Making currency work

[deadboy]

95% of our gold is in vaults to stop us from using it as an honest currency, not subject to the pressure of inflation, that the dollar allows. Or the confiscation as Mr. Greenspan points out. Not an Oz. backs our currency, and private ownership of gold bullion is illegal.


I have really enjoyed destroying your ignorance on this issue, and hopefully your world view

I`m here to help, it is what I do.

I actually found this out from my obviosuly not very good chemistry teacher today. So it's not really a world veiw I've ever had .

I am going to be taking economics for an a-level when I do them though so this is pretty useful to know

[Mykey]

Unequivocally, excellent message

[Talapus]

The only reason that I know that fact, is because my father and I are numismatists.

[deadboy]

The only reason that I know that fact, is because my father and I are numismatists.

???

What's that mean?

[Mykey]

The authoritative point of view, curiously..

[Nalaris]

But the United States dollar could never come to be if it wasn't backed by a resource. Because the United States dollar came to be accepted, the gold backing could be taken away. Iron, being more useful, has replaced gold, therefore making coins of any kind equal a certain amount of iron is feasible looking at reality so long as the government is reasonably stable.

How to make governments stable? Successors. Choose one before you die, or else civilization dies with you.

[Mykey]

You are mistaken. I can prove it. Write to me in PM, we will talk.

[wichita]

How to make governments stable? Successors. Choose one before you die, or else civilization dies with you.

Which is why Seatown Forest has always been going strong, hated by the envy of all who survey it.

[The Sociologist]

But the United States dollar could never come to be if it wasn't backed by a resource. Because the United States dollar came to be accepted, the gold backing could be taken away.

Yes, currencies were backed in historical times. You must bear in mind also that today only a fraction of money is actually coinage. Most of it is in the form of demand deposits, savings accounts, time deposits, money-market accounts, and money-market funds. In other words, elecronic data, mostly. There is in fact insufficient combined gold and silver on earth to back the modern world currencies.

For the historical kind of metal coinage to work in Cantr, you'd have to satisfy the requirements (1) convenience of handling, (2) durability, (3) divisibility, and (3) high intrinsic value. This is the standard definition in Economics. Currently, coins are less convenient to handle than "x grams of y", there is no difference in durability (raw potatoes stored inside will last just as long!), coins are less divisible than any other kind of resource, and finally the cost of making them is still too high relative to the intrinsic value of the metal. So Cantrian coinage fails all requirements of the definition.

And yes, fiat currencies could certainly be imposed by the usual Cantrian village tyrants. However, without wider acceptance they could only be used for local things, like the payment of wages. However, since said tyrants don't pay wages anyhow, they would just be making work for themselves. There are other scams for extracting surplus from people than introducing a fiat currency.

[Wilmer Bordonado]

I thought this subject had been done to death in previous threads. As someone said above, unless the currency has its own intrinsic value, (eg 10g iron) it won't be accepted without trust. How many Cantrian governments last more than 20 Cantrian years? Thus no trust.
If a 10g iron coin is worth 10g iron, what's the point of processing the iron expensively to produce it in the first place.

I've been thinking about the currency system since I posted my suggestion of decreasing the time for making coins in the Suggestions forums.
In a certain way, I do share what The Sociologist posted there about the characteristics a coin might have to make it useful. To resume, my ideas consists on 1) Coins must be faster to be made witht he coin press 2) Coins must be weightless for those who carry it in inventory. 3) Coins has no extra value rather than the raw material which are made; actual coinage value is set by economy, offer-demand dicotomy, or even if you want, arbitrary by government policies of convenience.
These points has its consequences: 1) Faster made, faster distribution of them. And if time -worked time- is eliminated from the coin press, then the coin in itself has no more exat value than the raw material used. 2) Weightless would convert coins in a very useful thing for those who travel a lot; it would give an enormous trading growing. 3) No extra value than the raw material used, would give governments-banks-owners of coin presses the possibility of giving it its own value, or let it set by the community of traders.

Now, why coins can't be weightless? Iron as a coin, with a named pressed on it, could be as weightless as a cloth for a character, while it is carried in his inventory. If the coin is ever reclaimed, then it would become in iron again, certainly in 10g of iron, which would have the common weight in someone's inventory.

Presently, currency systems couldn't work in the Cantr World because coins are treated as a resource and not as a way of payment.

Wilmer B.

[Pie]

Heres an idea.

To start coinage, use them as a way of prooving yourself, such as the deed to a house, or to prove that you are a member of an organasation. Or you could use them to validate people who are sent on missions. Such as, if you send a person out five towns over to deliver a message, you give him a coin, and then he goes and shows the coin to that man, and then he gives the guy another coin and he comes back to get his payment.

Or you could use it in another way to prove the compleation of something. Like, you give a guy a coin for every days work he gives you, and then he gives the coins back.

and the like.

these all could stimulate the usage of coins.

easy as that.

[Sho]

A backed currency as Talapus suggests is not incompatible with the idea of "one coin a day." The Quillanoi system, as started many Cantr years ago, was a backed currency with the currency's value vis-a-vis various resources set according to "10 Qui per day."

[Pie]

Ah but you forget.

In time, the "i give you these coins to prove yourself, you can go over there and get stuff"

Will soon turn to "I give you these coins so you can buy stuff"

(Becaus, actually, the first banks were made with this system tipe. such as, the tutonic knights would do such a thing as this, where you deposit stuff and then you get a bank note, and you go to a differen't place and get this stuff back)

All you really need to do is create a large enough orgonasation with a whide spread range of outposts.

[Hagan]

I believe the Biggest reason behind Coins not becoming more widely used in Cantr is all the OOC influence stateing WHY it cannot work.

The first Coin press built in KSF was for a "Pente (KSF Certifies on Deposit 1000g Coal) " which was rediculed beyond believe. The town still has hopes that it will be cosidered in the future but before it can really be accepted there has to be banks around the island stock pilling Coal to over flowing. Which until Diamonds find there way to the island can not happen. That is the reason 4 more presses were built with the idea of Labor being the backing behind the coin. Something that Anyone can produce, something that will not run out. Caring a Pente around which Certifies it is good for 1000g of coal posses the possiblitiy that there will not be 1000g at the bank you go to to redeem it. The town could build a vault and be sure that for every Pente placed into circulation there would be 1000g in the vault.. But that means it can only be guaranteed at that Bank.. What if there is a bank in Kwor with a vault. KSF place 10 coins into circulation having 10000g in the valut. but if the coins are taken to a bank in another town that only has 5 coins in circulation and 5000g in the vault they can not be redeemd. so to be a guarantee each and every bank would have to have in its vault 1000g per coin thus making the coal need to be stored per coin more than the value of the coin. 5 banks and 1 coin would mean 5000g of coal needed. IN ORDER to be able to GUARANTEE the value of the coin upon request. NO one would want to try to redeem a coin and be told they will have to wait for someone to run off to KSF and get the coal for them or be told they have to go get it for themself. SO I agree that right now Cantr is not ready to have a currency system backed by a resource. HOWEVER a coin backed by labor can be done. you work 1 day you have a coin worth 1 days labor.. True the exact resource you wish to obtain my not be available but its still worth 1 day. It has been explained many times in KSF and will be explained many more times in town and across the island. An endeavor the town undertakes knowing the struggle before it. HOWEVER let me state again. As a player I can take all the economic classes I have taken. I can use my Buisness degree and my years of experience all I want to and have some fun debates on here about economics BUT

IF all this OOC discussion about WHY it CAN NOT or CAN work could be kept out of the IC thinking it will go quicker and simpler. ITS a simple concept IF its looked at IC. So my advice and input condenced down simplely
Stop thinkg OOC .. when your IC

[Mykey]

The matchless theme, is pleasant to me