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 Replies: 12 / Views: 1,454 |
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Pillar of the Community
United Kingdom
616 Posts |
I see people refer to PMs as real money occasionally. Can someone explain why? Seems to me that basically gold and silver were made in to coins because they are attractive and malleable. But then I know they have been traded on just their weight alone as money and maybe coins just facilitated trade. Anyone help me on the history here? It just seems that someone want to divorce the value of PMs from their purchasing power and to me that basically is all that money is.
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Pillar of the Community
Mexico
1304 Posts |
You hit the nail on the head with this statement "maybe coins just facilitated trade."
Since they were standardized and controlled by government, that made trade easier. Nowadays, its a whole different ball game. I'm sure someone will chime in shortly with a link to a video on "what is money." (or you can look it up on youtube. There are also several print versions of the concept that most people are unaware of.)
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Pillar of the Community
United States
613 Posts |
If most everyone agrees to it, it is money, whether it's purple clamshell fragment strung on a bead or metal disks stamped with the authority of a national government, with or with PM content.
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Bedrock of the Community
13014 Posts |
Billy hit the nail on the head, things only have value or are money because we say so. Only food water and air have an inherent value that we absolutely have to have to survive, after that things are desirable or not because we say so.
The only advantage of a pm money is if there was a complete collapse you'd have the metal value. Other than that a clad quarter isn't less of a quarter than a silver one when you try and buy something.
As for why people say that I would say some is holding onto the past, some thinking that it would solve budget problems (which it wouldn't), and personal bias. Generally you hear it mentioned in a very pro pm setting where everyone has a personal interest in pms doing well.
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Pillar of the Community
Canada
3692 Posts |
Precious metals were fair game (sorta) in the ancient world because they can be found everywhere on Earth, giving people a fair start. But then empires expand, and today most of the world's wealth is concentrated in very few hands. Precious metals are in a way past due their usefulness, but they are still amazing metals with unique properties. Jewelry lasts a very very long if it's made well and holds up to repairs. They are denser than most other metals and they have very good luster, which humans are attracted to. Gold doesn't tarnish very fast at all, and platinum doesn't at all. Gold and silver are very malleable, which makes them good media for arts. Et cetera.
Money? If an empire makes a coin that is well balanced (in alloy, size, and weight) then they are very useful in commerce and trade. Gold was mostly reserved for settling accounts (like huge ones). Anything is money, though. A cigarette is currency anywhere you can find a smoker. Heck, even large stones were once used by ancient people to symbolize that a trade had been done.
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Pillar of the Community
Canada
3692 Posts |
I think that we should re-evaluate what numismatics even mean given the fact that anything can be money. Why do we engage in this hobby? Is it to collect the symbols of empirical power? We could very collect anything at all because anything can be traded or used as instruments of money.
I guess money has to be A) produced for the masses and B) able to last a long time in circulation. These parameters do work for commodities because of "A", that is, they are constantly being produced. Fake shortages of commodities would render them invaluable because there's nothing to "back them up". PMs cannot really be destroyed or consumed, which gives them a good advantage over wheat or tobacco. I think that is the strength of PMs. They are rarely used for anything else other than to look pretty, which can be argued that beauty is "useful". It truly is a thing of beauty to hold silver in your hand and copper in another.
Edited by Libertad
06/18/2013 9:58 pm
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Bedrock of the Community
13014 Posts |
Libertad thats an interesting point you brought up about commodities. In a lot of ways now those are now more of a forum of currency than PMs. Youre absolutely right theyre great metals that produce wonderful things we all enjoy collecting but if the argument is theyre money because you can barter the commodity holds the advantage in that regard.
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Pillar of the Community
United States
1796 Posts |
Following up a bit on some things that Libertad touched upon, if we want to talk about "real money" as in something exchanged often and valued across the world, Gold and Silver are not top on the list. As it stands, the world's largest commodities for 2013 are (in order):
1) Crude oil
2) Coffee
3) Cotton
4) Wheat
5) Corn
6) Sugar
7) Silver <---
8) Copper <---
9) Gold <---
10) Natural gas
It still makes me chuckle to think that PMs are beat out over a cuppa joe (that's real money!), but imagine the world was ending tomorrow: Which would you rather have in front of you *right now*? :-)
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Pillar of the Community
Canada
3692 Posts |
Coffee and sugar, obviously!
And you'll always need gas, water, electricity. Although, water should be free; don't let anyone tell you different.
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Bedrock of the Community
13014 Posts |
With how people act without caffeine I would want coffee to calm the masses.  Im actually not shocked that coffee is number two, Starbucks alone does an insane amount of business world wide. |
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Pillar of the Community
United States
1080 Posts |
People at the local coin shop sometimes complain to the owner, asking, "Does Texas charge sales tax on money?" Dude! You're not using a change machine, you're purchasing silver.
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Pillar of the Community
United States
1119 Posts |
All the things on that list of commodities are all consumable with the exception of gold, silver, and copper. When you use coffee you can't really use it again, maybe in a pinch you could re-use yesterdays grinds if you run out, but.... Crude oil, coffee, cotton, wheat, sugar, corn and natural gas are all single use items. Also as mentioned they can spoil or rot not very good for long or even medium term use as money. One could argue that copper, gold and silver can be single use too but often that takes chemical reactions to form new compounds. most of which can be reversed back to the components with a different reaction.
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Pillar of the Community
Canada
3692 Posts |
You can turn a silver teapot into a few spoons if that's what you needed.
Copper pipes/tubes can be recycled. Gold plating improves electrical conductivity (like headphone jacks), but plating is disgusting you rarely get it back.
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Replies: 12 / Views: 1,454 |
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Posted 06/18/2013 2:26 pm
