Money is something everyone wants but the problem is, where is it? Well everyone knows where it is, it’s in the banks, or is it? We don’t actually see our money in the bank, we just see what it says online or if we ask for our balance it’s what they tell us. But in reality our money is not actually there, it is loaned out somewhere and when we need “our” money we get someone else’s money who had it in the bank as well. People believe we should just use stones for trade instead of money since we will always be able to see the limestone wheel just like the Yaps use to use in the past.
In the prologue of “The Invention of Money” the reporters talk about how they discovered how money was fake. They talk about the value of things and how what you say your property is worth, doesn’t mean it’s actually worth that much because where is the money you say it’s worth? It’s not there until someone gives you the money for the item and if they give you a check, your not actually getting the money because it goes to your bank account. Even though it says it goes to your bank account, it’s being loaned out to someone else who wants to do something with that money.
They go on to talk about the Yaps and how the Yaps currency currency was massive stone sculptures which look like coins. These coins aren’t on the island yet they go to a different island 250 miles away to go carve the stone and bring it home with them. They use them for big purchases such as to buy their warriors bodies back from neighboring villages. They have a way of currency without giving the stone away. Everyone knows each other and if your stone is sitting on some random path away from your house, people would still know that you are there rightful owner of that stone. One crew lost a stone to the ocean and the town believed them and still that that was ok, it is still your stone to trade. So the Yaps still say you own that stone and it’s “good” money. The yaps currency works the same as we do with dollars, we don’t actually have to have the money in our hands but we say we have it even though it was probably loaned to a different person or company.
In Milton Friedman’s essay “The Island of Stone Money” he talks about in 1932-1933 the France and the USA and how the France thought that the USA would not stick to the gold traction. The traditional price of gold was $20.67, so France asked the USA to convert its dollar bills to gold bars. But the problem was no one wanted to ship the Gold so France just told the USA to hold it in France’s accounts. The problem was, how did French know that the USA weren’t lying to them about actually giving them the gold they requested. All of this led to the USA bank scare in 1933 because people believed because that the USA lost its gold it means that the USA had a “weaker dollar”. Friedman compared this to the Yaps and how the Yaps didn’t have to actually have their stone currency on there front step in order for it to be theirs.
In the article “How Fake Money Saved Brazil” inflation in Brazil’s money was going up everyday. Milk at $1 in the beginning of the year could end up at $1,000. When the newest financial minister was elected he called a minister by the name of Edmar Bacha. Bacha and his friends came up with a way to save Brazil’s currency without really changing anything. He proposed that they add a new currency called URV (Unit of Real Value). This currency was a way to stop the panicking and make it so that the people of Brazil believed that there was no more inflation. The inflation might of still been there but when they look at things such as prices, taxes and other forms and payment, the price would never go up.
Throughout our lifetime money was never there, it was just a way for us to imagine we had the money when in reality someone else had it. But just because it wasn’t in our possession it didn’t mean it wasn’t ours. The money will never actually be there, until you have the money in your hands then you can say “I have this money” but is it yours or was it someone else money?
Resources:
Friedman, Milton. “The Island of Stone Money.” Counterintuitive, Stanford University, Feb 1991. https://counterintuitive2015.files.wordpress.com/2015/01/stonemoneyessay.pdf
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/
Glass, Ira. “The Invention of Money.” This American Life, 19 Feb 2018. https://www.thisamericanlife.org/423/the-invention-of-money
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