Stone Money – sillyinternetperson

Money is fiction.

Think about Monopoly money, money that is used for a fictional scenario. You buy the properties in the game for a set price. However, you can make deals with players. A property can be traded for money, property can be used as collateral if you borrow money from a player, you can trade a property for a property or a utility. But say you’re too lazy to get up and have a surplus of money. You can offer your Monopoly money to someone (on your turn) to get you a drink. At this point, you have given Monopoly money real value.

In 2008 the market of real real estate crashed. The value of properties was raising exponentially daily. One day, that bubble popped and suddenly all of those properties lost their value. Trillions of dollars of value disappeared. Not dollar bills, bonds or credit, the value. The Federal Reserve, or the Fed, was forced to use emergency powers to solve this problem. The Fed our country’s center of banking. They decide every six weeks how much money should be added to the economy and how much should be taken out of it. According to a journalist who was given a tour, space in which this was debated and decided was nothing glorious. It was simply an office with a few cubicles, a yoga ball and a basket ball net. A regular office. In this office, with the click of a button, 2.4 trillion total was created in the year of 2008. This group of people after discussing it, just put the number into a computer and now it exists. The Fed then lends this money to banks, or in the case of the 2008 market crash, companies and Wall Street funds. Since they had lent them to companies, then ended up taking property as collateral until the loan was paid. Some places actually ended up being claimed by the Fed. The fact that money is made in almost a silly way, the story of the island of Yap may not seem so far fetched.

Yap is an island that uses massive stones for money. These massive limestone wheels are carved from an island over 200 miles away and brought back on a boat so that they can not be forged, as limestone is not naturally found on Yap. This giant coin is owned by a community. Whenever a large price has to be paid, ownership of the stone is transferred. It doesn’t even have to be moved. It is marked.

So how does a government handle debt in an economy like that? The same way. It is marked as void by the government. In an article called The Island of Stone Money by Milton Friedman, he quotes William Henry Furness III, saying that a man from the government would go around and mark each of the most valuable stones with a black ‘X’, showing that the stone had been claimed by the government. When this was done to get roads paved in 1898 after the purchase of the island by Spain, it “‘instantly worked like a charm'”. They fixed the roads and the government removed the markings, which gave the stones their value back. There was an instance when one of these stones was dropped into the water due to a storm. Once people who carved it got back, they explained what had happened and the stone was still given value. Someone owned it.

As absurd as stone money at the bottom of the sea sounds, on the opposite side of the spectrum, we have Bitcoin, or BTC. It was the first of now many cryptocurrencies, made by an anonymous programmer back in 2009 who “wanted a currency independent of any central bank of financial institution” as reported by Anne Renaut of Yahoo! News in her article The Bubble bursts on e-currency Bitcoin. Today, bitcoin is worth around twenty thousand dollars. Back when this article was written, it floated around the $50 to $300 range. It is generated by a process called “mining”, wherein users can use their computer GPU’s to basically roll the dice, solving equations to find a number. When that number is found, you are rewarded with one BTC. There is such a small chance of finding this number, that there are people who have created groups of users who volunteer their computing power to mine for BTC, and depending on the uptime, the user is paid in a very small amount in BTC. It’s an alternate currency, that was created to be ungovernable and anonymous. This raised concerns, valid ones, that it would be used to purchase illegal goods and services. It was and is currently used for such things. With an unstable value and use in deals of laundering and crime, this was perhaps not the best solution, however this does not mean alternate currencies are a bad thing.

Brazil’s inflation rate was unfathomable in the mid 20th century. Producing anything that took more than a day to make was not profitable, as the ingredients or parts cost more than the product by time it was finished. Prices in markets were being changed daily. Suicide rates skyrocketed as well as poverty and crime. How was this fixed? An alternate currency. Four economists studied for years to come up with a solution, but this wasn’t before a few failed attempts. One attempt was to regulate price changes in markets, but the markets would hide merchandise until they were allowed to change the price. Another was to freeze peoples’ bank accounts. This did nothing but cause Brazil’s people to lose respect for their government. Finally these four men were called in to help fix the crisis. They came up with an alternate currency: unidade real de valor, abbreviated to URV. Markets would set the price of a product to a certain amount of URV’s. Each morning, the banks would put out a proper conversion rate from cruzeiros, the currency at the time, to URV. Markets would price things in URV rather than cruzeiros. People would get paid in URV, rather than cruzeiros. Eventually, the cruzeiro became obsolete, and the real, a shorter way to say URV. The people of Brazil had all simply accepted the URV as the new currency and that’s why it worked.

Belief is what gives money, or anything for that matter, value. Be it a note, a coin, a bond or a check, depending on who you are and what you believe, you are the one who decides its value to you. Others decide its value in exchange for something the same way you do. A dollar on Yap won’t get you anything, but a giant stone will.


Milton Friedman. Internet Archive. (1991, February 1). Retrieved September 28, 2022, from Island of Stone Money by Milton Friedman

The Invention of Money. This American Life. (2017, December 14). Retrieved September 29, 2022, from

Renaut, A. (2013, April 13). The bubble bursts on e-currency bitcoin. Yahoo! News. Retrieved September 29, 2022, from–finance.html?guccounter=1

About sillyinternetperson

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1 Response to Stone Money – sillyinternetperson

  1. davidbdale says:

    Best Stone Money ever.

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