Stone Money Draft-sixers103

The concept of money is comparable to a wide variety of items in the world. Growing up Pokémon cards were a huge hit and each card basically had its own type of rarity. You could exchange these cards or make deals with other people for better cards. Say you have a card of a legendary Pokémon, that card could basically be like an hundred dollar bill but of Pokémon cards. If someone wanted to trade for that type of card, you would have to give said person two cards or more that could be equal enough to that card which would be like giving someone two fifty’s or five twenties for just the a hundred dollar bill.

During the NPR podcast about the Brazilian inflation rates it describes this fake money that was created by Edmar Bacha that tricked people into thinking that this “currency”, could benefit them. Bacha called it URV which stands for unit of real value and people would still have to use the existing currency but instead it would be listen under the URVs. This idea of fake currency allowed for inflation rates to not be as high in the Brazilian economy. URV helped resolve the issue of inflation but was it truly the money that solved the issue? The Brazilian people put their faith into the money which than allowed for the inflation to stop and it was like the economy had been completely fixed.

The island of yap brings us one of the most remarkable stories about money. In Milton’s “The Island of Stone Money,” it is all about the uncommon currency that is used. Giant limestone rocks that are fished out of the Pacific Ocean for families to use and trade with. Since you really can’t move the rock themselves you just announce who has the new ownership of the rock. It is basically like an imaginary form of money and it really doesn’t differ from the way our American economy works with the credit system.

A prime example that can be used to truly describe what the yap did is the deal between France and the United States. France wanted to be reconnected with gold that they thought they deserved from the United States. Transporting gold and making sure that every piece was accounted for would not be so easy to do. The United States decided to come up with an idea that instead of sending the gold to France, they would just set the amount aside and label it “France’s gold.” This is basically how the American economy is run now through the banking system.

Money can easily be misinterpreted in the fact that it is so easy to control or keep track of by just labeling it. People in this day and age have so many different forms of money that they can use. Credit cards, debit cards, cash, checks, change aka coins, or even food stamps are the most common forms that people use. Each has its own name but they all constitute the same value as in a form of money.

There are machines in this day and age that enable people to print fake money but yet it looks so real. In the article “The problem with Printing Money,” author Tejvan Pettinger talks about how Germany printed money to meet Allied reparations that they went into a hyperinflation which could result in another depression just like the Great Depression. Technology is vastly improving as time goes on and who says in the next 20-30 years that people will just be rich off of printed money. When you refer to the story about the Brazilian inflation problem, the fake currency that was used benefited the people. With the printing of fake money you could be looking at a rise in prices of even the smallest items.

Today most people like to use a credit card which allows for someone to purchase something now but actually pay for it later. The world is a breeding ground for the digital use of money with most recently the creation of Apple Pay which allows for someone to just pay over their phone digitally. Nowadays people will believe in anything that has to do with the word money and one of those items was Bitcoin. Bitcoin was this currency that people would pay top-dollar for just because it was the “new” money. Jeff Reeves states that “Bitcoin has no true value and therefore people who are willing to pay for such item are great fools.” The true dollar bill is starting to lose its value and is being replaced by the digital world of currency.

Ever since the first currency was created people have believed that a specific type of currency can buy a specific item. If people were to not have faith in that than money would not even be a realistic idea nor would people think it’s necessary. It has been built into our minds that if were to have a hundred dollar bill that we could buy anything that accumulates to a hundred dollars. Money isn’t money unless you have the people who put their faith into it. Take a sports team for example, if you don’t have faith in your teammates or coaches in won’t succeed. It’s the same way with money, if people don’t have faith that it can successfully buy them items money will not succeed and be useless.

After all, when you look at the definition of currency there can be so many versions of it real or not. Most money transactions are being done now without even seeing the money itself. The modern economy is basically a whole game that we have bought into playing every day. The stories of the Yap and Brazil were just the precursor to what we would eventually have happening in the American economy today. The paper bills could easily be made useless in the next day, week, month, or year we may never know. Jeff Reeves might have defined us all in two words “Great Fools.”

Pettinger, T., Aggarwal, D., Jacque, & Thakur, V. B. S. (2019, November 28). The problem with printing money. Retrieved from https://www.economicshelp.org/blog/634/economics/the-problem-with-printing-money/

Reeves, J. (2015, January 31). Bitcoin has no place in your – or any – portfolio. Retrieved from https://www.marketwatch.com/story/bitcoin-has-no-place-in-any-portfolio-2015-01-28

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

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” NPR. NPR, 4 Oct. 2010. Web. 13 Sept. 2016.

This entry was posted in sixers103, Stone Money Draft. Bookmark the permalink.

1 Response to Stone Money Draft-sixers103

  1. davidbdale says:

    Sixers, I appreciate your early draft, which gives me a chance to provide feedback even before tomorrow’s midnight deadline.

    I’m having trouble following your argument in several places. That’s understandable in an early draft, but I’ll be looking for more clarity in the next one.

    P1. Your analogy of the Pokemon cards is clever and appropriate, but it only demonstrates that some “denominations” of currency are worth more than others. Yes, a rare Pokemon card could be traded for several lesser cards the way a hundred-spot can be “traded” for five twenties, but that’s just making change. The fact that the right card might get you your friend’s bicycle or fielder’s mitt is the better analogy.

    P2. Granted the anecdote of the Brazilian real is complex, but if I didn’t already know the story, I’d have no idea what to make of your telling of it. The observation that a known currency would still be in use but “listed under” another name is not comprehensible. You’re certainly correct to observe that the Brazilians had to have faith in their new method of exchange, but your readers won’t understand how that was done.

    P3. The Yap indeed have an unusual currency (mined from 400 miles away, not fished from the sea), and “naming new ownership” for a big rock that is wealth in stone form is unique, but how that makes it “an imaginary form of money” is unclear, and that it “doesn’t differ from the American way” is even less clear.

    P4. Maybe this example of the French gold is supposed to illustrate the American way of dealing with credit. But it’s a better example of how the Germans were able to “freeze the assets” of the Yap by painting black crosses on the biggest fei on the island.

    You say labeling the gold as “France’s gold” is “how the American economy is run now through the banking system,” but . . . again, not seeing the explanation. We don’t use physical anything to represent wealth now; there’s nothing to label; and there was never a time when credit had anything to do with physical objects except as collateral for a loan.

    P5. You seem to want to illustrate the labeling aspect of tracking money here, but instead your examples are of the many ways to conduct value transactions. Yes, we transfer value many ways, but they don’t involve labeling, unless I’m missing the point.

    P6. There are certainly sophisticated ways to counterfeit paper currency, but considering how little of the world’s transactions are conducted in cash, the bigger risk of fraud is increasingly digital. The article you cite, “The problem with Printing Money,” has nothing to do without counterfeit bills. It discusses instead the danger of governments “solving their fiscal problems” by flooding their economies with a surplus of money.

    P7. I’m not sure why you entertained both ApplePay and Bitcoin in the same paragraph, Sixers. One is just a cardless credit card that does its transactions in the local currency, while Bitcoin is an entirely different animal, a currency minted by no country at all. People bought Bitcoin either to hide their transactions from government or to speculate that it would skyrocket in value.

    P8. You are certainly correct that I can only use currency to purchase items from someone who has faith in that currency. Rather than invoke sports fandom here, you should probably revive the Pokemon argument, Sixers. You certainly can’t trade your cards for pizza unless the pizza guy really cares about Pokemon.

    P9. You land hard on a conclusion that “the paper bills could be useless” tomorrow, Sixers, but in the same paragraph as your observation that most transactions are paperless, so we’re left to wonder, “Does Sixers mean the paper bills are useless, or that the whole $US currency is made worthless, or that worldwide, money might not be good for anything under the worst-case scenario?”

    You’re touching the right bases, Sixers: faith in the currency, variability of exchange rates, increasingly abstract means of tracking transactions and wealth, trust in the economy as the foundation of credit, debt, borrowing. They’re all worthy of your attention. Your next draft will be the place to demonstrate you’ve deliberated carefully about all of them.

    Please reply to all feedback, Sixers. I learn early to lavish my attention on students who keep the conversation going.

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 )

Connecting to %s