Money is powerful and fragile. It can confer social status, what we own, what we do, where we live. It can influence our actions, our thinking, and our way of life. But when one thing goes wrong with that money, the economy begins to crash, and the lack of money becomes the downfall of us. Money has come in many forms, and has always been fragile and surrounded by trust. The essay by Milton Friedman “The Island of Stone Money,” tells us of an island called Yap that used large stones, called fei, as money. A summary of Friedman’s essay can be found in an NPR broadcast by Jacob Goldstein and David Kestenbaum. The fei are similar to our money that we use today in that the fei were said to hold a certain value, and sometimes were never in the actual possession of the holder. We’ve come a long way with the use and creation of our money, but it will always rely on trust and the people who spend it.

At first one may laugh at the Yaps for having such an outrageous form of currency, but their system is actually not much different than ours. Money and banking today is based on numbers in cyberspace, and most everyone’s money is stored in a bank. We only keep a few actual dollar bills on our person. Like the Yaps didn’t need rocks in their possession to make a transaction, we don’t need dollar bills and coins in our possession. If a transaction were made between two Yaps, the buyer would simply have said the rock was his and the seller believed him, which like the credit cards and checks we use today. Despite no solid evidence, people believe others when a transaction is made without physical money. There is a trust in the system that allows people to feel secure when spending or earning money.

Like most of the world’s currency, America’s money is no longer backed by gold. Money’s value comes from the people who use it. Sellers control what the dollar is worth through the selling of their products. We trust that the money we earn will be able to be spent on a product, but when we have too much money, too much of a product, or not enough places to spend all that money, the dollar’s value changes. More expensive products and more money in the system make the dollar worth less, while cheaper products and less money in the system make money worth more. An example of this can be found in the New York Times article, “Back in Power, Abe Aims to Spend Japan Back to Economic Vitality,” by Hiroko Tabuchi. Japan is facing a problem with its central bank, which failed to fight deflation and the fall in prices, profits and wages. This lack of money and spending has led to a decline in the economy and the value of the yen. Shinzo Abe, Japan’s new prime minister, is planning to pump money back into the economy by printing it. It is a risky plan, because while the new money could energize markets and lift up the economy, it would only be for a short time. The increase in money in the system may lead to inflation and high interest rates, causing even more problems for Japans economy in the long-run.

The value of a dollar or any form of currency can fluctuate very easily. Bitcoin is a relatively new form of currency that is completely online based; there is no physical coin that we can hold or use to make a purchase. It is a good example of how easily money can fluctuate. “The Bubble Bursts on E-Currency Bitcoin,” by Anne Renaut, tells of the sudden drop in value of the Bitcoin after it had a three day high of trading and worth. Bitcoin is new, and like all new currencies, and even some current ones, there is a lack of places to spend it and little to no conversion rate among other currencies like Euros. All of that, combined with complications caused by investors, is what led to the sudden drop in the value of the Bitcoin. Many thought it would be the end of the Bitcoin, but Foundation chief scientists Gavin Andresen believed otherwise. He predicted it will take awhile for the foundation to grow and for the currency to be relative to other currencies. Since its crash the Bitcoin has slowly begun to rise, and has began to build a user base which will help its growth in value and stability.

Money is something we take for granted in everyday life, and we don’t always realize how fragile it can be. It is shocking how much trust we have in something which we sometimes don’t see, and which can fluctuate so easily. While the government controls how much money is printed and how much the dollar is worth to other countries, we, buyers and sellers, ultimately control what it is worth. Money relies on us, and that makes it one of the most powerful and fragile things we’ve created.