(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.
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>.
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>.
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>.