Stone Money – sunshine2818

Cash isn’t real

Cash isn’t real, in fact it doesn’t exist. This statement really made me think, if we were in the middle of a Zombie Apocalypse, and someone tried to trade me 1,000 dollars for my gun, I’m keeping the gun. Humans put monetary values on money which give us the ability to purchase items of actual value. The perfect demonstration that money does not exist is in the 2008 housing crisis. In an American life story, “The Invention of Money”, an interviewer asked a businesswoman where did all the money go during the stock market crash and she replied, “money is fiction”, therefore it never existed. Even though the idea of money isn’t real, money is still a key factor in today’s society. In addition to that, the idea of money, and where it came from is actually even more strange.  

Approximately 300 years ago, in China, Jacob Goldstein in an interview with Noel King talking about his new book “What is Money”, describes how China used iron pieces to represent money. The problem was iron wasn’t worth much, so a person would need several pieces, in fact bags of iron just to pay for simpler items. He compared it to “walking in a grocery store and paying in pennies”, it’s just not convent. In order to counteract this they came up with a system of paying with recites representing the iron. Eventually they just started making paper money all together. The problem was during that time they did not understand that making too much money causes inflation. Overtime they gave up and just went back to using regular bartering. Most of those people who had gathered up that much paper money, now had paper worth nothing. They went from rich to poor in an instant, which further confirms that money doesn’t have a real value at all.  

In the early 20th century, the island of Yap used money in the form of stones. Milton Friedman wrote an article “The Island of Stone Money” in which focused on the cultural customs of the Yap people depicted by William Furness. The people of the Yap would make large carvings of stone in the shape of a coin ranging from a foot to 12 feet tall and people would claim them creating value. When these giant pieces of stone were given values, they were then used and traded. These stones were too large to move. So, even though the stone was not in your direct viewpoint or even at the bottom of the sea, it still had value and someone owned it. The concept seems funny now, but how is that different from putting your own money into a bank? 

Even during the early days of the US, Goldstein described how there were at least 8,000 different currencies. At that time anyone was able to get into the banking business without regulation and make up their own money. Then merchants had to decide if they were going to accept the dollar at its worth or not accept the dollar at all. Gold and silver were also used as currencies and you were able to exchange gold for dollars because during that time they were the same cost.   

Money may not be real, but the value placed upon it is. A story that interested me most was “The Lie that saved Brazil”, act one of “The Invention of Money”. Brazil was going through an inflation crisis due to over printing and the government spending what it didn’t have. Prices were going up everyday to the point that by the time a worker got their paycheck, it was already worth less than the day they received. In the mid 90s, the only solution to the issue was to trick the people that their money was worth something. They implemented a new currency to balance out the current one in order to level the prices of goods. One women though that this was a “fantasy”, the new currency was called a URV, a virtual currency. This wasn’t money that was even printed, yet it still had value. They were trying to simply trick the minds of the population to believing their dollars were worth something. This act brought down the inflation from 80 to 40 percent within a few years. The implementation of the URV was eventually disband and a new currency took its place making Brazil the 8th largest economy in the world. 

In the events leading up to the economic housing crisis, a huge system known as the Federal Reserve, in which I had no idea existed, responsible for our entire economy including the worth of our dollar, started to create large sums of money in order to bail out large companies. In order to put money into the market you have to buy something in exchange. Originally the federal reserve strictly stuck to bonds, but this time they started investing into regular home properties, eventually causing the housing bubble. The federal reserve is supposed to be an independent system, but now they were working as the largest bank in the world. Soon people started hearing stories about the federal reserve owning land properties as if they were a bank. Also the process of putting money in the economy is littered like adding zeros to someone’s bank account, by the press of some keys you could be 1 1/4 trillion dollars richer. That aspect is so difficult to imagine, the quality of a person’s life could be shifted just by the press of some keys. 

Understanding the full picture of money is one thing, but Goldstein was asked if it was a bad thing. And his answer was there are really no other options. Unless we were a small close knit society which doesn’t really exist in the world anymore or a totalitarian working government in which people at the top would decide what other people would get, no other system would work. The point is that “Money is a tool” and for the most part it does its job. Goldstein continued stating, “It does the thing it’s supposed to do, even though it creates a lot of problems”.      

References 

 Friedman, M. The Island of Stone Money. Stanford, CA: Hoover Institution, Stanford University.

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

King, N. (2020, September 08). What Is Money? Jacob Goldstein’s Book Explains ‘Shared Fiction’. Retrieved September 22, 2020, from https://www.npr.org/2020/09/08/910586930/what-is-money-jacob-goldsteins-book-explains-shared-fiction

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