The Forum > General Discussion > Coins can reduce the debt pain.
Coins can reduce the debt pain.
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Posted by Arjay, Saturday, 18 February 2012 10:24:05 PM
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Arjay,
This sort of discussion has probably been going on ever since the invention of paper money. I don't know, it's not a field I know much about. But I do think that if there is - in response to your call - a much greater demand for coins as the medium of exchange, then the price of coins will effectively edge up, there will be a sort black market in coins: people will be willing to pay more than the face value for coin. One other problem with coin is pretty obvious, and it affected the Roman economy and a thousand years later the Byzantine economy: demand for the materials to make the coins would rise rapidly and keep rising, so where to get the materials from ? After all, the exhaustion of metal supplies leads either to wars over resources or to financial bankruptcy, as coin flows from one country to another with the purchase of goods. A vast amount of Roman gold and silver ended up in China and India, after all. Spanish gold and silver too. Perhaps instead of oil wars, we would have gold and silver wars, a re-run of the Anglo-Spanish wars of the 16th-18th centuries, and then Zimbabwe may figure more prominently in the news. But correspondingly to the rising demand for coin, if people want to get rid of their paper money, and the demand for it declines, then it will be devalued below its face value. So some smart bugger is going to buy up a lot of the paper money cheap, and wait for the rising price of coin (both in its production and in its market attraction) to force people back into the market for paper money, whose value will then rise to approximate its face value. But I'm only a one-trick pony, so it's back to Indigenous higher education and its record growth for me :( Joe Posted by Loudmouth, Sunday, 19 February 2012 10:30:12 AM
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coins..is small change to so many
qwho think only paper [ok now plastic]..holds value they forget..that a bank bill/note..is a promise of value in coin...[pre 66..it was a promise of one pound sterling silver coin.. *redeemable [in assured sterling quality silver coin by presenting it[the bank/note/cheque]..to any commonwealth bank] so coin is the real..that underpins..the values of the note [now coins are only silver colour..[being in the main nickle] but guess what..just like when..the copper coins cost 5 cent..of copper..[to make the 1 cent face valie] the nickle..is now at parity..to its weight/and metal content/value so..now matter where notes endup the nickle in the coin..must keep market values so i been investing..in nickle..by prefernce to keep all my small change[using up my notes..to retain the real value..now back into the nickle coin] the talk is they next want to steal the nickle [after stealing the gold/silver/copper coin] beginning with the 5 cent piece..[but ten/twenty/..contain near the same in weight/by face values].,.50 not quite as much..but close the cupra coin[copper/nickle] dollar's will be the last to go [but going by their gold colour..i ffeel fair value for the face on the current gold coins[is that weight in gold]..[to makeup for the theft of it further that..the nickle coins return to their traditional values..[weight times silver price] this is a simple matter of chasnging the face values[that instantly can generate wealth..to the poor]..who only save their pennies] top down bailouts failed botum up is simple as doing the right thing after doing the wrong thing[via inflation]...deflating the coin real value's..as the face values[par]..of the notes deflated in value this should hapen globally and the re-issued coin..will be local specific notes and credit..etc..stay national..[so the coin does its work locally] but what is the dream i agree arjay ol mate save the coin..till the rainy day [i somehow feel that when the quantive easing.. prints too many more.,..of the fiat notes... values will naturally settle on the metal..by weight..of the coins currency.. and worth..to those with so few pennies to rub together..even in the best of times Posted by one under god, Sunday, 19 February 2012 12:07:05 PM
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how this insane condition came about
is by babnkers..playing with govt bonds just like they now are doing to iran/greece..and [the pigs] the bankers were smart enough to demand full repayment.. of the bond..in coin[gold/silver]..[just like the clever money..[at decimalisation..took their cents..in 50 cent round pieces[sterling silver content].. [but hang on..what is a bond [really] but govt money[surity] .. think i put a bond up when i rented houses/car's etc a bond...must be the value that pays_off..in case of default why is no-one else..telling you? there is no greece debt no govt debt govt owns the wealth..[of coin] that underpins valuation of the notes or rather used to now it give bankers vaklue..that lol creates debt plus makes us pay income tax..to pay off intrsst[ursury] then when bankers cry poor..they get yet more govt bond values in a world gone nuts dont get caught out..with promises like happend in germany..where a wheel barrow of notes couldnt buy the barrow,,in fact couldnt buy la loaf of bread plus coins..make great ammo Posted by one under god, Sunday, 19 February 2012 12:07:47 PM
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Thanks OUG,
As a sort of residual Marxist, I would respectfully suggest that when you get a hundred-dollar paper note, it is in exchange for one hundred dollars' worth of something, potatoes, relief massage, or perhaps just your labour. It is a state-sanctioned promissory note that says that you are guaranteed by the state to get one hundred dollars' worth of stuff, or labour, in return for this note. And coin is simply another form of promissory currency: you can exchange it for the face-value's worth of goods or services, regardless of how much the coin actually cost to manufacture. A dollar's worth of Fisherman's Friends will cost you a dollar in coin, no more and no less. Two dollar coins can be exchanged for a two-dollar note, no more and no less. The state guarantees it, or rather the Reserve Bank does. Or am I being incorrigibly naive and so twentieth-century ? Posted by Loudmouth, Sunday, 19 February 2012 2:09:39 PM
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Every bit helps OUG and loudmouth.Even if we increase our coin usuage by $20 per week per working person,we make the mint print debt free money.This adds $ 100 million of debt free money to our economy in just one week.This is a lot of money over 1 year if done on a consistant basis.
I don't know how they balance the increase in notes with money created by the private banks.It would be interesting to know the mechanics of notes printed V's debt money issued by the banks. Posted by Arjay, Sunday, 19 February 2012 3:17:14 PM
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Arjay,
To paraphrase you, 'Even if we increase our coin usuage by $20 per week per working person, we increase the amount of coin in circulation by a total of about $200 million, and since we don't accumulate coin indefinitely, but spend it, we put it back into circulation fairly quickly, usually within the week.' Have I got this all wrong ? I have a lot of jingle money on the table here, but it will be gone in a few days, to be replaced eventually by about the same amount. Should I have a mountain of it, not just a molehill ? Posted by Loudmouth, Sunday, 19 February 2012 4:43:31 PM
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What I'm saying Loudmouth is that we force our Govt mint to create debt free money by increasing our demand for coins.
I think it is worth a serious study.Even create a $5 and $10 coin to reduce the amount of debt money created.We could even add bit of silver to it as an hedge against inflation. Posted by Arjay, Sunday, 19 February 2012 5:01:25 PM
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And what I am trying to say, Arjay, in my clumsy way, is that the government mint has to produce only about another $100 million in coin to keep up with demand. After all, what you are suggesting is that, in addition to the amount of coin you and I carry around day-to-day now, each of us hangs onto another $ 20. Not $20 more each week indefinitely into the future, just a one-off extra $20.
Even that's a fair bit of coinage to lug around. My trousers won't take much more strain :) Posted by Loudmouth, Sunday, 19 February 2012 5:10:11 PM
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joe/quote..""state-sanctioned promissory note''
it was..till the bankers took control over the fed and the mint [the constitution [115]..say's.. only gold and silver COIN..are legal tender] notes have on them a promise in weight pounds=weight...dollar=weight..penny/weight etc etc the dollar is redeemable for what...coin..[by weight] a promise..to pay...""that says that you are guaranteed by the state to get one hundred dollars' {WEIGHT in coin}...worth of stuff, or labour, in return for this note."" this note promises the bearor..uipon presentation to any common wealth bank..the value in coin..[who's weight in the old days represented one pound of sterling silver ""And coin is simply another form of promissory currency:"" no the coin..is..*the real that puts value..to the fiat./paper promise ""you can exchange it..for the face-value's worth of goods or services,..regardless of how much the coi.. actually cost to manufacture."" the mint sells..real silver/dollar coins [30/40 bucks]..thats how much the coin's face should be worth the face..on this 30/40 dollar cost coin is only 1 dollar clearly only a mug would use it at face values it was the same with the sterling/silver round 50 cent coins which when i last bought one cost 7 dollar each[ie the silver metal value] im not saying..make the coins real gold or real silver [only that their face value..be moved closer to what they would[SHOULD have been.. if the silver/gold/copper wasnt STOLEN*,from the coin at decimalisation..and the 90's ""A dollar's worth of Fisherman's Friends"" is 9 grams weight..is a dollar fishy fiends..""will cost you a dollar in coin, no more and no less. Two dollar coins can be exchanged for a two-dollar note, no more and no less."" your missing what im trying to say first there is no two dollar note anymore [wether its to kep the number of coins the same..to hide the sneaky theft of copperr coin..or someother reason the simple thing is if you had...a sterling silver 5 cents piece you would hold in that one coin..2.83 grams of silver.. [worth today arround a dollar Posted by one under god, Sunday, 19 February 2012 5:34:38 PM
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heck they been stealing
the gold/silver from our coin for ever once upon a time..a penny was equal to a threepence of silver content till they became monsterous lumps of copper weighing 2 ounces i bought one..cost me 30$..[ok not 30$ of copper] but heck..collectable coins are few..and i got here late ""The state guarantees it, or rather the Reserve Bank does."" the QUEEN ASSURE's..[ausauages]..[assays]..THE QUALITY of the metals in the copin age her head is stamped on..*debased face value its hrh..who has lost face as well as those who deflated..the cost of a 3 pence coke [getting a penny back on the bottle] up to 2/3 dollars a can.. inflating[quantive easing]..by the fed licence not govt order a dollar used to buy a feed of fish and chips for 4 plus a big..box of candy for mum... [i know cause im the spendthrift crawlwer..who dun it] try doing that under 30 dollars today thats how much real wealth..has been stolen from us all so bring coin back to the people/govt and let the bankers play with the rest just return true values..back into the face of coin linked to their traditioonal weight's in silver or gold ..wrote large upon their face recapitalise the consumer with pennies now worth dollars to spend notes renmain unchanged though i do miss the dollar notes still got a few..they could be collectable one day too Posted by one under god, Sunday, 19 February 2012 5:35:24 PM
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Yes, OUG, whatever. Life's too short.
And Arjay, if people had to walk around with another $20 of coins, even if they were $10 and $20 coins, they would weigh as much as they were worth. And presumably they would weigh their equivalent weight in the market-worth of their materials. So the weight of a $10 coin might be equivalent to, say, an ounce of silver-nickel alloy - it would weigh an ounce, and a $20 coin two ounces, and so on. All in your trouser pocket. Does this show what a complete idiot I am or what ? Posted by Loudmouth, Sunday, 19 February 2012 6:14:13 PM
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Loudmouth I said mint both a $5 and $10 coin.They could weigh as much a 20cent coin.Ten coins = $100.Enough do do your shopping as well as reducing your taxes and debt.
Posted by Arjay, Sunday, 19 February 2012 9:27:32 PM
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You seem to be fixated on "hard cash", Arjay. But I'm not sure you understand the way it might work, should you get your wish.
The first thing to consider is this: what do you mean when you say "debt-free money"? >>...5% is created debt free by our Canberra Mint. If we all use more coins,then our mint will have to respond thus increasing the amount of debt free money in our economy<< Where did you get the idea that coins are "debt-free"? They are issued under the same legislation governing notes. They are freely convertible, coins to notes and notes to coins. Even if it were possible to separately identify "debt-free" money from "debt-generated" money, there is no possibility that these can co-exist within the one economy. Think about it for a moment. Consider for a moment the mechanics of Greece leaving the Eurozone. On Day One, all Euros in circulation within the borders will have to be identified separately as being "Greek" Euros, to give the government time to issue "New Drachmas". Theoretically, the internal exchange rate will be one Greek Euro to one New Drachma, but as we all know (and indeed, the point of the exercise) that the New Drachma will devalue against the Greek Euro. For a while, Greek Euros and the New Drachma will have to co-exist in the economy, just like your "debt-free" coins and "debt-generated" notes. But because they diverge in value, smart operators will make a rush for the border, with as many Euros as they can carry. Causing even greater financial chaos. Exactly the same situation would exist in reverse, e.g. if Germany reissued the Deutschmark, to free their economy from the dead weight of the Eurozone, chaos would quickly follow. This is not a trivial issue. Currency is "created equal" for a reason, a ten-dollar note having the same value as five two-dollar coins, just as the Greek Euro is (presently) equivalent to the German Euro. If you try to break that connection, you will be running a two-level economy with a massive potential for financial disaster. Not nice. Posted by Pericles, Monday, 20 February 2012 9:50:25 AM
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Arjay,
Are you suggesting that coins should be the only currency, and that they should be worth their face-value, their production-value and no more or less ? Currently gold is fetching, what? $1600/oz ? So for argument's sake, if the Australian mint made 0.1 oz coins of pure gold, they would be equivalent to $ 160. As long as there is paper money, you could exchange such a coin for $ 160 in paper money. If there was only coin and no paper money, you could exchange it for what ? $ 160 in coins, gold, silver or whatever. Or such-and-such a quantity of bulkier goods. But as you point out on another thread, the world production of gold is currently about 13 tonnes/yr, only about $ 750 million's worth (in $AUS paper money). If there was a sudden increase in demand for gold, say if a particular country like Australia abolished its paper money and made only gold coins legal tender, say 100 million of them @ $10 each, five per head, (totalling a billion dollars or about sixteen tonnes of gold) then the world demand for gold would go through the roof. What would happen to the world price for gold, in other people's currencies, i.e. in paper money ? The price - in paper money - would also go through the roof. (After all, if the price of gold goes up or down, could you measure that in gold coins ? Can you measure the value of anything in itself ? The price of cabbages measured in cabbages ?) What would that do to a national gold-coin-based currency ? Is it possible that a thriving black-market would develop exchanging gold for other countries' paper money ? To paraphrase Pericles, there would be a rush of gold to the border. Suddenly gold would disappear from the national market, shipped overseas and replaced by a 'black' paper currency - creating billionaires and ruining millions of other people overnight, depending on whether you have gold or not. [TBC] Posted by Loudmouth, Monday, 20 February 2012 10:45:38 AM
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[contd]
So what if, simultaneously, all countries switched over to a coin-based currency, to try to get around this double-form-currency problem ? What would happen to the world demand for gold ? What would then happen to the 'price' of gold, its rate of exchange with everything else ? And as the mining of gold became more costly - in terms of gold coin to pay the extra production costs - the 'price', exchange value, of gold would rise further. As would the face-value of any other coinage, silver, platinum, nickel, copper, whatever, as well. Would people hoard gold, forcing the 'price' up further ? Would there be a sort of upward spiral in the exchange value of gold ? Or would a market develop where goods were exchanged for each other, by-passing gold altogether ? After all, it worked during the Middle Ages when coin was scarce and its value inreliable. Would some banks start to issue bills or notes in their own name, equivalent to a certain amount of gold, promising to pay for good or services, and would these notes start to have the authority and legitimacy of notes of exchange ? Hmmmmm, that might get around the problems of a face-value-based, coin-based currency. Posted by Loudmouth, Monday, 20 February 2012 10:55:08 AM
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as joe points out...gold coins wont work
that is why i say revalue the face..of the nickle coins i also..*did not say..do away with notes just revalue..the face value..back into the debased coin back to what it would have been..if inflation hadnt debased it pericules quote..""Consider for a moment..the mechanics of Greece leaving the Eurozone."" imover it that option wont happen they just seek a way..to control the value..of their own currency thus it is fixed..like usa dollar is pegged to the china juan.. thus..the debt is locked in not defaulted on..only belayed govt issues a dividend..to the greece people[in euro coin] then revalues..the coin's face..times 100... [so the issued euro coin..has its drakma value at 100 eurio/drackma]..which is at par with the euro] which fixes the pension/payments etc..in euro/drackmas just as all prices are reset..to the fixed rate ed Posted by one under god, Monday, 20 February 2012 2:41:55 PM
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As far as I know pericles coins are the only new money created on demand by our Govt.In the USA the Fed creates all their notes but their Govt mint creates coins debt free.
So perhaps you could enlighten us all with the formulae or rules in which our Govt in conjunction with the RBA creates new cash because it it really hard to define what their rules actually are. Now no obfuscation here,I want to see actual proof of this Govt implementation of coin/paper money policy. So does the Canberra mint do offsets to the private banks when they create new money or do they create it regardless thus help reduce our taxes. Posted by Arjay, Monday, 20 February 2012 5:43:21 PM
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joe and peri..know..this cant end well
greece..is just the latest beginning it might be well..to think back 20 years the commies went bust..[much like capitaslism is now going bust] but with commies..they got a share of the shares[on the asset stripped fixed/rundown assets].. regardless..they* had some/value next..we saw the germ/maniac re-unification quickly followed by..the euro..[creation] so the cost of the re-unification..of the mark was born by the new beast..of many austerity burdens..the euro sure the germs...made their mark..carry parity with the east and the west..[being in worse differnces that greece and the current eu[pew]..now is bringing..into the light the same thing has long gone on in the usa with those on the poverty mark..forced into paying high/dollar values from limited incomes..for rents/fines fee's levies access charges..even bank fees..credit card rates..etc in short ever growing debt..isnt just greece every multinational corperation..is under the same..just terms[sentance].. lol..eeeeasy money indeed..lol to call this..a bailout of greece..is a huge lie the credited 'euro's'..are held in escrow then gifted back to the lenders because..*banko allways wins heck if you got the global franchise on money you abuse it..[by over lending to mugs]..that cant repay and in the end must default..and you get the spoil too clever this over/lending ya know..they cant afford..the debt obligation..they got so lend them..more! then..in time you can loot and plunder..the public/resources and let them run-down..too...[sack the workers].. then raise fees acces/charges.. [while the rich flee..in glee] so/govt puts huge fines..on those leaving[looting] [a ban on them,..stealing their euro plunder that was formed..to pay-off..yet again germaniac/capitalistic re-unification who have been forgiven..massive debts[in times past] see the greek topic... and got a bailout..with reunification then the advantage..of the lower exchange rate...and easy_money to buy germain goods..[especialy german debt...!] with your pension funds Posted by one under god, Tuesday, 21 February 2012 7:57:38 AM
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Think of it this way, Arjay. There ain't no such thing as a free lunch.
>>As far as I know pericles coins are the only new money created on demand by our Govt<< That is not the case. In the context of money supply, there is no difference - at all - between notes and coins. They are completely interchanbeable, and are created, and enter the economy, in exactly the same way. Which is through the creation by government of debt instruments called Government Bonds. If you are still unclear on this topic, I suggest you look up "quantitative easing", which has been going on around the world for the last few years, as governments borrow increasing amounts in order to keep the economy moving. In summary, there is no such a thing as "debt free money", whether in notes or in coin. >>In the USA the Fed creates all their notes but their Govt mint creates coins debt free.<< That's wrong, too. Take a look through this: http://www.econlib.org/library/Enc/MoneySupply.html "The U.S. mints design and manufacture U.S. coins for distribution to Federal Reserve Banks. The Board of Governors places orders with the appropriate mints. The system buys coin at its face value by crediting the U.S. Treasury’s account at the Reserve Banks... Commercial banks buy coins at face value from the Reserve Banks, which receive payment by debiting the commercial banks’ reserve accounts." >>So does the Canberra mint do offsets to the private banks when they create new money or do they create it regardless thus help reduce our taxes.<< I haven't found the equivalent explanation on an Australian site, but would be reasonably certain that it conforms to the same rules. I hope this helps clarify the situation for you. Posted by Pericles, Tuesday, 21 February 2012 8:25:37 AM
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When Paul Keating sold off the rest of the carcass of the Commonwealth in 1996,it was too late to redeem the salient features of this once great institution that represented the creativity and toil of all the people of Australia.
Coins now are the only mechanism in which our Govt can express our toil as a debt free expression.
We can all now reduce our national and personal debt by using more coins.How? Our mint creates coins without private bank debt.95% of our new money is created by private banks but 5% is created debt free by our Canberra Mint.
If we all use more coins,then our mint will have to respond thus increasing the amount of debt free money in our economy.Our current problem is not lack of productivity but the medium of exchange to facilitate transactions.
Recessions/depressions are brought on by a starvation of cash that equals the productivity of a nation.It has been always a few elite who restrict supply of money for their own advantage.The increase in use of coins by the demand of the masses can reduce not only our national debt,but give them more debt free money for their own prosperity.
So put away the credit card and go back to traditional means of exchange which will reduce our debt,ie coins created debt free by our Govt mint.