Talk about inflation.

I ran across a bunch of mexican coins I had in a jar in my closet.

I thought I had something since these coins said N$1, N$2, N$5, etc.

Come to find out, it takes over 13 N$1's to make just one dollar.

I had 27 of these N$ coins and they are worth....a whole two dollars.

 

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I read this page the other day...

http://www.fleur-de-coin.com/articles/worthless-money

An example of currencies that were devalued, Zimbabwe offering up the most dramatic example in recent years. Not to make things political, but whenever The State gets involved in economic planning, economies always suffer. That isn't an opinion - it's a demonstrable fact with examples going back to ancient times. Government management over free markets = devalued currency.

 

It seems a lot of countries have reformated or demonetized their coins.

It's kinda cool US coins have been minted for over 200 years are and never underwent such things.

 

http://worldcoingallery.com/Reform/index.htm

 

That's not exactly true. We haven't suffered devaluation the likes of Zimbabwe, but one form of devaluation is debasement, and we've seen plenty of that in the 20th-century.

 

We had to reduce the sizes of our coins in the mid-19th century too.

 

Like it or not, all coins including US coins have gone through inflation and value wise and lost their value over the years. This can be seen by metal composition where mints attempt to reduce their production by using cheaper, inferior metals or reducing the amount of metal in it by making it smaller or alloying with cheaper metal. There are less common instances where mints attempt to increase the value of the coins by putting in precious metals, i.e. Mexico with silver coins but to little avail as such coins get removed from the system very quickly.

 

U.S Trade dollar was de-monetized.

 

Okay. I guess South Korea should never have had government-directed "five-year plans" in the 1960s and 1970s then?

If they hadn't, they'd still be where Zimbabwe is now (selling light textiles and wigs to the USA, as envisioned by the 'free-market' thinkers from THAT country) instead of the world's 11th largest economy for a country half the size of the state of Minnesota with NO natural resources and so soon after a devastating civil war. ...And heavy, chemical and high-tech industry to boot.

The problem with the market is that IT HAS NO BRAIN.

A devalued currency. Okay, but to what END?

 

There are exceptions to every rule. For example, in the 1970s the US experienced double digit inflation and interest rates that kept up with inflation, which before then had been thought to be not possible.

 

But, debasement to a certain extent is part of a healthy economy too (not saying that ours is right now). A certain amount of inflation is healthy and over a long period of time that will lead to debasement. After a long enough time, the smallest denomination may even become obsolete (like the half cent did).

 

How can loss be healthy?

 

I think, technically, the trade dollar was unintentionally monetized, demonetized, then remonetized. Tim's statement is true in principal. The Trade Dollar was never intended to be used in commerce in the US. When they were repatriated into the economy, they got demonetized so businesses wouldn't have to accept them. They got remonetized with that bill in the 60s.

Also, inflation can be healthy, since it allows for distribution of wealth.

 

"Distribution of wealth."

At the expense of savers.

 

I don't think it's ever healthy for the public but the government gets what they want and they got all the guns and tanks.

 

Well, that is where a currency converter comes in quite handy ...

By the way, your "new peso" coins must be relatively old. That Nuevo Peso (N$) was introduced more than 20 years ago. In 1996 they removed the word "new", and since then it has been the peso ("$" on coins) again.

Christian

 

We're a couple denominations behind right now in adjusting to this.

 

If there is no inflation in an economy, it is not a healthy economy. Inflation is an indicator of economic growth which is definitely desirable as it allows the economy to expand it's production possibilities. If there is no inflation, there is no growth and the economy is stunted. We control inflation by fiscal (taxes and government spending) and monetary (interest rates) as we have set guidelines of how much inflation is healthy for the economy.

Many economists believe that a healthy economy should see between 1-5% inflation.

 

Yeah, I agree.

 

CamaroDMD Your correct that inflation is an indicator of economic growth. That's exactly what it is meant to do-trick business into expanding capacity or risk "falling behind." But the growth isn't real which is why inflation is subtracted from nominal GDP to arrive at real GDP. All that's happening is special effects via Doctor John Maynard Keynestein hooking a car battery to a corpse to induce twitching.