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<p>[QUOTE=&quot;kaparthy, post: 1824410, member: 57463&quot;]BTW, we all know that the question came up because the fact of the two coins circulating at the same time seems to violate &quot;Gresham&#039;s Law.&quot; In fact the so-called &quot;law&quot; is only a general conjecture. Many examples of apparent violations of it are known. Some are so obvious, we never think about them.&nbsp; </p><p><br /></p><p>For instance, why are one-third of all Morgan and Peace silver dollars uncirculated coming from a time when silver prices were falling and you could get gold for silver? Why didn&#039;t people hoard gold and spend silver?&nbsp; Gresham&#039;s law would predict an abundance of uncirculated small gold. </p><p><br /></p><p>The 3-cent silver versus 3-cent nickel versus fractional currency is another case. Moreover, Gresham&#039;s &quot;law&quot; would make the paper notes rare as they would have been turned in for silver as soon as that was possible. </p><p><br /></p><p>Wider still, why would any minor silver circulate along with base metal equivalents? Why not turn in your cents for dimes and quarters?</p><p><br /></p><p>I believe that two factors are at work. Work is the first - it is not worth your time when you can make more at other labor.&nbsp; Underlying that is confidence. If you know that you can always exchange coins with no cost, then the nominally more valuable gold but readily available gold actually gives confidence to the holder of the&nbsp; silver and base metal minors.[/QUOTE]</p><p><br /></p>

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