Stone Money—nickalodeansallthat

How Paper is Heavier than Metal:
The Strange Concept that is Money

p1. Everyday we as people use or see money in some way shape or form. whether it be in actual paper notes or the more obtuse forms such as bitcoin or other types, money is apart of our lives. But does anyone really take the time to truly think about what the hell money even is? We use these paper notes to exchange goods like food or clothes, which can pose as an equal trade, but what about things like precious metals, that you would think would have more worth than a paper note, even when in bulk. Also consider abstract things, like how humans try and put a numerical value on things like nature. What got me thinking  into this is the article we read on the “Island of Stone Money”, or the island home to the Uap. These people use huge limestone discs that sometimes can not even be moved, they believe in the value of these discs no matter where they are. So to us, those that use dollars,yen, etc… this seems so odd and unconventional, but how different are we really? The actual concept of money, when you break it down, seems so odd it demands an explanation.

p2.For a good place to start this exploration ,we must go back to the island of Stone Money. As discussed the Uap use these giant stone discs as currency, but that isn’t the stangest part, the strangest part is about how much the island trusts this system.”My faithful old friend Fatumak, assured me there was in the village a near by family whose wealth was unquestioned…and yet no one, not even the family itself has laid eyes on this wealth”(Friedman 2) The island mutually respects that this family is the wealthiest family on the island, and the family’s wealth is said to be sitting at the bottom of the ocean. Even better yet, when the Germans came to the island, the way they got the Uap to listen to their demands was by simply painting on big black X’s on the stone wheels, thus, in the Uap’s eyes, devalued the money to nothing. Why is it that this primitive economic system can become nothing by simply changing one aspect about its currency, is money really that malleable?

P3. To answer this question this question, I’m going to pose another question. What happens when inflation in your county is so bad that something like a pair of sunglasses could cost $10,000 in two weeks? The answer is you make up an entirely new currency, and that’s exactly what Brazil did.”The four’s plan was allow the new currency to have an exchange rate to match the inflation with out putting people in debt, so you’d be paid 1000 URVs a month and milk would cost one URV, the next month it would be the same except, you’d get the original currency as change for the URV”(This American Life podcast 423). The rial is a fine example on what pushing currency to the limit does. The fact that inflation cause a group of four college students to make up a fake note and an exchange rate for that note and have it work really hammers home that modern currency and primitive currency, I.e. The Uap’s are not really that different in nature. The fact is that currency is just a tool for an economic system, which yea of course it is, but tools can be new and tools can do only certain jobs, the real point is that every economy needs the right tool for the job and while people like the Uap keep the same tool forever, counties like Brazil sometimes need new tools.

P4.A curious product of this concept of creating new tools is actually the Bitcoin. Bitcoin is a completely digital form of currency used on the internet for goods and services. The only difference between this made up currency and the rial is that the bitcoin wasn’t born out of necessity, it was just created as digital currency,exchange rate and everything.Bitcoin was a growing economy within the internet and more and more users did decide to dip their hands in it everyday,so how is it that some people just decide to switch over to something without having a sure idea where it’s going? Well the risk was not worth it because recently the bitcoin economy just had its first big crash. “The price of the virtual “geek” currency had soared through the stratosphere in recent weeks, trading for a high of $266 on Wednesday — only to come hurtling back to Earth in just three days.By Friday, a single Bitcoin was worth just $54, according to the Mt. Gox platform, which manages 80 percent of the Bitcoin transactions and had to briefly shut down trading Thursday.” Even from the beginning, some people had thoughts that something like this would happen at least a few times due to the nature of it being a privatized economy it was bond to burst.

P5. Why does it relate to the strange concept of money and its tool like qualities? It’s because, it’s too much like the incident with France when the US put gold aside and the market crashed, just on a much smaller scale. The actual concept of Money is a note or a tool that a group of government officials, college buddies, or some guy places a value on and the people trust its value with out considering what happens when it gets too big, or if we put away more gold than our actually currency can cover. Something similar to this is happening in Japan currently. Japan is fearing a currency war because the Yen has deflated immensely due to spending. “The yen skidded to a two-and-a-half-year low of 90.695 against the dollar Friday, which reinforced expectations for more monetary easing. The currency has slumped 11 percent against the dollar since early November as Mr. Abe stormed to an election victory in December with bold promises to end decades of intermittent growth”(NYTimes). The Yen has decreased so much that they need to reverse without changing the actual property of the Yen, or else they might insight a currency war.

P6. Money is so strange because with problems like in japan, and previous examples, like in Brazil, you can essentially just agree to stop using a currency for a new one until it balances out. Yet at the same time this could also incite an irreversible financial crisis all because the worth of some paper because too large or too small. That is the whole point of the oddity of money is that we as a country, or as people, put so much faith into a note without really thinking about it. I mean we pay for homes, and cars, and plenty of other things that, when thought about critically, seem way more valuable than the stack of papers sitting in our bank accounts. It’s almost miraculous that we, as people, pick some random thing, whether it be a paper note, a stone disc, chunks of data, or even shells, and decide that’s how our society will trade, especially when people value things differently than others.

Works Cited

Friedman, Milton. The island of stone money. Stanford, CA: Hoover Institution, Stanford U, 1991. Print.

“Japan Tries to Ease Fears That Its Policies Will Lead to Currency Wars.” The New York Times. The New York Times, 25 Jan. 2013. Web. 23 Jan. 2017.

Renaut, Anne. “The bubble bursts on e-currency Bitcoin.” Yahoo! News. Yahoo!, 13 Apr. 2013. Web. 23 Jan. 2017.

“The Lie That Saved Brazil.” This American Life. NPR, 7 Jan. 2011. Web.

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3 Responses to Stone Money—nickalodeansallthat

  1. davidbdale says:

    Thank you, Nick, for being first. I admire your enterprise and your willingness to submit to feedback before the deadline. I hope you find my remarks helpful. I won’t be gentle, but I’ll try to be useful and constructive.

    First, you’re very ambitious. You’ve decided to share the content of four very different stories about currency: the Fei, the Real, the Yen, and Bitcoin. It’s almost impossible to do well, so it’s not surprising that you don’t succeed, yet, but I hope you won’t abandon the effort. You’re off to a good start.

    You must keep in mind that your readers are not familiar with your source material. They know only what you tell them, and they understand only what you explain. Let’s examine Paragraph 3 from the eyes of a reader unfamiliar with the sources.

    To answer this question, I’m going to pose another question. What happens when inflation in your county is so bad that something like a pair of sunglasses could cost $10,000 in two weeks? The answer is you make up an entirely new currency, and that’s exactly what Brazil did.

    That is certainly intriguing. We don’t know what a pair of sunglasses costs TODAY, but certainly we won’t want to spend $10,000 for one in two weeks. That is, unless they cost $9,080 today. In which case, we’re living in Crazytown anyway, so what’s the difference? You’ll need to explain how fast the price increases, instead of naming the final price, if your illustration is going to be useful.

    As for the new currency, again, I’m intrigued. Creating a new currency is an astounding, revolutionary idea. It also sounds ludicrously dangerous, something only a madman would attempt. Have you done enough to prepare us for the necessity to try something insane?

    The four’s plan was allow the new currency to have an exchange rate to match the inflation without putting people in debt, so you’d be paid 1000 URVs a month and milk would cost one URV. The next month it would be the same, except you’d get the original currency as change for the URV.

    I recall quite well hearing this explanation during the broadcast and still being somewhat confused. But that was after I had been well prepared to understand WHO “the four” were, and WHY they were empowered to create a new currency, WHAT a URV was, and HOW the exchanges were to be made. The idea of an “exchange rate” between Brazil’s old currency and Brazil’s new currency, you understand, Nick, is a completely unprecedented notion. Readers cannot be expected to instantly “get” that there’s an exchange rate behind the transition from Reals to URV. You haven’t told them what URVs are, or even which one is the “original currency.” If they don’t follow your argument, you can’t blame the readers.

    The rial is a fine example on what pushing currency to the limit does.

    Reading this without benefit of having heard the broadcast, Nick, I would be completely mystified. I wouldn’t know whether the Real was Brazil’s first currency (Actually, it was the cruzero.), the interim currency used to “trick” Brazilians into accepting the new currency (That was the URV.), or its ultimate replacement currency, the one it uses today. Does “It’s a fine example” mean it’s an exemplary decision, one that everyone should admire? Is “pushing currency to the limit” a good thing? Or, perhaps, was the Real Brazil’s first currency, the one that suffered terrible inflation, the one that the economy “pushed to its limit” until it simply had to break?

    The fact that inflation caused a group of four college students to make up a fake note and an exchange rate for that note and have it work really hammers home that modern currency and primitive currency, I.e. The Uap’s are not really that different in nature.

    I’m lost, Nick. As a reader who IS familiar with the source material, I imagine you’re intimating that there’s something unreal about money. The Yap believe in coins that lie at the bottom of the sea, and Brazilians put their faith in Reals that, until last week, they had never seen and that look like silly colored paper. But I couldn’t have drawn even that conclusion without having read what you read and listened to what you heard. Without the background, I wouldn’t know what to make of “modern currency and primitive currency . . . are not . . . different.”

    The fact is that currency is just a tool for an economic system, which yea of course it is, but tools can be new and tools can do only certain jobs. The real point is that every economy needs the right tool for the job and while people like the Uap keep the same tool forever, countries like Brazil sometimes need new tools.

    Nothing here requires background knowledge of the sources, Nick, but what it means is unclear. You’re completely correct to declare that currency is just a tool of the economy. It substitutes for goods and services so we don’t have to trade them directly, or find someone who wants what we have. Everybody wants money. Your sentence might actually suggest that some economies have to dispense with the very idea of a currency, which you shouldn’t claim. You DO mean that sometimes a currency loses respect and needs to be replaced. Right?

    I hope that wasn’t discouraging, Nick. I’m not discrediting your abilities; I’m suggesting that you need to understand something essential about your readers: They require your careful guidance. This places a burden on you as the Author, but it also grants you great power. You decide what they need to know to accept the argument you are making. But they have to understand the material. That’s where you have failed them.

  2. davidbdale says:

    Now, Nick, you might well ask: “How am I supposed to educate my readers in the background material AT THE SAME TIME I use the material to support my own argument? Can it even be done?” Maybe not, but let’s try.

    Here’s your paragraph:

    To answer this question this question, I’m going to pose another question. What happens when inflation in your county is so bad that something like a pair of sunglasses could cost $10,000 in two weeks? The answer is you make up an entirely new currency, and that’s exactly what Brazil did.”The four’s plan was allow the new currency to have an exchange rate to match the inflation with out putting people in debt, so you’d be paid 1000 URVs a month and milk would cost one URV, the next month it would be the same except, you’d get the original currency as change for the URV”(This American Life podcast 423). The rial is a fine example on what pushing currency to the limit does. The fact that inflation cause a group of four college students to make up a fake note and an exchange rate for that note and have it work really hammers home that modern currency and primitive currency, I.e. The Uap’s are not really that different in nature. The fact is that currency is just a tool for an economic system, which yea of course it is, but tools can be new and tools can do only certain jobs, the real point is that every economy needs the right tool for the job and while people like the Uap keep the same tool forever, counties like Brazil sometimes need new tools.

    Let’s try to educate our Readers while we persuade them:

    In 1990s Brazil, inflation was so rampant that all Brazilians spent their entire paychecks immediately. If they didn’t, an affordable pair of sunglasses would become quickly unaffordable: 20 cruzeiros today, 2000 cruzeiros two weeks from today. Saving a single cruzeiro, of course, would have been insane; it bought less every day. At its weakest, about 3 quintillion cruzeiros would have bought one US dollar. At the urging of 4 American economy students, the government replaced the cruzeiro with the cruzeiro real, a new currency whose value was linked to a Unit of Real Value (URV). Every day during the transition, a gallon of milk cost ONE URV, while the value of URVs to cruzeiros fluctuated. The consistency of pricing milk and other goods and services at predictable numbers of URVs gradually bolstered Brazilians’ faith in their currency, reduced and eventually eliminated inflation, and stabilized the economy. The fact that a fake note and an arbitrary exchange rate for that note (1 cruzeiro=1$US), invented by four foreign economics students could salvage a bankrupt economy really hammers home that modern currency is every bit as arbitrary and primitive as the economy of the Yap. Currency is just a tool for an economic system. It substitutes for goods and services and simplifies the trading of physical things. Like any abstraction, it works only as long as we believe in it. Yaps decided to agree that the stone in the ocean was viable currency. We, so far, thankfully, believe in the purchasing power of the US dollar. But the Brazilians stopped believing that tomorrow’s real would be worth one of today’s reals. So. The real had to go, to save the economy.

    I saved the heart of your argument, I think, Nick, which was sound. It’s persuasive now, I hope, or at least more persuasive. It did require a careful reading of the source material, and a streamlined description of the essence of the story.

    Do you find this encouraging, I hope? I’d appreciate your reply.

    • nickalodeansallthat says:

      Thank you for the feed back and i will upload my updated version shortly, i will try and present more information so the readers have a better understanding. Thank you again!

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