War on cash

[dryheat]

Well, you can pound your gold into very dull knives and axes.

[togor]

Well, you can pound your gold into very dull knives and axes.

Does gold work-harden?

[Art]

Imagine having to actually exchange gold coins to transact business. We'd have an 11th century economy all over again.

One reason FDR had to do away with gold. There wasn't enough to grow the economy, nor monetize the value of Wall Street.

It's the same reason LBJ did away with silver in 1964. That was the real end of specie currency in this country. We were actually one of the very last countries to use metal both as currency and to back at least some of the paper notes.

The Constitution does not expressly prohibit the use of fiat currency, though early usage of paper notes was far from satisfactory.

The 13 Colonies and then the United States were the first political entities on the planet to issue paper money. The Continental Congress issued paper money in 1775 but inflation destroyed its value resulting in the term "not worth a Continental." U.S. coinage was never able to adequately finance the country in periods of stress, paper money was issued in 1812 to help finance the war with the UK. Shortages of gold silver due largely to hoarding, especially after the Currency Act of 1857 invalidated the use of foreign currency as legal tender. This act ended the use of very large quantities of Spanish and Spanish colonial 8 Real coins as legal tender. Interestingly the use of the Spanish 8 Real, also known as the Spanish Dollar was facilitated by the decision of the U.S. Treasury to make the American silver dollar the same weight as the Real...give or take a bit. Invalidating all of those Spanish Dollars out of circulation in 1857 (they were 25% of the total) added to a bit of an already existing crunch. The lack of adequate specie resulted in a variety of paper money issued by the government or government banks. The current system of paper money was instituted to finance the War Between the States (by both sides.)

So this country not only invented paper money but was just about the last to do away with specie.

[Vern Humphrey]

Actually, the Chinese invented paper money. Marco Polo wrote how on reaching China, his people had to turn in their gold and silver in return for paper notes.

[Art]

Actually, the Chinese invented paper money. Marco Polo wrote how on reaching China, his people had to turn in their gold and silver in return for paper notes.

You are correct, sir.