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Why did most ancient civilizations debase their currency over the centuries?
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<p>[QUOTE="kevin McGonigal, post: 7687981, member: 72790"]For a while, over decades, if the purity of the coinage is reduced gradually, much of the populace won't notice. Yes, the purity of the denarius was close to 100% in 1 AD and 90% in 100 Ad. How many citizens do you think took note of that? Or the drop over the next century from 90% to 60% ? As a matter of fact prices for most goods do not appear to have been "inflationary" until the third quarter of the Third Century when even the least observant Roman citizens had to admit that their "silver" coinage contained very little silver and that did touch off a raging inflation. For as long as the coinage looked "silvery" it passed muster at face value and if the Roman state took this coinage in at face value in exchange for their gold coinage, which was not debased, the silvery coins were accepted in the market place as a kind of fiduciary coinage, just as later on folks accepted paper in lieu of any kind of specie at all. As long as our later cupro-nickel coinage can be converted into paper (which can be converted into gold) and which is accepted (or mandated) by the state in payment of taxes, good and services, most people will care little about any specie in the circulating medium. Of course the state knows full well what it has been doing for millennia. All of these practices allow it spend more on needed projects such as bread and circus and repelling the barbarians at the gates or other always worthy causes. Nihil novum sub solem.[/QUOTE]</p><p><br /></p>
[QUOTE="kevin McGonigal, post: 7687981, member: 72790"]For a while, over decades, if the purity of the coinage is reduced gradually, much of the populace won't notice. Yes, the purity of the denarius was close to 100% in 1 AD and 90% in 100 Ad. How many citizens do you think took note of that? Or the drop over the next century from 90% to 60% ? As a matter of fact prices for most goods do not appear to have been "inflationary" until the third quarter of the Third Century when even the least observant Roman citizens had to admit that their "silver" coinage contained very little silver and that did touch off a raging inflation. For as long as the coinage looked "silvery" it passed muster at face value and if the Roman state took this coinage in at face value in exchange for their gold coinage, which was not debased, the silvery coins were accepted in the market place as a kind of fiduciary coinage, just as later on folks accepted paper in lieu of any kind of specie at all. As long as our later cupro-nickel coinage can be converted into paper (which can be converted into gold) and which is accepted (or mandated) by the state in payment of taxes, good and services, most people will care little about any specie in the circulating medium. Of course the state knows full well what it has been doing for millennia. All of these practices allow it spend more on needed projects such as bread and circus and repelling the barbarians at the gates or other always worthy causes. Nihil novum sub solem.[/QUOTE]
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