Silver coinage without gold standard?

James_Green_1982

AG47 wrote: »

Not sure what your reasoning is there. Remember currency is temporary they come and go. Gold and silver are always money.

An ounce of gold or 15oz of silver would always buy a handmade suit from Ancient Rome.

You have to measure stuff with stuff, ounces of metal, barrels of oil, bushels of wheat. Take temporary currency out of it, and measure stuff with stuff.

Silver is money, pounds of silver is money. Pounds of weight or money are the same thing, we are just in a temporary time where currency is being expanded around the world since the temporary new international monetary system that the world went onto in 1971.

We were told about 50 years ago it would be temporary. When the temporary system ends the world will go back to monetary precious metal backing as it was before 1971 and the temporary system was brought in.

This is why central banks are trying to stock up on monetary precious metal

I agree with what you are saying.
For example, to really understand the house price cycle you need to look at the price of a house in either ounces of gold or ounces of silver.
It's meaningless looking back in time at house prices priced in fiat GBP - because it's impossible to ''adjust for inflation'' - because the inflation figures are just invented (and manipulated).

You really need to compare gold and silver ounces to the price of beef, lamb, pork, farmland, houses, milk, beer, wheat and bread etc. Because they offer constant measures over time.

A cow was probably (roughly) the same size cow today as 300 years ago. Same with the field or barn it lived in etc.

AG47

James_Green_1982 wrote: »

Today, one troy pound of Sterling silver is worth approx £128.

The gold sovereign was previously used as the £1 coin. Today a sovereign coin is worth approx £245.

So in the past was one troy pound of sterling silver fixed at the same price as one gold sovereign coin?

Yes I’m the past when you asked how much something cost if it s this many pounds, it meant this many pounds of silver.

Then sometimes pounds of gold, and sometimes the cycle goes over to currency, but always the cycle goes back to money which is gold and silver.

The cycle will keep repeating, just like it did in 1971, when the world was backed by monetary precious metals.

Buying silver right now is far better than gold, for the first time in human history silver is more rare than gold. This has never happened before

James_Green_1982

One difference I think is important, is the difference between a gold standard and actually using physical silver (or less often gold) in coinage transactions.

A gold standard is just a promise to redeem notes for gold. As demonstrated by Nixon, such promises are easily broken, much like a debtor defaulting on a debt.

Actually using silver in coinage makes it much harder for a government to default - because it would require all citizens to hand in their silver (or gold) coinage.

I find it interesting that the US stopped using silver in its coinage in the 1960s - prior to the Nixon Shock gold default in 1971.

AG47

James_Green_1982 wrote: »

One difference I think is important, is the difference between a gold standard and actually using physical silver (or less often gold) in coinage transactions.

A gold standard is just a promise to redeem notes for gold. As demonstrated by Nixon, such promises are easily broken, much like a debtor defaulting on a debt.

Actually using silver in coinage makes it much harder for a government to default - because it would require all citizens to hand in their silver (or gold) coinage.

I find it interesting that the US stopped using silver in its coinage in the 1960s - prior to the Nixon Shock gold default in 1971.

These days it will be more like a silver back digital crypto currency.

People would far prefer to use a silver backed digital curb than an unbacked one like bitcoin and all.

You would have to have the option of physical silver or digital, so small silver coin in circulation as well as digital, and the digital component would have to be redeemable for physical.

The problem is maybe silver is too rare now to use as a global monetary system, on entire ounce would be more valuable than a house, when historically as many as 500 ounces should be valued at a house

Malthusian

James_Green_1982 wrote: »

Actually using silver in coinage makes it much harder for a government to default - because it would require all citizens to hand in their silver (or gold) coinage.

No it wouldn't. It just prints a load of money and just says "this is worth so many of your silver coins", or makes a load of new coins with less silver in them and says "this is worth just as much as your silver coins". Citizens who are owed money by the government can't require the government to pay them in old silver coins. This has been done since Roman times.

James_Green_1982

Malthusian wrote: »

No it wouldn't. It just prints a load of money and just says "this is worth so many of your silver coins", or makes a load of new coins with less silver in them and says "this is worth just as much as your silver coins". Citizens who are owed money by the government can't require the government to pay them in old silver coins. This has been done since Roman times.

But those citizens can hoard the silver coins they obtained prior to the currency devaluation. So the savings obtained through their labour retain their value. Obviously this requires a degree of planning by citizens prior to devaluation.

In effect what you describe is the government devaluing the labour value of the citizens going forward. Because all new wages will be paid in the less valuable currency.

James_Green_1982

AG47 wrote: »

These days it will be more like a silver back digital crypto currency.

People would far prefer to use a silver backed digital curb than an unbacked one like bitcoin and all.

You would have to have the option of physical silver or digital, so small silver coin in circulation as well as digital, and the digital component would have to be redeemable for physical.

That's just a sliver standard reliant on a government promise.
One day the government decides (without warning) that the digital currency will no longer be redeemable for physical silver.

James_Green_1982

AG47 wrote: »

These days it will be more like a silver back digital crypto currency.

People would far prefer to use a silver backed digital curb than an unbacked one like bitcoin and all.

You would have to have the option of physical silver or digital, so small silver coin in circulation as well as digital, and the digital component would have to be redeemable for physical.

The problem is maybe silver is too rare now to use as a global monetary system, on entire ounce would be more valuable than a house, when historically as many as 500 ounces should be valued at a house

I don't follow this argument.
I would say that the value of houses measured in ounces of silver (or gold) is their true value. This can be measured over time. Whatever happens to a fiat currency should have no direct effect on how many ounces a house is worth.

AG47

Malthusian wrote: »

No it wouldn't. It just prints a load of money and just says "this is worth so many of your silver coins", or makes a load of new coins with less silver in them and says "this is worth just as much as your silver coins". Citizens who are owed money by the government can't require the government to pay them in old silver coins. This has been done since Roman times.

And when there is a run on the banks and everybody doesn’t trust the promises of silver, they all want to exchange for real silver, they soon find out there is not enough real silver to back all the promises.

Real silver has a purchasing power far higher than the paper or digital promises.

We are heading that way now.

Got real silver ?

James_Green_1982

AG47 wrote: »

These days it will be more like a silver back digital crypto currency.

People would far prefer to use a silver backed digital curb than an unbacked one like bitcoin and all.

You would have to have the option of physical silver or digital, so small silver coin in circulation as well as digital, and the digital component would have to be redeemable for physical.

The problem is maybe silver is too rare now to use as a global monetary system, on entire ounce would be more valuable than a house, when historically as many as 500 ounces should be valued at a house

I don't follow the logic of this argument.
Today, a house valued at £100k is worth approx 10,000 ounces of silver.
If the fiat currency system changed tomorrow, that house would still exist and those 10,000 ounces of physical silver would still exist.
I don't see why more physical silver would need to be extracted from the ground in order to enable such a transaction to take place.