Stone Money- MellowTacos

Needs a Title

We all believe that money is physical, we can all hold a twenty dollar bill. That paper itself isn’t quite worth anything. In the podcast The Invention of Money, by The Planet Money Team they discuss the idea that “money isn’t real”. They start off by talking about when the stock market crashed in the financial crisis due to the housing bubble popping. Where did this money go, is the question asked. One of the members, Jacob Goldstien shared that he asked his aunt, a very successful business woman, where all this money went. She replied with the most mind boggling answer, “money is fiction”. When the prices of houses significantly dropped no money was psychically exchanged.

 Ira glass shares a thought provoking statement, “Money is not solid. Its value could disappear”. Trying to count all the money in the world would be impossible due to the fact that not all money is physical. When banks give out loans they have to take it from somewhere. If your money was loaned to someone else, do you still have your money or does someone else have it? Almost impossible to count how much money there is without doubling it. 

Stone money on the island of Yap is a large coin weighing more than a car that is used as a means of currency, however they are never physically exchanged. These massive coins are owned by someone and the majority of the time exchanged only in special circumstances. For example they may be traded when trying to get back the body of a soldier who died on the opposing territory. These larger than man coins sit on a path and everyone who sees it knows it’s yours or definitely knows it’s not theirs. This concept is not logically different from what we do. 

Owning a credit card is a brand new concept in brazil. The thought of purchasing something and getting to pay it off later is a “miracle” to them. The idea of paying for goods and items in six monthly installments would never have been able to happen a while ago because Brazil had very high inflation. Goods that you could buy now within 6 months would have cost 80% more each month. Since prices went up everyday people were required to change it every day. People used to try and get ahead of this worker to pay a lower price. 

Inflation in Brazil started in 1950 when the president built a new city when they didn’t have the money to afford it. The government decided to print more money in order to build this city, however it lowered the value of money. There was a man that stopped making and selling beer because by the time it was ready to sell it was worth a lot less. Many presidents tried to fix this issue and failed, like President Sarney. He decided to make it illegal to raise the praise causing a price freeze. This created another issue where business owners started hoarding the items, waiting for the price freeze to end so they could make more money. 

After many trial and errors 4 students came up with a masterful idea to fix Brazil’s inflation. Two of the men, Edmar Basha and Andre Lara, refused to help at first because it would be a very long drawn out process and they didn’t want to move to brazil. Members of parliament tried to butter them up by taking them to dinner begging for their help. They received many calls and Basha was even invited to meet the president, they would do anything for their help. They eventually were convinced and decided to try and put the plan into action. 

Their plan was to stop the printing press and change the people. They believed they needed to change the way people viewed money and make them think money had value. Their plan was to make a new currency but this currency would never be physical, they called it “unit of real value, URV”. People still carried around the local currency, Cruzeiros. The way URV worked was if you went to the store to buy a gallon of milk it would cost 1 URV but the value of URV would change from day to day. Since you can not pay with a URV you would look up how much one URV cost today. Wages, taxes and prices were all listed in URVS. The four men explained it to the country and stores started to adapt these prices and inflation went down. 

In act two of the podcast they discuss the federal reserve, the one institution that is able to create money. The federal reserve is its own institution and is not a part of the federal government. In 2008 during the financial crisis banks were doing things that they were not supposed to do. The bank firms had assets that were decreasing in value and needed someone to lend them money. The federal reserve holds a meeting every six weeks where they discuss the economy and decide if we need to print more money or not. When they decide we need more they put this money into the economy through loans and interest.


“423: The Invention of Money.” This American Life, 14 Dec. 2017,

1991 Island Stone Money – Hoover Institution.

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2 Responses to Stone Money- MellowTacos

  1. davidbdale says:

    First of all, MT, your essays need Titles. “Stone Money—MellowTacos” is NOT a title. It’s the identifier. Titles can be clever, and they can give your readers a hint about your argument. Browse the posts of your classmates for examples.

    Second, APA citation style requires you to call your sources References at the bottom of the essay. Just center the word References above your sources, no punctuation, not bold, not italic, the same size as your text.


  2. davidbdale says:

    You didn’t advise me what sort of Feedback you wanted, MellowTacos, so I’ll decide for myself, most likely content and rhetoric for the first go-round. In future, you’ll get more helpful advice if you ask for it.

    1. Your first paragraph makes sense to anyone who has listened to the broadcast, MT, but not so much to readers who haven’t. What are they to make of your question, “Where did this money go”? You didn’t actually say that any money went missing. All you said was that the stock market crashed and the housing bubble popped. That’s not “counting,” if you see what I mean. You didn’t say, for example, “Three trillion dollars worth of wealth evaporated.” Or, the stock market lost two trillion dollars worth of value. So, when we get the answer, “Money is Fiction,” we don’t know what to make of it unless we listened to the podcast. Get it? We need to provide our readers with just enough context to understand our claims. Too much and they get bored with irrelevancies; too little and they just don’t understand.

    2. Ira glass shares a thought provoking statement,
    —The connection between your two claims [not all money is physical] and [banks have to take it from somewhere] is hard to see, MT.
    —If all money WERE physical, we’d deposit cash into the bank and it would stay in our drawer. There’d be no way for the bank to lend OUR money to anyone, or make any profit from the interest charged.
    —The answer would never be, “You gave us 1000 dollars to safeguard, but we gave it to your neighbor to buy a snowmobile. You’ll have to wait for him to pay us back. The guy who sold the snowmobile has it now, or his landlord does.”
    —Does the fact that 1 you, 2 the bank, 3 your neighbor, 4 the snowmobile seller, 5 his landlord have all had the money in their hands mean we’ve created 4000 dollars? Or is there still just 1000 dollars that the bank owes you when you ask for it back?

    3. Stone money on the island of Yap is a large coin weighing more than a car
    —I know the answer because I heard the broadcast, MT, but what will your reader make of your bizarre claim that the Yap’s huge coins are “not logically different from what we do”? In what way is our system similar to containing wealth in big stone markers?

    4. Owning a credit card is a brand new concept in Brazil.
    —That’s a clever observation that buying in installments cannot happen with an inflation rate of 80% a month . . . unless . . . UNLESS! . . . the interest rate on credit purchases could be 90% or 100% a month. Right?
    —No reader unfamiliar with the anecdote about the grocery store pricing gun will have the slightest idea what you mean by “people used to get ahead of this worker.”

    5. Inflation in Brazil started in 1950 when the president built a new city
    —The most important claim in your paragraph here is that printing more money than was healthy for the economy “lowered the value of money.” So far, you haven’t said much about the “value” of money at all, which is, after all, its most important characteristic. A five dollar bill is desirable not in itself, but because it has “a value of a bag of apples” or some other commodity, the first 15 minutes of parking in a downtown garage, whatever.
    —The rest of the paragraph is interesting, but you’ve already identified massive inflation as Brazil’s big monetary problem. What’s the point of the price freeze details?

    6. After many trial and errors 4 students came up with a masterful idea
    —Skip the rest of the paragraph. It’s completely unnecessary.

    7. Their plan was to stop the printing press and change the people.
    —Make them believe in the value of money again. Exactly.
    —You describe the mechanics of the URV nicely, MT, but does it explain why Brazilians were convinced by this obvious scam?

    8. In act two of the podcast they discuss the federal reserve
    —You’re not wrong about the Fed, MT, but you don’t USE the material to make a point about the value of money. Since you opened the essay with a question about where all the money went, wouldn’t it be effective to reflect that printing billions of dollars of new money was how the Fed solved the problem of the “missing trillions”? Could it possibly be that simple? (It didn’t work for the Brazilians. 🙂 )

    That was probably pretty painful, MellowTacos. But I hope it was a helpful wakeup about the nature of persuasive argument, and a good guide to how clearly and thoroughly you need to guide your readers to THE RIGHT understanding of the evidence you have to present.

    Always Reply to Feedback, please, MellowTacos. 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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