People have been using the money for a long time, but the real meaning of money might vary depending on who is using money and how money is valued. When people talk about money, they mean different things. Sometimes money is synonymous with income. The problem is defining cash comes in place because various people value money depending on how they live, some people appreciate money with goals and others with limestone stones. For instance, there are the people who live on Yap Island in the Western Pacific.
When reading the article by Milton Friedman, called The Island of Stone Money, I can realize the Yap people have a unique money system. According to Friedman’s writing, the whole concept can be seen when the French wanted their gold form the United States. This is precisely what happened with the Germans and the fee. The Gold, in this case, was not helping the French; it was only that gratitude and the respect that they had gold that satisfied them.
The people of Yap for several years have been using a single currency of money. The currency is a massive stone wheel called rai. The rai stones can be evoking some curiosity for some people because they are extraordinary. However, looking keenly at the Yap money, one can learn different things about the value of money. First, we should not there is no stone on the island of Yap. The people of Yap have to travel to a place called Palau where there is limestone. Palau is another island; they curve these stones and transport them back in canoes. The second things to note with these people is that however big these stones are, the most significant stone does not necessarily mean it has the most significant value. What happens is that if the stone cost people a great expense to bring it to form Palau, which will be the highest valued stone. There are some lessons to learn from this money. One can realize that money maintains its value over time. The second lesson is that the limestone wheels and the electronic cash both have value; they can be classified as a source of wealth, depending on who is involved. For instance, the Yap people believe that the stones have value, and that is their best currency, in the same way, someone using electronic currency believes in that value of money (Friedman, 20). However, some few differences can be depicted regarding portability and cost. Limestone stones money is quantified differently compared to the electronic money.
The other piece that I was reading is How Fake Money Saved Brazil. I was interested to know this because I need to know how people valued money and invested. This was another reminder on the NPR article, which stated that sometimes money is fiction, meaning its value can change from day to day (Joffe-Walt, 21). In this story, an economist and his friends tricked the people of Brazil to save the economic inflation in the nation. The trick was crazy, but it worked perfectly. According to the plan, the new president was to come up with a new idea, he freezes the new prices, he fails, he is impeached, and the processes repeats. People were tricked to believe that money would still hold its value. The four economists wanted to create the fake currency with no coins, just a unit of real value (URV); this was a virtual currency (Joffe-Walt, 24). In this case, people would be suing the cruzeiro, but everything was to be listed in the URV currency. Everything in the currency was listed in the fake URV currency. This was meant to make people think alongside URVs as a stable economy. Indeed, money is fiction as this tricky raised the economy of Brazil.
The concept of being wealth contributed to the Great Depression in the US. Wealth distribution was a challenge indeed. There were low wages, and salaries in the 1920s and many Americans were working in farms and factories. This means that there was the uneven distribution of wealth since these people did not have a lot of money. The manufactures of companies enjoyed the cheap labor form the poor Americans; they continued being rich as they exploited the poor Americans. The wages did not increase, therefore; people lacked enough money to sustain their basic needs. The disparity between the poor and the rich created an unstable economy the market plummeted; people could not afford the products the factories were manufacturing. The investors lost hope in the market and sold their shares, in turn, was a market crash in 1929.
According to historians, the rich had a lot of money, and the rest of the people had nothing. When the depression came in, people whom had little money had to suffer a lot since they did not have a lot of money to sustain them. If wealth was distributed equally, all people could have got enough money to spend, and the demand for the goods and services could not have dropped as it was seen. If the government of the United States had distributed the same amount of wealth to people, then the Depression might not have occurred.
The fiscal cliff according to be is a false representation of sound economics. Virtually, it is evident that every American will benefit from the safety-net programs. It can be either through school lunch, unemployment benefits or social security checks. As there is a debate to reduce spending, and increase taxes, some programs like housing credits and food stamps should be incorporated because they work. These programs will ensure employers are getting reliable workforces and taxpayers benefit from the pumped money into the economy.
Conclusively we have looked at the history of money and how various people have been valuing currency. The Yap Islanders are known for their large stone money, which they appreciated a lot. They had their best currency, and that is how they traded. The monetary systems vary from one location to another. Therefore, the stone money can be likened to the American financial system in a way that both have value and currency. I have learned that money is a fiction, as evidenced by the fake money that saved Brazil.