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<p>[QUOTE=&quot;jackeen, post: 139380, member: 5683&quot;]Token coinage is by definition coinage that has less intrinsic value than face value.</p><p><br /></p><p>US silver coinage was token coinage after the Bland-Allison Act of 1878, except for the occasional spike in silver value during periods of uncertainity, such as World War I. As I observed earlier, the silver in a silver dollar was a small percentage of its face value for decades.</p><p><br /></p><p>The fact that minor coins didn&#039;t even contain a token amount of silver after 1970 wasn&#039;t the culprit behind the &quot;process of removing any intrinsic value from the money supply&quot;. That was accomplished in name in 1933 but had been in fact since 1907. After the latter date, only a small fraction gold of the gold needed to redeem all the paper money in circulation - and supposedly redeemable in gold on demand - was on hand. The convertablility of paper money into gold was a bluff thereafter. So long as most people didn&#039;t try to redeem their paper money for gold, there was enough gold to redeem any note that was actually proferred. So long as people perceived they could get gold for their paper money whenever they wished, most of them didn&#039;t care to do so. $1000 in paper money (even in large size notes), fits in your pocket. Fifty ounces of gold is a burden to carry and hard to conceal.&nbsp;&nbsp; </p><p><br /></p><p>This bluff was called in 1933, when four years of depression and bank failures convinced enough people to hoard gold that it essentially vanished from commerical channels, contributing to the final collapse of the banking system in the days prior to FDR&#039;s inauguration. That&#039;s&nbsp; why the government was <i>forced</i> to go off the gold standard in name as well as in fact at that time.[/QUOTE]</p><p><br /></p>

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