The Significance of Currency

Across all the different human cultures throughout history a structured system for financial exchange has always existed or always has been used and whether we are examining the Yap people or ancient Egyptian or ancient Greeks are they all had some form of money. Money remains a fundamental concept. The capability of displaying personal wealth or accumulated material or possessions will always be something human beings do and live by because they like to show off how wealthy they are. Money is so important to us, human beings, and to really anyone because it is an aspect of our lives and you really can’t do anything without money because of the power it holds in today’s society because our lives are money driven.

In The Island of Stone Money by Milton Friedman says the people that lived on the yap island used large stones as a form of currency. These stones were cut from limestone into large discs that varied in size and shape, the larger the stone, the more valuable the stone was to be. The diameter of the stone was measured by cutting a hole in the center of the stone, easily visible to everyone. This form of currency is not coming known because the possession of the item was not actually taken from the original owner. The way these stones were given to the new owners was not actually delivering the stone to them, but buying them verbally, knowing who is in possession of the stone, and who’s stone it is. The stones in today’s modern society can be related to money vaults that are in banks. And the ownership of the stone will be transferred to the buyer of the stone and its possession might stay with the previous owner, because some stones are too large to move to the other possession. This process is also very similar to modern day bank transactions. The concept of stone money was only visible to the people that lived on this island, or because these people kept their integrity of the value of the stone and ownership of the stones was word of mouth, as there was no feasible way to move these stones to two different locations due to size. 

In today’s modern society the significance of money has never been more important, yet, so fading  and dying out from our transactions that we do daily. Most goods that we acquire, or without the exchange of physical coherence. The credit systems and cryptocurrency have bloomed over the past few years and have currently taken the center of the stage as the top form of currency right now. The prices of items in stores change at any moment, because they all depend on the value of the dollar. At any given second the value of the dollar can change. The emergence of cryptocurrencies like bitcoins and Ethereum introduced a new level of dimension to the financial world. And I. purchasing crypto currencies may seem odd or strange to the average human being, because it is such a new concept. Also a major factor because it is digital currency or digital assets have a lot of intrinsic value. What is the true value of money itself? Money’s worth is shaped by the human perspective and how the human perceives the money. For example, if a group of people believe a sack of flour is worth eight dollars then if they agree on that, then it could hold its value. This could also go with any other item that people can agree on a value. In “Decoding Crypto: What Is It, How It Works, and How to Get Started ” the author underscores the differences between traditional stocks and the cryptocurrency world. Traditional starts correlate with specific companies and their states and trust in the shareholders investment in the company, which the shareholders will invest into the stocks and buy their stocks. The value of cryptocurrency is primarily linked to the investor. These people who are buying crypto currencies, and holding these currencies in their possessions, the value of the currency is primarily linked to the investor himself, because if he perceives the value of cryptocurrency to be what it is, then I will remain steady or raise the price or decrease, depending on the investors perception. The dynamics change when the individuals who were the investors in these stocks, start short selling these socks. This is known as a ‘whale’ that liquidates a large portion of the investors hoarding in the stocks, causing a substantial drop in price in the cryptocurrency world or stock world.

Brazil’s crackling with a lack of trust in its currency, sees dire consequences, but government interventions paved the way for a remarkable outcome, and turn around in events. In “The Invention of Money” the authors review how the government managed to rebuild their currency and faith among the people of a population of 150 million despite a complete absence of supporting evidence. The author states “The government tricked a hundred fifty million people into believing again that their money was worth something, but there was no absolute evidence to support that claim by the government” (423,2017). The reason for this financial crisis in Brazil was due to its crippling hyperinflation in rendering the basic necessities beyond reach, as the author describes “with 80% inflection, the price is $18. Six months later the sunglasses are $340. And by the end of the year the price tag reads “more than $10,000 Brazilians lived with high inflation like this for decades” (423,2017). They strived to expand and build infrastructure without a significant amount of funds to support this project. Brazil resorted to making new money, so they basically were printing money out of thin air, and no one knew where it came from. This turned into an astronomical inflation in this country in this practice, as the author explains results in the devaluation of each dollar known as inflation. “If there’s say a hundred dollars in the economy you create a hundred more now every dollar is half as much. That inflation and in Brazil inflation continued for the next five decades. Year after year Brazilian money was worth less and less” (423,2017). As the value of the money in Brazil plummeted, the prices became a product of the market dynamics and consumer demand, rather than reflecting the government’s assessment of their work. And the government rabbit we created money, and tried to restore the trust of their people, and the peoples trust in their currency. And the restoration of the faith among the population of Brazil was very important, because the populace in the value of money was a major impact of the runaway inflation of their currency this believed, and created an allusion that the Brazilian economy was on the mend promoting inflation to gradually dissipate and go away.

In conclusion, what bestows money with its importance and what grants money such intrinsic value is the people in the ways that these people perceive the money in assets. It all comes down to how the individual uses it, and shapes their life money serves as a key way to material acquisitions while complementary currency is far from being rigidly backed by the federal reserve as it once was its value remains usable in every day transactions because it has been brought back and restored to its original value. And the amount of money one individual may have or possess may flow with market dynamics because of how much currency is going through these markets, but it’s significant lies in the capacity to facilitate the exchange for goods and services, if needed to be. It’s not merely the mirror call figure displayed on the screen, but rather the materials repossessing have with us the number is a whole different meaning then the objects we actually obtain.

But but one matter that has not change is the manner in which we acquire food, and other essentials that we need, as human beings has always been in the same structure as past cultures what has evolved is the meaning of trade and what trade means instead of bartering tangible goods, such as self made clothing or homegrown vegetables or food now we use money instead of bees. The money is represented as the value of the time and effort these people invested in providing services or creating the product for the other people. You are compensated for your time which you turn in to pay for other time and expertise of others. This principle stands and holds true regardless of your circumstance, or wherever you are in this world this fundamental principle will always be true. 

References

Hyatt, John. “Decoding Crypto: What It Is, How It Works, and How to Get Started.” Nasdaq.com, 6 July 2021, http://www.nasdaq.com/articles/news-and-insights/what-is-cryptocurrency-and-how-it-works.

“The History of Stone Money – Manta Ray Bay Resort – Yap, Micronesia.” Manta Ray Bay Resort, http://www.mantaray.com/discover-yap/the-history-of-stone-money/. Accessed 20 Sept. 2023.

Friedman, Milton . “The Island of Stone Money.” Miltonfriedman.hoover.org, 1991, miltonfriedman.hoover.org/objects/56723/the-island-of-stone-money. Accessed 19 Dec. 2021.