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Post by Antti Jokinen on Jun 25, 2019 11:55:57 GMT
JP, some food for thought:
If one accepts the "collateral theory" of coins made of precious metals, then debasement of coins seems fully legitimate, doesn't it? It's not anymore about the government luring the people, but about the government trying to keep the coins in circulation (which in itself was important, to avoid shortages of currency) and thus precious metals from being exported. Again, I'm not the first one to suggest this. Even the Wikipedia article on 'debasement' refers to similar thoughts expressed by Ralph Hawtrey in his Currency and Credit (which is a great book, btw).
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Post by JP (admin) on Jun 26, 2019 5:23:12 GMT
I mean, it's also consistent with the idea coins are often tokens, or IOUs printed on metal. Once the metal value of the token exceeds its IOU value, it'll start to be melted down. A debasement is necessary to lower the token's metal content back below its IOU value so as to keep it in circulation. I've written before why these sorts of debasements were good policy: www.bullionstar.com/blogs/jp-koning/where-did-all-the-silver-coins-go/
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