Money is something that everyone wants, its something we strive for. In today’s world, our money is mostly controlled by banks. Now think, when was the last time you saw your money? Lately the only way we could be able to “see” our money is by looking at the slip of paper we got before leaving the bank or looking at an app from our bank that shows how much money we own. If we don’t get to physically touch and see our money, how can we claim it? Is it even there?
After listening to “The Invention of Money” on the NPR broadcast, it really had me thinking where does our money actually go? They talked about how Brazil was saved with a lie. In 1990 Brazil had an 80% inflation every month, that lasted for 5 decades. They tried to find a way to fix it by listening to many presidents, that didn’t work out for them. Then three men came up with the idea of tricking people into thinking that the currency was real. There would be no coins for anyone to own, everything would be virtually. They needed everyone to believe in it and they did. This compares to our banks because we never see our money once it goes in and if we take money out we think it’s ours but it’s truly not. This leads me to another story told on NPR Broadcast about an Island called Yap.
Yap was a place where the money they had was stones. The stones weren’t just average stones you would see now a days, they were huge stones made out of limestone. Being as big as they were, no one was going to move them. Once you have purchased something, the stone would be yours and everyone would know. There was no marking your name it because it wasn’t necessary. To obtain these stones they had, they had to travel to another island on a boat carve the stone then bring it back. Unfortunately, one time there was a bad storm, so the men had to let the stone go. The stone sank to the bottom of the sea and surprisingly still had value to it. How can something you can’t see have any value to it? The Value of money is in our heads, it is what the government wants it to be and we go along with it.
After reading “Island of Stone Money” by Milton Freedman, it opened my eyes that the government tells us how much worth our money is. Money is created it really does not have any value until the government decides to put a number on it. In the “Island of Stone Money” the German government came over to the Islands and just claimed. They interfered with the daily lives of people who lived there. They didn’t need to fix anything up, but they did and if anyone was disobedient to the chief then the government decided to claim their money by using paint. So, the islanders didn’t want that to happen, so they followed everything the chief wanted so they could keep their money. If you think about it, it is just like this society today. The government takes our things or claims our money if we don’t pay something off. They can freeze our bank accounts which mean we cannot access the money we have. Which now leaves us with nothing. That’s how some people feel when they use bitcoin. Bitcoin is not a place where there is actual money. The money you think you have does not have value and can be stolen from hackers. Just like a government tells us how much money is worth, Bitcoin is worth how much a random person is willing to pay you.
You can never really say something is yours. The bank loans the money to whoever needs it, so it is not your money that you have in your account. After reading these stories, I can now have a better understanding as to how money works and know that the money I have is not really mine, even though I worked for it. The money you have is not worth anything unless someone tells you. Hold on tight to the money you have that you can actually see and hold because before you know it, it won’t be around anymore. Everything will be electronic, and bills won’t have any value to them at all.
Friedman, Milton. “The Island of Stone Money.” Counterintuitive, Stanford University, Feb 1991, https://counterintuitive2015.files.wordpress.com/2015/01/stonemoneyessay.pdf
Glass, Ira. “The Invention of Money.” This American Life, 19 Feb. 2018, http://www.thisamericanlife.org/423/the-invention-of-money
Reeves,Jeff. “Bitcoin, Not In My Portfolio” MarketWatch, 31 Jan. 2015, https://www.marketwatch.com/story/bitcoin-has-no-place-in-any-portfolio-2015-01-28