The Fate of our Circulating Coinage

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Exactly.

And once all our purchases are known how long will it be before insurance companies refuse to pay
for our heart condition when we continue to buy pizza or steak? Those who write the laws don't
want all their transactions open to scrutiny anymore than the average citizen would. Indeed all
those thick manila envelopes would become a thing of the past.

Coins are much more convenient for some transactions so look for cash and coin to be produced
for at least another generation.

 

If you are aware of any fiat currency that has gained in absolute purchasing power over a period of years, say, 1955 through 2005 [a 50 year run], please let us know and post the source. Everyone would probably like to hold a currency that could be used to buy food, gasoline and the other necessities of life at the same price as 1955 without suffering the depreciation common to fiat money.

 

Only one more reason for the government wanting an 'electronic currency' harder for the black and gray markets to avoid the IRS.

 

Could the Mint not mint pennies for a while, saving money, leaving pennies in circulation, and no one needs to know? Then X years later, start up the machines........?

 

Man, I sure hope you are right! After that I really don't care.:thumb:

 

Their is a subculture of folks who go to the bank every payday and cash their checks to recieve cash in hand.They buy money oeders to pay their bills and have no bank accounts.these folks have NO trust in the government and in general live from week to week with some possessions that can be pawned but no real cash reserves.There will always have to be transactions that are not on electronic record:and this is as it should be.A society where no action : financial or otherwise,can escape the governments eye is NOT a free society.GOD forbid that should happen to us!

 

The first question that comes to mind is -- which fiat currency that existed in 1300 that still exists today do the studies use to measure currency depreciation? I already know what your studies are going to show. They are going to show that when large amounts of silver and gold were discovered and shipped from the New World to Europe, prices rose. And that pretty much proves the point, doesn't it? Now in the case of the metals, there was a natural limit to this and they never lost all of their value. In the case of fiat currency, there is no limit and that is why there is no fiat currency to measure price changes from 1300 to 2000, only gold and silver.

I'm guessing here because I'm too lazy to look it up, but I believe it was mentioned in a recent US Geological Survey that most of the silver that exists in the ground has been found, and that silver is expected to become the first major commodity to be completely mined out in the forseeable future. This doesn't mean every ounce will be extracted, but it means that all economical deposits will be extracted. "Economical" in this sense is measured as much in energy requirements as price, since mining silver is extremely energy intensive. I vaguely recall the timeframe as something like 40 years from now. This makes it unlikely that there will be a repeat of the massive silver discoveries that led to the inflation you mentioned because it is less likely that there are massive ore bodies yet to be discovered. But essentially you are correct. An increase in the money supply in excess of the increase in good will depreciate the currency, any currency. Historically, the dicipline of nature has been a better preserver of value than the dicipline of men.

 

All currencies ever invented by man have been degraded and eventually gutted. It is not
the basis of the currency which causes this it is the nature of government; they grow. As
they grow they find that people complain less when "taxes" are removed from the currency
by lightening them or printing more.

Having a tangible as the basis of money leaves the economy open to major disruptions caused
by changes in the supply of the tangible or percieved changes in the supply of this tangible. In
the past economic upheaval caused by currency was often severe but the effect on most in-
dividuals was not. In the modern age an economic meltdown like this would lead to starvation
on a massive scale.

There are vast quantities of heavy metals in the solar system. While a rumor that the European
Space Agency was sending unmanned craft to retrieve some of them would gain little traction
today, how many years would it be until just the rumor of such an event would lead to many mil-
lions of deaths? How about when people question the quantity of gold in Ft. Knox?

What if there's a fundamental change in the value of one tangible relative another? Suppose
that a warm superconductor is found which requires about 2 Ozt per mile? Does the economy
suddenly have to react to not having viable currency?

If you want stable currency then vote for better politicians. Any other means is not only in-
effective but dangerous.

 

I'm not certain so much that it is a matter of Government taxation policy that causes monetary devaluation. Its more that, without getting deep into economic theory here, that a healthy economy demands a slight rate of inflation. When we had a gold standard we spent a forture trying to keep its price stable. In addition, not all changes in the economy are quantitative. A lot of it is qualitative.

Ruben

 

I could not agree more

Our current concept of money - that the value of our money is based on something other than intrinsic value - is a relatively new idea and works only so long as the people trust the authorities. This is why paper currency was so adamantly fought the first half of the nation's history. Opponents said that paper money would lead to inflation and the debasement of the currency. It's also explains the Mint's extraordinary efforts to ensure that a coins intrinsic & stated value matched (continual changes in coin size, file marks, plugs, etc) People knew that a silver dollar (an oxymoron today) had 100 cents of silver and that a half dollar had half that and that a cent had 1 cent of copper. The Mint is making a tidy fortune on producing silver dollars for 8 cents that banks "buy" for 100 cents. Worthless money indeed.

 

There is now and never was any intrinsic value to money. We used to believe that money had value because gold has value but in point of fact this simply isn't true. Gold has very little vlue. If it had real value it would not be sitting idle in warehouses all over the world. It would be useful for things and people would need it where nothing else would suffice. Gold's value is derived from the fact that people believe it has value primarily because of its scarcity (it's nearly as common as silver by the way). If everyone woke up tomorrow and decided they didn't want gold the value would drop to a few dollars per ounce (or less). It's the same way with money. It has no intrinsic value. It's value is derived solely from the fact that people believe it has value so they accept it for goods and services. So long as the supply of money remains constant (or the growth mathches the growth of the economy) there is a limitation in how much you can acquire and prices are stable. When the government prints more to fund the latest boondoggle then the supply increases and the value goes down. It is this decreased value which we experience as inflation and see in the price of bread or gold. No boondoggles= no inflation. Politicians= more inflation. If government supplies your cake and you eat it too, then expect higher prices for everything.

At one point Zaire was printing money to fund excessive spending. Every few months they issue new currency with more zeros on it. Incredibly the people got fed up with unstable currency, stole the old printing plates with fewer zeros on them and refused the new government money. Consider that here was an economy running on fiat currency without fiat. Fiat means force of law or edict but this currency was worthless according to the government. There was no fiat- - only money. There was no intrinsic value, just peoples' belief that this had value. This is and always has been the true nature of money.

And it's the reason that commodity based currency is dangerous. It doesn't protect from inflation if the government is bent on debasing it and it can cause economic mayhem anytime the wind blows. The only answer to sound money is now and always will be sound economic policy and restraint. Luck never hurts since even in the soundest economies people can run scared and destroy real value which is productive capacity.

 

This thread is getting off track. To worry about the use of currency is a waste of time. To worry about the cost of precious metals is chancy. I realy beilieve that in the not to distant future there will be only electronic trasactions for just about everything. As to a limited amount of precious metals the ever changing Earth itself continues to spew out new quantities of elements with vocanoes and at cracks in the crust contiuously. The Earth is bombarded with materials every day from space and some day we'll get hit with a meteor of solid Gold. Then there soon will be the transformation of one element into another through nuclear bombardments which is basically being done already but not for Gold, Silver, etc.
There are a massive amounts of these court type programs on TV lately and one thing you'll hear on them is that if you pay for anything in cash there is no record. Case dismissed. Forcing people to think electronic paying for everything. Paying cash won't allow for a tax deduction for anything unless there is an electronic receipt.
As countries come closer together and the peoples go back and forth more and more frequently, cash of different types and denominations will be a hindrance and go the way of the DoDo Bird. One electronic type of monitary system is the only possible solution in the future. Paper money is to brittle. coins are to heavy. Checking accounts take up to much paper.
However, that flipping of a coin replacement bothers me.