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What if silver was put back into circulation?
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<p>[QUOTE="medoraman, post: 1432943, member: 26302"]It would basically wreak havoc with commerce since Gresham's law would kick in. </p><p><br /></p><p>Lets walk through it. The mint coins a coin with lets say $4.50 worth of silver and has a face value of $5. The instant silver pops up over $5 the coins start disappearing. If the mint is relying on this coin to facilatate commerce, now we have a drastic shortage of coins to conduct business. </p><p><br /></p><p>I would read about the experience Mexico had in the late 40's through the 90's. Continuously they tried to reset the Peso to silver to provide stability to the peso. They tried over and over as anyone with a Mexican type set will quickly see. Each time it never worked as the peso continued to go down versus silver, so these coins are almost always found AU/BU, meaning they circulated little. Since they circulated little, they did no good for commerce, so this experiment failed.</p><p><br /></p><p>Its a great idea with the best of intentions, its just the mint cannot dictate monetary policy, and cannot stabilize a currency on its own. All the mint should have to worry about is to provide enough coinage so as to not be a burden on commerce.[/QUOTE]</p><p><br /></p>
[QUOTE="medoraman, post: 1432943, member: 26302"]It would basically wreak havoc with commerce since Gresham's law would kick in. Lets walk through it. The mint coins a coin with lets say $4.50 worth of silver and has a face value of $5. The instant silver pops up over $5 the coins start disappearing. If the mint is relying on this coin to facilatate commerce, now we have a drastic shortage of coins to conduct business. I would read about the experience Mexico had in the late 40's through the 90's. Continuously they tried to reset the Peso to silver to provide stability to the peso. They tried over and over as anyone with a Mexican type set will quickly see. Each time it never worked as the peso continued to go down versus silver, so these coins are almost always found AU/BU, meaning they circulated little. Since they circulated little, they did no good for commerce, so this experiment failed. Its a great idea with the best of intentions, its just the mint cannot dictate monetary policy, and cannot stabilize a currency on its own. All the mint should have to worry about is to provide enough coinage so as to not be a burden on commerce.[/QUOTE]
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What if silver was put back into circulation?
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