Stone Money-wafflesrgud

Money Money Money Money Rockin Everywhere

There are few things nowadays that people actually value. Something that has always stayed consistent throughout the years, generation after generation is—money. Of course the value of money has changed like a roller coaster, but the sheer fact that money itself or currency actually holds value in this world will most likely never change. This is a concept that is overlooked by the average person, but many economists have studied and reporters accounted on. In the NPR Broadcast, we hear the stories recalled from the five reporters trying to unravel the truth about money and what exactly it is. Early on in the podcast we find out that money indeed is just fiction and a made up concept of currency and value.

What is the intrinsic value of money? Well, there is none. It’s zero. Money is given it’s value by man and as a society we all agree upon it. The innate value of money is that we all essentially value it and decided we need it to survive and flourish in the world. Regardless of what kind of currency is used in a country, there is always this sort of exchange happening whether with metals, paper or digitally. Let’s use our own country for example. We didn’t always have our founding fathers on the bills, what do you think they used? I’m sure they didn’t carry photos of themselves on paper and call it dollar bills. There was a period of time in the 1820’s that there was free banking and free trade with money. Money was a receipt issued from the bank and because of this there were thousands of different kinds of money in the U.S.  “And if you brought your note to the bank, they would give you gold or silver in exchange.” said Jacob Goldstein in “What Is Money?” interview. 

Exchanging bank notes for gold or silver in the U.S. seems so obsolete to us now, but what about exchanging a 12-inch to 12-foot stone coin for currency? This is what the Yaps do. The concept of money is essentially the same thing all around the world as it is in Yap. The currency would be the fei (stone coin) and would be exchanged for goods. Something interesting about the fei is that when the ownership has changed from one person to another, the fei itself remains in the same spot. It is far too large to move, therefore the new owner is quite content with knowing it’s in their possession without even truly moving. To the Western world where most currency is paper (very light-weight and easily transferable) this concept seems odd and possibly almost silly? However, what about digital currencies? We never truly have it in our possession as a dollar and so we can’t really hold on to it either. It’s just a number on a screen going up and down everyday. So in a sense, it isn’t too different after all. 

Even though there are some similarities between the two different types of currencies, there are still some differences. When the Germans took over the ownership of the islands, there were some changes to be done for the new currencies. When they had to redo their roads and highways, the German government came and put black paint in a cross formation on the coins which marked that it was the government’s currency. Finally the highways were repaired once this happened then shortly after the black cross was removed. One would not see this with the U.S. currency since our government is already pretty established on it’s own. Another difference is that when a stone coin is transported to Yaps, the native islanders see it at a manifestation of wealth. This term manifestation would normally not be heard of with our money as it is seen as very logical and not as spiritual in comparison to the Yaps. 

The Yap concept of money is more abstract than ours because of the large stone coins that are known as their currency of course. Rai stones and fei cover the Micronesian islands and if anthropologists did communicate with them about their currencies it would not be known that these large eye-catching stones are their money. Even though banking and online money which are not tangible might seem abstract to a Yap, to Americans, this stone that is not possible to move is very abstract. It’s almost the equivalent of owning a property because wec cannot actually move it but we do own it—except this is their exchange of goods.

The value of our money is one of the most fluid things in the government. I wouldn’t say it comes and goes, but it definitely fluctuates in it’s worth. As mentioned in the NPR broadcast, “money is fictional”, so the value it has is only temporary and will soon change. This also goes hand in hand with the government of course because they are the ones who essentially control how our money works and it’s worth of the dollar. Public faith in the value of currency is everything. If people lose faith in the government and the “higher authority” then the sense of money and it’s worth innately means nothing. 

When you are asked “what is money” or try to explain to someone else, it turns out to be a really difficult question to answer. It means something different to everyone like their own worth they give to it. A businesswoman compared to a yoga instructor for example may both have completely different notions as to what it means, but it all comes down to one thing. Money is fiction and the worth the government gives to it is all the value it holds. A man made idea and worth put into our currency is all our money ever is and will be. 

References

Friedman, Milton. The Island of Stone Money. Hoover Institution, Stanford University, 1991

“The Invention of Money.” This American Life, 19 Feb. 2018, http://www.thisamericanlife.org/423/the-invention-of-money. 

“What Is Money? Jacob Goldstein’s Book Explains ‘Shared Fiction’.” NPR, NPR, 8 Sept. 2020, http://www.npr.org/2020/09/08/910586930/what-is-money-jacob-goldsteins-book-explains-shared-fiction. 

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Stone Money – bluntwriting88

All Money is a Matter of Belief – bluntwriting88

Money and its historical development is truly a remarkable thing. As Milton Friedman brilliantly showcased in his essay The Island of Stone Money, the idea of money being merely a myth in which the collective believe in seems to be more applicable today than ever before. That is, the concept of money is ultimately rooted by conscious experience and abstraction rather than material property. While money has its roots in literal concrete objects as we shall see, it fundamentally relies on a collectively perceived value for said money.

                The island civilization known as Yap serves as a stark example of the evolution of money. Yap relied on large limestone wheels from 400 miles away as currency – very alien to today’s paper money. Due to the size of the wheels, once a transaction is completed, the new owner would simply acknowledge the fact that there was a ‘transfer of ownership’ without relocation of the limestone. As Friedman explains, while this may seem counterintuitive or illogical, the same mechanisms of transaction for the people of Yap applies to modern economics. In 1933, France had requested a conversion from dollar to gold from the U.S. Instead of shipping the gold across the Atlantic, ownership was similarly transferred as the gold now had France’s name on it. Inevitably, the medium of the currency becomes abstracted where only belief and recognition of value constitutes ‘money’. France never really possessed the lump sum of gold – they simply knew it was theirs regardless of where it was in the world just as the scattered limestones throughout Yap. The only thing which changed for France was a number on a sheet – completely void of anything physical.

                Similarly, the U.S. economy operates under such a system run by the Federal Reserve which can declare money into existence via a computational entry. Fractional reserve banking allows the Fed to create money out of thin air and affect the economic landscape. Former Fed Chairman Alan Greenspan himself once states that the U.S. can simply print all its debt away with these methods. As stated in act one two of NPR’s The Invention of Money, so long as people believe in the Federal Reserve note, the abstraction holds valid. Many have criticized the Fed for operating in such a regime, while some claim it to be a blessing. The fact of the matter is that it is rather peculiar and occult to have a group of Ph.D.’s autonomously control the money supply and banking system. One property of money which many attribute to the Fed is inflation.

                Inflation, like money, is also dependent on the conscious experience. But it is also dependent on prices. As pointed out in act one of the NPR broadcast The Invention of Money , when people’s faith in money is unstable, economic ails such as rampant inflation correspondingly follow. As in the case of Brazil in the 90’s, a new fiat money the Real was declared as an attempt to curtail the mass inflation of the cruzeiro. Brazilian’s faith in the cruzeiro was so low that they would immediately spend their money due to the fast loss-of-value. This aggressive feedback loop which leads to even more inflation is fundamentally rooted in the perception of money by its users, as Brazil’s inflation was. The new Real currency (for unit of real value) was not backed by gold or limestone. By fixing price levels in the Real units, Brazils consumers perceived a ‘fixed’ price (that actually varied day to day to adjust for cruzeiro inflation). Yet, counterintuitively, faith prevailed, and the Brazilian monetary system was saved from absolute collapse.

                Like the Fed creating money from nothing, Brazil pursued a similar idea. The Fed may print trillions that needn’t be backed by a physical equivalent so long as the whole of society believes in and agrees as to its perceived value. Money from nothing so to speak. The limestone wheels from Yap likewise did not have anything of value intrinsically backing them. The islanders simply had faith in it as a means of exchange. Brazil’s case was no different. Time and time again, we see the same patterns and rules of money appear all over history – and we know that our employed methods of monetary policy have at least aided in regulating and manipulating money. Yet as was the case in Brazil, much of monetary policy revolves around simply manipulation of certain factors of perception in the human mind.

                One good counter example is the sub-prime mortgage crisis of 2008. For decades almost everyone held the notion that mortgages were easy and ‘not that big a deal’. Credit in itself was strikingly easy to come by. The perception for decades was that everything was fine. And this is precisely where economic catastrophe meets cognition. The population, including banks, were fed lies on the ‘true value’ of mortgage backed securities which were really mostly low-rated mortgages sprinkled with little high-rated ones in order to make the entire package seem like an overall net-high-quality security. Like an aggressive self-fulfilling inflation cycle, overvaluation was a persistent malady. The lie was so great that the entire global economy was nearly annihilated. An article from History.com The 2008 Crash: What Happened to All That Money?  highlights how tens of billions of dollars ‘vanished’ from ledger sheets. And just like how money can be created from nothing, it can return to nothing. If it did not exist in the first place, then only a mind-game is being played with it. Certainly, the world was shocked at the time when all this money vanished into thin air. But why should we be considering its abstract nature?

                Much of economics and money is still a deep mystery. But as with the Fed, Brazil, or Islanders, money shrinks and grows via the value assignments people decide to adhere to within their minds (It may not even be a decision at all). It may ultimately come to acts of autosuggestion as a means for economic growth. What is without question though is the universally established fact on the mental nature of all currencies throughout history.

References:

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

“The Invention of Money.” 423: The Invention of Money. This Is American Life, WBEZ. Chicago 2011

Rauchway, E. (2018, September 14). The 2008 Crash: What Happened to All That Money?

Retrieved September 23, 2020, from https://www.history.com/news/2008-financial-crisis-causes

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Claims – l8tersk8ter

The phone never stops ringing. If it does for 14 seconds, Brannan writes an email to help get whatever someone needs or publishes a blog post about her own struggle.

This is an evaluative claim. The author is saying the phone appeared to never stop ringing, but I’m sure there were periods between calls that the phone was silent for longer than 14 seconds. Also that Brannan did nothing in those periods of time between the phone calls but blog or write emails could be argued.

Caleb was not amused the first time one of these posts went live. But now he’s glad she didn’t ask him his permission.

This is a causal claim. Caleb was at first not amused, but he is now happy that she made the post. He changed his mind because there were positive responses that shows they were all not alone and Brannan is now able to help people. It is because of these responses that he is no longer angry about the post. Another causal claim is that he was not amused because of the initial post.

It’s a brief emergence from his bedroom

This is a quantitative claim about the amount of time he leaves his bedroom, which is brief, and never longer.

he’s been “sleeping or hiding,”

This can be a categorical claim. Sleeping and hiding are the activities in the category of things Caleb does when he’s in the bedroom. If he’s not sleeping, he’s in there hiding, and vice versa.

20 or so hours a day for a few days

This is a numerical claim about the amount of time Caleb spends in the bedroom when he is either sleeping or hiding. She says it is about 20 hours a day that he is in the room, and this usually lasts for a few days in a row.

He leans forward to put his glass of orange juice on the table; it takes many, many long seconds for him to cover the few inches

I think this can be a quantitative claim about the length of time it took him to put the glass on the table. It took him a long enough time, many long seconds, to complete the task. It is a measure of the time. It can also be a comparative claim because she is observing he took a long time whereas it is typically a quick task. But for him, compared to others, it took longer.

today, like most days

This is a comparative claim about how Caleb feels on this particular day as compared to other days. On this day he was feeling the same as he usually does on other days,

he feels “like a damn train ran over me.”

The quote from Caleb is an analogy claim. He did not get run over by a train, but between his physical and mental trauma and pain due to his war experiences, he feels like what he would assumes the experience of getting run over would entail. He is comparing the similarity between the feelings he does experience and the feeling he would experience by getting run over by a train.

“But because of the feedback she got, I know that other people were going through the same shit I was…”

Here Caleb is making a categorical claim that people who gave/give feedback to Brennan are in similar situations, meaning others are going through the same thing he is. He is in a category of people that are suffering and people that have family members that are suffering because of that.

“…And she’s helping people.”

This could be a moral claim because he is stating how she is doing a good thing that is morally right. There are people that need help and she is providing that to them,

“She’s got a good heart. She’s always been like that…”

Caleb’s description of Brannan is a categorical claim placing her in a personality category. Her good heart that she has, and has always had, put hers in a category of good people. If someone has a good heart you wouldn’t assume they were a bad person, so therefore he is claiming that she is a good person.

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Claims – cfriery

Caleb has been home since 2006, way more than enough time for Brannan to catch his symptoms. The house, in a subdivision a little removed from one of many shopping centers in a small town in the southwest corner of Alabama, is often quiet as a morgue. You can hear the cat padding around. The air conditioner whooshes, a clock ticks. When a sound erupts—Caleb screaming at Brannan because she’s just woken him up from a nightmare, after making sure she’s at least an arm’s length away in case he wakes up swinging—the ensuing silence seems even denser. Even when everyone’s in the family room watching TV, it’s only connected to Netflix and not to cable, since news is often a trigger. Brannan and Caleb can be tense with their own agitation, and tense about each other’s. Their German shepherd, a service dog trained to help veterans with PTSD, is ready to alert Caleb to triggers by barking, or to calm him by jumping onto his chest. This PTSD picture is worse than some, but much better, Brannan knows, than those that have devolved into drug addiction and rehab stints and relapses. She has not, unlike military wives she advises, ever been beat up. Nor jumped out of her own bed when she got touched in the middle of the night for fear of being raped, again. Still.

  • “has been home since 2006” is a factual claim that Caleb has been back from the war since 2006.
  • “more than enough time… to catch his symptoms” is an evaluative numerical claim because of the first phrase. It’s surprising that it’s been THAT long with NO help.
  • “is often quiet as a morgue” is an analogy claim because it compares the house to a morgue. I enjoy the tone the author uses to really set the mood of this article.
  • “When a sound erupts-the ensuing silence seems even denser” – casual claim because it is cause and effect with Brannan waking up Caleb, Caleb screaming, the silence seems more intense. PTSD is no joke, especially when it’s affecting your dreams.
  • “new is often a trigger” – evaluative claim or casual claim because news is a PTSD trigger for Caleb. This is an interesting trigger; I’m not quite sure why the news would be such a terrible trigger for him (It’s explained a little more in the article but not to the depths I was looking for).
  • “tense with their own agitation, and tense about each other’s” – evaluative claim because the are tense with the situation. Understandably, it takes such will and immense strength to continue to fight through these hardships, and I have IMMENSE respect for these two after reading the article.
  • “trained to help veterans with PTSD” – factual claim because the dog is trained. Man’s best friend, enough said.
  • “ready to alert” – factual claim because the dog is trained.
  • “calm him” – factual claim because the dog is trained. It’s such a beautiful thing to see animals, and especially dogs (I’m a dog person if you couldn’t tell), being used this way. I understand this dog is trained for PTSD but emotional support animals in general are such a blessing to have around.
  • “worse than some” – comparative claim because you are comparing their situation to others. The fact that she (Brannan) understands her situation to a TEE allows her to handle all of this beautifully. Major props to her. As well as Caleb.
  • “devolved into” – casual claim that is stating the cause is PTSD and the effect is addiction, rehab, and relapses. This is the sad truth of vets with PTSD (or vets without it). I wish everyone could help each other out. It would make the whole world such a better place.
  • “She has not” – can be considered a factual claim (unless she’s lying, which I doubt) because she is stating a fact that she has not been beat up. This is a really good thing to hear because I’ve heard a plethora of stories about vets with PTSD and abuse.
  • “Nor” – factual claim, same reasoning as, “she has not”.
  • “Still.” – factual claim with the same reasoning as “she has not”.

Let me know if I missed any please!

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Stone Money — SmilingDogTheProfWants

Rougher than the Pacific Seas

Our analysis of the abstract concept of money begins in the Pacific Ocean, on the island of Yap. Money is well known to be used as a trading device for goods and services but don’t quite understand the actual idea of the money. This island’s money is made of stone, used just as change would be for the most part, but the unique part of there money is that they have a handful of giant (some 8 feet tall) stone currency that are heavier than a car! Now, these coins (if you can call them that) are meant for the most important/expensive things to them but it’s more than obvious that they cannot be moved easily and without a large amount of either aid or time. So what did the islanders do instead, why they just created their independent idea of virtual/spiritual currency, or rather, just the concept of money. The islanders kept track of who owned the slab and made sure that it was known when they were traded between people and so despite there being no evidence of ownership the rock that was once laying on the ground holds behind it a sense of power, trust, and the concept of money.

The islanders have created something similar to how our money works today. We have trust in the money and understand its value while it is actually a simple piece of cotton or plastic credit card. We perceive its value, think/plan with that value in mind and spend that money with the understanding that you’ll need more for later in case something occurs. This concept may have been different from the Islanders of Yap as their currency is more for everyday things and then large purchases (those 8 foot tall coins) while they probably still traded and exchanged services alongside their shiny rocks but the concept mimics many strange problems and solutions throughout history involving loaning and borrowing money from one nation to another. 

Now that the inhabitants of Yap have created this nearly fictitious form of money we may begin to understand our own money. Our money holds the power to purchase anything from your cup of coffee in the morning to a skyscraper in Dubai. The only thing stopping you is how much more of the concept you have in your bank account. Your money you see through bank statements and recent mobile apps are nothing more than ink or pixels blotted on a surface for you to look at. Money exists, of course it does, there are pennies, and nickels, and five dollar bills, and much more, but not all money can be held by that person at all times. When you give a bank your money for interest or insurance the bank gives your money out to a person looking for a loan, that’s your money, that belongs to the bank, that belongs to the person that got the loan, for them to pay back, and for the bank to collect your money back and then keep the profit for themselves. There’s no way to count how much money is in circulation because that money always belongs to several people at the same time. 

On top of this possibly new and fascinating news it would be worth mentioning that the Federal Reserve Board doesn’t print most of the money they release into the market they just type a little bit on some keys and a few million dollars have been added unknown to almost no one but them. This concept is a testament to how fragile money can be and a prime example of this is Brazil about three decades ago when the people lost faith in their currency. The whole idea of currency is to have faith in an object that has been bestowed a value and otherwise would be nothing more than a cool trinket. Brazil got to the point where if you were making a good that took more than a few hours to make then you’d be losing vast amounts of money. But, their issue was fixed by reinstating a new currency and forcing people to trust it (more like tricks, but the people didn’t really have a choice whether they realized it or not). People began to believe in a currency and that currency stabilized and completely fixed the inflation issues that were caused by a lack of faith (catalysed is a better word because the construction of a palace is what started it).

France in the early 1930’s had a significant amount of money invested in our economy and when the price of gold was about to change the best solution was to give france their gold as assurance for their investment, but doing that would take time and money so instead the bank labled that the gold belonging to france in their vault in the basement and France found no issue with it. As far as the french were concerned their gold reserves had just increased, and as far as the people in the United States were concerned they just lost a large amount of gold to France and led to distrust of the gold backing their dollar in the bank. Yet the only physical thing that indicated that the U.S. didn’t own the gold was the fact that it was put into a bin that said it belonged to France and a moral code that said we had no access to it and could not use it despite France never wanting to cross the ocean for it.  

From giant stone slabs on an island to the French gold in the banks vaults to the modern day keys on a FED employee’s keyboard, money has kept the same core functionality and mysticism since before the days of Yap and works all the same. We’ve also bared witness to the destruction of nations because of its fragile concept and we’ve seen others thrive off it, it’s a strange idea that helps drive our world’s even stranger people. 

References

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

Joffe-Walt, Chana . “How Fake Money Saved Brazil.” NPR.org. 4 Oct. 2010. 30 Jan. 2015. http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil/ 

“The Invention of Stone Money.” 423: The Invention of Stone Money. This Is American Life, WBEZ. Chicago . 7 Jan. 2011.

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Stone Money—612119d

Money Over Everything

The monetary system of the people of Yap does seem crazy upon first glance, but when thought about it is very similar if not identical with today’s monetary system. A limestone wheel and an electronic bank balance Have way more in common than you ever thought.  Both are completely different at first glance but as you go back in time you can see they are actually very alike. A Big limestone wheel was worth everything while having no actual value or use, in today’s world we have bitcoin, a virtual money that only value comes from people buying it at a higher price. .Since the time of the yap , money has gotten more and more complicated. As a society just put blind trust into the bank to hold our money and hope that when we want to spend it, it will be there.

The Island of Stone Money shows us how the Yap people used their simple but effective monetary system. The Island of the Yap was a  small island which had a population between five to six thousand.  In 1903, William Henry Furness III studied the culture of their community.  What he found most fascinating about them was there monetary system  and rightfully so it was remarkable. Their Currency on the Island of Yap was called fei. Since they had no metals at the time they used immensely thick and big limestone wheels that could be up to 12 feet big. The most bizarre part is that this money is only ever exchanged by word of mouth. Their system worked so well that once the stone is acquired it is placed in a singular location never to be touched again. When the rock was used as payment, people were aware that the ownership of that rock had changed and acted accordingly. Friedman recounts a story of a crew from Yap that went to retrieve limestone from the island on which they harvest it, but on the way back weather got really bad and knew having this big rock increased there likelihood of dying. For the safety of the crew they tossed it overboard.While the crew made it back the rock did not and even though no one but this crew ever laid eyes on this carved stone,  everyone in the community trusted that it did exist. It was even enough for someone to have ownership of it and the value of the stone would be the same as it would be exchanged anyway. In the late 1800’s  the German government acquired the island of the yap. The German government soon realized after buying the islands that the island’s roads and paths were beaten down and were in terrible shape. The chiefs of several districts were ordered by the Germans to have them repaired as fast as possible. The people of the island thought their blocks of coral were good enough but the German government had other ideas. They put black “X” on their big limestone coins and told the people that until the roads were done the coins were owned by German government. This worked so well that highways were made across the island. Once they were finished, the German government took away the black “X”’s off which meant the people of the islands paid their fine. 

“The Invention of Money” Jacob Goldstein of the Planet Money team observes that most of  money is never even hard currency. Salaries are paid in direct deposits , bills are paid online and the proof is numbers on a virtual screen. The only way a central bank will work is all the people have trust. If this trust were to break at any time , the whole monetary system would crash and all money would be worthless.A good example of this is a “Rare” baseball card. It would be worthless but people assign value to it and treat it like it’s expensive when in all reality has no true value. Anything is worth something because someone told you that it is. Money is something that has value  because the banks tell you that it exists and that you need it for basically everything in life.  We put our trust in them even if we do not see the money. Our Money is not only not seen, but in general most of the money in general does not even physically exist. It is an idea that we have learned to trust, and this trust is placed in the banks just as the Yap Most people don’t carry cash. The world we live in is digital. Cash is slowly fading away in this ascendance of the internet. Most people in the bank and  it doesn’t actually belong to a singular person. How They describe your money is they put it into the bank, and then the bank gives it out to someone else on a higher interest rate. He gives that someone else the description of a shoe store owner, he uses that money loaned from the bank and purchases a sign and now that money is once again in someone else’s hands. We as a society just put blind trust into the bank to hold our money and hope that when we want to spend it, it will be there. The Gold Standard had failed but that led the US into letting people borrow money that they do not have.It worked out so well here other countries adopted the idea of credit which either hurt some of them. Brazil’s inflation increased eighty percent a month and looked like it couldn’t be stopped. Credit destroyed Brazil and only worse when they continued buying inflated items. The  U.S. went through its own hell which left us with an extreme amount of debt. WhenAmerica was introduced which let anybody borrow money they didn’t have as long as they paid it back to their bank. People who couldn’t pay back what they borrowed were in something called debt and when people couldn’t the banks all failed and almost ruined the country.

References

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

Reeves, Jeff. “Bitcoin Has No Place in Your – or Any – Portfolio.” MarketWatch, MarketWatch, 31 Jan. 2015, “The Invention of Money.” This American Life, 19 Feb. 2018,

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Stone Money – gooferious

Money… fiction?

Cash, credit, debit… these are all terms used to define money, more importantly your money. One would assume that a person would want all their money easily accessible, at hand’s reach one would say but money isn’t all that we think it is. After listening to the NPR broadcast called The Invention of Money, my perception of money and it’s worth has definitely changed.

Initially, I believed that money is what makes the world go round. This statement after careful thought is somewhat true yet invalid at the same time. The broadcasters really get you to think about the concept of money. Money is something that was created to give value to objects. We in America use the dollar bill while in Mexico pesos are used. Regardless where you go some form of currency is used to be exchanged for goods and/or services. According to what was said in the broadcast, listeners are told money is fiction. How can that be so?

While listening, the story of the island of Yap is told. In Yap, it’s residents use sculptures as a form of currency. By sculptures, I am referring to big rocks of limestone. It is implied that this form of money is no different than what we use here in our own country. In the United States, we entrust banks to keep our money secured safely. These banks put our cash in huge vaults underground for storage. Once the process of delivering money to the bank is complete, your bank account balance should go up and one is satisfied with that. How can you be satisfied with something that you cannot see? You ensure yourself that the bank will hold your money safely so you shouldn’t have to worry about it. This is no different from what is done on the island of Yap.

On the island of Yap, residents first started to trade big stones as currency to exchange goods and/or services. One would have to physically move their “transaction” from the home of the buyer to the home of the merchant. This method however grew to be tiresome for many. That’s when an idea was suggested to the people of Yap. Basically what was informed to the citizens of the island was a way to pay for your products without having to physically move the huge stones. If the limestone was kept at the home of the buyer then once he has made a purchase, the ownership of his stone would now go to the merchant but it would remain in the same place. Sound far-fetched? Well it’s not because that’s what we do here in America. The only actual physical item of money would be the cash bills and coins but after the broadcast these bills and coins are as significant as that huge stone leaning on the house of the buyer. Companies make transactions cryptically, it’s done over a computer. Physical money is rarely used in banks unless a member of that bank is making a withdrawal of cash from their account.

As the broadcast keeps ongoing, listeners hear the story of how cruisers from the island were coming back with a limestone that would be given to someone. While at sea, a storm caused the big stone to fall off the ship and sunk to the bottom of the ocean. When the sailors returned to shore and told their story, the people of Yap believed them and said that the big limestone was still valuable and can still be used even at the bottom of the ocean. How can this be? Well someone has ownership of that stone and when they buy something that stone’s ownership would now go to the person who is selling to the buyer. This is a constant cycle of who claims ownership for a giant rock at the bottom of the ocean. This method is ironically used here as well. We keep money in banks and when we need to pay a bill or make any form of payment, most of the time money is exchanged electronically; should that be via credit or debit card. We physically are not giving cash to someone we are actually giving ownership of our money in the bank to another person. While your account balance goes down, the cash money is still in that vault in the bank. Sound familiar?

In Milton Friedman’s article titled The Island Of Stone Money, Friedman gives an insight on the story of the people of Yap from his perspective. He at first found it completely weird that their form of money were big rocks but soon came to the realization that those rocks and our money are actually no different. We do not physically touch our money once it’s in the bank just like how the owner of the stone does not physically touch his money. What really stood out to me from the article was a statement Friedman wrote which said that the “civilized” world made their money from metals that came from the ground, which were then refined at great labor, which eventually was transported to multiple locations and then is stored once again in vaults underground. How is this any different from a very big stone wheel at the bottom of the ocean?

In an article written by Anne Renaut called The Bubble Bursts on e-Currency Bitcoin, Renaut provides readers with the dangers that come along with e-currency and it’s transactions. In her article, Renaut states that “Bitcoin is made of strings of dazzlingly complex code created by a process called mining”. While we have established that paper money, coins, and stones are all of insignificant value, Renaut gives readers a warning about the dangers of e-currency which is what is mainly used in today’s society. She goes on to state that once the virtual money is mined, Bitcoins are stored in the virtual wallet of it’s user. Sending money is kept anonymous which can be dangerous. Renaut calls it a “high degree of anonymity” which is then switched over to how this anonymity can be used as an alternative form of payment for drug dealing and money laundering. Any form of money has it’s advantages and disadvantages but overall I believe the statement that “money is fiction” is accurate.

References

This American Life. 2020. The Invention Of Money – This American Life. [online] Available at: <https://www.thisamericanlife.org/423/the-invention-of-money&gt; [Accessed 21 September 2020].

Friedman, Milton. The Island Of Stone Money. Hoover Institution, Stanford University, 1991. [Accessed 21 September 2020]

Renaut, Anne. The Bubble Bursts on e-Currency BitcoinYahoo! News, AFP News, 13 Apr. 2013, sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html. [Accessed 21 September 2020]

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Stone Money- gabythefujoshi

Money is a Lie

“Money is a fiction.” This is a line mentioned in the beginning of the NPR broadcast, Planet Money. Anyone who hears this would find it absurd because nobody would associate money as something made up. It’s something our country heavily relies on, it’s part of one’s stability. How could something of such importance be considered made up? Money itself is worthless and really doesn’t exist, but it’s people’s strong belief in those numbers that bring it to life. The faith that people put on money, regardless of whether it is tangible to them or not, is what truly makes up its monetary value. 

An NPR broadcast, The Invention of the Economy, discusses the beginnings of our reliance on numbers. As mentioned by Karabell, writer of The Leading Indicators, the economy was invented as a result of the Great Depression. The country was suffering tremendous loss to its businesses, employment and overall well-being of the people. It’s because of the overwhelming short-run effects of the Great Depression that we now have a long-run effect, a nationwide financial system. Suddenly, the country was reading out numbers of GDP, national income, and these numbers brought prosperity or demise for the country. These numbers determined whether someone felt it best to invest in stock or if they will have enough to buy food for the week. However, these measures aren’t concrete either. As mentioned in the broadcast, the measure of the gross domestic product (GDP) doesn’t count the black market, so its readings are not accurate. At the end of the day, GDP is just an idea that gives people peace of mind. Without a system where we can measure our finances, the country would still be in disarray like they were during the Great Depression. The people’s belief in these numbers is what helps drive an economy and the overall country from distress. 

A prime example of people’s faith being a driving component in our universal dependence of money was the sudden boom in the economy in Brazil in the nineties. In Act 1 of the NPR broadcast, The Invention of Money, they discussed how the government of Brazil had tried to control the means of the economy through tactics such as freezing prices to decline the high inflation rates. The majority of these attempts proved to be unsuccessful, so the Financial Minister of Brazil in 1993 invited four graduate students to come up with a solution to the economic distress of the country. The coordinator of this act of Planet Money themselves were baffled in hearing that virtual money was the key to reducing inflation, getting the country to be in equilibrium, as well as developing a new currency. The key to this madness, as the economists mentioned, was to trick the people into believing this virtual money was worth something. Regardless of how the government fluctuated the prices of goods and services, the economy was still failing and the only way it was able to stabilize itself was through people’s trust in virtual money. People’s strong believe in a completely distinct economic system almost seems ridiculous, but the country had nothing to lose. In a time of desperation, people are willing to place their hopes on anything. While the monetary and numerical value of currency didn’t change much, it’s the belief that people have placed on this new currency that has enhanced its value. 

Believing isn’t just seeing and this is something that has been proven through the interactions of the Yap Islanders and the French with the U.S. In the essay, “The Island Stone Money,” the writer mentions an anthropologist by the name of William Henry Furness III who wrote about the monetary system of the Island of Yap. Their means of exchange is done through stones made of limestone found on another island some 400 miles away from the island. Because of how far away the other island is from Yap, there was bound to be mishaps that followed the journeys back home. One incident recounted in the essay is during a violent storm, an enormous fei, the stone currency, fell to the bottom of the ocean. Regardless, the owner of the fei still deemed themselves to be wealthy without having the stone in their possession. This idea itself sounds ridiculous, but the U.S and France did something similar with France’s gold. Friedman, writer of the essay, further goes on to explain that the French firmly believed that with a couple marks made, the gold was theirs. This resulted in one of the biggest financial crises in the U.S. when the country believed to be out of gold. Both the French and the Yap Islanders believed in a wealth that was miles away from them regardless of the inability to have it in their vicinity, they felt wealthy. 

Friedman questions in his essay, “The Island Stone Money” if this system is any different from today, challenging the ideas of how we put faith in something we cannot see. We still do this today daily. Today, we are in worldwide pandemic that had shut down our economy, something that has never been done before. Money, something we heavily rely on, suddenly becomes inaccessible to thousands of people. Currently, with the coin and paper shortage of the printing of money, we now more than ever use money that we cannot touch. Everything nowadays is paid through Venmo, online bank transfers, and phone applications. Most of shopping is done online so one no longer sees their money being put into the cash register. All these forms of exchange cannot be done without putting trust in the system, exactly how the Yap Islanders and French did. It’s not something out of the ordinary and it seems that currency is heading in the direction where it will be purely digital. 

If it weren’t for the human faith and need for social structure, money would be completely worthless. These numbers allow us to properly function as a society and gives us a sense of security.  

References

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

Glass, I. (2018, February 19). The Invention of Money. Retrieved September 21, 2020, from https://www.thisamericanlife.org/423/the-invention-of-money

Goldstein, J. (2014, February 28). The Invention Of ‘The Economy’. Retrieved September 22, 2020, from https://www.npr.org/sections/money/2014/02/28/283477546/the-invention-of-the-economy

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Stone Money – shadowswife

The Perception of Money

           When thinking of how one uses currency to purchase products, one gives a physical value in the form of denominations. If in the United States, money has a physical appearance with different set values. For example, there are denominations of one, five, ten, twenty, fifty, and one hundred bills utilized as a form of payment. Further, there are bank checks that can be used to pay when money is not in possession or if the receiving company has a preference. With the introduction of money wired transfers, the idea that a monetary transaction can be made electronically called for speculation of the perception of money. This took the physical aspect of money and gave it a different concept. Therefore, while listening to the King’s, What is Money? Jacob Goldstein’s Book Explains’ Shared Fiction, Milton Friedman’s article on The Island of Stone Money, and Krugman’s The Curious Case of Japan’s Economic Stimulus, the perception of money and its transaction was a phenomenon worth discussing.

To think that something that is not visible or an object with no defined features seems counterintuitive to assign value. In The Island of Stone Money by Milton Friedman, one can assert that value “is in the eye of the beholder.” This notion stems from the foundation that establishes a value system of currency that is provided from immovable stones. In the Island of Yap, the idea of the need to carry, count, or engage in a physical exchange of goods for money as it is done by society today seems like an artificial event. For example, the power to purchase is not so much weighted on an assigned physical number, such as in the value given to a Benjamin Franklyn one hundred dollar bill. In their monetary system, the value was not in the form of a written word; rather, it was in the form of an established idea of the value of the stone and for the purpose that it was being used. In fact, as stated by Friedman, the sunken rock had as much value in the ocean as it would have while in display on the road or in any given space; thus, the sunken stone, while not being seen, still had value and was used as a form of currency. This value assignment and its use allows one to understand the exchange of gold or stock shares between countries. As indicated in The Island of Stone Money, gold was never exchanged between France and the U.S. In this occasion, the gold was simply tagged as becoming France’s property, thus forcing a financial market crisis within the U.S. The gold was never carried from one country to another in a similar manner as it is done on the Island of Yap.

           The NPR Broadcast also indicated the idea that a non-visible or undefined object has value. Here, the discussion focused on the idea that money is fiction. This idea of fiction money was motivated by thinking about the loss of trillions of dollars during the housing market crash. Here, the ironic nature of calling money fictional at first had a counterintuitive impression. In this regard, the question that came to mind was if there was no real value, and if the money is fictional, then how can a housing market crash cause a disturbance to the economy? Is the market or the stock exchange also fictional? Perhaps, King in What is Money? also based the discussion on the idea that there is no set value for a particular object that is being used as a form of payment; thus, money is fiction. As an example for not having value, the stones in the Island of Yap had no fixed value. It was indicated that the value of a stone consisted of who was giving it or owned it and for what purpose was the stone being used. This idea seems counterintuitive, especially when trying to make use of the stone for a particular payment; yet, using the same stone to pay for a completely different kind of payment. In this regard, how does one keep track of its value? The answer to this is, “you don’t!” As indicated by King in What is Money?, the stone has a value that differs by its creation and the difficulty of obtaining it. This discussion runs parallel to the established idea of value, and it is used as indicated by Friedman.

           Understanding the stand taken by King in What is Money? on fictional money and the idea that a stone still possesses its value even if not present or seen as indicated by Friedman, one can appreciate Japan’s economic stimulus and the fluctuating interest rates as it relates to actual transactions. In Krugman’s article, Japan’s economic stimulus to counter deflation was believed to be crucial to stimulating the economy. Here, a 10.3 trillion dollars in Yen currency stimulus package was approved to allow spending and purchasing by businesses and consumers, respectively. As quickly as the long-term interest rates increased during a specific period due to the economic stimulus, the rates fell as the economic recovery efforts faded. Regarding the transaction of money by Japan’s government and understanding that the ability to carry that much money or have it printed may be a tremendous task, one can speculate that the stimulus was not a real physical transaction. One can make an inference that the stimulus was in the form of a non-visible or physical object. 

           In essence, the idea that a visible value or physical transaction is required may not be as counterintuitive as once thought. These articles provided the foundation that value and a monetary transaction do not necessarily require physical or visible. One can apply these points of view to the stimulus that was provided during the COVID-19 economic stimulus. Here, one can ask if the stimulus as a form of transaction with monetary value was similar to the idea of value given to a stone; thus, providing truth to indicate that money is fiction.

References:

Friedman, M. (1991). The Island of Stone Money. Retrieved from https://counterintuitive2015.files.wordpress.com/2015/01/stonemoneyessay.pdf

King, N. (2020). What Is Money? Jacob Goldstein’s Book Explains ‘Shared Fiction.’ Retrieved from https://www.npr.org/2020/09/08/910586930/what-is-money-jacob-goldsteins-book-explains-shared-fiction

Krugman, P.(2013). The Curious Case of Japan’s Economic Stimulus. Retrieved from https://truthout.org/articles/the-curious-case-of-japans-economic-stimulus/

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stone money- corinnebuck1219

Cash, or crap?

While living in a very materialistic world, it seems people never ask themselves: “what even is money?”, “Where does money come from”, and “how does money even come about?”. The simplest answer: it’s not real. Now, I will say in a society today it does seem apparent to be very real and valuable, but how does such a thing even come about? Well crazy thing is, out of thin air. Money is so made up with no actual value. Money can simply be a rock or a piece of green paper labeled to be currency. While listening to a podcast called “The Invention of Money” they state the most unsettling statement, that money is purely fiction (thisamericanlife.org, 2018). I first heard this while drinking my overpriced coffee I just purchased, and just sat there and pondered for a few minutes. Hearing such a thing really just puts a pit in your stomach thinking about how everything in your life can just really be made up.

The scariest part about money is how the value can fluctuate. In the podcast, they made mentions of the housing market. When the housing market crashes, where does all the money go? Well it turns out, the money quite possibly never existed in the first place. That being said, money isn’t always certain, its value can slowly disappear. In the United States, the dollar in 1913 held the equilivlant as $26 dollars in 2020 (Amadeo, 2020). According to Kim Amadeo, from thebalance.com, three factors can make our money lose value: 1) higher demand for products/ services, 2) restrictions on available supplies, and 3) an increase on the amount of money being printed (Amadeo, 2020). Now in Yaps’ case, how does our concept of money differ from ours? Basically, our money is based on gold, while theirs is based on huge stone sculptures taller than a man. In Yap there was an incident where a crew picked up one of these stones and tried to go across the sea with it. To make a long story short, the boat went through a storm and lost the huge disk stone. Even though this stone is now sitting at the bottom of the ocean, the people of Yap believed their Government and that this sunken stone is still owned by someone, therefore still giving it value despite location (thisamericanlife.org, 2018). Now in a perfect world this makes sense though, right? 

Think about current times, we don’t get paid cash in hand, its direct deposit. It’s just numbers that get added into our bank account, so then does that money really even need to exist? The cashless trend started in China when they were allowed to turn in their coins to get paper receipts instead of carrying around these big heavy coins. Same thing happened in America when Marco Polo was amazed how China used paper money, and it has us Americans floored. We stopped with the gold and followed China in the use of paper currency (basically a paper note that was a claim on gold and silver from the bank), but now in 2020, we barely even see the cash. That’s where things like ‘Bitcoins’ jump in. Bitcoins are a form of “e-money” where investing into this software creates a more anonymous way to spend money. Bitcoin can have a negative connotation since it became the way to launder money and drug deals. That being said though, people are weary of those claims saying since it is private money, it can be a direct threat to governments, which leaves them to make these accusations (Renaut, 2013). 

Now that we addressed the issues with money, let’s chat about the economy. The economy was created as a response to the great depression, where the government calculates based on the national income. Thats where GDP, gross domestic product, also came about giving value to all the goods and services produced in the country for a year. The GDP does not care about anything but measuring the economy. This measure of GDP can be challenging though, where the US does not count off the book workers or the black market like other countries do. In the 80’s Italy counted its black market and before you know it, the Italian economy grew massive compared to the UK economy. Similar to Italy, US in 2013 slightly tweaked the way we measure GDP which instantly profited our economy $500 billion dollars (Goldstein, 2020). 

To conclude, the public faith in currency is what makes the economy what it is today. If we didn’t believe in it there would be no value in anything in life. We would be living like barbarians doing what it takes to survive. There would be no Louis Vuitton or fancy restaurants because we could just simply kill someone for leather or food. So was money just a prop to make us act more civilized? On the other hand, money might have simply just been created just for the government to dip in and charge us taxes. That’s for you to determine. On a more normal note, the world would never be what it is without this exchange of currency. Despite the many flaws in the system, money does create technology to help us advance as a whole, whether it being ‘fake’ or not. Money allows us to explore and learn more about the world everyday. So maybe biting into this idea wasn’t such a bad thing after all.

“The Invention of Money.” This American Life, 19 Feb. 2018, http://www.thisamericanlife.org/423/the-invention-of-money.&nbsp;

Amadeo, Kimberly. “Why the Dollar Is Worth So Much Less Than It Used to Be.” The Balance, 21 Aug. 2020, http://www.thebalance.com/what-is-the-value-of-a-dollar-today-3306105.&nbsp;

“What Is Money? Jacob Goldstein’s Book Explains ‘Shared Fiction’.” NPR, NPR, 8 Sept. 2020, http://www.npr.org/2020/09/08/910586930/what-is-money-jacob-goldsteins-book-explains-shared-fiction.&nbsp;

Renaut, Anne. “The Bubble Bursts on e-Currency Bitcoin.” Yahoo! News, Yahoo!, 13 Apr. 2013, sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html. 

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