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It's fascinating to understand that originally there was no "official" US currency, only that the Spanish dollar was circulating as a sort of international currency. The US dollar was then defined a unit of weight of either gold or silver and not some floating, independent notion of value. Anyone could bring a quantity of gold or silver into the mint and have it turned into a dollar coin. Of course, that original notion has been inflated away and the dollar has lost some 99% of its value.

One of my favorite sites for seeing the effect of debasement is http://www.coinflation.com/.




"It's fascinating to understand that originally there was no "official" US currency, only that the Spanish dollar was circulating as a sort of international currency."

This still happens to some degree. See:

http://en.wikipedia.org/wiki/Maria_Theresa_thaler

Still minted and still used in trade, though they stopped changing the date on them in 1780.

Still made of real silver, too.


I've read this post over several times and for the life of me it seems that you believe the existence of a fiat currency is... a bad thing?


Well, you could exchange it for gold, although gold isn't necessarily useful. Ask Spain what happened when they focused on getting precious metals at the expense of real non-monetary wealth in the economy (like cork trees).

Answer: Inflation, economic collapse.

(If someone could either provide a citation or call me out on my BS, that would be nice; I could be full of shit here.)


Yes, I've become fairly certain that fiat currency is indeed a bad thing.


Whereas I've become fairly certain that fiat currency is the only viable option.


That site just adds more to the argument that we should get rid of the penny. The coins are materially pretty expensive compared to their worth as a currency.




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