Infinite and Equal

P1. An infinite amount of one-dollar bills is equal to an infinite amount of one-hundred dollar bills. As a society, as a world, we are made to believe that a small piece of paper with a number on it is enough to give us what we need. We could have two one-dollar bills and be able to get a pack of gum and a water bottle. Meanwhile if one has the same piece of paper with a 100 on it instead of a 1, a purchase such as a small flat screen TV or an iPod. Nothing changed on the bill except a number, and even a small number can make all the difference in how much wealth a person in this world has.

P2. Located in the westerly group of the Caroline Islands, in Micronesia is the Island of Yap. In his paper, “The Island of Stone Money,” Milton Friedman tells about American anthropologist, William Henry Furness III’s experience on the Island of Yap. During his visit, he found the way the people of Yap used currency to be of interest. Described as “large, solid, thick, stone wheels, ranging in diameter from a foot to twelve feet,” Furness found the Yap’s money to be intriguing, wanting to figure out how this form of money came about for them. Due to the lack of silver and gold on the island, the Yap resorted to stone once they realized they needed a form of currency on their island so they could buy and sell. This money is also based on trust. A piece of rock, or money, fell to the bottom of the ocean years ago, though the islanders have never seen the money, they still respect that it belongs to someone and that they have that money. Much more trust in this society than most in the world.

P3. In countries such as the United States, one would almost believe that money is something sacred, the way you see people treat it. People kill for money in the United States, giving very little trust to those in possession of another’s money. In the podcast, “The Island of Stone Money,” Jacob Goldstein and David Kestenbaum discuss how economists love the island called Yap “because it helps answer this really basic question: What is money?” They also explain how on Yap; money doesn’t even need to be transferred from one person to another to change its ownership. All it takes is one transaction. They say, “One person gives it to another person. But the stone doesn’t move. It’s just that everybody in the village knows the stone now has a new owner.” This sounds like the ultimate amount of trust.

P4. Sometimes though, trusting people with money is not something that everyone can rely on. In Brazil, the government was able to trick 150,000,000 people into believing that their money had value. Inflation in Brazil, at 80% a month is through the roof, causing something as simple as a pair of sunglasses to be brought from $80 to $340 in a matter of six months. They could not find a way to stop the inflation. That brings this to a very intriguing point. Why is inflation even a concept? From the first paragraph where it is alluded that an infinite amount of one bill and an infinite amount of another are equal, it brings up the question: Is money real?

P5. Who is there to even trust if there is nothing to be trusted with? Like time, money can be seen as an illusion. A physical, tangible illusion, but an illusion nonetheless. We possess paper, coins, or in the Yap’s case, stones, that are worth everything, but if there’s too much of it, it is somehow worth nothing. The Federal Reserve of the United States is responsible for creating money whenever they want, yet the country is still fourteen billion dollars in debt. So why not print more? They do not print more because more money equals the value of it decreasing, yet the less we have, the more it goes up. So why do we not just print the fourteen billion we need to climb our way out of debt? No one really seems to have an answer for that.

P6. There’s a form of e-currency out there called Bitcoins whose value drastically jumps from the two-hundreds to the fifties. In the article, “The bubble bursts on e-currency bitcoin,” by Anne Renaut, she goes on to describe the digital currency as something “which was created in 2009 in the wake of the global financial crisis by an anonymous programmer who wanted a currency independent of any central bank or financial institution.” This is another way of proving that money isn’t real. Someone decided that they did not like the way their money was being handled, therefore they just created a new one. The way money is used here, the drops, the raises, the way it is handled is almost fictitious. It seems that if someone is not satisfied by the way their money is being handled, they change the value, or create something new. In what was does that have value?

P7. Back to the Island of Yap, they do not have debt, because how can there be a shortage of rock? Money on Yap is less physical and more transactional, based on trust where one can just say “this is yours now” and it will belong to them with no questions. Yap is a place built on trust, rather than America, where people need to see their money to believe that it’s there and valuable. There’s that classic phrase in movies and TV shows: “Show me the money.” The character in whatever situation they have found themselves in won’t do what they are being told to do until they see their reward, which is not something absurd, but when Americans hear about how the Yap deal with their money, it sounds absurd then.

P8. Money is nothing but a concept. Each place in the world handles it different, yet we all seem to think it is one of the most important possessions one can own, when in reality, if one thinks about it, money is an illusion. Tactile, but still, money is not real in the long run.

Works Cited

Blumberg, Alex, and Dave Kestenbaum. “Weekend At Bernanke’s.” Audio blog post. www.thisisamericanlife.org. N.p., 7 Jan. 2011. Web. 18 Jan. 2017.

Friedman, Milton. The Island of Stone Money. Feb. 1991. Working Papers in Economics E-91-3. The Hoover Institution, Stanford University.

Goldstein, Jacob, and David Kestenbaum. “The Island of Stone Money.” Audio blog post. N.p., 10 Dec. 2010. Web. 18 Jan. 2017.

Joffe-Walt, Chana. “The Lie That Saved Brazil.” Audio blog post. www.thisisamericanlife.org. N.p., 7 Jan. 2011. Web. 18 Jan. 2017.

Renaut, Anne. “The Bubble Bursts on E-currency Bitcoin.” Yahoo! News. Yahoo!, 13 Apr. 2013. Web. 21 Jan. 2017.

Weeks, Linton. “The Trouble With Trillions.” NPR. NPR, 22 Aug. 2011. Web. 22 Jan. 2017. http://www.npr.org/2011/08/22/139846133/the-trouble-with-trillions

How Paper is Heavier than Metal:
The Strange Concept that is Money

p1. Everyday we as people use or see money in some way shape or form. whether it be in actual paper notes or the more obtuse forms such as bitcoin or other types, money is apart of our lives. But does anyone really take the time to truly think about what the hell money even is? We use these paper notes to exchange goods like food or clothes, which can pose as an equal trade, but what about things like precious metals, that you would think would have more worth than a paper note, even when in bulk. Also consider abstract things, like how humans try and put a numerical value on things like nature. What got me thinking  into this is the article we read on the “Island of Stone Money”, or the island home to the Uap. These people use huge limestone discs that sometimes can not even be moved, they believe in the value of these discs no matter where they are. So to us, those that use dollars,yen, etc… this seems so odd and unconventional, but how different are we really? The actual concept of money, when you break it down, seems so odd it demands an explanation.

p2.For a good place to start this exploration ,we must go back to the island of Stone Money. As discussed the Uap use these giant stone discs as currency, but that isn’t the stangest part, the strangest part is about how much the island trusts this system.”My faithful old friend Fatumak, assured me there was in the village a near by family whose wealth was unquestioned…and yet no one, not even the family itself has laid eyes on this wealth”(Friedman 2) The island mutually respects that this family is the wealthiest family on the island, and the family’s wealth is said to be sitting at the bottom of the ocean. Even better yet, when the Germans came to the island, the way they got the Uap to listen to their demands was by simply painting on big black X’s on the stone wheels, thus, in the Uap’s eyes, devalued the money to nothing. Why is it that this primitive economic system can become nothing by simply changing one aspect about its currency, is money really that malleable?

P3. To answer this question this question, I’m going to pose another question. What happens when inflation in your county is so bad that something like a pair of sunglasses could cost $10,000 in two weeks? The answer is you make up an entirely new currency, and that’s exactly what Brazil did.”The four’s plan was allow the new currency to have an exchange rate to match the inflation with out putting people in debt, so you’d be paid 1000 URVs a month and milk would cost one URV, the next month it would be the same except, you’d get the original currency as change for the URV”(This American Life podcast 423). The rial is a fine example on what pushing currency to the limit does. The fact that inflation cause a group of four college students to make up a fake note and an exchange rate for that note and have it work really hammers home that modern currency and primitive currency, I.e. The Uap’s are not really that different in nature. The fact is that currency is just a tool for an economic system, which yea of course it is, but tools can be new and tools can do only certain jobs, the real point is that every economy needs the right tool for the job and while people like the Uap keep the same tool forever, counties like Brazil sometimes need new tools.

P4.A curious product of this concept of creating new tools is actually the Bitcoin. Bitcoin is a completely digital form of currency used on the internet for goods and services. The only difference between this made up currency and the rial is that the bitcoin wasn’t born out of necessity, it was just created as digital currency,exchange rate and everything.Bitcoin was a growing economy within the internet and more and more users did decide to dip their hands in it everyday,so how is it that some people just decide to switch over to something without having a sure idea where it’s going? Well the risk was not worth it because recently the bitcoin economy just had its first big crash. “The price of the virtual “geek” currency had soared through the stratosphere in recent weeks, trading for a high of $266 on Wednesday — only to come hurtling back to Earth in just three days.By Friday, a single Bitcoin was worth just $54, according to the Mt. Gox platform, which manages 80 percent of the Bitcoin transactions and had to briefly shut down trading Thursday.” Even from the beginning, some people had thoughts that something like this would happen at least a few times due to the nature of it being a privatized economy it was bond to burst.

P5. Why does it relate to the strange concept of money and its tool like qualities? It’s because, it’s too much like the incident with France when the US put gold aside and the market crashed, just on a much smaller scale. The actual concept of Money is a note or a tool that a group of government officials, college buddies, or some guy places a value on and the people trust its value with out considering what happens when it gets too big, or if we put away more gold than our actually currency can cover. Something similar to this is happening in Japan currently. Japan is fearing a currency war because the Yen has deflated immensely due to spending. “The yen skidded to a two-and-a-half-year low of 90.695 against the dollar Friday, which reinforced expectations for more monetary easing. The currency has slumped 11 percent against the dollar since early November as Mr. Abe stormed to an election victory in December with bold promises to end decades of intermittent growth”(NYTimes). The Yen has decreased so much that they need to reverse without changing the actual property of the Yen, or else they might insight a currency war.

P6. Money is so strange because with problems like in japan, and previous examples, like in Brazil, you can essentially just agree to stop using a currency for a new one until it balances out. Yet at the same time this could also incite an irreversible financial crisis all because the worth of some paper because too large or too small. That is the whole point of the oddity of money is that we as a country, or as people, put so much faith into a note without really thinking about it. I mean we pay for homes, and cars, and plenty of other things that, when thought about critically, seem way more valuable than the stack of papers sitting in our bank accounts. It’s almost miraculous that we, as people, pick some random thing, whether it be a paper note, a stone disc, chunks of data, or even shells, and decide that’s how our society will trade, especially when people value things differently than others.

Works Cited

Friedman, Milton. The island of stone money. Stanford, CA: Hoover Institution, Stanford U, 1991. Print.

“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.

Renaut, Anne. “The bubble bursts on e-currency Bitcoin.” Yahoo! News. Yahoo!, 13 Apr. 2013. Web. 23 Jan. 2017.

“The Lie That Saved Brazil.” This American Life. NPR, 7 Jan. 2011. Web.