What if silver was put back into circulation?

I have bracelets, shells, axe heads, hoes, pretty beads, silver miniature canoes, all kinds of "primitive money". Is a string of pretty beads "real money" or "fiat money"?

Sorry, but little chunks of a certain metal being the only "real money" is a cultural bias not shared with a lot fo the world. It was used around the world in the 19th/20th century only because of European domination.

Like Doug said, money is what people accept as money. Its a culturally acceptable means of exchange designed to facilitate commerce.

 

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You probably know what I mean, but it's hard to tell if a person is being sarcastic on the Interwebs. By "real money", I mean bullion based coins or at least representative based paper currency.

While it sounds nice in principle, I just don't think it's possible in the current world economic and political system where everything fluctuates in relation to everything else, which creates an opportunity for profit. e.g. The price of silver fluctuates relative to the price of gold, and both fluctuate relative to the price of Dollars, Euros, Pesos, etc. Whatever world currency is takes a beating in the exchange rates to the point where the PMs in their coins can be had for less than spot, that's the one that people will gobble up for its silver content. Even moreso than if it was just the residents of that particular country hording their own currency.

Also, world population and GDP have been growing while the amount of PMs in the ground have not.

Some people here have recommended issuing coins that have some precious metal content in them, but are still cheaper to produce than their face value. This is still a fiat system and it's essentially what our current coins are. While not exactly made from precious metals, the metal in our coins does have value. If we saw runaway inflation, the value of the copper and nickel in the coins would become worth more than their face value, as has happened with pre 1982 pennies.

 

Blue threads is what I recommend, like the Techelis.

 

Monkey's (chimpanzees) have been known to trade edited for goods such as fruit and other food. Edited forum rules

 

I don't know. Can a service be a form of currency? Or is it that the fruit is the currency being used to pay edited

 

The principle of money is that you can give it to someone that doesn't want it in and of itself, but rather for what they can get for it. In the case of edited the recipient cannot pass those services on to another person to get something they desire. (Well, I suppose they can pass something on they might have gotten from those services, but I wouldn't consider that a currency either.)

 

Well, if I buy fruit now, I give the clerk legal tender that the U.S. printed to use as money for the exchange of goods or services.

So yeah, same concept, just different form of payment.



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But since they're both getting something they want, and especially since the service is non-transferrable, it's more of a barter system. :yes: (We need a lol smily)

 

If I could get face value silver coins from the US gov't and not have to pay a premium I would hoard every single one I got my hands on.

 

A U.S. Mint Produced Circulated Silver Coin Having Bullion Value

I believe that such a coin as the OP suggested is currently available in Mint State condition. The coin can be located trading at its melt value. It is designed to legally be exchanged as a legitimate authorized medium. The Silver coin is generally ignored by the average citizen and collectors alike. The coin has greater value than chunks of Silver currently being produced by the mint, generally not intended for circulation, commanding a greater purchase price than net sales price.

These coins are readily available, and haven't produced any significant disruption in the U.S. economic cycles.

They are called a pre-1965 U.S. Silver quarter-dollar.

I still purchase/sell these coins as the U.S. economy advances and subsides, while many of my associates have acquired and retained the newly minted Silver Eagle "coins" which they haven't been able to convert for their gross investment.

I suggest that a new Silver coin would have little economic effect other than to enrich the government, and some "dealers".

JMHO based on historical evidence. :thumb:

 

I noticed you used the word "today" in your post four times, and I agree, "today" our money is indeed money. But when I said "real money", I was thinking beyond today. I meant something that can be used as money in our current system, but also have the additional benefit of being valuable 50-100 years from now when who knows what happens to our economy. That's what I call "real money".

For example. What would have happened if a guy in Germany stashed one million Deutschemarks in a box, and sealed that box inside a wall twenty years ago, for his kids to find after he died. His kids remodel and find the box today. What's it worth? Not one million Euros. Probably not even a thousand Euros in collector value.

Of course the German Mark was demonitized when they changed over to the Euro. After the deadline, the Mark became worth the paper it was printed on, and the coins became worth the metal they contained.

Now, what would happen if that same guy stashed one million Marks worth of Silver in a wall. That would have been about 165,000 ounces of silver. Twenty years later, his kids would find 165,000 ounces of silver. Instead of being worth close to nothing, it would be worth close to four million Euros.

Speaking of uncertainty, maybe we'll discover a way to efficiently rearrange atoms in such a way as to make any element we want. This discovery could very well make every element abundant and the concept of precious metals would be a thing of the past. All of our PM bullion could instantly be reduced to numismatic value.

 

Edited ~ forum rules

I still like the idea of money (a commonly recognized medium of financial exchange in regular useful denominations) that has an underlying intrinsic value like copper or silver; which is no doubt what the expression "real money" means in this context. I have never liked clad. It's like money that lies to you and pretends to be something it's not. Make coin of solid alloy. The reason early coin was accepted was that it had "real" value. that value was increased when a Government that was trusted assured the value was honest; honest reliable weight and alloy content. While the Gov still assures the consistency of content of our current coins, they lack the intrinsic value of a metal that historically has value to humans (all monkey 'business' aside ;0 ) Return to 'real' intrinsic value based coin! viva la plata! long live the silver! and copper!

 

Blaubart, I would say you are not advocating "real money" but "hard money". You wish your money to intrinsically be valuable. I am not disagreeing with your position really, but would say you are a tiny minority in the US. Why not convert your USD to gold or silver then? Easy enough for you to achieve what you want, and you don't have to worry about changing the other 99% of the populations minds.

I convert my USD to stocks, bonds, land, and PM all of the time. I don't have much in the way of USD, preferring to store them instead in assets that I believe will appreciate. That is how the rest of us get aroud this issue.

 

good point medoraman But I still like the idea of common coinage having underlying value. A lot of people over the years have saved up coin "for a rainy day" Kind of the poor man's savings account. Take the huge release of coin back into circulation in 08 and 09 that lead to shutting down the mint presses in 09. people held coin because of its value and used it when they needed it. Not that you can't ( and people did) do that with clad coin, but people do know the difference and like that intrinsic value. How many little "grandpa's cigar box" coins are still horded up just because of that? They aren't hording paper money.
How many coin collectors started collecting coin instead of stamps, because the coin "will always be worth something" not like a stamp. I like that value and it says something about the American dollar when there is value in that coin and America its self when the put that value in.
re that "law" that silver would soon be out of circulation because of "wild swings in silver prices" while that would be true if you tried circulating a coin worth 90% of its face value, I would like to see coin that is less than half of face in copper or silver value, but still something substantial. Enough to say this has value in and of its self. A coin the size of a dime with 90% silver is worth (very rough round number) $3. To make a coin that size and call it a $5 coin would mean that coin would certainly not have a long circulation, as the "law" says. but a coin between the size of a nickle and a quarter that was the same copper as old pennies, and minted as a dollar coin, would be worth maybe 5c in copper and would have a good long circulation life. If the economy outruns the value of that coin so fast that it never circulates and is horded right away, then the kind of coins we have and use will be the least of our worries.

 

The Gov has no reason nor does the fed to even consider making coinage for use with a PM.

Currently they can make a hundred dollar bill for a few cents. People still give it the value of 100 dollars. If you made some type of $100 coin with about 3 oz or 2.5 oz of silver it would cost the FED basically 100 to make and then their little sceme no longer exists.

As is the FED can make money out of air, and we let them(sadly). Why on earth would they ever stop?

 

canada has a 20.00 1/4 ounce coin i believe that is legal tender, mexico had silver in their coinage as recently as 1999 , and the swiss 20 franc coin had silver until 2000. if silver were to be put back into coinage the price would have to be significantly higher. A well known bent in Mexico named Hugo Salinas Price is trying to get Mexico to reintroduce silver into circulated coins. When a major country does it others will follow, but to do this prices must be significantly higher, way higher...........just some info

qsilver007

 

Yes Canada has a coin like that. Its not one readily available at the bank or such though. There is a limit like 2 or 4 per household and you order it from the Canadian mint. The are free shipping though and cost face value. So it really has no downside.

The problem is the coin will never depreciate below 20$ but it has a fairly good chance to eventually one day have the silver appreciate over the face value of the coin. Therefore it has a upside to hording and no downside to hording (unless you dont have 20 bucks to spare)

 

No downside? How about the fact every single year $20 Canadian is worth less due to inflation. Its a fool's paradise to ignore the money you are losing every single day holding $20 versus investing it into something that returns interest or will appreciate.