Stone Money-therealmoana

The Belief It Will Work

P1. What is the actual value of money and where does it state that our money system is not a complete fraud and has a legitimate backing?  We pay with checks, credit cards, and online websites but money is not actually being exchanged in person. In the podcast “The Lie That Saved Brazil” they state money does not actually exist, it is just the idea that the bank is saying yes, there is a certain amount in your bank account and that is the amount you can spend. Throughout the world the concept of money is the same, but ideology is different. From before we could remember bartering was the primary way to get something you needed. Throughout the years we began to put value on gold, stones, and paper money that people believed and trusted in.

P2. In Yap, a German colony, the monetary system was based on stones. After finalizing a bargain which involved the price of a fei too large to be moved, the new owner would claim ownership without so much as a mark and the stone would sit on the pervious owners property. When the German Government declared ownership of The Caroline Islands they marked a number of the most valuable fei to show they were claimed by the government. With this happening the people of Yap had to shift there methods of payment to what the government enforced. It was a time when the chiefs on the Yap Island were struggling for power they had no other choice than to comply with what the government wanted. The Yap islanders felt invaded and hesitant about the new system because they were all use to the system they created and did not see the flaws in it. In “The Island of Stone Money” by Milton Friedman the Yap Islanders expressed their monetary matters as “the money we have grown up with, the system under which it is controlled, these appear “real” and “rational” to us.”

P3. There were many factors that determined the value of stone money. The first factor was the number of human lives that were lost bringing the stone money to the Island of Yap. Many lives were lost bringing back the stones, there was a lot of rivalry to see who brought back the biggest and most valuable stone. The second was the workmanship, some stones looked different than others being polished although they were of lesser value than the stones that were not polished. The last factor was whether the stone was dedicated to the chief. The people of Yap wanted these stones because it gave the chief more wealth and power. The chief was in charge of land prices and alliances therefore if you brought back a stone that caught the chiefs attention he would accommodate your needs.

P4. In Brazil the way everyone spends money in the mall is new. People can go and pay in installments because of the high inflation rates Brazil has had in past years. Their inflation rate was 80% a month in 1990. If something was ten dollars, in one month it would be eighteen dollars, in six months it would be three hundred and forty dollars and by the end of the year it would be over ten thousand dollars. Brazilians lived with this inflation for decades until it was changed by a couple of drinking buddies. This was a dream come true to those that were struggling with the high inflation rates. People would not live out their dreams or buy the essentials they needed because everything was over priced. Brazil created this system where people would earn one thousand dollars and the prices could not be raised until people earned more money. This way the value of money would stay the same and people could afford things. Brazilians believed in the new system because the government balanced their budget and slowed down on money production. Everyone in Brazil collectively tricked themselves into thinking that this fake “visual” currency was real, more real then the actual money they had in their hands. The belief of everyone made the system work and “visual” money real.

P5. Money is a human invention without our support the chain and flow of money would diminish. In “The Concept and Illusion of Money” by Koos Jansen, bartering developed the necessity to be self-sufficient slowly decreased. For example if a farmer that grew tomatoes and carrots wanted to exchange some of his produce for bananas and oranges he could do so. The option to trade was always open because people were growing more than they could consume. In the early stages of bartering there were several different forms of “money”. One form of money has the advantages that the value of all goods and services have in our economy. Koos Jansen states money is supposed to serve three main purposes: a medium of exchange, a store of value, and a unit of account. The overall concept of money is a matter of trust because by itself it has no use for us, without people spending it it would be another paperweight with no value. Money does not have value because the end goal is always goods and services which we can use and consume.

P6. Fiat money is used around the globe today. Milton Friedman states in “Quantity Theory of Money” it is created by central banks and it can exist in paper, coin, or digital form. Paper money can be made by printing paper or typing amounts into a computer, there is no limit on how much or how little we can print at once. When flat money is created it is exchanged for assets from the central bank. The central bank collects government bonds to keep the money flow going. The amount of gold circulating into the economy starts to grow faster than the amount of goods and services it can be traded for causing the value of gold to decline compared to all the goods and services, being there is an oversupply of gold.

P7. The money system is counterintuitive because currency is not backed by a commodity but all currencies are really fiat currencies. In Forbes article “All Money is Fiat Money” by Pascal-Emmanuel Gobry they make a comparison to how a cigarette based currency system would work because people would mass cigarettes, use them as a medium of exchange and store of value, etc. Currency is easy as a common agreement, gold is valuable because we have all come to agreement that it is. Switching to fiat currency means money supply is linked to commodity. Everyone in the world wants to believe everything has some type of sentimental value but the value of the marketplace is simply made up by supply and demand and nothing else. It is frightening to think the US dollar and currency system are actually worth nothing but a common agreement to use the currency.

P8. Without the monetary system we would end up in entire chaos. It has become second nature to us, that we cannot imagine ourselves without it. Society is in the habit of living a certain way where money gives us order, stability, and security, among other things. Money determines the way we live our personal lives and what society class we live in it also rates our country and what type of nation we live in. Governments look for wealth, which give them power to control our money. It determines so many factors in our lives such as: our behavior, what we do and how we use it. According to “Faith-Based Currency” money’s definition can and does change throughout our lives, and throughout history as a whole, however, the fact that it has become something so important to us makes it our real religion the one we all believe in, and the one that really shapes our lives and our beliefs.

Work Citied

“The Island Of Stone Money.” NPR. NPR, n.d. Web. 28 Jan. 2017.

User, Super. “History of Money.” History of Money. N.p., n.d. Web. 28 Jan. 2017.

Friedman, Milton. “Quantity Theory of Money.” Money (1989): 1-40. Web.

“Faith-based Currency.” Daily Reckoning. The Daily Reckoning, 30 Oct. 2006. Web. 28 Jan.      2017.

“The Concept Of Money And The Money Illusion.” Koos Jansen. N.p., 31 Aug. 2016. Web. 28 Jan. 2017.

Gobry, Pascal-Emmanuel. “All Money Is Fiat Money.” Forbes. Forbes Magazine, 08 Jan. 2013. Web. 04 Apr. 2017.

This entry was posted in A01: Invention of Money, therealmoana. Bookmark the permalink.

12 Responses to Stone Money-therealmoana

  1. davidbdale says:

    You do some very nice writing in your early paragraphs, Moana. I was trying to decide whether to take a holistic approach to your feedback or correct grammar on this round, but then I read your fourth paragraph and noticed a voice change.

    https://www.bullionstar.com/blogs/koos-jansen/the-concept-of-money-and-the-money-illusion/

    Money is a collective human invention. When barter emerged the necessity to be self-sufficient ceased to exist. A farmer that grew tomatoes and carrots could exchange some of his production output for bananas or oranges if he wished to do so. There was no necessity for the farmer to grow all crops he wished to consume, when there was an option to trade. In the early stages of indirect exchange there were several forms of money. A single type of money has the advantage that the value of all goods and services in an economy can be measured in one unit. Money is supposed to serve three main purposes: 1) a medium of exchange, 2) a store of value, 3) a unit of account. We must realize the subject of money is always a matter of trust, because money in itself has no use-value for us humans. Money does not have use-value as it’s not the end goal of a participant in the economy, the end goal is always goods and services. Fiat money is what nowadays is used all around the globe. Instead of being picked by all participants in a free market as the best marketable commodity, it’s created by central banks and it can exist in paper, coin or digital form. Out of thin air and without limitation it can be brought into existence by printing paper bills or typing in digits into a computer. When fiat money is created it’s exchanged for assets a central bank puts on its balance sheet, after the first exchange the money can start circulating in the economy. A central bank can buy any asset, but usually it will be government bonds. The value of commodity money is anchored to the value of all goods and services in a free market, because it requires capital and labor to produce commodity money. The amount of gold circulating in the economy starts to grow faster than the amount of goods and services it can be traded for. The value of gold will decline relative to goods and services, as there is an oversupply of gold.

    http://www.inquiriesjournal.com/articles/241/the-universal-prayer-how-money-became-the-worlds-first-shared-religion

    If the value of money were taken away from our world, we would end up in entire chaos. It has become something so natural and central in our lives, that we cannot imagine ourselves without it. Society has evolved in a way that money gives us order, stability, and security, among other things, and eliminating it would be like taking a huge step backwards in history. Money not only determines the way we live our personal lives, but this pattern can also be seen in a macro level. Governments look for wealth, which in turn gives them power. Therefore, money does not only play a central role in our personal lives, but also represents something crucial in higher levels, which brings it even closer to the definition of religion. It has the potential to determine our life, our behavior, what we do, and how we do it. It is up to each person to define money the way he or she wants, and needs. Its definition can and does change throughout our lives, and throughout history as a whole. However, the fact that it has become something so important to us makes it our real religion—the one we all believe in, and the one that really shapes our lives.

  2. davidbdale says:

    The two sources linked above have provided you two out of five paragraphs without citation of any kind. That of course is not acceptable, Moana. Rectify this immediately and avoid any hint of it in future. The penalties can be severe. I’ll delete this note as soon as the problem is resolved.

  3. davidbdale says:

    I’m removing your post from the Feedback Please category, Moana, until you make substantive changes to your work. You can return it to the category for additional feedback any time you make improvements.

  4. davidbdale says:

    This is still in plagiarism violation, Moana. Fix it very soon or it will become an irretrievable F and qualify you for very serious academic sanctions. Reply, please. This is very serious.

  5. therealmoana says:

    just fixed it

  6. davidbdale says:

    You aren’t understanding what qualifies as plagiarism, Moana. Beyond about halfway through your essay, you owe everything you say to other authors and you credit no one. That’s plagiarism.

    Provisional Grade Recorded on Blackboard Grade Center.

  7. davidbdale says:

    P1. You ask a rhetorical question to open your introduction, Moana. Then you don’t answer it. Instead you make five or six seemingly unconnected claims. I don’t understand your intentions, but as a reader, I’m completely confused.
    1. We pay with checks, credit cards, and online websites but money is not actually being exchanged in person.
    2. In the podcast “The Lie That Saved Brazil” they state money does not actually exist, it is just the idea that the bank is saying yes, there is a certain amount in your bank account and that is the amount you can spend.
    3. Throughout the world the concept of money is the same, but ideology is different.
    4. From before we could remember bartering was the primary way to get something you needed.
    5. Throughout the years we began to put value on gold, stones, and paper money that people believed and trusted in.

    Is there a logic here I’m missing? The statements don’t seem to follow one another in any reasonable order.

  8. davidbdale says:

    You appear to have writing skills, Moana, but I don’t know what to trust anymore. I thought you were taking responsibility for your sources by citing some of them in your revised post, but then P7 completely undid my new faith in your compliance. Paraphrasing someone else’s article without citing it is still plagiarism. I’m sorry. I hate to keep looking for it. I’d much rather be giving you other kinds of advice.

  9. davidbdale says:

    Thank you for providing a source for P7, Moana. I’m intrigued by the content. Does the quote mean what I think it means? “In Forbes article “All Money is Fiat Money” by Pascal-Emmanuel Gobry they make a comparison to how a cigarette based currency system would work because people would mass cigarettes, use them as a medium of exchange and store of value, etc.” Calling this a “fiat economy” suggests that people would stop smoking cigarettes in a cigarette-based economy. Is that correct?

    You’ve put your post back in the Feedback Please category. What sort of advice would you like now that we’ve resolved the citation troubles?

  10. davidbdale says:

    You never asked for a Regrade of your Stone Money, Moana, after scouring it of integrity violations. The F was killing your overall semester grade.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s