Stone Money- nousernamefound1

A Fool And His Money Are Soon Parted

Do you think money is real or fake? People in the US will believe that money is everything, but honestly, the value of money has fooled us for years. We have been tricked to believe that the value of money is superior. If all banks crash and you had 5T$ in your saving account, then tomorrow it is gone means that you never truly had it. It’s crazy that something so fake can be so dangerous in every country. Once people lose faith in the dollar, it will not have value. Bond issues by the US government is a way that money is processed so quickly. After its processed money is created, which is why many people believe that money is everything. Banks lead out money and that is how new money enters into the economy. Fed never loses money. In fact, they always increase by buying bank bonds. We will examine the island of Yap, the United States, and Brazil to figure out what turned the dollar into something bigger than what it should.

When trying to figure out the answer to “what is money?”, Economist visits the island of Yap. Ira Glass claims, In “The Invention of Money,” that “at the time on this island, for currency, this pre-industrial person used something completely impractical and counter-intuitive, these massive stone sculptures in the shape of coins”. People that lived on the Island knew that they couldn’t carry the stones, but they still believed that the value of it can be used as money. This is the same thing people in the United States did when dealing with gold., “It’s unclear if these stones started as money. But at some point, we don’t know when the people on Yap realized what almost all societies realize. They needed something to store value. They needed something that everyone in the society agreed you can use to pay for stuff,” according to Goldstein in “The Island of Stone Money.” You did not need to have the stone in your position for it to be considered valuable, so this should tell you something about the concept of money. Yap used the stones as a way to pay off fines. Friedman claims, In “The Island of Stone Money,” that “the fine was exacted by sending a man to every failu and pabai throughout the disobedient districts, where he simply marked a certain number of the most valuable fei with a cross in black paint to show that the stones were claimed by the government.” Before you start criticizing the people of Yap, you must realize that other countries misunderstood the value of money also.

Just like the Island of Yap, the United States faced the same problem when trying to figure the real meaning of money. People believed that the American financial system was failing because of the loss of gold. Ira Glass claims, In “The Invention of Money/Act Two,” that “each dollar corresponded to a dollar of gold that in a vault somewhere. But when we went off the gold standard, somebody had to decide how much money there would be.” The United States had it all planned out. They knew that the Federal Reserve could create the dollar at any time, and they could trust any bank to make sure the money stays placed. This was all good until the United States hit a crisis. The money that we had was gone, and many people were upset. I think people were more upset that they didn’t have the 6 figures in their accounts, rather than being mad about being tricked. The Feds didn’t think of a backup plan and it showed when the window closed. The solution should have been according to David Kestenbaum, In “The Invention of Money/Act Two,” that “The Fed window is jargon for the Fed creating a bunch of money out of nothing and lending it to institutions in crisis who can’t borrow money through the normal private market. Sort of like a bank window where you could walk up and get an emergency loan from a magical genie.” Instead, the Fed treated the financial problem like the Island of Yap. David Kestenbaum claims, In “The Invention of Money/ Act Two,” that the Feds” would hold onto your grandmother’s antique earrings and in return, give you far less than they’re worth. And if you bring in cheap plastic earrings, the Fed wouldn’t give you any money at all.” The financial problem didn’t stop here, so the Fed brought home mortgages. This was another way to get money out into the economy. The land is valued by the production of homes or somebody willing to build houses on. Land can be worth nothing 10 years ago but can be sold for a bunch of money the next day. The recent events show that the Fed doesn’t care too much about money, so why do we still believe that money is real. The process of creating money on thin air is so easy for the Fed.

In Brazil, people lose faith in the dollar and it hurt the economy. Ira Glass claims, In “The Invention of Money,” that “the government tricked a hundred fifty million people into believing again, that their money was worth something when there was absolutely no evidence to support that claim.” Before, people believed that when money sits it will lose value. In fact, a lot of people hid products until the prize freeze went away. Brazilian inflation caused many suicides. This what happens when you play with people’s money. The government was in trouble and it needed help. They contacted Edmar Basha and his buddies for a plan. Chana Joffe-Walt claims, In “The Invention of Money,” that “they didn’t want to just change the underlying causes of inflation. They wanted to change people themselves. People were the problem. People had to be tricked into thinking money had value when all signs told them that was absolutely not true.” The four economists wanted people to talk in a virtual currency. They would get paid 1000 URV’s and see that milk will only cost 1 URV. The government started to see inflation decrease more and more each day. The plan was simple, “while they put the URVs in place, the group of four also made the government balance its budget and slow down on the money creation, “according to Chana Joffe-Walt in “The Invention of Money.”

In “The Invention of Money,” Chana Joffe-Walt claims: “Brazil went from being an irrelevant, economic basket-case to one of the most important economies out there. The eighth largest in the world.” The solution is simple, we must stop believing that money is real. The United States and the Island of Yap failed to realize, and it showed. It’s hard to lose faith in the dollar, but you see what can happen when you do. After reading this essay, you should be able to answer the question stated in the introduction. With that being said, Is money real or fake?

References

Friedman, M. (1991). The island of stone money. Stanford, CA: Hoover Institution, Stanford University.

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

The Island Of Stone Money. (2010, December 10). Retrieved from https://www.npr.org/templates/transcript/transcript.php?storyId=131934618

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