Page 1 of 1

Currency Devaluation and the Effect on Coins

PostPosted: Sun Jul 19, 2020 6:28 am
by Recyclersteve
This thread is about the effect that currency devaluation has on coins. Let me clarify a few things:

1) I'm not talking about normal 2-3% inflation which slowly erodes purchasing power over time.
2) Also, when I talk about coins I am not referring to 90% silver coins, just stuff that we would normally expect to find in change these days, well, pre-coronavirus anyway.

I thought I read something somewhere about a country which devalued the currency, but at the same time kept purchasing power of the coins from being devalued. Was this Mexico or Zimbabwe or somebody else?

Here is an example of what I am talking about. Let's assume that the U.S. Government said they were creating a new currency. It would be worth twice as much as the old currency. That is, a current $20 bill would be equal to a new $10 bill. Yet, at the same time, $10 in current coins would be worth $10 in the new currency. So there would be an incentive to hoard coins.

If this did in fact happen once or more than once around the world, it could be part of the reason coins are hard to obtain these days. I tried looking on the internet (even with ixquick.com) and was unable to find anything other than war stories about hyperinflation, etc.- not exactly what I was looking for. Can anyone else find anything about this? Are there any links you can share with information?

Thanks in advance.

Re: Currency Devaluation and the Effect on Coins

PostPosted: Sun Jul 19, 2020 12:49 pm
by coppernickel
Makes me grateful to have a few coins, which have intrinsic value separate from their first value. When the currency starts inflating, that we be the time to add extra purchasing by offering nickels to sweeten the deal.

Saw an article on CBS Sunday Morning about a town, Tintino Washington, printing their own scrip on wood. Another step toward a free market economy.