Everything in this world revolves around money yet it’s nothing more than simply an idea. As long it has value, it doesn’t physically have to be there. It seems very shocking and unusual for me to learn that something like a stone can be used as money. These pre industralized folks of small Island called Yap by south pacific used large stone as their currency. These people of yap believed that craved stone has currency which they referred to as fei. And they also believed that it resembles how wealthy an individual is as long its there and anyone can name it to be theirs.
After getting in-depth information from this article called The Island of stone money by Milton Friedman, I realized this historic yap situation is similar to current USA money concept. The yaps believed money existed even after it wasn’t with them after they lost possession it in storm inccident. Similar to today’s world, physically money isn’t taken out it’s simply just numbers changing through wire pulses. It actually made me think and wonder what happened to the money if it’s only digital numbers changing from one account to another to satisfy a payment.
Not only that the Yaps were gullible into thinking that the heavy stones are considered german property because of some black cross placed on it. They really respected the german’s ownership that the yaps agreed to build new roadways just to regain their fei. However USA had done similar thing that it led to the banking panic of 1933.
After further research I learned that money is really worthless and it’s just an idea that makes it going. The NPR broadcast called “The lie that saved Brazil” explained how entire economy of the country called Brazil was changed just from introduction of a new currency. I realized how important it was for this plan created by Bacha and other men to stabilize people’s faith in money itself. The Brazilians couldn’t grasp the concept that the value of cruzerios didn’t change just the idea of how much they would be able to buy. But this fake currency URV which was totally made up changed their perspective and their expectation of increase in price since the URV was stabled. It gave the spenders illusion that they are not spending too much money.
There’s another currency that had been fluctuating over past year. This new currency is large antique coin which is called bitcoin. It made me more doubtful about this new creation coming in. It had no central bank behind it, meaning it has no monetary value. It’s value had dropped from being high which means it’s currently very unstable. It will take people some time to be acquainted with this new digital currency. According to the articles, there may be hope for success for Bitcoin company.
After researching these articles my idea about money has changed. Money’s worth isn’t from how much quanitity it is but rather from it’s value. Money can be anything as long as population has faith in using it. Also I gained knowledge from something that I never thought of from these articles which swifted from one topic to another.
“Bitcoin: What to Expect in 2015.” CNBC. N.p., 15 Dec. 2014. Web. 07 Sept. 2015.
“Bitcoin Has No Place in Your – or Any – Portfolio.” MarketWatch. N.p., n.d. Web. 07 Sept. 2015.
Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.
“The Invention of Money | This American Life.” This American Life. N.p., n.d. Web. 07 Sept. 2015.