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<p>[QUOTE=&quot;kaparthy, post: 1822808, member: 57463&quot;]The government was in denial. Silver coins dated 1964 were produced through 1965. The simple fact of fiat money inflation was being denied and &quot;coin collectors&quot; were being blamed for &quot;hoarding&quot; coins.</p><p><br /></p><p>Also, the Kennedy Half Dollar was considered a memorial to the slain President. The silver-clad coins had most of the appearance of the 1964 coins. And at 40% silver, they were not immediately &quot;hoarded&quot; by &quot;collectors.&quot;</p><p><br /></p><p>This sort of thing has happened often in European history. See <i>The Big Problem of Small Change</i> by Sargent and Velde reviewed here:</p><p><a href="http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3374" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3374" rel="nofollow">http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3374</a></p><p>Just to say, during the Middle Ages, by weight and fineness a <i>grosso</i> coin might be &quot;worth&quot; six <i>penny</i> coins, but the six pennies have more utility for small purchases, so in the marketplaces people were loathe to give them up and might offer only four or five for a grosso.</p><p><br /></p><p>If any prince, bishop, or city struck pure silver, the coins went for exports and did not circulate at home, so there would be a shortage no matter how many were struck. So, the solution was to reduce the fineness, making &quot;base silver&quot; the common coins at home. </p><p><br /></p><p>The prince or bishop or city strikes a few tens of thousands of grossi to buy the things they need like armor, food, or ships. That&#039;s fine but eventually those suppliers to the authority need to buy beer, bread, cloth, shoes, etc., and if shoes cost four pennies and the supplier to the city hands over a grosso, he does not get any money back: the shoes just cost him six pence.&nbsp; Then 500 years later, economists scratch their heads over &quot;silver inflation&quot; at a time of &quot;silver famines.&quot;</p><p><br /></p><p>As this was really a US History question, see <i>The U.S. Mint and Coinage</i> by Don Taxay.&nbsp; We read elsewhere that at various times in the 1800s US coins were exported for their silver, causing shortages at home. Newspaper stories are sometimes cited.&nbsp; Taxay denies them, pointing to the <b>utility</b> of coinage, downplaying the temporary nature of news, and citing other stories of merchants having to sell their change at a discount to get rid of it.&nbsp; I believe that both stories are true depending on time and place and realizing that conditions go back and forth.[/QUOTE]</p><p><br /></p>

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