Sound Money
Posted: Fri Jul 05, 2013 8:46 pminflationhawk wrote:InfleXion wrote:I will meet you halfway inflationhawk in that fiat currency is what we have to use to settle our debts, but it is not real money. Real money is fungible, divisible, durable, and portable. Fiat currency fails the durability test, and is less divisible since you can't cut it in half or put flame to it and still make change.
Maybe I meant to say sound money instead of real money in those instances, if there is a difference.
But yes I would not forgo my cash cushion for metals because then I might have to sell some when I don't want to.
Yes, I agree, sound money is a good description of hard assets like gold and silver. "Real money" has too many possible nuances since to me anyway, real money means its a medium of exchange that can be used in its current form to settle debts.
Taken from the Silver Was $20 now $18....How low can we go? discussion and brought here for more communication.
I have a book (quite falling apart) called History of Coinage and Currency in the United States and the perennial Contest for Sound Money by A. Barton Hepburn, LL.D. (ex-comptroller of the currency, ex-superintendent of banking Department of the state of New York, vice-President Chase National Bank). It's not Pieces of Eight : The Monetary Powers and Disabilities of the United States Constitution purported to be the definitive authority on the subject and I'm sure it is (I'm so sure, I'm trying to get a library from anywhere to loan me a copy). We'll see. Good chance History of Coinage . . . published in 1903 is referenced in it. History of Coinage . . . was the project of the National Sound Money League. The Sound Money League were friends of the gold standard and were formed on February 5, 1897 and considered the silver question a source of great anxiety.
I have yet to read it in fine detail but from the above it seems they seek to "educate" towards gold and away from silver by a combination of documented history with narrative including the opinions and conclusions of the author.
I have yet to research the list of members but, no doubt they were prominent in finance in their day. I'll post the list if anyone is interested.
Sound money is described as:
"Sound money means money made of (or unquestionably redeemable in) a commodity which has a stable value in the markets of the world independent of fiat. Sound money as applied to coin means money wherein the commercial value of the bullion equals it coinage value. Sound money as applied to paper or token money of any kind means that which is redeemable in money wherein the commercial value of its bullion equals its coinage value.
The term "sound money" doubtless originated from the auricular test commonly applied to coins. the counter or other convenient surface offering an opportunity, the coin is dropped thereon, and its quality depends upon whether the resulting ring possesses the true sound or not.
The test of sound money varies with different periods, and is determined by varying conditions. It has, however, a general significance easily understood, is concise, cogent, and seems to have found a permanent place in our economic literature." pp 7-8.
So, is this what is meant by "Sound Money"?
Edited to fix a typo.