What is Money?
P1. Does money really have a value? It is a question that has many different answers and no one is really right or wrong. All throughout the cultures of the world money has different meaning and different value. Cultures other than our own have used different objects as their source of money, but the idea of what is stood for was very similar throughout cultures. In the United States we did not start out with paper money, in fact we started out with just exchanging goods. We then moved on and created a material used to obtain different things, which was gold. From there on it went to what we have now, paper that truly is not worth anything. Our money today is simply just pieces of paper that everyone agrees is worth some amount, but really it does not have any value to it. We are just told that there is value to paper money and it is something that is just believed to have value to it. There is really no value to money when it is not physically there, rather in a bank account, it is just a bunch of numbers that we trust is worth something in the world. Money is subjective and seen different all over the world.
P2. One culture that uses a different form of money than America’s in on the island of the Yap. On the island of the Yap, money is in the form of stones and they are exchanged throughout the island to purchase different things. Some stones were bigger than others or harder to get to which made them more rare which in turn made them more valuable. When Germany seized control of the island in the early 1900s the islanders labeled certain stones that were to be taken away. This made the stones worth more and more rare. The people of the island of Yap really demonstrated that money is what is made of it. The people living in a certain region are the ones who determine what is valuable and what is their idea of what money should be. The idea of using stone money as currency was easily doable by the Yap because it was not a large community and the rocks were abundant enough to be used as their movable currency. The same idea would not be able to be put to action in a larger populated community or a more modern community because people like to be able to move around with their money and use it freely as they wish. The Yap did not feel that they needed to be strict with their money and they did not believe they needed to always have their money with them. In their culture the man’s word was trusted just as much as physically having the stone with them. This trust was necessary for the survival of the Yap’s monetary system because some of the rocks were so large they were not able to be moved easily.
P3. Currency is what people determine its worth to be and this is seen by how the Yap’s currency functioned. Even though they used stones as their currency they are still similar to other cultures and they can still have a surplus or a deficit. A lot of countries have been dealing with inflation issues with their currency for a long time and one country that is really struggling with this is Japan. The name of their currency is a yen. A yen is very similar looking to the US dollar, but it is worth less because there is a surplus of them in Japan. When there is a surplus of currency in an economy the value of that piece of money goes down. When there is a surplus of money in an economy it causes prices to go up, which makes people need more money to purchase less goods and services because the currency is worth less. A yen is only worth ninety percent of what it actually should be worth, which causes people to spend more and receive less in return.
P4. With a surplus occurring in Japan the opposite was happening in the United States during the early 1900’s. The opposite being the Great Depression and during this time dollar bills were very hard to find because the government was struggling to handle the country’s finances. This made money become worth more, but also a lot harder to find circulating throughout the economy. Since money was harder to find it was labeled as more valuable. This was an example of currency’s worth being determined by what people decided they wanted it to be. To try and combat the Great Depression the government had to come up with the economy. The government started to realize that money could not just be spent as they wished and there needed to be a structure to the country’s spending. By coming up with the economy a dollar’s worth was able to be determined based off the demand of it.
P5. Every unit of money is worth something different depending on the place you are at. Even though it is different between cultures and places it is still possible to purchase things by just transferring their money to the new currency. There has been a new type of money that has come to the surface called bitcoins. A bitcoin is online currency that is stored in a computer and never put into anything physical. This money is universal and does not need to be transferred into another unit because it can be used all across the world. With bitcoin there are a couple setbacks. They can really only be used online, they are not worth the same as other currencies, and bitcoins are commonly used to complete illegal activities. If bitcoin’s popularity increases, their value will increase. Money’s value increases or decreases depending on its demand and determined worth by the people.
P6. Money is viewed and used differently throughout the world. Even though the Yap use stones and the United States uses paper they are both used in the same ways. If something is valuable to someone then it will have worth. Throughout the world currency looks different, but it is used the same to purchase different goods and services.