There is one common goal that everyone on this earth has and it’s to make money. Everyone wants to have a lot of money. People go to college to ensure they can get a good job to make “good money”. People work every day for this material that is so important in our everyday lives. Money helps you survive, money helps you buy the things you want and the things you need but the craziest thing about it is that money isn’t even real. Money is a way to class people as lower, middle, and upper class but how do you classify people on a system of monetary value when the monetary value isn’t even real. People carry little amounts of cash in their wallets every day but money in the bank isn’t actually yours.
After listening to the podcast “The Invention of Money” everything makes sense. In this podcast they talk about the question “How much money is there?” and there’s no way to actually know. If people ask you how much money you have you are going to count the money in your bank and in your wallet but once that money goes into your bank it is loaned to someone else and now that person has your money. In this podcast they talk about how you cannot count that money twice. So if everyone is sharing the same money how do you count it, how do you know what’s yours and what’s not? How can their be so many questions about such a simple thing.
In Martin Friedman’s “The Island of Stone Money” he discusses the way that the people of Yap use money. In Yap the carve these giants wheels made out of limestone that they call “fed” for their money. These stones are huge so the people of Yap don’t carry them around with them. These stone sit in the same spot but everyone knows that it’s their stone. Once you trade that stone to someone else it still doesn’t move. It is known by everyone that it is your stone regardless if you have it with you or not. The people of Yap have to go to a different island just to carve these stones and once they even dropped a stone in the middle of the ocean due to a storm but they still use it as money in their economy. You might think this is crazy think about it but it’s really not. This is almost the same thing we do today. We do online shopping and we pay our bills online and where does this money go? The bank does hand the the money to the bank or give the money to the people you are shopping from. Money online is just and exchange of numbers over to another place. In “The Island of Stoney Money” Martin Friedman shows this concept again. In 1932 The bank of France needed gold from America. America told them that they set aside their gold for them and they didn’t transfer it to them. France was fine with this and happy they had their gold. The odd thing is that they didn’t have the gold it was in America so why were they satisfied with it.
In the piece ” How Fake Money Saved Brazil” the inflation was 80% which Joffe-Walt explains that a $10 pair of sunglasses would be over $10,000 in a year. They had no way to fix this. Year after year the Brazilian economy was changing. This happened for 50 years. People in Brazil were losing money every day. They tried to fix this with a price freeze but than merchants started hiding their merchandise waiting for the prize freezes to go away but once that failed President Collar tried to help but his deal was that you were not allowed to take your for a while. Finally their came four Economist to solve the problem. These four people had a plan that they discussed for years over the Brazilian inflation. They came up with URv’s and URV’s are stable. The URV made people stop panicking. This made people think that there was no more inflation. The inflation was still there but it was lowering by the years. This fake currency saved Brazil just because everyone was tricked into it being real.Finally in 1994 they made a new currency that ended the inflation. People stopped panicking because of a simple trick in money. How can money do something like that over so much panic.
References:
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/
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. https://www.thisamericanlife.org/423/the-invention-of-money
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