Metal Money

Did you know the 2011 Budget includes language to change what our coins are made from?

Get ready for steel coins America.   

This is exactly why I've been telling anyone who would listen for the past year or so!   SAVE YOUR CHANGE!  You know, what's rattling around your sock drawer, ashtray, cup holder etc...is all going to become like the old silver coins.  They'll disappear from circulation when the switch is made, and just like the old silver coins, the coins in your pocket right now will appreciate just like real silver did.  You will hear something similar to this when it is announced; don't believe it, save your change now, it WILL increase in value. 

Maybe you think this is a good thing, after all it makes no sense for Treasury to spend more than a penny to make a penny.  And I agree with that.

But the problem isn't that metal prices have gone up, it's that our currency has been debauched; it's been beaten down; it has been devalued through inflation.  I hope you understand that when they go to steel coins that is only one step away from the proverbial wooden nickel.  Steel is about the cheapest metal you can make coins out of.

Anyway the issue is this:   100 years ago a pound of copper had the exact same utility that it does today.  Its' utility, its' usefulness,  its' value hasn't changed (ie no one has invented a flying copper car the produces skittles as exhaust).  So what has changed?  The currency that it is measured with.  Currency value goes down, price goes up.  If the value of any item/product/commodity stays constant,  but its' price goes up = currency has declined.  We had half cent coins in circulation in this country at one point in time!  Back when the currency wasn't fancy toilet paper.

There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose. - John Maynard Keynes



In the video I make a comment about a dollar increasing in value may only be worth fifty cents, but that that would be a good thing. As long as the fifty cents has the same purchasing power as the original dollar did this is a true statement. We are used to prices going up. We accept this as normal. But what it is is inflation, a monetary phenomenon. It is our currency being devalued. We could also get used to a system in which the currency strengthens and prices drop.