Log in or Sign up
Coin Talk
Home
Forums
>
Coin Forums
>
Ancient Coins
>
Why did most ancient civilizations debase their currency over the centuries?
>
Reply to Thread
Message:
<p>[QUOTE="Tejas, post: 7690974, member: 84905"]Interesting discussion. I’m a central bank economist, so these questions a close to my heart. </p><p>1. Q: Why have ancient governments debased their coins? A: It is a great covert way of making money. It was used when a lot of money was needed in a short period of time and when taxation was not practicable or whatever reason (mostly during wars). Since the price effect, i.e. the increase in inflation, comes later the debasing government can greatly increase its purchasing power for a certain period of time</p><p><br /></p><p>2. Q: Why are modern governments not debasing their coins? A: They have already reached the limits of debasement and switched to fiat currencies. The US demonitized and illegalized gold coin in the 1930s and finally reneged on the promise of gold convertibility in 1971. </p><p><br /></p><p>3. Q: So no more debasement in the present or the future? A: It is not called debasement, but with fiat money, the money supply can practically be increased at will, by printing more dollar bills or by crediting the reserve accounts of banks at the Fed. This has been done to a magnitude last year that has never been seen before in the history of mankind. Result: massive asset price inflation, house price inflation at 15% pa.[/QUOTE]</p><p><br /></p>
[QUOTE="Tejas, post: 7690974, member: 84905"]Interesting discussion. I’m a central bank economist, so these questions a close to my heart. 1. Q: Why have ancient governments debased their coins? A: It is a great covert way of making money. It was used when a lot of money was needed in a short period of time and when taxation was not practicable or whatever reason (mostly during wars). Since the price effect, i.e. the increase in inflation, comes later the debasing government can greatly increase its purchasing power for a certain period of time 2. Q: Why are modern governments not debasing their coins? A: They have already reached the limits of debasement and switched to fiat currencies. The US demonitized and illegalized gold coin in the 1930s and finally reneged on the promise of gold convertibility in 1971. 3. Q: So no more debasement in the present or the future? A: It is not called debasement, but with fiat money, the money supply can practically be increased at will, by printing more dollar bills or by crediting the reserve accounts of banks at the Fed. This has been done to a magnitude last year that has never been seen before in the history of mankind. Result: massive asset price inflation, house price inflation at 15% pa.[/QUOTE]
Your name or email address:
Do you already have an account?
No, create an account now.
Yes, my password is:
Forgot your password?
Stay logged in
Coin Talk
Home
Forums
>
Coin Forums
>
Ancient Coins
>
Why did most ancient civilizations debase their currency over the centuries?
>
Home
Home
Quick Links
Search Forums
Recent Activity
Recent Posts
Forums
Forums
Quick Links
Search Forums
Recent Posts
Competitions
Competitions
Quick Links
Competition Index
Rules, Terms & Conditions
Gallery
Gallery
Quick Links
Search Media
New Media
Showcase
Showcase
Quick Links
Search Items
Most Active Members
New Items
Directory
Directory
Quick Links
Directory Home
New Listings
Members
Members
Quick Links
Notable Members
Current Visitors
Recent Activity
New Profile Posts
Sponsors
Menu
Search
Search titles only
Posted by Member:
Separate names with a comma.
Newer Than:
Search this thread only
Search this forum only
Display results as threads
Useful Searches
Recent Posts
More...