PDA

View Full Version : What's the point of a bimetalic standard?



Richard
30th November 2008, 14:44
http://news.goldseek.com/ClifDroke/1228066260.php

There's a lot I can say and talk about in that article, but I wanted to more talk about the bimetallic standard.

I confess, I never did see the reasoning behind it. And yet, I just sense there is a good reason for it. Just haven't come across any good info on it yet! The best I've heard is that "silver makes change for gold" but that's easily gunned down because change for an ounce of gold is 31.1 grams, 311 decigrams, 31,100 milligrams etc.... I don't see that silver is needed for that function.

So how about it? Does anyone here understand the point of a bimetallic system? Was it a way to balance money supply, as the article says or was it something else?

fansubs_ca
30th November 2008, 19:41
http://news.goldseek.com/ClifDroke/1228066260.php
The best I've heard is that "silver makes change for gold" but that's easily gunned down because change for an ounce of gold is 31.1 grams, 311 decigrams, 31,100 milligrams etc.... I don't see that silver is needed for that function.


The problem with such excessively small pieces of gold is that they would
be incredibly easy to lose. This is why silver and at a certain point copper
are beter suited to smaller payments. I have 2 miniature gold replica coins
that are each a 1/100 of an ounce and have to keep them in the little
plastic ziplock bag I got them in to keep track of them. You also really
have to look close to see what's engraved on something that size.
Considering the gold in each is about $8 worth you can see where a gold
coin equivalent to a modern $1 or less would be just too tiny.

Ardent Listener
30th November 2008, 20:29
The problem with such excessively small pieces of gold is that they would
be incredibly easy to lose. This is why silver and at a certain point copper
are beter suited to smaller payments. I have 2 miniature gold replica coins
that are each a 1/100 of an ounce and have to keep them in the little
plastic ziplock bag I got them in to keep track of them. You also really
have to look close to see what's engraved on something that size.
Considering the gold in each is about $8 worth you can see where a gold
coin equivalent to a modern $1 or less would be just too tiny.

Good reply. If we ever get back to dealing in physical metal money for what ever reason, then silver and even copper will have their rightful places along silde of gold.

Richard
1st December 2008, 08:44
fansubs_ca : "The problem with such excessively small pieces of gold is that they would be incredibly easy to lose. This is why silver and at a certain point copper are beter suited to smaller payments. I have 2 miniature gold replica coins that are each a 1/100 of an ounce and have to keep them in the little plastic ziplock bag I got them in to keep track of them. You also really have to look close to see what's engraved on something that size. Considering the gold in each is about $8 worth you can see where a gold coin equivalent to a modern $1 or less would be just too tiny. "

True, but the same can be said of silver. With a gold/silver ratio of 1:10 (say), one gold dollar in silver would be...

Gold dollar = 1/800 oz Au : 1/80 oz Ag = 39 mg Au : 390 mg Ag

So a 1/10th gold dollar would be 39 mg of silver, or if you can picture it about 1/58th the silver content in a pre '65 US dime. Better than seeing and handling 39 mcg (micrograms) of gold, but only ten times better! They're too close to each other for silver to make those kinds of small denominations. Even if it were the historical 1:15you'd have only half again as much silver, which on the mg scale wouldn't make much difference either. To make that sort of difference, you need 100's or 1,000's. Which of course leaves...


Ardent Listener: "If we ever get back to dealing in physical metal money for what ever reason, then silver and even copper will have their rightful places along silde of gold."

I don't recall the numbers, but I know that copper is 100's if not 1000's of times more abundant than gold. Assuming it's 1:1,000 then 1/10 of a gold dollar mentioned above would be almost 4 grams of copper... much better than silver, and you could even go 1/100 without it getting ridiculously tiny!

Okay, fine... a trimetallic system would solve the human eye issue, and quite well at that. But what does all that say about what the article said, if anything? Does a multi-metallic system prevent or reverse depressions? Does not having it even cause them? If so... then how? That's what I was more wondering about.