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After reading over all of the different sources and now being knowledgeable about different forms of currency and how they came to be I feel confident I am able to understand the concept of money better as well as how it came to be in the first place. The story of the island of Yap and their monetary system is truly intriguing to me, they use stone money which are literal massive stones that hold a currency in their society. It is explained that no physical ownership needs to be carried out and that the physical stone itself can sit miles away but still be understood that it is owned by someone. Even more so when it comes to using these stones individuals made a verbal pact that they were transferring ownership and the stone stayed as is in place. While I can understand how some could be taken aback by this system it would be ignorant to say it is not loosely how our system of currency in modern day America works as well.
The island of Yap calls their stone money fei and the rocks tower twelve feet high with a hole in the center. Obviously something so big can not be moved as you please, especially not in this time where no machinery was in place to move it either. Our currency is similar because our paper money is connected to gold that we do not have access to and the paper money we see and use day to day are simply symbols of that which are easier to carry around. So it is not too far-fetched of an idea that the Yap’s followed because we started at the same place as them but they did not upgrade their system and honestly I do not see it necessary considering how well this was able to work for them. “ In the village near-by a family whose wealth was unquestioned,—acknowledged by everyone—and yet no one, not even the family itself, had ever laid eye or hand on this wealth; it consisted of an enormous fei, whereof the size is known only by tradition; for the past two or three generations it had been, and at that very time it was lying at the bottom of the sea”,( Friedman 91). Showing how the Yap system of currency was not as flawed as it seems because they were able to stay on top of who owns what throughout the entire time this was used. They go less abstract with their organization and are able to be content with and do not need to have the physical currency like we do in America. Friedman explains how German soldiers came in and took over the island subsequently claiming fei as theirs by marking specific stones with black paint and the islanders complied as they were now broke. My initial reaction was taken aback. I could not understand how they could so easily follow these rules but it was what they were used to and they followed the rules of their currency when someone claimed it. As he continues he explains how in the USA we have seen an issue similar when France wanted to take back gold we had. The French government and United States Federal Reserve spoke and decided France wanted America to turn its dollar currency to gold and return it, but to save the trouble of shipping all of that across the ocean France simply suggested that they label the boxes in a way that would be understood that they belonged to France. Now this is the same scenario as the Yaps and Germans, American tabloids explained the loss we experienced and France celebrated its riches all the while the physical gold was still in the basement in America’s reserve. So how can one system be regarded as barbaric while another is essentially the same but seen as completely different.
Moving on to the NPR Broadcast I truly felt a part that stood out to me and goes well with the theme of this paper already. Goldstein explains that the current transferring of money is still an updated version of the exact system of the inhabitants of Yap island, he stresses how even now when we are paid or paying someone it is not often that the physical dollars are being transferred. “ I get paid. That is just a direct deposit from NPR, from my employer, to my checking account. It’s not like they give me a bunch of hundred dollar bills every week. And then, I pay my bills online”, (Goldstein 2011). Showing how in modern day we still only transfer the idea of money that we have agreed on and not giving briefcases of large sums of cash, especially online transferring because that is simply clicking buttons and all is said and done but no physical transfer was made. I believe that this proves how important it is for a society to have faith in the value of currency because if it was not believed and agreed upon by all then the luxury of not having physical money is taken away, we believe in the idea of money when we do not see it. If the Yap’s did not take their system seriously then chaos would ensue and no one would definitively know who owned what. If we did not believe in our currency in the USA then we would not be able to agree on countless things and nothing would be completed. The broadcast then went on to talk about Brazil and the issues with inflation they have had, in the 50s the government wanted to build a new capital but did not have the funds. They printed more money out but this caused inflation to dramatically increase, and for Brazilians this was difficult because the moment they were paid their money was at risk for being worthless as any amount of time passed. This caused chaos in Brazil and citizens quickly distrusted the government, they were impeached and replaced but inflation was still a huge problem. Four economists came in and fixed the issue by introducing a virtual currency that could help the people of Brazil believe in the value of money again. Online currency is something that we see a lot of today in the form of bitcoin, the WInklevoss brothers known for their lawsuit with Mark Zuckerberg think of it this way,” they had bought $11 million worth of Bitcoins — that value assessed before the crash — praising it as a mathematical system “free of politics and human error”,(Renaut 2013). Showing how credible trust is being put into this new form of currency and how that is a huge part of what a monetary system needs to be followed.
Overall the idea of currency is not going to be nationally agreed on within what each individual in every country does and calls correct. It does not matter what example you look to in order to gather the conclusion that the most important part in a system of currency is the belief that the people using that system have in it. The Yaps were able to be successful with theirs because they agreed the stone money belonged to someone even though they could not see it. America’s issue with France mirrors that of the Yaps and German government when it comes to belief in the currency behind the physical dollar. Moving onto online banking connected to the emergence of Bitcoin, it shows even more how you do not need to see or hold a symbol that stands for whatever amount of money is simply not a necessity. Showing overall how money is less of the main idea but instead the belief in what it stands for is of utmost importance.
“The Invention of Stone Money.” 423: The Invention of Stone Money. This Is American Life, WBEZ. Chicago . 7 Jan. 2011.
Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.
“The Bubble Bursts on e-Currency Bitcoin.” Yahoo! News, Yahoo!, 2013, https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html?guccounter=1.