You’re immature, Fielding.
How am I immature?
Well, emotionally, sexually, and intellectually.
Yeah, but what other ways?
How dumb do you have to be to write for Forbes?
Experts Agree: U.S. May Become A ‘Simpsons’ Episode And Need Platinum Coins Or IOUs
Abram Brown, Forbes Staff
1/10/2013 @ 11:32AM
If the Treasury did mint that $1 trillion platinum coin, depositing it at the Federal Reserve would allow it to keep paying the bills, says Donald Marron, director of the Urban-Brookings Tax Policy Center. The Fed would book $1 trillion, just as it would book 25 cents if the Treasury sent a quarter instead.
Marron quickly concedes the mind-boggling nature of a $1 trillion coin, which would weigh more than 43 million pounds and occupy roughly 32,000 cubic foot (assuming about $1,600 a troy ounce of platinum): “Minting a trillion-dollar coin sounds like the plot of a Simpsons episode or an Austin Powers sequel. It lacks dignity.” For perspective, the coin would weigh as much as 100 Statues of Liberty; America’s copper-cast leading lady weighs in at 450,000 pounds.
Too dumb, it seems, to have passed even a High School “Introduction to Economics” class.
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country.
(N)early all contemporary money systems are based on fiat money. Fiat money, like any check or note of debt, is without intrinsic use value as a physical commodity. It derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for “all debts, public and private”. Such laws in practice cause fiat money to acquire the value of any of the goods and services that it may be traded for within the nation that issues it.
The money supply of a country consists of currency (banknotes and coins) and bank money (the balance held in checking accounts and savings accounts). Bank money, which consists only of records (mostly computerized in modern banking), forms by far the largest part of the money supply in developed nations.
Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful to not accept the fiat currency as a means of repayment for all debts, public and private.
One of the last countries to break away from the gold standard was the United States in 1971.
No country anywhere in the world today has an enforceable gold standard or silver standard currency system.
Commercial bank money is created through fractional-reserve banking, the banking practice where banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder, while maintaining the simultaneous obligation to redeem all these deposits upon demand. Commercial bank money differs from commodity and fiat money in two ways, firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The process of fractional-reserve banking has a cumulative effect of money creation by commercial banks, as it expands money supply (cash and demand deposits) beyond what it would otherwise be. Because of the prevalence of fractional reserve banking, the broad money supply of most countries is a multiple larger than the amount of base money created by the country’s central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators.
Or, indeed, to have learned how to use Wikipedia. This level of dumb applies to “economists” who are directors of the Urban-Brookings Tax Policy Center too.
Metals also have a market value; silver and gold, for example are traded daily. Other metals also have value and a new breed of investors is emerging: the coin hoarder.
All American coins are made from a variety of base metals. Prior to 1965, dimes and quarters were made primarily of silver, until the soaring cost of silver forced the United States Mint to change the composition of the coins to a cheaper alloy. Prior to 1982, pennies were composed of 95% copper, until lower-cost zinc replaced a substantial amount of it. Nickels are still composed of 25% nickel and 75% copper. As the underlying values of the metals rise, the coins become theoretically more valuable. At today’s prices for copper and nickel, a five-cent piece is worth almost seven cents. There’s a catch, however. Since 2006, it has been illegal to melt down pennies and nickels.
NO circulating United States coin, save for those with minimal face value intended for trade as bullion, EXCEPT for pre-1982 pennies and all nickles has a commodity value as metal greater than its face value as currency. This difference between the value of money and the cost to produce and distribute it is called Seigniorage.
So, unless you want to be laughed at as some ignorant wacko destined to die under a pile of used coffee grounds and old newspapers, please don’t let this fallacy enter your conversation even though you are an “economist” who is a director of the Urban-Brookings Tax Policy Center or a columnist for a major “financial” publication.
It makes people wonder if you got your job through nepotism and inbreeding.