Yes, I too have found it nice to have a place to comment where I do not have to explain my point of view every other sentence.

Insofar as work is concerned, when I was in my 20's, I looked ahead and decided that I would probably need to continue working until I died. I did not think that Social Security would be around to provide me with an income, nor that I would be able to accumulate 'an independence'...nor that I would want to. (I have seen too many people fall apart after retiring.)

Fortunately, I do not work digging ditches (when I was in my 20's I was employed as a medical technologist), so continued employment was quite possible. Now - as a software designer - it is even more so.

So Herb: Have you considered putting your considerable intelligence and talents to finding something to do that can provide you with an income? No, it is not good that what you worked for has been taken away from you, but the only real remedy that I can see is to bring more money in.

Jan
(Which advice makes it obvious that I do not work for the federal government. If I did, I would have suggested that Herb start a counterfeiting business and just print the money he needs.)

Can an "almost fact" exist? Your claims fall short of reality.First of all, the silver dollar was struck from 1794 to 1935. Originally 26.93 grams (defined by law as 416 grains even) from 1794-1840. The Coinage Act of 1834 revalued the dollar, but no dollar coins were struck after 1803 until after 1840.) From 1834-1935, the silver dollar was 412.5 grains (26.73 grams). The coins were 90% (0.900 fine). It was both a matter of seignorage (profit to the Mint) and also the convenience of a tougher alloy.

Minor silver coins - Half, Quarter, and Dime - were struck on a lighter standard. Four silver quarters only weighed 25 grams .900 fine. In addition other fractional silvers such as the 20-cent and 3-cent came and went. (The 3-cent was only 0.750 fine; it was always a token.)

Your confusion of a dollar being worth a dollar in silver stems from the universal confusion of money of account with weight of metal. For about 2100 years (about 550 BCE to about 1550 CE), a coin was worth its weight, nothing more or less. Henry III or IV of France created a coin called the "franc." From that point on, the franc was worth whatever the government claimed it was. Other nations followed suit.

Note, however, that even today the British Gold Sovereign has no statement of value on it. Our own Eagle gold coins of 1795-1804 also had no statement of value. The first silver dollars - by law our standard coinage - said "one hundred cents one dollar or unit" only on the edge, not the obverse or reverse. (The half dollar was similar.)

As for "a dollar's worth of silver" the price of silver relative to gold has always been in flux. That was another conceptual challenge beyond the grasp of most people in 19th and 20th century America. From the Bland-Alllison Act of 1878 forward, silver was inflation money. Rising against the dollar during the Civil War, the price of silver collapsed both with peace and huge strikes in the west. The government propped up silver miners by buying their metal at above market prices and by law striking 2 million silver dollars per month from 1878 to 1904. By the Depression of the Thirties, silver was down to about 34 cents per ounce, making a silver dollar worth about 21 cents.... if metal was all that mattered.

Inflation is GREAT if you are a debtor. You get to pay off your loan in money that is less valuable then the money you borrowed. Example of a home loan: you get a 30 year mortgage that requires a payment of 1 week per months pay. 30 years later, still doing the same job (let's say auto mechanic) your pay has risen due to inflation to the point that your mortgage payment is now less then a day's pay. Great so far.

What they fail to realize is that when they retire, the value of their retirement will shrink in purchasing power as fast as their ability to pay off their mortgage grew. In this inflationary world you have to hope you die before your retirement becomes worthless.

From my studies of money through time, there has yet to be a utopia where money actually in use had a constant value through time. While gold and silver have retained roughly the same value in terms of purchasing power, they are no longer 'money' any where that I know of. If a government were to try to back its currency with gold, it would have to value it so highly to maintain convertibility that it would be a real boon to those who knew (and acted on the knowledge) of what the government had been doing in debasing the currency. The US dollar no longer serves one of the most important functions of money - that of being a store of value. (See http://www.cliffsnotes.com/more-subjects...)

You could put your savings into 100% gold coins. The gold coins of Canada are the purest on the market: 5 Nines - 0.99999 fine gold. You do not have to save Federal Reserve Notes in the FIT Credit Union. You could also diversity to minimize risk with coins of silver, platinum, and palladium from the US Mint. You could invest in Microsoft, Apple, Disney, ... and other companies. You could buy futures contracts for December 2022 in Home Heating Oil, Brent Crude, or Ethanol. You could lend money to entrepreneurs in return for stock options. You have good job and you are young. I don't know how you manage your finances, but you are in an enviable position (if I were given to envy, (ahem)...)

Just a comment from a retired guy:
Worked, struggled, succeeded, saved. And now, it is just so much fun to see all those savings and investments withering away. Not because of bad investments. Not because of overspending. But because the money buys less and less every year, because the money diminishes in value while prices inflate.
Compared to many others, we are in pretty good shape. Almost enviable shape. Everything is paid for. Anything bought on credit is only done if it can be repaid at 0% interest. Even with all of that, there's a pretty good chance that the dough won't last until we assume room temperature. That is, unless we exit earlier than planned. So...I've been hard-working and pretty smart my whole life, to what avail? So that some drooling idiots who think wealth is created because they say so is causing me grief.
Am I off topic?
Where else can I complain if not here, to people who get it?

Your fictional history is close to correct, but not complete. People in England shaved silver pennies because the coins were _legally_ all the same "by tale" (by count). Gold coins were weighed. The poor state of silver coinage - nothing significant was issued for almost 100 years - led to counterfeiting. Newton estimated that 20% of the coins in circulation were counterfeit. Also, those coins that were good silver were about 20% under weight by shaving. Newton recommended a new coinage at 20% the value of the old, but the committee he served with John Locke Locke, Christopher Wren, and others, decided to just recoin the entire nation at the old standard. As Warden and Master of the Mint, Newton achieved that. (See my review of Thomas Levison's _Newton and the Counterfeiter_
http://www.coinbooks.org/esylum_v12n32a0... )

People today wring their hands over the shaving of coins as "dishonest" but it was the easiest way to bring the coinage into conformance with commerce. There were NO copper coins. People used lead tokens and other expediencies. The silver pennies had been cut along the long cross into fourths (farthings) for 300 years by Newton's time, creating yet another largely undocumented expediency of small silver slivers.

(Again, there was no copper. That problem was solved by the Birmingham Button Makers of the Soho Mint. They make copper coins economically feasible. And coinage was a monopoly of the crown - and protected by a charge of treason which brought drawing and quartering in punishment. By contrast, in the USA of the 18th and 19th centuries, we had a plethora of coinages, with Federal coins being a second or third tier and Spanish or Mexican being first with UK second in many place. Many banks in New York, Michigan, Alabama, etc., showed pictures of Spanish coins while promising to pay Federal. See "Spanish Coins on American Money" here: http://scoan.oldnote.org/ ) Merchants along the East Coast kept their books in pounds-shillings-pence until the 1830s, fifty years, a lifetime, after Independence.

As for armies of coin inspector, just exactly such an army did exist. The job title - the guild - was called "The Shroff." In China of 18th through 20th centuries shroff schools trained clerks in the certification of silver coins. (See my article "The Shroff" here http://www.coinpeople.com/index.php/topi... ) Of course, today, we would have machines for that - and such machines do exist.

Also, today, we would have electronic coin cards and digital coin codes and all the rest. And, indeed, we do.

First, the fact that gold (silver, oil, etc.) is limited means that its value rises relative to the other many new goods and services constantly created. Gold money becomes worth more over time, prices fall; saving is rewarded.

Second, money has always been the _second_ use of gold: jewelry was always first.

Even as money, gold was primarily for large transactions. It was the medium of kings and emperors, not commoners (or barons). For most of history in most places, silver was the common currency. Capitalism changed that. Of all the coins of the US Mint 1794 to 1934, the $5 gold - about the same size as the UK pound sovereign - was a steady product, one always produced regardless of whatever else was struck. America led the way with small gold coins, the quarter eagle ($2.50) and one dollar - even as the dollar was legally defined in terms of silver.

The price of gold today versus 1914 relative to the economies tells you what gold would be worth. A nice three-piece man's suit is still about an ounce of gold. But a cellular telephone under contract is 1/10 ounce or less - and that did not exist at all in 1914. Candy or eggs versus Lakers tickets or an hour in a Cessna with a flight instructor, whatever you measure, that which existed in 1914 costs more or less the same (allowing for industrial progress), and that which did not exists is "miraculously" affordable to just about anyone in the West - and many people everywhere. (Cells phone time is an informal currency in parts of Africa.)

You probably know George A. Selgin's book, _Good money: Birmingham button makers, the Royal Mint, and the beginnings of modern coinage, 1775-1821_. (You can buy it at Mises.org) In fact, Richard A. Doty was first by ten years.

"His 1998 book, “The Soho Mint & the Industrialization of Money,” explored important links between an 18th-century British inventor’s use of steam power rather than manual labor to make coins and the influence of that breakthrough on minting worldwide. No one had connected those dots before, [Smithsonian curator Karen] Lee said." -- http://www.washingtonpost.com/national/r...

It is also important to place paper money in its commercial context. In the first half of the 19th century, a skilled worker earned 50 cents a day (for a 10- or 12-hour day). Call that about $100 in present value and you can see that a $2, $5, or $10 was clearly intended for large transactions, not retail purchases by consumers.

Therefore, these bills spoke to the upper tiers of commerce and finance. When they tout slavery or present women as decorative (and decoratively undraped) they reflect the implicit values of those people of that time.

Not anymore at least.

The difference between fiat-based currency and backed currency is that with fiat-based currency all you have is extrinsic value. You can't even burn the paper for heat it is so worthless.

A backed currency has both the extrinsic value of the faith in one using it AND the intrinsic value of the backing material. Will the actual intrinsic value of the backing material fluctuate slightly as to market demand? Absolutely. But those are reflections of real value - not merely the faith of the transaction participants.

Fiat-backed currency, absolutely. If the money is backed, however, one can always retrieve the intrinsic value of the backing. That's one of the huge problems with inflation: it is a reflection of the artificial manipulations of the value of currency.

Bitcoin is a very interesting alternative to fiat and paper money. It's now being accepted by big retailers like Overstock and Dell computers. It goes to show that pretty much anything can be a means of exchanging value as long as people agree.

Why do people assume gold and silver backed currency is the best? It's certainly better than paper, but it too is only valuable as long as someone thinks it has value.

Just as well would be a currency that replaces current currency and is unable to be reproduced. Something with a serial number maybe. 1 out of 1,000,000,000,000, and is infinitely divisible, like Bitcoin.

Some type of proven secure, redundant system would have to track the whole thing (cloud or otherwise), but essentially, fraud would be impossible unless someone could spoof the owner of a currency's "key", which could be a combination of three things: Something you know (password), something you carry (a rotating key generator), and something you are (your fingerprint, retina, something).

The retina scan would go through a hash that is based on the key you carry, which would then also go through a hash based on the password you input, and compared to what it should be, which is stored on the system in some manner.

It's way more complex, but if done right, fraud would be near impossible. Even if someone hacks the system, the transactions related to the hack could be tracked down and reversed, unlike bitcoin.

Silver and gold
Silver and gold
Everyone wishes for silver and gold
How do you measure its worth?
Just by the pleasure it gives here on Earth.
(from Rudolph the Red Nosed Reindeer movie)

LOL.

Even our coin money - even when it was silver - was basically fiat currency because you had to accept a silver dollar as a dollar even if it weighed only 95% of its original weight. (Talking say the 1950's and 60's - not sure if that was true in the 1800's).

Has anyone read Neal Stephenson's works? Specifically Cryptonomicon which ends up dealing a lot with money in the modern world and the System of the World cycle which does the same in Isaac Newton's day. I learned a lot about money from reading these books even though they are fiction. For example, that is why quarters and some other coins have ridges around the edge. Because in hard money days, people would shave off the rim of the coin and still spend it at full value. Also, people would examine any coin and might or might not sell their goods at full face value of the coin depending upon its condition. I can see that working in a 17th century town square, but I have difficulty seeing Microsoft hiring an army of coin inspectors to make sure that the coins they receive for their software are actually within acceptable tolerance in terms of weight.

Money is a representative of your stored productive time. If your time is being stolen from you through taxation and inflation you end up with little or no savings.
When 50% of our society is unproductive, this nation will "flip" over to complete dependency and will fall into a looting stage where you won't be allowed to store time.
Get ready to shrug.

I tend to agree in principle and want a hard money system. Yet I'm not sure it could work in today's economy. Gold is more than just a precious metal to potentially back currency. It is also a key ingredient in electronics and other industrial uses that render it's use as money questionable. Silver is even worse from this perspective. In addition, with either, I'm not sure there is enough gold in the world to back the currency needs of the world's business transactions. And if we were to use it then we would instantly be giving tremendous power to countries that are basically enemies of our way of life (eg Russia).

I'm not sure I can accept that a gold-backed currency is anything more than an unrealistic fantasy in 2014 - as great as it could have been in 1914.

American capitalism floated on a sea of paper. The British colonists were greatly disappointed not to find a tribe of cocaine addicts to loot for their silver. So, they made do with paper money. Except for China (famously), and an early attempt by the national bank of Sweden, the American colonies of Britain led the world in the creation of fiduciary currency. America was truly a land of _promise_. The vignettes on these notes show production, creation, crafts, farming, commerce, and very many very ordinary people being very busy at work.

You are free to create any kind of money you want. Many anarcho-capitalists agree with you (via Rothbard) that only 100% gold backing should be lawful; anything less would be fraud. However, Hayek and others disagree. The best evidence that I can offer is the stock market. Common stock typically has _no par value_. Yet, stocks trade for more than nothing.

These 19th century notes all carry the empirical evidence of (nearly) unregulated banking. And the regulations themselves tell stories. (In frontier Michigan, a bag of gold coins ran from bank to bank ahead of the auditors.) Reading the histories also requires a perspective. A newspaper story from Georgia complained that paper money from Michigan traded at a discount. Many people thought that money should never have a transaction cost.

As for your gold coins, what happens when they wear down? Is it fraud to spend a coin that has previously been circulated? Hard money people have their hearts in the right place, but Rothbard was a sloppy scholar and his theories are full of holes because he never relied on the facts of numismatics.

Ah, but does affect my costs more than my prices. I will grant you some leeway here, but most of that 5% extra value is going to the looters now.

The way things are right now is that there really is no good long term store of value at this point. Everything is worthLESS.

"That is not possible now through even through conservative investing."
This is that same thinking where inflation only affects your costs (i.e. other people's prices) but not your prices (i.e. other people's costs). In this thinking, I or my business must product 5% extra value per year just to maintain constant real earnings b/c all my vendors' prices are going up, but I can only raise prices if I add value. I don't think you're actually arguing that, but it sounds that way when you say inflation makes it hard for investments to give a positive real return. It's saying every thing else's price goes up except whatever your business and investments happen to be selling.