Money or currency is a concept used all over the world. The idea behind currency can be drastically different from one population to the next. For example there is an island off the coast of Australia named Yap where their form of currency is know as Fei. This is limestone slabs which can range in size from a CD disc to a stone the size of a small house. The greater the size of the Fei the greater the amount of wealth the owner will have.
When the Fei is as small as CD’s they are traded like how modern coins are used. In cases where it’s as big as a house, it will not always change hands for it to be known who owns it. The citizens make a mental note of who has the ownership of the Fei. It can only be found over 400 miles away from the island of Yep and can only be retrieved by using wooden rafts to retrieve it.
Imagine if the United States were to use the Fei for it’s currency. Many American use credit cards which is almost the same idea as having your Fei on someones property. Almost as we keep our money in a bank. All they physically have is a piece of plastic. This concept of not physically having your fortunes in your possession can end very badly.
For example during the 1930’s before the great depression a minute change in detail of ownership for gold drove Americans into panic. For the French were nervous about the deflation of the dollar currency and requested that their dollars be changed into gold. No money or gold changed hands, just a simple note was put onto the vaults of gold to show whose it actually was. Nothing had moved it was only a simple piece of paper. This gave horror to many Americans and can be argued to have sparked the great depression.
What would have happened if the French had actually took their gold from our vaults and brought it back to France? The results would have been even more catastrophic than not physically taking the gold.
The United States monetary system is only as good as our faith is in our country. The US has virtually no money, the dollar bill is only worth the paper its written on. The monetary system only works when the people believe that there is worth behind the system. Everything has value based on what the people are actually willing to let it be.
These systems are just a substitute for bartering are never a full proof idea. Even now the world is making technological advances such as the “bit coin”. This is a form of virtual currency that has its up and downs like any other. Is this the future of our currency or is is just another fluctuating form of currency?
Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University , 1991.
Phillips, John. “Bitcoin: What to Expect in 2015.” CNBC. N.p., 15 Dec. 2014. Web. 07 Sept. 2015.
Durden, Tyler.” The concept of money and the money illusion”. 5 Sept. 2015.
Chambers, Clim. “Money is Merely an Idea”. 29 July 2013.