South Pacific to understand how the abstract concept of money has been around for decades, and how not much has changed since. On the island of Uap this pre industrial population in 1910 used a currency that relied on the trade of large round stone sculptures, which were larger than the size of an average male and three times the weight of a grown male. The islanders would trade these humongous stone sculptures for large or important trade deals. So how exactly would they transport these stones? There was simply no need to. If a person wanted to trade their large stone for a product from someone in another village they would simply just give up ownership of that stone. The stone would not have to move, people would eventually figure out who the true owner of that stone is. The similarities of this system compared to that of today is shocking.

So what makes these pieces of paper we call dollars have value? well because people in society decided to make it have value. This method of currency was created to make the trade of goods easier and faster to manage. After learning and reading about “The Island Of Stone Money” one can notice that the inhabitants of Uap had a very similar system to the one we use today. back then, technologically, they did not have the means to obtain “valuable” materials like gold. In the U.S, gold used to be a placeholder, a placeholder for dollars. The gold would be stored in banks and if one wanted the gold they owned they would trade paper gold swaps. Today technology has advanced so much that we can now digitally manage, distribute and view our money through mobile apps and online websites. whether one prefers using credit cards, Pay Pal or bank apps that digital number is a place holder for that dollar on any of those digital outlets. We people in society are expected to trust that digital number we see on our computer screens. Essentially modern day trade is no different from what we saw on Uap, those inhabitants were expected to trust the fact that

The physical dollar is evaporating the more and more technology advances. It is increasing so much that eventually we may see a dollar-less future where society goes full digital. Currency is what controls our societies, pixels on a screen or worthless pieces of fabric in our wallets will always hold value to people, because money is what gives us control over our lives. It is how governments control their nations. it’s what motivates people to apply for jobs and work. it is not about the material the currency is made of it is about how one obtains the money is what makes it valuable.

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 idea of money has always confused me as money is not a constant entity. The exchange of money for things such as food or goods with only a piece of paper does not confuse people as it was established that that piece of paper has worth that is backed by gold which equivalent to the goods that the person was purchasing. However, the worth that people give money is somewhat confusing as the wealth is determined by something as arbitrary and finite as gold. That piece of paper worth one U.S dollar can be worth even more or even less just for being in another country; where the wealth of the dollar and currency of another country, such as the European Pound is determined by something as “economic state of the country”. The concept of having the fabric of how society functions, from purchasing common goods for the everyday man to differences in power in intercontinental affairs, determined by something that isn’t constant sounds absurd. Yet the use of the abstract idea that is money miraculously makes the world turn round.

The faith in money is something that is only backed up with the faith humans put in it, which is absurd. Most societies happened to decide that money would be based on the rare and valuable material that is gold, but the material itself is arbitrary. Money just had to be something that a certain group, whether it be a city or an empire, backed up with any material they wished to. In the intriguing case of the island of Yap, the people of the island decided that gigantic limestone boulders that they held in such high regards would be what represented value. However, instead of making the money that was based off limestone something easily accessible such as the paper money that most people are familiar with, they habitants of Yap decided that they would use huge circular slabs of the material, ranging from a diameter of a foot to twelve feet, with a “convenient” hole in the middle as their currency. This Fei, which is what the island of Yap called the currency, tended to be so large and heavy that moving the Fei was too difficult; so the inhabitants nominally claim the large slabs and everyone collectively understands that the claimed stone is their worth and can be shifted to another person in just name alone. The concept of Fei initially sounds absurd, but the concept is still the same as the US dollar albeit less convenient. Both forms of currency utilize a representation of material where everyone agrees is valuable where they can exchange for other goods based off of the value of the currency. This money which the person doesn’t even have to physically have with them can then be exchanged to another person. What the inhabitants of the island of Yap consider a common exchange can just simply be compared to exchanging things digitally, as both money is essentially just claimed.In fact, a currency that is more current could be considered to be just as bad if not worse than the Fei, the digital Bitcoin. The idea of the digital currency free from the bank seems to be a legitimate idea, but the downfall is that the online currency’s worth is only worth what other people want it to be. This means that the Bitcoin which could sell for the equivalent of $266 on one day could become as little as $54 for essentially no reason.

Yet while Fei still backs up the money with material and Bitcoin’s worth remains changing forever, the handling of the economic crisis of Brazil shows that money doesn’t even have to be backed up by material but by the faith that the money was worth something. During the 1990’s, the constant inflation for forty years made the inflation rate rise to 80% per month, which would eventually make the costs of everyday items insurmountable for the people of Brazil. This caused sporadic changes in the costs of goods that made the Brazilian currency, the cruzeiro, have a sense of inevitable doom for the people. In order to solve this economic downfall, Edmar Bacha and his three friends devised a new currency that eventually replaced the cruzeiro and stabilized the entire countries economy, the URV. This virtual currency was technically based off of the erratic cruziero but everything of society from the wages of the workers to the goods that they would purchase was based on the stable URV that stayed static throughout the increasing costs of the cruzeiro. As the URV became more integrated into Brazil, Brazil simply swapped the failing currency with the URV and the inflation was gone. This completely overturns the very idea of money as something that was backed by another varying currency which was based on the common idea of money

The very idea of money was and will always be an integral part of society. Yet the true complexity and absurdity of what money is truly worth, which can apparently change given different circumstances, leads to show the true faith that people assume about something they deem to be an absolute truth when it is not. Yet people still believe in the worth that a collective whole believes have worth, so money will always have a place to keep the world going.

Works Cited

Friedman, Milton. “The Island of Stone Money.” Working Papers in Economics (1991): 1-7. The Hoover Institution Standford University. Web. 13 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. 13 Sept. 2016.

Anne Renaut, Anne. “The Bubble Bursts on E-currency Bitcoin.” Yahoo! News. Yahoo!, n.d. Web. 13 Sept. 2016.

To illustrate how worthless a dollar truly is, first we must envision the impact the dollar has on an economy. The economy can be affected greatly by the value of the dollar, for example the Great Depression and Brazil. These two examples display that the dollar itself only holds as much value as the people within that region claims it does. During both situations the dollar lost its value and as a result the people in that culture suffered greatly because the economy plummeted. The dollar value changes constantly in actuality the dollar or paper money is not worth much the reason it holds value is because the culture states the value of the money.

Within the essay “The Island of Stone Money,”  by Milton Friedman, he emphasizes a method used for transactions within his story about a cultured known as the Yaps. The Yaps transactions where similar to what the France bank and the United States bank did when the France wanted gold from the U.S. The Yaps transactions never moved however the ownership did. Their currency was in stones and the stone took the place of the limestone that was on a different island. This is relatable to what the France Bank and The United States went through because the bank of France noticed the value of the U.S. dollar was depleting. As a result of the bank of France taking note of this they asked for gold in exchange for their previous transactions with the U.S. dollar. Similar to the Yaps and their transactions the U.S. put a certain amount of gold aside for the French and labeled that the property of France. The French approved of this transaction and likewise to the Yaps transactions the stone never moved, however the owner of the stone changed.

Similarly with the French and U.S. banking situation it reveals how the value of money doesn’t remain the same. Within the Yaps society, the use stones as their currency and the value of their stones can change depending on who is involved in the transaction. The stones held this value due to their society accepting it. However not every person within the society accepted the same amount of stones or accepted what we can get with our stones. Some residents of the society accepted one stone for one cow, while if we walk to another part of the island another person may offer us 2 coconuts for our one stone. Our neighbor may offer us 4 bags of rice for 2 stones, but the person who lives across the river may accept 4 bags of rice for 4 stones. From these different transactions reveals that the value of the stone within the Yap society will vary based on our consumer.

Traditionally people advise us in order to obtain money, we must save our money. However within the article “Back in Power, Abe Aims to Spend Japan Back to Economic Vitality,” by Hiroko Tabuchi, it suggests in order to make money you are required to spend money. This supports within the article when it was stated that those who support Abe’s concept claim his policy will defeat deflation and generate growth. The Japan government has decided they will spend a large amount of money in order to generate a stable economy, while other governments go with a more traditional approach and save their money in order to obtain money. This shows how the value of money constantly changes because Japan is trying to spend more money in order to become stable, however they were put in this situation because they spent too much money in the first place.

Spending too much money doesn’t always produce the same results for each economy. In the article, “How Fake Money Saved Brazil” by Chana Joffe-Walt, she went in depth about how Brazil’s economy was plagued by inflation and each time they tried to spend money the prices of merchandise would rise. Their structure became stable by using a “fake” money system. They used a different currency to take the place of the previous one, however the the new currency the price remained the same. However since no one had euros they used their old currency and used it in place of the new one. For instance, if one bag of chips was one euro last week, it would be one euro this week. Due to no one having any euros that one euro would convert into 7 pounds, however the next week it would remain one euro but it would convert into 14 pounds instead of 7 pounds. This system was able to provide Brazil with the solution to their economic struggle despite the fact it contradicts the concept of the value of money. It is doing so because inflation still was occurring within the economy the only difference was the fact that they attached a physical label to make it appear as if inflation was not occurring. Inflation continued because each week the customers still had to pay more and more, nonetheless from their perspective the price remained the same.

When I think of coins I imagine of pennies, nickel, dimes, and quarters that can fit into my pant pocket. That’s a different story for the people of Yap who have coins that are taller, bigger, and stronger then themselves. They call it fei another name for it could be stone money. Their stone money is a type of rock called limestone. Yap is a tiny island that is in the Pacific Ocean. When I first heard this story I thought it was really silly because they cant move the coin when they claim it. Later when I read the article “The Island of Stone Money” it gave me a better understanding of it. David Kestenbaum and a couple of other people broadcasted about stone money. They were a little astounded about the size of the money. they also understood the value of money. Money is worth whatever we an get for it. It doesn’t really have a real value of it.

Planet Money team did a broadcast of Brazil’s fight against money. In the broadcast called “How Fake Money Saved Brazil” it talks about how inflation in Brazil reached 80% a month just because the government decided to use printed money to build a new capital. Luckily, 4 former graduate students helped save their country’s economy with “fake money”. Everyday grocery store prices went from cheap to expensive. For example, a bag of chips may cost $1, however, after a month it may cost $10 for one bag. People were tricked into thinking that money had value when that wasn’t true. They used something called “virtual currency”. It tricked them into thinking that their new currency was in URV’s (unit of real value), but in actuality it wasn’t. It was a good way to help the economy from heading towards bankruptcy.

My concept for money has change because all my life I always heard people say that money is valuable. However, after reading the essay, listening to the broadcast,and discussing it in class. I have more of an understanding of money. That money could be fiction because it’s what you can get from it. When I heard the story about the United States put gold in a drawer and labeling it “France” it reminded me of the stone money in Yap because they don’t have physical possession of it but we still left it in the drawer for nobody to touch and just put a label on it. Later, we could have used it towards the Great Depression it would have helped us get out of the hard thing this nation went through. If the people of Yap came to the United States and saw our currency and how we spend it I believe they would be shocked because we pay for everything with a swipe of a card.

In the essay, “The Island of Stone Money” by Milton Friedman. He talks about how an ancestor and a group of people went out to found stone money. They were on their way back to the island but there was a strong storm and they group of people had to let go of stone money to save their saves. It sunk to the bottom of the ocean and they came back telling story about their journey. The people of the island decided that the coin at the bottom of the ocean was the ancestors’. Even though it’s not physically in their possession it’s still labeled as theirs. In Caroline Lafargue article,” Yap’s Stone Money” she stated that  “And it could be easy to assume that the biggest stones would be considered the most valuable. But in reality the value can depend on each stone’s individual story.” Each person has a story to tell bout how they adventure to get this big piece of stone.

In the broadcast by NPR, they learned about the stone money at Yap and they figured out that the value of money isn’t really real. For example, when you get paid you don’t get money handed to you nowadays, instead it’s sent to your bank account the only thing that changes it the number you see when you go into your bank account. In my class discussion I found out that the more money I have the less the dollar is worth. For example, If I get paid $288 one week and go to the store to buy something that’s a dollar it doesn’t seems expensive to me because I have $287 left.

Work Cited

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

Goldstein, Jacob. “The Island Of Stone Money.” NPR. Planet Money, 10 Dec. 2010. Web. 13 Sept. 2016.

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” NPR. NPR, 4 Oct. 210. Web. 13 Sept. 2016.

Koning, JP. “Yap Stones and the Myth of Fiat Money.” Moneyness:. N.p., 4 Jan. 2013. Web. 13 Sept. 2016.

Lafargue, Caroline. “Yap’s Stone Money: The Largest and Heaviest Currency in the World.” ABC Radio Australia. ABC Radio Australia, 11 May 2016. Web. 13 Sept. 2016.

Money, it’s something most people use everyday. Why is its existence so perplexing? The factor that it is a mere representation of something of a greater value can be a cause. How could a dirty sheet of green paper come to represent a trust of gold or other wealth? How, is hard to explain, but why is a simpler question; it all falls into the hands of the people who are going to use the currency. Users have to have faith and trust in the economic system in order for it to work. If one takes a look at “Stone Money” written by Milton Friedman, they could see this idea, but in a purified state. On the island of Yap, the natives have taken up, what some may call, a strange monetary system. For large purchases, such as a dowry or buying land, they can pay for them with large stones known as Fei  (Friedman). This is not to say that someone is rolling a huge boulder to their neighbors yard when they want to buy their cow, the transaction can happen without even moving the stone. It is basically the same thing as buying something in store with a credit card, the shopper gets what they want and all they have to do is make an agreement with what was once their money. This fundamental theory is used in Yap, “One person gives it to another person. But the stone doesn’t move. It’s just that everybody in the village knows the stone now has a new owner.” (Goldstein). Buying a cute pair of pumps with a visa card, is essentially the same as buying a farm with a large boulder. Neither the islander’s “fei” or the shoe buyer’s money actually gets moved, just a change of title, and they can get what they want. A more specific example, can be found in 1932-33, between the French Bank and the Federal Reserve Bank of New York (Friedman). France wanted their dollar assets changed to gold, and to save the trouble of shipping it across the ocean, they settled for simply putting the French gold aside in the same United States Bank (Friedman). This mirrors the situation when one islander has a rock on their property that actually belongs to someone else. The idea of non-literal possession, that is so stupefying, is agreeing that the gold belongs to the French because they claimed. The French government felt comfortable knowing their gold was safe, simply because everyone else knew it was theirs. It is kind of like a game of “playing pretend” because nothing is actually happening, the rules are made up as they go. The trick here is the public’s trust in the system. If one Yap islander decided to physically take someone’s stone and claim it as theirs, chaos would ensue. The islanders would then have to fight over the stones instead of the peaceful transition of ownership they had been enjoying. When Brazil began to become desperate in their economic situation, their government too relied on the faith and good intention of the people. Edmar Bacha, a Brazilian economist, came up with a solution for the inflation crisis in Brazil (Joffe-Walt). The important factor in his solution was trust from the people “But, just as important, you have to stabilize people’s faith in money itself.  People have to be tricked into thinking money will hold its value.” (Joffe-Walt). Bacha is counting on the positive response of the Brazilian people for this idea to work. It eventually was successful, causing the people to believe in the Unit of Real Value (or URV). Money, or Fei, or French gold, is worthless if its value is not respected by the people meant to utilize it. The moral of the story here is that this aspect of society is charged by the people. Like parts to a machine, the economy would fall apart without the cooperation from the very people that use it.

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

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

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

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

Now, a concept like Bitcoin shows how far we have truly come. It is a completely digital currency that certain places of business accept as a form of payment (Reeves). This brings me back around to the idea of the stone, because just like stone currency, I don’t need to be in physical possession of these Bitcoins to own them. Yet another way of the same thing taking different form.

Between cash, coins, credit cards, checks, or any other type of electronic currency, money comes in many different forms. Whether it is a hundred dollar bill or a penny, it all has worth. And no matter how significant the worth, it should never be taken for granted, because I know that money makes the world go round.
Friedman, Milton. “The Island of Stone Money”. Hoover Institution. February 1991. Web.

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

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

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

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

P2. The fact that there is a giant ball of limestone sitting in the middle of the ocean somewhere still being claimed by someone who is deceased is unsettling to me (NPR). that is like me having 500 dollars and throwing it in the ocean. When the money washes up onto shore and someone picks it up, it would now be theirs. Nobody can just go pick up the giant ball of limestone and claim it.

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

P4. Once a country is in debt they will do anything to try and get back on track. For Japan, this means an increase on inflation (NYTIMES). As if the people are not paying enough already, they are about to get hit with an increase on everything they buy just to pay off the country’s debt. The Japanese government will announce around 12 trillion yen ($136 billion) in fiscal stimulus measures to boost the nation’s shrinking economy (Bloomberg)

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

Works Cited

To many people, money is the most solid, most definitive proof they have of well-being. To have a lot of money is never wrong – to be low on money is very wrong. But the very concept of money is a dynamic one.  It’s a dynamic concept that is built, very basically, on a sort of honor system. Yes, money has no value other than the value we all says it does.  Historically, money was invented as a way to make exchanging goods easier. Money started off as gold, but when gold became too heavy for larger quantities and too scarce for higher demand, we started using paper. Each paper stated its equivalent worth in gold. Eventually, paper became fully independent, and gold was removed entirely from the equation: the value of the paper was based off what the government said. And when paper became too heavy, we made money digitized. Now people have even less solid proof that there is money at all; the banks say we have the money, so we have the money. Is there any backing that the dollar our bank says we have is actually worth a dollar? None really, except for the reassurances of the government. What ever step comes next, no one knows for sure but any new step only increases how arbitrary the concept of our money is. However, as long as the government, and society continues to say that our money is worth something, it will continue to be worth something.

P1. Growing up as kids we have always been told how important money is and how important it is to earn money, to save money and to value money. I was taught that money is a method of exchange. We give money and we get something in return. But we can’t get anything and everything we want. We can only get those things that holds the value which is equivalent to the money we provide. However the concept of money isn’t as simple as it looks. The more you start thinking about money the more vague your concept becomes. When you shift your focus from being an individual conducting day to day exchanges just to survive to nations all over the world managing those exchanges, you start to question, What is the end result of those exchanges? Where does it go? Who decides what should happen and Where it should go? Who invented this form of method in the first place and Why do we need it?  In reality there is no definite answer and logical explanation for all these questions because its too complicated to calculate just like its complicated to find the sum of two infinite numbers. Of-course you know that the answer is infinite but you also know that its just impossible to measure or calculate. One can consider money as just an illusion humans created in-order to make exchanges for using services and products provided by other humans, without much hassle.

P2. Money or some form of exchange has been around since the existence of the human race. The exchange started with bartering system. For example people will give vegetables in exchange for clothes. However this system was not efficient enough, because in the scenario where you want to buy a house you can’t possibly have enough vegetables that holds the value equivalent to that house and even if you do have enough vegetables there is no way one can use it up before it goes bad. Hence people started coming up with new ideas, which led to the invention of gold and silver coins. It lasted for a while and  it was a good idea, but it had it’s drawbacks. Firstly, digging gold and then giving it the shape of the coin is expensive in itself and it’s also hard to find. One can’t find gold on streets. Also carrying gold coins all the world with you is a heavy task – literally! And then finally the currency we use today was created. Its paper, its easy to carry and easy to exchange and thanks to technology we don’t even need to carry it anymore. It’s just a number in our bank accounts that keeps changing. Hence one can say that money is just an illusion we manipulate according to our convenience and our needs.

P3. The 7 billion people on this planet don’t necessarily use the same currency or the same method of exchange. The reason behind is difference in culture, difference in geography, difference in the availability of resources. There is one island out in the pacific ocean that supports my argument. It’s an island called Yap and people there use limestones carved in huge stone discs that could weigh more than a car to pay for stuff since they don’t have gold or any form of metal available on the island. At first people will think its bizarre but what is more bizarre is the trading process. In general we buy something and we give liquid money in exchange or transfer it to bank account. However transferring the limestone without any equipment and machinery is impossible. So during a trade the people in Yap would just be informed that person A bought x thing from person B and now that limestone of person A belongs to person B. The stone won’t be moved from its place but everyone knows who it belongs to. The question is why the people on Yap would go through all the trouble of getting limestones and carving it? “At some point people on Yap realized what most societies realizes. They needed something that everyone agrees you can use to pay for stuff.”(The island of Stone Money) We need something to support our illusion and we can go beyond our limits to achieve that. The Yap’s concept of money may sound insane but it’s nothing new. We use that concept everyday. When we buy groceries via credit cards, “what’s really changing? The digits in the bank account.”(Stone Money NPR Broadcast) Convenience and availability plays an important role in how we carry out exchanges.

P4. Money is a lot more rather than a mere tool of exchange. If not handled properly, it can make people go bankrupt, it can create inflation and deflation, countries can be consumed by debt. One such example is brazil. “Twenty years ago, Brazil’s inflation rate hit 80 percent per month.”(CHANA JOFFE-WALT) The prices would change everyday and will go from $10 to $1000 in no time. It all happened because of poor decisions made by the presidents of the country at that time. However, how four people who knew how to handle money set an example by ending brazils inflation is incredible. People of brazil had lost faith in government and the value of money. The idea was to bring the faith back by creating virtual money and making people believe that it’s real. We can say money is nothing but just Faith. You need people to believe in money and believe its real.

P5. Money is created out of nothing. It has no value initially. We decide it’s value and how much it’s worth and change it according to our convenience. Reserve Bank decides how much money to print depending upon whether the economy is good or bad. Japan decided to devaluate its currency to bring country out of recession. “Bitcoins were created in-order to have a currency that is free from central bank or financial institution.”(Renaut, Anne) One can conclude that money is just an idea people play around with but it doesn’t exist in reality.

Works Cited

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

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

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

P1. Money is a broad concept and can define in so many ways. It is used in our everyday lives and we can list all the scenarios how money is used.  For example, if you wanted to travel around the world, you would need money in order to do so, or buy a car, along with many other situations. Like the saying goes, “Money does bring happiness”.  In society, people portray money as distinguishing someone’s social status. People look at how much one is worth due to their specific income. Furthermore, people generally think money has value, but the money made from reality TV shows doesn’t have any inherent value, it is simply pieces of paper or numbers in a ledger. In the Milton Friedman’s piece The Island of Stone Money, I noticed the idea of how the Yaps monetary system and concluded the American monetary system is identical, but is a different concept of how it’s being used. The Yaps used stones to make a higher purchase like if a warriors dead body was being kept held it at another village and the village requested it they would buy the body using the stone. And then people would know that this he or she has claimed the stone. Americans use paper bills for purchases and seems cliché, but the Yaps certainly had creative manner to use money.

P2. The NPR broadcast was very interesting and what surprised me is how the claims were accurately correct in my opinion.  I would have never thought of how money can change so drastically in time.  In the past, we were exposed to using gold as a currency, then to paper bills and now an electronic transaction. In today’s world, society does claim to use paper bills and coins for small matters, but at the same time we already progressed, using digital cash. A prime example, paying bills, in which society pays bills using a computer and that consist only information it’s seems surprising to know now how easily any amount of a transaction can be paid off or transferred. There is no physical money being involved. The closest idea that I can think of using paper would be is sending checks through the mail, but that’s highly rare nowadays.

P3. The next most intriguing topic was Bitcoin. Bitcoin basically changed how traditional currency is being used. Bitcoin shared database between of computers all keeping track of accounts and their associated balances secured by mathematically encrypted password.  And people are so consumed in buying bitcoin that they don’t realize it does not have a true value.  Yes, virtual banking sounds amazing because it is so easy and accessible, but there are some tweaks that could be issued.  Bitcoin is just like the stock market, the value changes every day. And the money you spend might not have the equal value as the price drops or arises. Money comes and goes there is not a financial base structure to accommodate users; it is simply the game of chance. NPR broadcast mentions how money is now just information and Bitcoin is prime example.

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

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

Works Cited

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

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

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

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