The valuable paper called money
How interesting it is to know that everything in this world revolves around green piece of paper yet it’s nothing more than simply an idea. It’s not believed to be just any rectangular paper instead there’s something valuable on it which makes it important. Sometimes as long as money is there it doesn’t physically even have to be there. In fact the people of the Yap Island, far by pacific used hard enormous rock which just sat on dry sand. It seems very shocking and unusual for me to learn that something like a stone can be used as money. These gullible preindustrialized folk of Yap believed that the rock resembles how wealthy an individual is. Now imagine taking large stone rocks to pay for Rowan University tuition fees. Since this heavy rock, twice the height of human was unmovable; people were allowed to just call it their ownership. There was need of paper work or putting in safe place like we do now days.
First time when I read Milton Friedman’s article, it all seem like made up story of people of yap using a stone as currency system. 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 had fixed mindset of thinking money is still part of the owner even after they lost possession of it in storm incident. Similar to today’s world, physically money isn’t taken out it’s simply just numbers changing through wire pulses that give us an idea. 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.
The concept of money is universal and understood well no matter where you are from. When the Germans visited Yap Island and claimed the rock to be theirs by simply painting black cross over it, it was understood by the yaps. They respected the German’s ownership and agreed to pay by the fine to regain their fei. You may think there bit foolish enough to fall for it. However USA had done similar thing that it led to the banking panic of 1933.
The problem that this country called Brazil went through in history is an evidence of how blindly people believe in how much something has cost of. 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 Brazil was changed just from introduction of a new imaginary currency called real. This was smart idea to give people an illusion of thinking their cruzerios price weren’t changing but it was. I realized how important it was for this plan to be created by Bacha and other men to stabilize people’s faith in money itself. During inflation, 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
There’s another currency that had been fluctuating over past year. This new currency is large antique shiny 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. Its 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.
We all around the world use money for our food, shelter and living throughout our life. Whether it’s using rupees, euros, peso or dollar, we all around the globe share common idea about money. Money can be anything as long as population has faith in using it.
“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.