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Sparkelyrainbowgirl

If a quarter only costs the US Mint five cents to make, shouldn't the quarter be worth five cents?

Albert Page:

You know....the only true currency really is Gold, Silver, Platinum, etc. Precious metals are controlled 100% by supply and demand. It is this very factor that has made our government NOT use these metals anymore as a pure form of currency. Because they cannot control the price of money.
So they made paper bills, and cheap coins for us to use. Now they can say "this here quarter is worth twenty-five cents". And it is...

Porkenstein AKA Pork, Porky, Porkens:

That is not true at all. The only TRUE currency in the sense you mean is something that has utility to the owner such as food, shelter, energy, etc.

Albert Page:

What I mean is it is controlled entirely by supply and demand (metals). Or that a government cannot control the price of Gold anymore than it can the price of Microsoft's Stock.
According to Jamie Ellis of Whiskey and Gunpowder: in an article entitled "Investing in Gold: A Defensive Asset" which appeared in Northwest Territorial Mint's Newsletter #29

"Gold is the only real money, and its value cannot be changed or controlled by government fiat — the underlying reason for governments to go off the gold standard, unfortunately."
And - "Thirty-seven years ago, the U.S. decided to drop its gold standard and revert to a purely fiat currency system. Now that our currency is no longer tied to anything with tangible worth, the supply of money is sure to increase and the value of those dollars will fall. The damage to the dollar’s worth will raise the value of Gold."
No room for the entire article. I recommend everyone go to http://nwtmint.com and subscribe to their newsletter.

.......:

And how much does it cost to make a $1000 dollar bill? It took time for paper money to catch on as people liked to know that their money was worth its weight.

Nat*lee 24/7:

What do you mean, should be?

A quarter is worth only 5 cents! Haven't you heard about inflation this year?

But going by your logic, I would demand getting paid in pennies. It costs about 1.3 cents to make a 1 cent coin. If I was paid $100 in pennies, I should be able to go to the mint and demand $130 and get them to stop making new pennies instead!

More seriously, a "dollar" is only a unit of exchange. In itself, money is worthless! IF AIG had not been rescued by the US Government a couple of days ago then the dollar would have collapsed and maybe dropped to 10 cents! that's 1000% inflation! AS miserable as Americans are now, you would have been worse off if nothing had been done!

So when you say a quarter is worth only 5 cents, ha. Its like having a car. The car aint worth nothing until someone agrees to put money into your hand which you can exchange for food! Then the car is worth something and the food is worth something but the medium of exchange, the dollars, they weren't worth diddly!

FitInRight:

It is worth five cents...they just sell it for twenty five. ;)

Sparkelyrainbowgirl:

That is what the tour guide said at the Denver Mint, so you get my vote.

NetRocks!:

That makes 25 "wheat pennies" worth more than a quarter! Changes in coins have, over the years been announced and understandable. Currency changes less so. The detail known as the "obligation statement" has changed many times over the years. I don't understand the recent change on the "offset " federal reserve notes. FRNs always identified the issuing bank: the "new seal" only identifies something called the federal reserve system. The truth is, what we call money is only an idea. When enough people decide it has little value that will become truth. Tricky Dick has the last laugh after all!

Porkenstein AKA Pork, Porky, Porkens:

It doesn't work that way. This country has a type of currency called "fiat money", which means it has a certain value because the Government says so, not because of an underlying value of the physical coinage. If it were 1 for 1, it would be a wash to create it and not be worth the efffort.

NetRocks!:

Hello JohnFx - Nice to meet you. The Obligation Statement that once appeared on Federal Reserve Notes identifying the note as "redeemable for lawful money at the United States Treasury, or at any Federal Reserve Bank." has been gone for many years. The redemption in specie of paper money authorized by the Act of Congress of 02/25/1862 as revised down to 03/03/1863 faded into history following the order by Kennedy to release United States Notes to circulation. The absence of the "redemption" obligation statement and the ongoing issue of currency did create true "fiat money" issued by debt creation and backed by the national government's ability to pass regulations and enforce the payment of taxes.

LusnIca:

If it costs as much to print a $1 bill, as it does to print a $100 bill, shouldn't they be worth the same? Why do people accept the idea that one is worth more than the other?

There was an excellent series, "The Day the World Changed", by James Burke, that examined the emergence of currency, one of mankind's great inventions. There is a companion book that went along with the series, that I highly recommend.

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