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Message:: [QUOTE="Numbers, post: 712969, member: 11668"]Oh, okay.  So it's like the U.S. silver coins I mentioned above, except that in the sixties, instead of giving up on silver, we declare all the silver certificates to be legal tender for $1.50 now (and proportionally for other denominations). If you literally do it that way, there's going to be an issue with the discreteness of the valuations.  One day a silver coin is worth $10 in paper, the next day it's $15: nobody's going to spend silver if they think there's likely to be a legal increase announced soon.  Gresham times guessing game equals chaos. But even if you give up on the "round to a multiple of 5" and let the legal value of the silver coin be defined as exactly the highest melt value it's ever had--or even, say, 110% of that value--you've got the 1962 problem whenever silver is near a price record.  If the value of the silver coins is (probably) about to go up, then people won't spend them if they can choose to spend paper instead. So you have a choice.  You can either make sure that there's enough paper in the system that transactions can still take place at times when nobody's spending silver--in which case, you've got a paper-based system fundamentally the same as we've got now, so you can't really talk about "sound money", now can you?  Or you can try to have a really truly silver-based system--in which case, everyone else in this thread is right, there ain't enough silver in the world to make a go of it. In other words, any form of your proposal which would be feasible would also be pointless, as everything would in practice still work just like it does now....[/QUOTE]

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