Money = Fiction
What is money? Seriously, what makes money, money? Everything has a dollar amount price to it. Like we all know, the small, green, rectangle piece of paper that is worth something. Either is worth $1, $5, $10, $20, $50, or $100. What makes this piece of paper worth so much. Nothing. Nothing makes it worth anything either than the government telling us that. I can go somewhere and exchange my green piece of paper for food, clothes, etc. If I buy a shirt that is worth $25. Why cant I go somewhere and use that $25 shirt to buy $25 worth of food? Because the government says so. It’s weird isn’t it? How you can run a whole nation by simply saying, hey, this piece of paper is what you’ll be using to purchase goods or services. What we call dollar bills would be meaningless if they weren’t said to be something by the government.
After reading Freidman’s essay I was told about the situation of the stone money. I was told about money that was being used in the for of stone sculptors on an island called Yap. I mean c’mon, people were freaking out over a piece of stone. Well this was because they were told that this piece of stone was worth something of great value. And that’s all that needs to be said. The islanders were on a mission to retrieve more of this fei from an island. As they were on their way home, a storm arose and to save their lives they needed to abandon the fei in the ocean. As they got back they told the authority and they responded that the fei holds it value. No matter where it is, people can own it. Now this sounds absurd! I can pass along this piece of stone that is lost somewhere in the ocean from one another. Now this is shows exactly how money is fiction. When the German Government assumed the ownership of The
Caroline Islands the roadways were very poor. And they needed them to be fixed by the islanders. So they put some x’s across the stone pieces to show them that it was theirs now until the roads where fixed. The islanders immediately got to work so they could get their stone money back in their possession. This really proves to us that value can be put on anything. Even today as these name brands get to sell a pair of shoes for thousands of dollars. It is all basically because people said that having that item is a flex or is of great value. As well as the Bank of France feared that the U.S. would not stick to the gold standard at the traditional price of $20.67 an ounce of gold. They asked to buy the gold off from the federal bank of New York. And to avoid shipping of the gold they just had it to be put into a separate drawer and labeled it as France’s. Then the markets called French gold reserves as stronger. Just for having some gold thousands of miles away labeled as theirs made them “stronger”.
Then I went on to listen to the NPR broadcast. This broadcast really enlightened me in ways that I never thought about money. They talked about how a trillion dollars just disappeared during the stock market collapse. And we were all hit with the question, well where did that money go? And they went on to say that the money never existed. This just hit me. I was like, how could a trillion dollars just never exist? But then they went on to say that houses used to be worth a certain amount, but then that amount lowered. And they said it was this way for numerous things. And then it all kind of clicked. If someone says this house is worth $500,000 then in a few years they say its worth $400,000. That $100,000 never existed, it was just kind of said to be there. And when the prices for the housing market dropped that’s when it seen as a whole lot of money just disappearing. This really made a whole lot of sense to me. I’ve never thought about money the way I am right now. Then they also went on to explain how you really don’t know how much physical money there really is. Lets say I put a few thousand dollars into the bank. Then a number gets added to my bank account but that money isn’t really there. That money gets loaned out to someone, then the money they got loaned gets spent on something else, then the money that was spent on whatever just keeps getting tossed around or maybe put in someone else bank account. The money we see in our bank accounts are no more than just a number. That money isn’t really just sitting there waiting for us to grab it, its all virtual numbers being sent around. I mean at this point, the NPR broadcast has me rethinking everything. I am so baffled now that this was brought to my attention. Money is fake, it doesn’t exist in certain areas and is only said to be there.
I then went on to read about bitcoin. I’m sure we have all head of it. Bitcoin is a a virtual currency designed to act as money. On a day in 2013 bitcoin has risen to a great new high of $266. Several days after the coin has dropped to only $54. First of all, I find it pretty crazy that we can now buy a virtual coin and sell it for an absurd amount of money. But the main problem with bitcoin was that it was very unpredictable. The believed that as bitcoin grew that so would the infrastructure around it which would make it more stable. Bitcoin is also a big target for hackers as it just sits in a virtual wallet on your computer. Bitcoin could also be mined by anyone with a computer. It is very difficult but possible. Another thing that is insane is that you can go on your computer and “mine” for a virtual coin that people give value.
In conclusion money is only given value because people with authority give it value. Money is imaginary and can be literally anything if the right person says so as we saw in the story of the stone money. But overall listen and reading these sources shed a whole new light on the way I perceive money now.
Friedman, M. (n.d.). 1991 island stone money – hoover institution. “The Island of Stone Money”. Retrieved February 15, 2023, from https://miltonfriedman.hoover.org/internal/media/dispatcher/215061/full
The invention of money. This American Life. (2018, February 19). Retrieved February 15, 2023 https://www.thisamericanlife.org/423/the-invention-of-money
Renaut, A. (n.d.). The bubble bursts on e-currency bitcoin. Yahoo! News. Retrieved February 15, 2023 https://sg.news.yahoo.com/bubble-bursts-e-currency-bitcoin-064913387–finance.html