Woah Here the fluctuation in the price gold has been mainly due to the fiat currency we provide in the form of 1963 and current Federal Reserve Notes and Some United States Notessmockers83 wrote:
Not true.
In fact, the very opposite could be very much true.
Inflation serves a purpose in an economy. Inflation is not only driven by government policies, whether fiscal or monetary, it's also driven by the increase in income. The more money there is to go around, the more producers can charge due to an increase in money supply and the resulting increase in demand, thus inflation. The purpose inflation serves is that it produces incentive for producers to produce. If prices were falling year after year, would you produce more year after year or less? Producers would actually produce less, thus a contracting economy.
As gold and silver prices fluctuate, the money supply would fluctuate with those prices and the government would have less control over inflation and deflation. As those metals' prices rise, they're more expensive for the government to acquire, so the money supply may not grow fast enough to keep up with the economy. The opposite is true as well. The other factor to that is that as those metals' prices rise over time, in order for a $0.25 piece to be worth $0.25, the amount of silver present would become smaller and smaller. Or, if it were kept at the same quantity, the coin would either cost more than it's worth, or be worth more than it's given value, thus needing to adjust the face value of the coin.
Plus, are you going to melt that coin down and try and extract the small amount of silver? I think not.
Those gold coins from the government they're selling on TV now, they aren't worth their face value in gold given the price of gold and the amount of gold present (they're true value is much less).
Modified by smockers83 at 11:11 PM 1/6/2010
Before 1963 US Currency had a promise to Redeem them for Lawful Money IE Silver and the Series 1928 FRN's Have a Promiss to redeem in GOLD.
To answer your question the standard amount of silver in a Silver dollars is roughly about 3/4 of and oz. the content rate was set in 1839 by Congress of 90% Silver If we revalued the dollars like Mexico did for the Peso in 91 to use Silver as our standard unit of currency that dose no detract away from Using the current mixture of 25% Nickel and 75% copper for lower denomination coins But make a Silver Half Eagle (AKA $5 dollar coin) the size of a Half Dollar which dose not circulate well
But yes I have melted down Silver coins for Bullion from small denominations like the British 3 pence of pre 1947 U.K. to U.S. Silver Dollars
Now for the price of GOLD it was set at $35 Dollars per Oz. until 1972 when Nixon Allowed US citizens to Own gold bullion. Today the value of gold will show the true value of the dollar which is 1100 USD for a Oz of Gold today that 30 years ago was 35 dollars and in 1933 was 22 dollars an Oz. The Amount of Gold has not changed there is not going to be less gold on earth if anything more gold is being mined. "BTW who buy gold from a TV Set Those things are not even US Legal tender. a $50 dollar gold Eagle In bullion is like a 1300 USD from the Mint.
The Depression and US currency has a Intresting story In 1929 There were several Circulating Types of US Currency 1st: Federal Reserve Notes Which Promissed to Pay in Gold 2nd: National Bank Notes Which Private banks Could Have Currency issued under the Banks Name as long as they held a federal charter3rd: United States Notes Orignally Issued to pay for the Civil War this was the First type of Fiat currency and could not be used to pay Customs Duties 4th: Silver Certificates which were Redeemable in Silver 5th: Gold Certificates
With All these notes in circulation the U.S. Not really trusting the value of Paper money still this dates back to colonial currency which was not even redeemable in face value so this left a bitter taste in Citizens mouths On Paper and not Hard Currency."OK on to the depression" Banks Whould recive deposits of Gold and Silver from the citizens and issue them Notes for the Money. But they would only keep 10% of the gold and issue 90% of it in the form of loans all well and good until everyone wants to get there gold out and the bank has spent the money which caused many of the bank failures in the day. "Lesson remove Gold from the obligation and Silver followed suit" Make money worthless excpet for the faith in the bearer and reciver in the value fo the note."
