Why Put "Bogus" $ Amounts On Bullion Coins Anyway?

Agreed! The Krugerrand, arguably the most successful bullion coin ever, is made just this way. It has legal tender status and no denomination. It's legal value is whatever the current PM price might be. I see no reason why this cannot be replicated for American gold and silver bullion products. In fact, the absence of absurdly low (and irrelevant) denomination values might actually boost the popularity of these products.

"Bimetallic standards", with a fixed price ratio of silver to gold, are never stable, because the two metals are not mined at the same ratio all the time and because demand for each of them varies. You'd have to pick one metal, and that would be your standard.


What you're suggesting isn't "new thinking". It's old thinking - really, really old, like pre-500 BC, way back when coins were invented.

The system was dysfunctional back then because nobody could be trusted to maintain the standard. Unscrupulous private individuals, merchants and moneylenders would dilute the gold and silver pieces they used in commerce, or simply use dishonest weights. Having the government, as a neutral third party, certify the weight and purity of the pieces of metal (by turning the metal into "coins") helped a little, but even governments cannot be trusted to maintain the standards when times are tough.

Short of issuing everybody with a three-decimal-place balance and a portable XRF analyser to "keep them all honest", I can't see any way of making such a system work better today than it did back then.

Interesting read, smith. Wonder if US banks have similar regs, not that it's much of an issue here since the banks would be on the net-gain side of the transaction, anyway.

Interesting topic, and great video (I found that amazing really, I find it hard to believe that the employee of mcdonalds dint simply accept the dollar coin and replace it with a dollar from her pocket...but I guess they sew up their pockets :S)

I was going to mention the Kruggerand, I was told that was originally developed as a way around being taxed on your money if you move it abroad...hence no face value.

The removal of the gold/silver certificate and back in the 1990's Englands sale of the gold that backed our pound really was a step backwards in my opinion. Those notes that all of us work so hard for really are an abstract representation of wealth and could become valueless overnight in theory.

As for legal tender it is up to a vendor to accept or decline custom as he pleases. In Scotland they have banknotes which are not "legal tender" but merely considered "acceptable tender." That is due to multiple banks producing a few varieties of their notes. In law the only legal tender in Scotland is the coinage of England! This once went to court though when someone would not accept settlement of a debt in notes but instead demanded pound coins. The Judge declared that the notes were acceptable and if the person owed the money would not accept them then it was not the debtors problem.

Bimetalism fails all the time. One only has to look at the recent change in the Canadian $2 coin, from a pure nickel and bronze to a steel with plated copper. Thumbs up for cheap money.... I'm starting to believe that physical money is only a representation of computerized digits.

Yeah. Of course, that was from a time when our economy actually worked and was not a house of cards created by the cabal of banksters and politicians.



Well, that's just the thing. The Fed / gov folks KNOW that our currency is virtual already. They zap it into existence out of thin air and know that it's intrinsic value if nil.



You, me, and virtually everyone on this web site, I am sure, would agree. If US currency was even partly backed by PMs, a lot of our financial problems would be improved if not solved outright. PM backing provides a terrific block to run-away printing, since they cannot wave a pen and create any PMs. They can are are printing as much fiat as they want, however.