Stone Money Draft- gossipgirl3801

The True Value of Money

            Money is what makes the world go around, but how often do we physically see our money these days? Since the beginning we have evolved from trading goods, to paying with gold, to coins and paper money, as well as paper checks and plastic credit cards. Now today we download an app, log in our credit or debit card information, type in a value and press “send” to pay for anything as little as food or as big as cars. It has come to the point where people don’t even carry around cash anymore because all they need to do is have a charged phone and Bitcoin. We can all blindly say how much we care about our funds but how much do we really value them if we no longer can see or touch them?

            In “The Island of Stone Money” written by Milton Freidman(2010) he shares with us the small island of Yap, that is inhabited by the Yap people. Unlike us, the Yap do not use paper money or an app to pay for purchases, they use stone money. Specifically, heavy giant discs that can be bigger than those who own them or only a foot long. The size of the discs determines how much it is worth, but they are all made from limestone. The Yap found the limestone very beautiful just like the U.S. found gold very pretty and decided to make it their currency. This is when the stone discs start to sound like Bitcoin though, the person receiving the disc never actually sees it. Since the stones were found hundreds of miles away from Yap and brought back to their island on a vigorous adventure they are deemed way more valuable to the people, though they are just littered throughout the land because they are too much of a burden to physically move. Everyone in Yap knows how wealthy or not wealthy everyone is without ever seeing their riches. They all go by word of mouth, much like when us Americans send money to someone through our phone and just trust it got to them. The Yap might find the fact that our currency is a small dirty paper bill that we can exchange to one another is strange, just like us as Americans were shocked reading this story, but will not be shocked with our more convenient way of electronically trusting our money is where its meant to be similar to their economic system.

            Another deal that occurred that was similar to the Yaps economic system is what we, the U.S., did with France when they requested back gold they thought was rightfully theirs. It would’ve been hard for the United States to ensure that all the gold made it to France so just like in Yap they set aside that fortune and deemed it “France’s Money”. Even today this is how our U.S. banks work when holding our money, they label each citizens wealth, but we may never even see it.

            Our value on money is lessening because people stopped caring about holding paper bills in their wallet. This issue is mostly due to apps such as Bitcoin, in the article Bitcoin Has no Place in your our any Portfolio by Jeff Reeves (2015) he speaks about the devasting creation Bitcoin has on our economy, Bitcoin was a fake currency created where you could virtually buy these coins with the U.S. currency and spend these coins like real money. Jeff Reeves says this is not a sufficient way to pay for things or to invest in because, “In short, your bitcoins can go to zero either because they have no underlying value or because some hacker has stolen them and left you with no recourse. And even if they don’t go to zero, drops like the nearly 85% decline in the past few years can leave investors with a boatload of pain in a hurry,”(Reeves, 2015). In reality, Bitcoin is hurting our economy not helping it, it is very easy to hack accounts and get all your coins stolen.

            On the other hand, though, another country’s economy was saved due to fake money. In How Fake Money Saved Brazil by Chana Joffe-Walt (2010) it talks about how Brazil’s inflation rate went up 80% per year. Until a group of friends, including Edmar Bacaha, decided to come up with a resolution that would solve the problem for Brazilians. They came up with a fake currency called URVs, Unit of Real Value, and tricked the citizens into using them. The Brazilians put their trust in the URVs causing the inflation to dramatically go down over the years, almost completely healing their economy.

            More controversy in the economic world struck in 2013 when Japan decided to take aggressive action when trying to end 20 years of deflation and not manipulate the yen. In an article by the New York Times titled Japanese Tries to Ease Fears That Is Policies Will Lead to Currency Wars, a clip from the article reads, “Prime Minister Shinzo Abe’s calls for aggressive action by the central bank, which have prompted a slide in the yen, have also raised fears in Europe of a currency war if other central banks adopt similar policies,”. This proves that when one country makes an economic decision it affects the whole world and makes them feel in a competition, thus proving that money is truly what makes the world go around like I said in the beginning.

            Before starting this class, I had no prior knowledge to any of these interesting yet terrifying topics or any insight on economic topics. Now after reading these articles and listening to the podcasts I have earned a greater appreciation for how our American concept of money has evolved over the decades and how it may differ or be similar to other countries economy. The Yaps way of stone money seems absurd at first glance, but after analyzing it further the U.S. banks do the same in the fact that we as account owners never physically see our riches we just put faith in the fact that they hold it for us. Money is a complex thing, but how much do we really value it if we never see it?

Work Cited

Friedman, Milton. “The Island of Stone Money.” The Island of Stone Money(1991): 3-7. Web. 23 Jan. 2017.

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

Web. 23 Jan. 2017.

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

“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.

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1 Response to Stone Money Draft- gossipgirl3801

  1. davidbdale says:

    GossipGirl, I’ve had only a few minutes to scan your work, but you’ve clearly figured out how to cover a large amount of material in just a few words. In future drafts I’ll try to help you craft a more obvious theme to thread your pearls.

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