Counterintuitive Spring 2023

There is one thing, and maybe the most important thing, that I have learned from my extensive research of currency from the past and from the present: money is not real. Money is this fictional idea that we have been told to follow by the people who we are told to follow. The only way currency really works is if the people have faith in it and decide to use it. I will admit to not being the most knowledgeable person on money, currency, and the way our banking systems are run. Before this essay, I had no interest in the reason our economy is the way it is. However, after reading and researching and comprehending, I found that this is an important debate in every day politics. The economy shapes the entire nation. One more time, the economy shapes the entire nation! In the United States, pieces of paper are the difference between riches and poverty. But money is not real, and although it is not real, it is something we all strive for. We strive to gather as much of these pieces of paper as possible. We believe that if we have an abundance of money, then we have an abundance of happiness. And this did not start in the United States. This has been happening for centuries.

In Milton Friedman’s essay, Island of Stone Money, he tells of a small, German controlled island called Yap. Vast wheel like stones were used as currency. They were often saved for big purchases. For example, they might be used to buy a house or to bring back a soldier who died on enemy territory. However, unlike money, these stones were hardly moved. They would sit in one place and only the owner would change. If it was purchased, the people would know who it belonged to and respect it. When the Germans took over the island, they noticed that the footpaths were in horrid conditions. They recruited the people of Yap to fix them. Yet, the people of Yap were unwilling to do so. The Germans decided to mark a symbolic black X over the stones and this would make the people of Yap poor. At this point I asked myself, why would one painted black X would stop the people of Yap from using the stone? But it would be like the United States government taking away our money. If they told us we did not have any more money to use, we would stop using it, right? To reverse this, the people of Yap worked hard on the footpaths until they looked like new, so the Germans went around and erased the black X’s and everything returned to normal. This is eerily similar to the time when the United States put gold in a marked box just to make France happy. France was anxious that the United States would cease to follow the gold money standards, so to ease their nerves, the U.S. stored the gold and never used it. Because the United States did this, France was considered rich while the U.S. was considered poor. Until the United States realized their mistake, they negatively affected themselves. The Yaps and the U.S. have parallel stories only the Yaps had stone and the U.S.  had paper but nothing was really different.

The first place I heard “money is fiction” was in the NPR broadcast, The Invention of Money. Money is unpredictable so if I spend my life, like many people do, trying to foresee how money will change next, life will go by and then I’ll be the richest woman in the grave. Why does being wealthy mean so much to people and did this ideal cause the great depression? We all revolve around the concept of money and the value of it. But do we really understand it? Money is one huge lie. Money is relative in value. It changes, when it needs to, to fit the needs of our economy. So maybe a better way of thinking is not that money is fictional; however, its value is. Think about it like this, when we pay our bills, does the bank walk over the money to the company which our money is meant to go to? It is a virtual game. A few numbers are typed into a computer and the companies are “paid”. Money does not change hands, just numbers in computers. Our banks are not made to sit on our money. Money is meant to be spent and cycled around the economy. It is a never ending cycle of the banks’ lending out money and the people repaying them back. But one thing we may never know is how much money is in the world. If I have three hundred dollars in my bank account and the bank loans the three hundred dollars to a business owner, then when you’re counting the money, who has it? This is called double counting. In this case there is only three hundred dollars circulating. But this money belongs to the business owner and me. When counting, is the money mine because it was originally from my bank account or is it his because it is currently in his possession? Does the money really exist at all?

In case I haven’t stated enough, money is not real. This was emphasized to me in the NPR broadcast, The Lie That Saved Brazil. In the 1990’s, inflation was at a staggering 80% per month. 80% is a large increase in one year, let alone one month. The people of Brazil stopped believing in the currency, stopped believing in their government, and this caused the economy to crash. The problem started in the 1950’s when the government started printing money to compensate for the trillions spent on a new city. The problem is that every dollar is worth half as much as it was when new money is made. Inflation became the number one political issue in Brazil. President after president tried to fix the problem. In 1985, the president made raising prices illegal. This did not work because businesses just held out until the price freeze went away. In 1990, the president said that the people could not take money out of the bank. When the government messes with their people’s money, the people lose respect. It was chaos. But four men knew the answer. They said to stop creating money and to stabilize people’s faith in money. These men made an imaginary currency called the URV. The URV prices never went up or down, never increased every month, and most importantly, renewed the people’s faith in money. Eventually the inflation went down to almost 40% per year. This reiterates my claim that the people need to believe in the money system for it to be real.

In accordance to money, we use it as we are told to do and do not often question it. Maybe a few more questions we need to ask a few more questions. Maybe if we do, our eyes will be opened to a whole new world.

Works Cited

“The Invention of Money | This American Life.” This American Life. N.p., 7 Jan. 2011. Web. 07 Sept. 2015.

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” Npr.org. NPR, 4 Oct. 2010. Web. 7 Sept. 2015

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

Phillips, John. “Bitcoin: What to Expect in 2015.” CNBC. N.p., 15 Dec. 2014. Web. 07 Sept. 2015.

Reeves, Jeff. “Bitcoin Has No Place in Your- or Any-portfolio.” Market Watch. N.p., 31 Jan. 2015. Web. 7 Sept. 2015.

I have always felt that money was somewhat of a nebulous concept; during the process of my research on the Yap and their stone money system, some of my thoughts were confirmed. Each society has a different currency and a different monetary system. But are they all really that different?

The Yap use limestone disks, called fei, as currency. The bigger the disk, the wealthier the owner. If the disk was too big to move, it stayed in the same spot on the island. Yet they still acknowledged that it changed hands. They were content with the idea that the money now belonged to someone else. This baffles me. My initial thought was to wonder how they trusted one another with this currency system; after all, it was just someone’s word against another’s. It also made me think about our own currency system. We tend to take it for granted, but really how are we so different from the Yap? We give value to little green pieces of paper, but what is backing them up? We see numbers on our computer screens representing the worth of our bank accounts, but is the money actually there? We satisfy ourselves with the thought that our money can be used to pay bills, buy groceries, fill our gas tanks. But where is this money actually coming from? The bank doesn’t have it. We don’t have it. Is it really just a myth?

Brazil’s monetary situation got so bad that 4 graduate students had to come up with a fake currency just to stabilize the economy. Inflation caused prices to rise each day; people were in poverty. But with this new “currency” called the real, they could trick people into thinking prices weren’t changing. Everything was still bought using the actual currency, the cruzeiro. What changed each day was how many cruzeiros a real was worth. But by pricing everything in reals, the people felt that they had a stable pricing system to work with and thus stopped the wide-spread panic. And eventually it did stabilize the economy. The inflation rate decreased rapidly, and the poverty-stricken population were able to make ends meet. Japan is also attempting to end their national debt crisis by printing new money and creating more jobs.

Reading these stories really makes me think. It brings up a lot of questions about how our economy works. What does the national debt really mean? Why is college so expensive? Why does it take years to pay off a house or a car? Why do we need to pay so much money for healthcare? If Brazil can trick people into believing that the economy was changing, surely we can come up with a clever solution to our own money issues. It seems to be the same world wide.

What I’ve come to realize through this research is that money has imaginary value. We place value on it, but have no real way to back up that claim. We put all of our trust in pieces of paper and numbers on a screen. I started out thinking that the Yap system of fei was illogical and old-fashioned. But in reality, how are we any different? Money holds only the value that we give to it. And I can’t help but think that we could be doing a much better job. Each country’s problem is unique, but stems from the same issue. We put too much trust in the value of money.

                         Works Cited

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” NPR.org. 4 Oct. 2010. 30 Jan. 2015.

Krugman, Paul. “The Curious Case of Japan’s Economic Stimulus.” truth-out.org. 22 Jan. 2013.

As a child, it didn’t take long for me to realize that money was important. After all, I saw my mom buy me food and toys all the time. Then I saw the intensity of how essential money was when I saw people with sorrowful faces stretching out their hands for spare change. That image stuck with me forever and my view on money was how much it was the center our lives. Never would I have thought that our money’s value was based on our faith and the idea of money was all in our heads.

In the media, money is often portrayed as corrupting and controlling. Yet, according to Brazilian’s economic history, money is actually controlled by people’s faith. For instance, Brazil once faced economic crisis because of a huge inflation. According to NPR Broadcast’s “The Invention of Money,” the government printed too much money, which lowered the value of it and made it difficult for the citizens to afford goods. A memorable story from the broadcast was when people rushed in to buy food before the sticker man placed the changed prices. You could image the horror of having your cash loosing its value each day; people lost faith in their currency.

The surprising solution to this was introducing fake money, called Unit of Real Value, urv for short. By making the prices of the items in urv, the pricing was able to stabilize. Gradually, more people started to use the fake money and have more trust in the currency. As a result, urv became the official type of money and people were able afford things. In other words, this plan of using fake money worked because people had faith it, which showed to me how much power people had over money.
While Brazil suffered inflation, Japan experienced the opposite. Japan had a problem where people were not spending enough money, making the economy slow. In Hiroko Tabuchi’s article, “Japan Approves $116 Billion for Urgent Economic Stimulus,” it stated that the government was “pumping more money into the economy” so that the Japanese people could spend more. Though Japan is already in debt, Japan has a lot of problems to overcome such as the shrinking population and income. Consequently, the government is doing their best efforts give people a better income and more job opportunities by spending even more money. Clearly, the value of money in a country is heavily weighted on the people.

Another thing I realized is the idea of money is just in our minds. For example, according to the broadcast there is this island called Yap, and the civilians there use stone sculptures as currency. What is interesting about their type of currency is that it doesn’t have to move at all for people to own it. For instance, if the stone was too heavy to carry, people would just switch the ownership and the stone could stay at the same spot. There was an incident, where one of the heavy stones fell to the bottom of the ocean and was lost but it was still accepted as valuable so the owner stayed rich. I thought that the people should at least be skeptical. After all, what if he lied about making the huge stone, what if it doesn’t exist. But then I soon realized how much of my money didn’t exist as well.

The NPR broadcaster did a wonderful job at demonstrating how much of the money in America did not exist when he asked how much money is out there. People couldn’t even count that because the money in the bank is given to other people to borrow. What we truly have is only a number on a piece of paper or on a computer system of the amount we have, but physically we do not own it.

Ultimately, I find it really scary that the amount of money we technically own isn’t physically out there as ours but I am also relieved that when things go wrong, people are the one who truly accept and decide the value of money.

Works Cited

Joffe-Walt, Chana. “How Fake Money Saved Brazil.” Npr.org. NPR, 4 Oct. 2010. Web. 6 Sept. 2015

Krugman, Paul. “The Curious Case of Japan’s Economic Stimulus.”Truthout. Truthout, 22 Jan. 2013. Web. 08 Sept. 2015.

Tabuchi, Hiroko. “Japan Approves $116 Billion for Urgent Economic Stimulus.” The New York Times. The New York Times, 10 Jan. 2013. Web. 08 Sept. 2015.

“The Invention of Money | This American Life.” This American Life. N.p., 7 Jan. 2011. Web. 04 Sept. 2015.

Money does not exist. The most shocking things for me to believe in, after dealing with all these paper bills and bank account statements, was that it is all fiction. You don’t really own anything valuable. Money exist when everyone believes in it, in the power and wealth they give to the owner.

When I just started reading Milton Friedman’s article “The Island Of Stone Money”, I couldn’t believe that people were using stone as their money. Stones aren’t that valuable! They’re everywhere! Just go outside and grab some. However, for the people of the island Yap the stones named fei, were equal to our gold; people had to send ships hundreds miles away from the island to get more “money”.  It would be shaped in wheels with a hole in the center. The sizes of the stones varied from the foot size to twelve feet.  I had mixed feelings about this statement. First, for me it sounds incredibly inconvenient to carry those coins. I believe that we got used to having our money everywhere with us and being able to buy whatever we want in any moment. In case with fei, you can’t just take your money with you and walk around, but people from the island Yap didn’t have Starbucks, so there was no every day trading. On the other hand, the weight of  money would make it harder for the thief to steal it. Besides those minor inconveniences, fei was very stable and valuable currency on the small part of the world, but  it worked for the people who lived on the island. The big coins were placed in certain parts of the island, they had their owners, everyone was acknowledged of the owners and it was unquestioned. Money that we’re using every day could be just as unreal as fei. We have some papers, or some number on our bank account and we believe that it’s worth something, just like people who have limestone coins and they know they are valuable.

Belief in money keeps money stable and improves the economy. It was proved by Brazilian students who tricked the entire country and saved it from inflation.  Joffe-Walt tells about it in the article “How Fake Money Saved Brazil“. Four students from the Catholic University in Rio were invited by new finance minister to embody their idea of stabilizing the economy of the country. The idea was to create one stable currency that would be placed along with the existing currency, cruzeiro. All the prices were changed to Unit of Real Value — URV, and they wouldn’t change. The different would be just the price of URV. After few months people got used to new currency and stopped expecting prices to always go up. It stabilized the economy and prevented the inflation. As for me, this is an amazing example of how people can control the value of money just with the mass thoughts. When people stopped expecting bad and started thinking stable, it also stabilized the economy of entire country.

Those few stories made me change some of my thoughts about monetary system, and reconsider my belief in money. Money is a valuable thing that can stop existing any time, but it can help us to get some actually valuable things in a life.

WORK CITED

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. 7 Sep. 2015. <http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil&gt;.

Reeves, Jeff. “Bitcoin Has No Place in Your – or Any – Portfolio.” MarketWatch. Livefyre, 31 Jan. 2015. Web. 07 Sept. 2015.

Glass, Ira . “The Invention of Money.” NPR.org. 4 Oct. 2010. 7 Sep. 2015. <http://www.thisamericanlife.org/radio-archives/episode/423/the-invention-of-money?act=0#play

Money is such an enigmatic concept that people who understand it, people who spend the majority of their lives studying it, still sometimes refer to it as “magic”. That isn’t very reassuring but you just have to trust them them on this one. Money and the concept of money is so elusive that most of it does not really exist, yet it is something that everyone from every culture interacts with daily. The value and the worth that is given to money is is based mostly on trust.

On the island of Yap, its people have a form of money that is made from stone. These stones are created so large sometimes that it is unnecessary to even move them or in some cases, actually have them in the owner’s possession. They are traded through the simple agreement that whoever is the current owner of the stone is known only by the trust of others. Although the idea of not actually possessing the money yet still having its value may sound ludicrous, it is no different than a gold exchange in the 1930s between the United States and France in which the labels on drawers were changed noting who the gold belonged to. These are two clear examples of the power of trust and its effect on money. Everyone in those groups, the Yap inhabitants and the US and France, agreed on what would happen and trusted that value was upheld. Money itself has no intrinsic value. Its value is what we decide to give to it and what everyone agrees upon. Because people can agree on money’s value and trust that it is mostly the same between everyone, we can conduct business much more fluidly than if we did not trust what our money is worth.

The fact that money, in any form, relies on trust is absolutely astonishing. The existence of money is ironic because so much of it is essentially fiction . The form of money that seems the most fictional is bitcoin. This is a form of electronic currency that relies totally on trust of those using as it has nothing but that trust denoting its value. With money in the United States, there is the Federal Reserve that one can trust to tell them how much their money is worth but with bitcoin the trust is entirely reliant on the ones giving the bitcoin and the ones receiving it. Because of that, bitcoin’s value has had tremendous leaps and falls in value over a short amount of time (Reeves). For bitcoin to really cement itself as a currency it needs “increased acceptance and usage” (Phillips). This means more trust in bitcoin. During our lifetime, we had been able to witness the birth of a currency and it allows us to see just how much trust is needed for money to be sustainable.

With all the additional information, all the research done on money and how it can change so easily, it starts to seem like just a bunch of numbers. But because it is so necessary to everyday life, we need to continue trusting that it will do what we need it to do or else it collapses along with society. Money is such a necessary part of society yet it is so difficult to understand.

Works Cited

Glass, Ira, and Chana Joffe-Walt. “The Invention of Money | This American Life.” This American Life. Planet Money, 17 Jan. 2011. Web. 07 Sept. 2015. <http://www.thisamericanlife.org/radio-archives/episode/423/the-invention-of-money&gt;.

Phillips, John. “Bitcoin: What to Expect in 2015.” CNBC. N.p., 15 Dec. 2014. Web. 07 Sept. 2015. <http://www.cnbc.com/2014/12/15/bitcoin-what-to-expect-in-2015.html&gt;.

Reeves, Jeff. “Bitcoin has no place in your—or any—portfolio.” Market Watch. N.p., 31 Jan. 2015. Web. 4 Sept. 2015. <http://www.marketwatch.com/story/bitcoin-has-no-place-in-any-portfolio-2015-01-28;.

My lack of interest in the economy and the way money works had left me with the naïve concept that money is extremely valuable. If I were to receive a hundred dollar bill I would be cautious with it. However, after listening to the NPR Broadcast, “The Invention of Money,” my idea of currency and money all together has changed. I realized that the value of money is manmade, which relates to the idea that was introduced in the podcast: money is fiction. The idea that money is made up is somewhat frightening since it is the reason people go to college and get jobs. Even after researching, my opinions on this idea are mixed. Although it may be easy to not physically carry around money, it may also be risky to be so trusting of just the idea that one has a certain amount of money.

When I first read about the Yap’s currency in Milton Freidman’s “The Island of Stone Money,” I immediately thought their concept of money was more abstract than ours. I thought it was illogical that the people used extremely large pieces of limestone as their currency. I questioned why the limestone was so valuable in the first place. Plus, since the fei was too difficult to transport, Freidman explained that a new owner would simply claim acknowledgement of the fei, and the stone money would remain with the previous owner. I thought of this as unfair since the fei was not physically in their possession, but then I realized that this concept is not much different than ours. When someone gets a paycheck from their workplace, they do not physically have the money they earned. They instead have a piece of paper, or an acknowledgement that they do own more money. This comparison further proves the idea that money is fiction because it is not physically within ownership. I do not see the acknowledgement of owning fei is risky. Since it’s a complicated task to physically move the fei to a new owner’s possession, it seems as though a simple acknowledgement between people would suffice.

In the article, “How Fake Money Saved Brazil” Chana Joffe-Walt explains that four economists created the Unit of Real Value in order to fix the inflation issue in Brazil. The goal was to get the people to stop expecting prices to increase, and to start thinking of things in URV’s instead of the original currency, the cruzeiro. The URV solved the economic problems and Brazil flourished, which again supports the idea that money isn’t real because the URV was a currency that was never in anyone’s physical possession, therefore the money was completely made up. In this instance, the fact that URV was not an actual physical form of currency was a good thing, since it resolved the issues Brazil faced.

Bitcoin is an example of the risky side of money being fiction. In “Bitcoin has no place in your — or any — portfolio” Jeff Reeves explains that a bitcoin’s worth is equal to whatever a random person is willing to pay, therefore, the value of this currency is fiction. Plus, if one’s account were to be hacked and their bitcoins stolen, it would be difficult to find the hackers and get the bitcoins back.

After all of the research, my concept of money has evolved. Money is only an idea, created in different forms. Money is an acknowledgment, a marking on a stone, or a number on a piece of paper that proves one’s wealth.

Works Cited

Freidman, 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.

Reeves, Jeff. “Bitcoin has no place in your—or any—portfolio.” Market Watch. N.p., 31 Jan. 2015. Web. 4 Sept. 2015.

“The Invention of Money | This American Life.” This American Life. N.p., 7 Jan. 2011. Web. 6 Sept. 2015.

(Substitute an actual title if you like the idea. I think it’s smart  to title your essays.)

I always believed that the money I had in either my bank account had value. My belief was true to me until I was introduced to the story about a Carolina island named “Yap”. This island had a unique way of currency. Their currency was large stones named “fei”. These stones sat on a person’s lawn representing wealth. The islanders believed in this system to pay, giving the stones value. Although the idea seems a bit silly, the stones were a physical way to pay for purchases. After learning about Yap, I learned about the Brazilian economy. Money has changed drastically over the years. Money went from a physical object to pay for goods and services, to no physical object other than the debt or credit card in a person’s hand. In Brazil four graduate students came up with the idea to use virtual money to rebuild the Brazilian economy. The NPR podcast about Brazil made me think of several questions. Even with all the changes, does the piece of paper I have in my wallet actually have any value?

Money is an extremely hard concept to understand. During the economic downfall in Brazil, every day the value of money decreased. For decades the government tried to fix the issue and the price of goods until the idea of virtual money was proposed to the Brazilian Government. Once the money became a virtual way of purchasing things, the economy in Brazil got better. The virtual way of representing money changed from week to week making 1 URV equivalent to a certain amount of cruzeros. Brazil’s change in the way they viewed money, made me change my idea of money. I realize that the people give the money value and we don’t need to.

Hundreds of years ago in America, the people used gold to pay for goods. According to Milton Friedman in “The Island of Stone Money”, this way of keeping track of money was called the gold standard, America got away from the gold standard as the years passed due to the French wanting to exchange their paper money for gold. Some year later the federal reserved used paper money. Decades later, America has shied away from paper money once again however it is digital. I have always questioned the value of digital money and what it means to me if I don’t see it. Similar to Brazil, a new way of handling money in America is Bitcoin. Bitcoin doesn’t have any physical value. As competitive as the nations are around the world, other places have hoped on the virtual train.

Money is not just an issue in America in Brazil; it’s also an issue in Japan. According to the article “Japan approves $116 Billion for Urgent Economic Stimulus” Japan faces a similar problem to the one in Brazil. The government in has changed the value to the Yen making it weaker. Japan’s government plan makes me question, why virtual money does mean so much if people don’t physically have it.

Learning about the different ways and forms money can come in, while most of these ways being digital I believe the statement of the NPR podcast that money is Fiction. Believing in money is a silly concept to me that I have to accept and live by during my lifetime as the economy and forms of money change.

Works Cited

Friedman, Milton. “The Island of Stone Money.” (1991): 1-5. Feb. 1991. Web.

Phillips, John. “Bitcoin: What to Expect in 2015.” CNBC. N.p., 15 Dec. 2014. Web. 07 Sept. 2015. <http://www.cnbc.com/2014/12/15/bitcoin-what-to-expect-in-2015.html&gt;.

Tabuchi, Hiroko. “Japan Approves $116 Billion for Urgent Economic Stimulus.” The New York Times. The New York Times, 10 Jan. 2013. Web. 07 Sept. 2015. <http://www.nytimes.com/2013/01/11/business/global/japan-approves-116-billion-in-emergency-economic-stimulus.html&gt;.

Glass, Ira, and Chana Joffe-Walt. “The Invention of Money | This American Life.” This American Life. Planet Money, 17 Jan. 2011. Web. 07 Sept. 2015. <http://www.thisamericanlife.org/radio-archives/episode/423/the-invention-of-money&gt;.

During class the other day, we read and discussed about the currency on the island of Yap. The currency is called fei, they are stone coins mined from an Island 400 miles away from Yap, the bigger the stone the more wealth you have on the Island. My mind could not wrap around the idea of stone coins being used for money. You do not have to posses the stone to own the stone the islanders just knew who it belonged too. This made me think, is our currency any different? Now a days we don’t even physically touch our currency to pay for most things.

Listening to the NPR broadcast my whole concept on money changed, if you think about what money really is, and take the time to actually really develop an understanding of it, it’s fiction. We as citizens pay all this money for bills, cars, food, etc…, and our hands never even physically touch the cash. To my understand the Island of Yap and the US are no different from each other currency wise. The only difference is that we use a piece of paper and Yap use limestone coins.

Now there was a time Yap was owned bye the Spanish but, bought bye the Germans. The Germans kindly asked the people of Yap to build some roads on the Island because all there was were coral shell paths. The folk of Yap agreed, years and years past and still no roads, so what the Germans did was paint black crosses on the giant limestone coins , stating until you build roads we the Germans own your currency. The islanders did not like this they felt that their coin had decreased in value, so they built the roads and the Germans simply washed off the paint from the coins and the Yaps owned their currency gain. Reading Friedman’s essay, a similar event happened in 1933 when France and America were having some issues with gold exchange, so the French went into the American gold vault and painted crosses on the gold claiming the Americans gold. There is no difference in what the French did to the Americans than what the Germans did to the Yap.

Listening to more articles I discovered how the Brazilian citizens were invested in their money and how they used some sort of fake , made up money to save their country. Brazil was causing inflation day by day in their own country.The Brazilians could not wrap their mind around the concept that the price of the dollar or cruzeiros stayed the same, but the value of the cruzeiros were due to change and how much they could purchase would also change. This example shows you by the Brazilians using the fake currency which was called URV’s changed their country rapidly. This article proved that we depend on money so much that man chooses to just make money when we do not have it, showing that money is a fictional item.

The last article that I read was about how the Japanese approved a $10.3 million yen stimulus ($116 Billion dollars) to help their countries economic issues. Doing this Japan decreased the value of yen so much it made their currency weaker. From fabricating this fake money Japans public debt is twice the size of their economy. Reading this article definitely changed my opinion on how I look at money permanently.

My mind is blown because of the knowledge I just received.  I will, never can look at money the same again. Money is a fictional item in my mind now. I can now say I as a young adult have a better understanding about the US dollar and currency around the world period!

Works Cited

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.

“The Invention of Stone Money.” 423: The Invention of Stone Money. This Is American Life, WBEZ. Chicago . 7 Jan. 2011.

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&gt>

Tibuchi, Hiroko. “Japan Approves $116 Billion for Urgent Economic Stimulus.” NYTimes.com. N.p., n.d. Web

Money is an interesting aspect to life. When asked what money is, most would suggest that it is a thing, and point to their wallet or the paper money in their hand. This is true for any civilization; we all have different forms of money but it all serves the same purpose. And it always has the same aspect that few people succeed in realizing. Money is not a thing, but rather a concept. We use it to value objects of desire in a clear, algorithmic way. And who dictates money always serves as quite an unpredictable variable.

Before being introduced for the first time to these fundamental ideas, I fell in the pit with all of the other conformists. I looked down at Jackson’s face and thought, ‘I have money right here’. That thought now lies in contention with some of the greater lies I have told myself. Milton Friedman wrote an essay entitled “The Island of Stone Money” which details a small Micronesian island in which the indigenous people use large limestone rocks as their currency. He explains that the stones can be used to purchase things despite not having to actually be transported due to their immense and inconvenient size. While this seems illogical at first, Friedman is able to draw parallels with the United States government during the Great Depression, citing that they conducted a very similar move sanctioning off gold for the French merely by labeling it (Friedman 2-4). He proved that all monetary systems are in essence the same, despite some seeming less logical on the surface.

Today, we suffer from an even more illogical economic strategy, that being online banking. We are all told we earn money and that money is placed in a bank account, but nobody ever sees it. Chana Joffe-Walt explains that the money we earned is not necessarily real, as it is never physically held, just told it exists. Furthermore, in our society today, there is an unbelievable reliance on online banking and transactions. Though the money we pay on Amazon is coming from “our” bank account, what does that truly mean? Is it our money? Or is it just a promise that we’re able to trade and negotiate with at our own will?
Bitcoin deserves a notable mention here, as it gained popularity recently and is already notorious for being a worthless investment. The idea behind Bitcoin is to provide an anonymous, easy method to transfer funds. They present themselves, them being Bitcoin, as a concept, not a currency. This being said, there is no true value to them; they have no backing in the real, physical world (Reeves). Since they advertise themselves as failing to have a tangible value, they are in a sense making themselves vulnerable to an unstable worth. People see them as being not real, unlike paper money, such as USD, which they think is, and people do not value them as much. The concept of money, in this sense, is a curse as it maintains that currency must have a physical “value” in order for the lie that is money to work.

To some extent, money is a real thing with real value. But practically speaking, it functions as a system through a series of lies and promises that may or may not be true. Your money in your bank account may have been dropped in the Atlantic Ocean, but it is still your money, and you can still withdraw it from your account.

Works Cited

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. 7 Sep. 2015. <http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil&gt;.

Reeves, Jeff. “Bitcoin Has No Place in Your – or Any – Portfolio.” MarketWatch. Livefyre, 31 Jan. 2015. Web. 07 Sept. 2015.

Glass, Ira . “The Invention of Money.” NPR.org. 4 Oct. 2010. 7 Sep. 2015. <http://www.thisamericanlife.org/radio-archives/episode/423/the-invention-of-money?act=0#play

The concept of money brings a lot of things to the table in our society. I used to think that money was just used for currency but after these articles and doing a little research, there are other purposes that money creates. But overall, I still think that money serves its main purpose is to be used for currency. This gives people the right purchase to spend it on their essentials. But there are other concepts that money brings. Money is also the most valuable thing when it comes to trading. People are “trading” money in order to get products or services from others. Before there was money, people would often trade products or services with each other in order to obtain of what they need or desire. “Before money was invented it was very common for people to trade animal skins, weapons and salt with each other instead of using currency.” (Beattie) This method turned out is valuable because people would value each other’s work in order to get what they needed. This process was called the fair trade method, which was when two sides would offer something valuable in exchange for the other person’s goods. Obviously this method probably wouldn’t work today in a first world country because people today value too many possessions and have nothing to offer in return. This is how currency was invented.

Nowadays people use money in order to obtain their essentials or pleasures. People now value money more then anything else. This is why every product and service has a price. Money gives people and organizations power. People with more money are generally the most successful people in our society. The concept of money also creates social classes there is the upper class, middle class and the working class. The more wealthy people are the higher their social status will be. People with the most money will be towards the upper class and people with the least money will be towards the working class. Money is also the key component in the stock market and job market. People in the stock market put up money towards companies and if the companies are doing well then the business will reward people with a percentage of their profits. People will also put up their services to work for various companies and businesses. In exchange for the services, the business will reward the people by giving them an annual salary. Money also gives people power to do various activities. People with the most money are generally the same ones that are in charge of businesses and other things. People who run businesses are the ones that are in the middle and upper classes. Money can also change how people think overtime. People who have more money can tend to think that are superior over every else in society. “Money can also has lead people to act immorally or lie to others after being exposed to a large amount of money.” (Gregoire ) Money has done more than just create currency; it has also made other things possible such as social classes, job and stock markets and can even change how people act and think towards one another.

Works Cited

Gregoire. Carolyn. How Money Changes the Way We Think and Behave. The Huffington Post. 6 January, 2014.

Beattie. Andrew. The History of Money: From Barter to Banknotes. Investopedia.