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<p>[QUOTE=&quot;Texas John, post: 1181520, member: 25813&quot;]There is no reason a currency has to have intrinsic value of its own. In fact, having an intrinsic value can interfere with its utility. We as coin collectors learn this better than most. We know that America&#039;s struggles to keep coins in circulation lasted for decades, with gold coins disappearing in the early 19th Century, then silver in the 1840&#039;s and 1850&#039;s, and finally every sort of coin during the Civil War (shinplasters, anyone?).</p><p><br /></p><p>Certainly precious metals endured as money for so long for the reasons you mention. But reliance on them has proven disastrous for many peoples in many places. A principal reason the Dark Ages were so dark was that the collapse of the Roman empire cut Europe off from traditional sources of gold and silver. Pathetic little chips of silver in far too-small quantities were all that was available as money for centuries, the ability to trade beyond one&#039;s own area and in any way other than barter was stymied and English kings were forced to send troops scurrying around the country, attempting to seize hoards of Roman gold whenever they were uncovered from farmer&#039;s fields or the walls of old buildings. That was the basis of today&#039;s Treasure Trove law - caches of gold when found were declared property of the Crown because the Crown was chronically desperate for cash.</p><p><br /></p><p>Ironically, in some cases the opposite was true. When the Spanish discovered vast reserves of gold and silver in the New World, they swamped their home country&#039;s pre-industrial economy with heaps and piles of &quot;intrinsically valuable&quot; money for which there was nothing on offer to buy. Unable to ratchet up production to soak up the new funds, and too uncomprehending to realize that money is actually not very useful unless you can buy things with it, the Spanish experienced an early episode of hyper-inflation and the eventual destruction of their national economy. It was a catastrophic blow from which Spain failed to recover for hundreds of years.</p><p><br /></p><p>It&#039;s only when &quot;intrinsically worthless&quot; currency became the norm that nations were shielded from the vagaries of the money supply, and could build the great industrial economies of the modern era.[/QUOTE]</p><p><br /></p>

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