05. October 2005 · Comments Off on Debasing the Currency: Pt 1 · Categories: General, History, Media Matters Not

A long time ago, when currency in the West of the world was in the form of coins and monetary policy was an infant science, the most-valued coins in the marketplaces were those minted of precious or semi-precious metals, each coin valued approximately to the content of the metal and based on that relationship of content to the official value stamped upon it—or so is my understanding of the grim science of economics, given that I was an English major, and given to interpret these things from a literary worldview.

Changes, variations and plain old criminal fiddles upset this tidy understanding almost immediately by the creatively larcenous. Thieves shaved minute scrapings of precious metal of gold and silver coins— did you know that the milled edge was an innovation designed to defeat this criminal stratagem? And of course, out-right counterfeiters did their ingenious worst. It got to the point where clever merchants had to be as careful of coins as modern retail establishments are with large-denomination notes, since there was always the chance of the bad penny turning up, and being a distinct loss to a commercial establishment. In those early days, coinage crossed borders freely, mostly because the currency distributed by a well run, prosperous, and fiscally sound state, city or kingdom could be assured of being worth its assigned value. (Bonus trivia note: certain coins later assumed to be equal to a dollar were cut into eight pieces, to make change in the American colonies; this is the origination of the slang “bits”, as in the use of “two bits” for a quarter, or 25 cents. And the word “dollar” itself is drawn from the German “thaler” coin… )

OK, enough trivia, back to the point: I do have one, honestly. The general use of currency implies an act of trust. We trust that the coin or bill is worth what it is supposed to be, as true now as it was two hundred, four hundred, or two or four millennia ago, and in the brutal financial meritocracy prevalent in the hurly-burly of interesting historical times, some coinage was always counted as more valuable than others. There were always established states, or kingdoms whose rulers fell to the temptation of short-lived gains earned by fiddling with the coinage… who took the short way out of economic problems by shorting the quantity of good metal in their coins, for what they viewed as the best of short-term reasons.

But short-term expedients have long term consequences, and the major media lords who control imperfectly, that appears in print, on the radio, and most importantly, on TV, may yet discover this at first hand. They have taken a good, solid coinage, a trusted, solid precious-metal coinage— at least, that which existed at the mid-point of this last century— and for immediate, short term gain, chosen to substitute dross for value.

(To be Continued)

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