Would it be feaseable to have circulating silver?

I feel like it would be possible to say make a bimetallic $2.00 or $2.50 coin and have the center be silver (kind of like the 1992-95 10 pesos from Mexico). What do you guys think?

 

Log in or Sign up to hide this ad.

It is possible but I would say it would have to be a $5.00 coin. Also with so many hoarding silver now probably would not go over well at all. Maybe in collector sets, doubtful for circulation, imho.

 

Maybe a $20 one ounce silver coin. Spot is too volatile though, and people would hoard them so likely wouldn't work well.

 

The 100FF coin did see limited circulation in France before the adoption of the Euro. Everytime I bought them in cash windows at banks the person selling them to me kindly reminded me that after the Euro was circulated that the coins would be demonetized, but I didn't care. I was buying them for my collection.

Similarly in Germany it was possible to find 10DM coins from time to time, and I even spent a few of them - I remember spending some in Munich that were for the Olympics in 1972 and an older lady explaining in German that I should keep them instead of spending them. 10 DM coins were the only silver coins I have ever spent.

The last country that had coins in silver that really did see daily circulation has to be Mexico when they issued the $10 peso coins in 1993.

 

Here in Germany we have €20 silver coins (Ag 925) that are issued at face. But those are collector coins and don't actually circulate. Me, I don't care - of course the face value is well above the intrinsic value. People who want silver pieces should just buy silver pieces.

Christian

 

think:
when the mint announced the 'golden' dollars folks hoarded them for their gold content

 

In English you also use the term "German Silver" for an alloy that is of course not silver. (In German that was called "Neusilber".) Also, you can have our (€) 10, 20 and 50 cent coins. They are made from "Nordic Gold", hehe.

Christian

 

I believe the real threat is not just the volatile spot price but as well as the genuine threat of super counterfeits. Wait till counterfeits can find out a way to come up with tungsten alloy that matches a silver alloy and then plate it. Absolute nightmare.

I think it's time to see it dead for good. It's the same argument of why there isn't circulating gold coins.

 

Matching silver's density is relatively easy. It's only gold that's difficult -- tungsten is the only thing with comparable density that isn't expensive.

I agree that circulating silver is a non-starter. It makes me a bit sad, but that's the way it is.

 

I think Gresham's Law would quickly kick in.

 

That would effectively put us back on a 'silver standard' and I don't see that happening with the PTB (powers-that-be). A money supply can't be manipulated in quite the same fashion.

 

From the land of the classic in imaginative design:



Yeah, that coin is fernsehen alright.

 

Well, that is an older one, thus €10. Shows how silver coins cannot really work unless the face value is very high above the PM value ...

Christian

 

They cannot work in a fiat system. They worked for centuries when the PM value was the face value. The reason that a silver dollar was worth a dollar was that it contained silver worth approximately a dollar.

 

If you produced a coin where the face value was well above spot, made billions per year, and manufacturing prices were in check, then it could work.

That would make the coin worth way more than face value, thus no one would want to hoard and there were billions made. The key is breaking the basic economics of the hoarders and collectors.

It may have to be bimetallic. A larger copper round with a small silver inset. So total value of coin would be like $5 but have a face of $50 on it. So it would then also compete against the $50 paper bill.

It's just the perception of coinage versus paper. Didn't work for the $1. Don't think it would work for the $50, or $20 or $10.

 

For those of us who have to Google such things:

"In economics, Gresham's law is a monetary principle stating that "bad money drives out good". For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will disappear from circulation."​

 

Down here, in the see it on 60Minutes state, someone sold a couple of them to a pawn shop.

 

It's an extension of a law that applies to barter, too, and is nothing special regarding money. If I have two things that are up for barter, one of which I like more than the other, and the two items I'm offering are of equal value to the other party, I give them the one I like less. Gresham can go take a hike; he's irrelevant.

MOST of you guys are too young to remember it, but for a while in the mid-60's, not very long, people hoarded the "new sandwich coins" and spent the silver.

 

Right, past tense. If investors influence the exchange rates or commodity prices, that "link" is simply gone. You may of course decide to use some quantity of gold, silver, coffee or wheat, etc. for payments.

Christian

 

Mexico also had too much of an emotional attachment to silver and it led to coining pesos with 10% silver. Whoop-de-do.