In a neat admission that his bosses are rotting the money in our pockets, Chicago Fed economist Francois Velde has come up with a bright idea: debase the nickel by a factor of five!
“The problem [of the current high price of metal] remains for the nickel, but there is a simple fix that encompasses both coins. If we formally discontinue the one-cent denomination, the existing stock of pennies (a billion dollars’ worth of resources sitting in cash registers, jars, and sofas across America) could be recycled as five-cent coins, by simply declaring that pennies are henceforth worth five cents. Rebasing the penny would at the same time debase the five-cent piece and put it safely away from its melting point. The new value would be instantly established by the Treasury’s standing ready to exchange 20 pennies for a dollar bill.”
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To be precise, the nickel would probably not be debased by a factor of five. The penny would be worth five cents and would thus debase to some extent dimes, quarters and dollars as well, but it would be most easily observed relative to the nickel.
Nero would be proud.
Debasement! Lest us declare quarter coin worths 1 dollar!
Every emperors in the past, like Nero as Mr. Gaskell said, will walk out from their graves and praise Dept of Treasury for establishing a record of debasement.
Hurray for Debasement! Debase everything! Long live the Bush Regime!
If you would like to withdraw $5000 dollars in pennies from your account at the bank, will they accomadate you? I’d at least like to be one of the first to recieve the new money if this happens.
I don’t understand how a decree, declaring that a penny is now a nickel, solves the problem with the nickel. It seems it would just make it worse. Inflating the money supply with one type of coin would eventually just make the other coins and bills worth less right? So if a nickel can then buy even less “stuff” wouldn’t it be more desireable for people to melt them down?
can’t we just get to electronic money already? this debasing thing is such a pain! it should be a good long time before the dollar becomes worth less than a pulse of electricity, although at the rate we are going I am not so sure.
AMEN to that! Less than 2% of the money in circulation is cash. Let’s kill cash. The existance of cash aids and abets every kind of illegal activity. There is no legal need for coins and paper money.
I’ve been saying stuff like this for a while now, and no one listens to me. If we would just call what is now a single cent a dollar, then everyone would be a hundred times richer. There’s no limit to the amount of or overvaluation that the government can do to money, so it seems to me they’re completely neglectful.
“In our current (fiduciary) system, the stock of tokens we use in transactions, and their value, is determined not by minting and melting—as under the old (commodity) system—but by the monetary
authority’s policy.”
And that sums up rather neatly why I rely on precious metals as a store of value.
Great! I just rented out a warehouse to store all the pennies I am going to buy up with borrowed money. Any who wish to invest with me just e-mail me. I guarantee a 200% return on your money.
“AMEN to that! Less than 2% of the money in circulation is cash. Let’s kill cash. The existance of cash aids and abets every kind of illegal activity. There is no legal need for coins and paper money.”
- billwald
That sounds like a reason to have more physical money. (Hopefully real money)
“illegal activity” Hah!
Illegal activity such as street robberies, bribery of politicians, tax evasion, gambling and dope sales . . . .
Of which only “street robberies” are an actual crime.
KILL CASH? mike? bilwald?
Are you people out of your minds? As it is, the mere existinace of Fiat currency has destroyed the possibility of having real wealth. You think its easy to inflate the ecomony and devalue the dollar now? – Just get rid of physical cash and all ‘they’ have do do is move the decimal point in a computer and devalue your “credits” overnight.
Do you really want to give ‘the powers that have the control” MORE control?
Hellooooo – anyone ever read Farenheight 451? 1984? the alpha strategy?
I have an Idea – why dont you all watch a little MORE TV, maybe the media will feed you some more good ideas.
Just the fact that you posted that garbage on THIS site…..? Why are you even here?
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