Truth In The Coin Shop

It is interesting. I can appreciate the guy's passion behind his writing. And some thoughts stood out, such as:



Unfortunately, this has been the case during other periods in US history. Anyone curious can look up the term "not worth a Continental", or study the heated debates between bimetal/metric/gold standards in the late 1800s when serious monetary instability ensued due to gold/silver supply issues and efforts to peg money to actual metal values. It's complex, confusing reading, and those are simply a few things I remember. It also bears saying that during our supposed "golden" past, there were pound and dollar notes with only implied, not intrinsic value.

The point I took away: we need to have trust in our currency. Since money, checks, credit cards will always represent an abstraction; we need that abstraction backed by something we can trust. That means proper banking regulation. There was far too much profiteering from excessive credit liquidity in the past decades--and that's partly to blame for our current fiasco and dare I say: panic.

Well, enough of my blather, lol. Please correct or add to my incomplete thoughts. I had actually hoped the article was on "truth" as that applies to coin dealers and their wares.

Xavier, perhaps that's true.
However, how exactly does one "peg" the nominal value of a gold coin against market values which fluctuate as a rule? Would price fixing of spot metals work? Let's just say I'm skeptical.

For the sake of argument, let's say a circulating $10 gold coin is minted with Au at $1000/ounce. Just a year later, gold drops to $650 and bounces around that number for the next decade. Now, everyone's $10 gold coins they once trusted are now devalued because of market realities. The same mechanism which provided financial security is now their undoing. Do merchants now refuse $10 gold coins? On a scarier note--what happens to US Treasury balance sheets? And so on... In essence, this was one of the problems facing metals-backed currency in the late 1800s.

Just something to consider; I won't be an instigator of another debate that has all been said before. It's a very complex subject I'm where I'm rather unqualified to speak in detail

I agree with jeffreyice1.

We need to return to honest money.

In 1800 it cost 18.50 a week to live for a family. Gold Prices were 19.3939 as of 12/31/1800.

Today it cost 800.00 a week for a family to live. Gold Prices were
914.00 as of 1/14/2008.

Ask me if I would want to hold on to $19.39 in currency or that 1 ounce of gold for 200 years. (Except for the collectible value).

1800's Geldings between $30 and $50, a mare between $40 and $60 because she could be bred and the foal could be sold as profit later.

So about two ounces of gold.

One of the reasons that backing currency with gold worked was that the gov't guaranteed the price of gold. Before 1933, gold was set at $20.67 an ounce. Gold could not fluctuate in price because people wanting to buy gold knew that they could buy all they wanted from the US Gov't at that price. I could not tell you that my ounce of gold was worth 100 dollars because you would know that you could pay only 20.67 for that ounce.

The dollar was devalued in 1933 when gold was revalued to 35.00. That value was maintained until market conditions forced the gov't to let the dollar float and did not control the price of gold.

Obviously you can only guarantee the price of gold if you have a lot of gold. And for many years, the United States did have a lot of gold.

Jeffrey.....
I guess that depends on where you lived or live !....BOTH of your analogies seem exhorbantly expensively waaaaayy too high.
Here's an excerpt from an Arkansas paper in 1839...


I realize this isn't the price of the horse, only the reward for returning one if found....
But, I can't believe these "facts and figures" would apply to, say 1812, the same as 1856, and the same in 1889. Meaning several differnent generations of families would have seen "drastic" price changes on Horses, dry goods, etc. etc. just from 1812 to 1889 for example. The Price "for a family to live" would change A LOT every 15 years or so.....and that would also depend on where they lived....some places are MUCH more expensive with "goods" and "stock" than other places were.
......"pennies will get you pounds" of stuff !
coffee, flour, bacon, cookware (not China, but simple cheap), tobacco, nails, milled wood, etc. etc. etc.