Why Trust Money?
What is the real value of money? Honestly, almost nothing. In early ages people trusted and founded currency off of the gold standard but as time went on we switched from precious gold to dirty paper, Yet for some reason we still believe that these pieces of paper are actually equivalent to a certain amount of gold.
All this leaves us to question why we see value in this money when really the only value it has is what we give it. In the podcast by YAP from the planet money team, they speak about money and this exact concept that the dollar only has the value we give it.
The podcast from the planet money team spoke about the Brazilian government and their stone money. Essentially in Brazil they had these giant stones that would just stay in place and when you had to use your stone to buy a big purchase like a warrior who is being held you would pay for it with your stone. The stone however did not move and stayed in the same spot, only now someone else owned it. There is even one of these stones at the bottom of the ocean that still was used to purchase things and held its same value. This Currency however did not last and Brazil went into a mass depression where they could not keep inflation down.
This depression is also addressed during the podcast. A Brazilian woman shared stories on the podcast about how the prices at the market would change from morning to afternoon so you’d have to go and beat the sticker man to get the cheaper price for the product. She explained how as soon as people got paid they would rush to buy food before the prices increased yet again. Brazil couldn’t figure out how to stop inflation and asked these Americans who had studied the Brazilian currency and had a plan to fix the government to come and help. Essentially what their plan was, was to give out virtual currency and the virtual currency prices would be lower than if you paid with standard currency, eventually making it overtime switch the virtual currency with no inflation. This idea actually worked and helped Brazil climb out of their depression, but this new virtual money had absolutely no value, the people just believed it did.
America did the same thing, switching out of the gold standard to paper money. The only issue is the US Treasury can decide at any point that they want to drain money or add money into circulation. With the press of a button billions of dollars can just be made up out of nowhere and given to the banks to help calm the market. The issue with this is illustrated perfectly in the 2008 market crash.
The 2008 market crash was devastating to most. In the article “the fall of the market in 2008” by Paul Kosakowski he claims,”This period ranks among the most devastating in U.S. financial market history. Those who lived through these events will likely never forget the turmoil.” During this crash people who had all this money or so thought they lost it over night. Million dollar properties lost insane amounts of value in just one night. People were broke, people struggled, and even died. This harsh time was “relieved” so to speak by the US Treasury and there tax breaks and stimulus packages, making this a perfect example of just making money whenever they deem necessary as well as a great example with tax breaks posing the question if we could cut them short for a break why can’t they just be that low all the time.
With both of these examples we see that people are so willing to trust these currencies that in actuality have no real value. Why did we give up our gold to the banks in exchange for dollar bills, and even worse than that we are starting to switch to virtual currency more and more everyday. People are trading in cash in their hand for numbers in their bank accounts. With venmo, credit cards, debit cards, and even bitcoin were putting more and more value on a number on your screen. In the article “The Cashless Future is Here. So is Big Brother” by Daniel de Vise he claims that,” three-fifths of consumers told Gallup they used cash only on occasion last year, twice the share of five years ago.” Now our government and treasury are looking to see if moving cashless is the best idea and if we will benefit from it, some believe we will and some believe we won’t.
In conclusion, we have seen multiple countries including out own switch out their currency and fix their market and tame inflation, but is switching to strictly online currency the right move? This idea poses even deeper questions like has the government already started and we just don’t know, and is that why when you go to take YOUR MONEY out of the bank they don’t always have the amount you’re asking for. Where is our money going? Why is cash being used less and less? Are we going to see a cashless society? Will other countries follow? These are all questions that we should be looking deeper into and figuring out why we so easily believe the fake value of our currency.
References
Yap, This is American Life https://www.thisamericanlife.org/423/the-invention-of-money
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Counterintuitive Spring 2023 
Pink Monkey, you didn’t specify what sort of feedback you wanted, so I’ll just do whatever feels most helpful. I’m impressed that you generated your own additional sources. I haven’t checked them out, but you went the extra mile. I’m eager to see what they bring to the party.
1. What is the real value of money? Honestly, almost nothing. In early ages people trusted and founded currency off of the gold standard but as time went on we switched from precious gold to dirty paper, Yet for some reason we still believe that these pieces of paper are actually equivalent to a certain amount of gold.
—This is a very big claim that you almost immediately retract, Pink Monkey. Why even say money has no value if you’re going to say in P2 that is has value, but that the value is assigned by its users? The same could be said of almost any commodity. It would be more honest to say money is a commodity that we trade for other commodities. It’s VALUE is its BENEFIT: everyone will accept it in trade.
2. All this leaves us to question why we see value in this money when really the only value it has is what we give it. In the podcast by YAP from the planet money team, they speak about money and this exact concept that the dollar only has the value we give it.
—The value of gold in dollars is always changing; when it does, did the gold become worth more, or did the dollar become worth less?
3. The podcast from the planet money team spoke about the Brazilian government and their stone money. Essentially in Brazil they had these giant stones that would just stay in place and when you had to use your stone to buy a big purchase like a warrior who is being held you would pay for it with your stone. The stone however did not move and stayed in the same spot, only now someone else owned it. There is even one of these stones at the bottom of the ocean that still was used to purchase things and held its same value. This Currency however did not last and Brazil went into a mass depression where they could not keep inflation down.
—That is a VERY ODD conflation of two stories, PM. The Yap are the featured story of Act One of the podcast. They did indeed use huge stones as money, but they weren’t Brazilian and they didn’t suffer an inflation.
4. This depression is also addressed during the podcast. A Brazilian woman shared stories on the podcast about how the prices at the market would change from morning to afternoon so you’d have to go and beat the sticker man to get the cheaper price for the product. She explained how as soon as people got paid they would rush to buy food before the prices increased yet again. Brazil couldn’t figure out how to stop inflation and asked these Americans who had studied the Brazilian currency and had a plan to fix the government to come and help. Essentially what their plan was, was to give out virtual currency and the virtual currency prices would be lower than if you paid with standard currency, eventually making it overtime switch the virtual currency with no inflation. This idea actually worked and helped Brazil climb out of their depression, but this new virtual money had absolutely no value, the people just believed it did.
—Nothing entirely untrue about this anecdote, but I certainly wouldn’t understand how the switch from cruzeiros to URV to reals was accomplished if I hadn’t listened to the broadcast. Your job is to give readers just enough of the story so they understand that once the Brazilians lost faith in their currency, they couldn’t get it back without an INTERIM way to value goods. The URV provided a stable way to do that.
5. America did the same thing, switching out of the gold standard to paper money. The only issue is the US Treasury can decide at any point that they want to drain money or add money into circulation. With the press of a button billions of dollars can just be made up out of nowhere and given to the banks to help calm the market. The issue with this is illustrated perfectly in the 2008 market crash.
—Readers will want to know how this anecdote relates to the others, PM. I’m not sure we get yet what all these stories have in common.
The 2008 market crash was devastating to most. In the article “the fall of the market in 2008” by Paul Kosakowski, he claims, “This period ranks among the most devastating in U.S. financial market history. Those who lived through these events will likely never forget the turmoil.” During this crash people who had all this money or so thought they lost it over night. Million dollar properties lost insane amounts of value in just one night. People were broke, people struggled, and even died. This harsh time was “relieved” so to speak by the US Treasury and there tax breaks and stimulus packages, making this a perfect example of just making money whenever they deem necessary as well as a great example with tax breaks posing the question if we could cut them short for a break why can’t they just be that low all the time.
—This is the most fundamental and important claim in your essay, PinkMonkey: “During this crash people who had all this money or so thought they lost it over night. Million dollar properties lost insane amounts of value in just one night.”
—Just as gold value can fluctuate, so can the value of all commodities, including “million dollar” properties. The MONEY didn’t lose value. The houses and apartments crashed back to their ACTUAL VALUE when the sellers couldn’t find buyers to pay what they were asking.
With both of these examples we see that people are so willing to trust these currencies that in actuality have no real value. Why did we give up our gold to the banks in exchange for dollar bills, and even worse than that we are starting to switch to virtual currency more and more everyday. People are trading in cash in their hand for numbers in their bank accounts. With venmo, credit cards, debit cards, and even bitcoin were putting more and more value on a number on your screen. In the article “The Cashless Future is Here. So is Big Brother” by Daniel de Vise he claims that,” three-fifths of consumers told Gallup they used cash only on occasion last year, twice the share of five years ago.” Now our government and treasury are looking to see if moving cashless is the best idea and if we will benefit from it, some believe we will and some believe we won’t.
—Currencies backed by strong national governments DON’T “have no real value.”
—Brazil was able to recover faith in its currency because of the strength of the economy.
—But BITCOIN, which you only mention here, is VERY DIFFERENT from your credit and debit cards, venmo, and the rest. They’re just ways of transferring dollars.
—BITCOIN (like the insanely overheated real estate market of 2008) is based on nothing more than the “greater fool” concept. They have value only if a greater fool is willing to give you more for them than you invested. There’s no economy, no nation, backing them up.
In conclusion, we have seen multiple countries including out own switch out their currency and fix their market and tame inflation, but is switching to strictly online currency the right move? This idea poses even deeper questions like has the government already started and we just don’t know, and is that why when you go to take YOUR MONEY out of the bank they don’t always have the amount you’re asking for. Where is our money going? Why is cash being used less and less? Are we going to see a cashless society? Will other countries follow? These are all questions that we should be looking deeper into and figuring out why we so easily believe the fake value of our currency.
—I like your skepticism, PM.
I guess I didn’t offer much advice about how to REWRITE your sentences, PinkMonkey, but usually, when advising about a first draft, my most useful advice is to help you concentrate on the quality of your arguments. If they’re confusing or misleading, no amount of good writing can save your essay. Do you understand the concepts better after my interference?
Always Reply to Feedback, please, PinkMonkey. It’s the primary value of the course, and I love the conversations, but I tire of them when they become one-sided. Thanks!
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