P1. When first hearing about the concept of Stone Money in class, I could not help but think this is absurd and must be a made up story being told for affect! As I comprehended the lecture and began to read deeper into Milton Friedman’s piece The Island of Stone Money I came to realize that this is a very real piece of history and forced me to analyze how similar the Yap and their money system is with the monetary system we currently have in the United States.
P2. As I read in Friedman’s essay, the whole ordeal that occurred with the French wanting their gold from the US is almost identical to what the German’s did the the fei. (Friedman) What is the point of money?! The gold was not helping the French at all by sitting in our national reserve, it was just the concept, or symbol of the French owning that gold that satisfied them. Was that idea of being wealthy that important that played a hand in the Great Depression? This train of thought then got me thinking what even caused the Great Depression? If money is fictional as the NPR Broadcast stated, then why were we in such a hole.
P3. The NPR Broadcast also caught me dazed and confused when they mentioned the information about online banking. It is true, when my father pays the bills online he is not physically handing the money to Verizon, or whatever bill it is. And if the banks do not actually have our money in the checking or savings account, that they lend it out to circulate how are they getting the money to pay the Verizon company? Is it just the idea that money is getting transferred to each other that satisfies the companies demanding money? Knowing, ok, so and so has the money but the bank lent it out. He’s good for the payment. All this information has me digging deeper into all the things I once believed money to be. We are no different than the Yap who at the beginning I believed to be insane. How silly is our society that we use a piece of paper and hold it up to such high standards that we revolve our world around it. In fact the Yap’s may think we’re crazy for revolving around a piece of paper
P4. I then went on to read How Fake Money Saved Brazil because I was intrigued at how invested citizens were in money. It kind of reminded me of what the NPR broadcast said that money is fiction, therefore the value can change from day to day. This is what was happening in Brazil, causing inflation. The Brazilians did not grasp the concept that the price of the dollar or cruzeiros in their case remained the same, but the value or how much they could purchase would change. It shocked me that a “fake” currency called URV’s could turn around a whole economy that quickly. It just reiterates that money is fiction and it has a firm hold on everyone because we all depend on it. (Chana Joffe-Walt, 2010)
P5. As I read the article relating to Bitcoin, the E-currency I was interested, but not surpassed by what I read because it all relates. They mentioned the Bitcoin’s worth plummeted from $288 to just $54! This in a way doesn’t surprise me, no matter if money is huge ginormous stones, or paper, or virtual over the internet it is all unpredictable. And goes back once again to being fiction. No one can predict whether the inflation of value of the dollar will drop because no one knows exactly how much money is in the world because of the constant circulation!
P6. Now after gaining all that knowledge on the history of money along with current issues about money my mind is boggled to say the least. It gave me a whole new perspective on just what money is. Even though I still haven’t figured out what it is, I gained new knowledge and look at currency and the monetary system in a whole new light!
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>.
Renaut, Anne . “The bubble bursts on e-currency Bitcoin.” Yahoo.com. 13 Apr. 2013. 30 Jan. 2015. <https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html>.
“The Invention of Stone Money.” 423: The Invention of Stone Money. This Is American Life, WBEZ. Chicago . 7 Jan. 2011.