U.S. coins as currency

[paultakeda]

To explain the difference between the value of food and the value of precious metal:

Right after the nuclear attack, gold is worthless. During nuclear winter and the lean years where starvation is rampant, gold is worthless. 75 years later, with stable societies with power centers that are expanding their control, when the population has reach an equilibrium with what can be produced in the region and a trade economy exists... yeah, gold is valuable.

[Nephilim]

No, the materials are not transported at all

I rest my case.

I guess cash is useless too, because you can use eftpos where the money isn't transported physically either. Just like every electronic transaction where physical payment isn't made, which is like oh, 99.9999999% of all transactions in the world, without exaggeration.

I rest my case.

[b0rsuk]

This idea doesn't make sense, because US coins are not made of valuable metals. You have Richard Nixon to thank for that, who, in 1973, removed the relation between gold and dollar.

[Nephilim]

This idea doesn't make sense, because US coins are not made of valuable metals. You have Richard Nixon to thank for that, who, in 1973, removed the relation between gold and dollar.

It makes perfect sense so long as people have faith in it working.


.... if that doesn't work then you're stuffed.

[Drool]

Um... we went off the gold standard in 1933.

[Nephilim]

Um... we went off the gold standard in 1933.

No, 1944-1973 was the Bretton-Woods system where the US dollar was pegged at $35/oz of gold. Other countries fixed their currency relative to the USD by +/- 1%.

Lack of confidence forced Nixon to suspend official purchases of sales of gold by the US Treasury on August 15, 1971, and most currencies were allowed to be floated to levels determined by market forces as of March, 1973.

We are now officially rather off topic.

[Woolfe]

You crazy Americaners with your crazy paper money.

You should get with the times... Polymer all the way baby!

Aussie money will last the apocalypse... And our coins also still have real metal in them. I am pretty certain our 5 cent piece was worth more than 5 cents at one point....

But I agree with Paul, we appear to have several currency type threads running in different locations of these forums.

I think there should be a mix of some towns large enough to have some agreed upon system of currency, some towns that are barter only, some towns that will trade for ammo, some that even use bottlecaps.

Thats just my 2 cents anyway

See what I did there... 2 cents, in a currency thread... hah.... Man I need to go to bed

[CyberCrist]

Leaves.

[cah]

I guess cash is useless too

Duh!

[Nemo]

This idea doesn't make sense, because US coins are not made of valuable metals. You have Richard Nixon to thank for that, who, in 1973, removed the relation between gold and dollar.

You might try reading the whole thread before responding...

Currency does not need to be made of precious metal. It does not need to be made of metal at all. History backs me up on this.

All that is required is that it be durable, portable, easy to recognize, difficult to forge, and common (but not too common).

Incidentally, money usually does NOT have other practical uses. So arguing for bullets (for example) on those grounds is just nonsense. Bottle caps are absurd, but not nearly so absurd as most people seem to think, by the way. (They are certainly more plausible than ammunition, for instance.)

U.S. coins post-apocalypse would have every property money has had throughout history. Their value might have little relationship to their face value, was my point. And there are not all that many out there, in the big picture... The vast majority of money today is in electronic form. Wipe that out, and the value of the tiny fraction in physical form might well rise significantly.

Gold would work too, of course, as it always has... But how boring is that?

[CaptainPatch]

All that is required is that it be durable, portable, easy to recognize, difficult to forge, and common (but not too common).

Right on target.

What Nixon did was acknowledge the fact that backed currency was no longer being exchanged for the backing valuata, EXCEPT in one very annoying situation: Foreign nations that had accumulated large amounts of backed currency could/would/did on occasion "dump" the accumulated currency back onto the issuer demanding that it be exchanged for the backing material, e.g. swapping paper money for gold reserves. Sending the backing material out of the country did nothing beneficial for the country of origin.

By recognizing that >99% of transactions never involved using the actual backing material made it easier to see that what the currency is doing is acting as a "yardstick" for all transactions. For example;
If Item A is = to 100 rupees, lira, pesos, dollars, rubles, marks, guilders or whatever the home currency is, then you can calculate how much Item B is worth in the same currency. And then one after another, you can peg the relative worth of EVERY other commodity or service against the value of Item A. Furthermore, the system is flexible enough to adjust for the variances in Supply & Demand. All that is required to make the system work is to have the willing cooperation of everyone engaging in Commerce in _that_ Economy. This is termed as "consumer confidence". Lack of confidence leads to wheelbarrows of paper money to do the grocery shopping. Adequate confidence leads to that currency becoming the "yardstick" for most other nations as well. This is the case of the US dollar (USD) while it was being used as the price measure for petroleum sales in OPEC. However, with the economic meltdown of 2007, most of the USD in circulation became worthless when the housing industry caved in on itself. Most USD was predicated on the debt incurred by home buyers mortgaging their homes. When an unprecedented number of home owners started to default on those loans, suddenly trillions of dollars of USD in circulation lost their value. The effect was the same as the inflation that occurs when the currency supply is expanded with nothing of value to back it. The ONLY thing that kept inflation from causing another post-WW1 Germany situation was the general consumer confidence that "things will work themselves out, eventually." [Most of that confidence stems from the fact that Finance is just too confusing for John Q. Public to figure out. If the majority DID understand "Voodoo Economics", we would be experiencing 1929-1930 all over again. Sometimes, ignorance IS bliss.]

[Gizmo]

Bottle caps are absurd, but not nearly so absurd as most people seem to think, by the way. (They are certainly more plausible than ammunition, for instance.)

Not so. The dominant power in the region (of desert) was the water merchants; they backed the bottlecap because out there it was durable, portable, easy to recognize, difficult to forge, and common (but not too common); and they backed it with potable water.

[Mandemon]

Yes, bottle caps were not a random choice. Bottle caps were chosen because their qualities. I remember you can even question how using bottle caps makes little sense and they explain it in the game.

[b0rsuk]

US money without a functioning government would only have sentimental value. How many sentiments is power armor worth ? Bottle caps are just as sentimental.

[Zeful]

US money without a functioning government would only have sentimental value. How many sentiments is power armor worth ? Bottle caps are just as sentimental.

That's not how currency works. Or sentimental for that matter.

[Nemo]

Not so. The dominant power in the region (of desert) was the water merchants; they backed the bottlecap because out there it was durable, portable, easy to recognize, difficult to forge, and common (but not too common); and they backed it with potable water.

Do you have a reference for this, preferably from within the original Fallout? What I remember was that bottle caps were "backed by the merchants of the Hub, so you can trade them anywhere." Nothing about water merchants or water in particular.

Mediums of exchange need not be "backed" by anything useful, and indeed they usually are not. (Gold, for example, is backed by nothing, but it has functioned quite well as currency in many societies throughout history.) Mediums of exchange do not require any government behind them, either.

The authors of the original Fallout seem to have known a lot more about money and history than most of the people on this thread.

[Mordul]

Nemo I'll start looking through NMA for an actual quote, but you do remember that the merchants of the Hub rose to affluence through their control of water correct? Therefore you might call the water merchants?

Edit: This provides some background on bottlecaps. While this comments on the Hub and its faction of Water Merchants.

No where does it specify that the bottlecaps were ever physically used as bottlecaps again, but it does show how to "create" a currency.

[cah]

What I remember was that bottle caps were "backed by the merchants of the Hub, so you can trade them anywhere." Nothing about water merchants or water in particular.

Water merchants are by far the most influential merchant house in the Hub, so that would mean that they also backed the bottle caps. Since the water merchants supplied water to pretty much the whole area, what is there to suggest that they didn't back the bottle caps with water?

Mediums of exchange need not be "backed" by anything useful

They need to be accepted by the people who have something useful to trade.

Mediums of exchange do not require any government behind them, either.

They require a form of authority, which is generally the exact same people who have something useful to trade.

[CaptainPatch]

Water merchants are by far the most influential merchant house in the Hub, so that would mean that they also backed the bottle caps.

[chuckle] Can you just imagine that once Life has normalized and old tech is reclaimed and operational, no one would be allowed to bottle anything because putting a cap on the bottle would be tantamount to counterfeiting!

[cah]

[chuckle] Can you just imagine that once Life has normalized and old tech is reclaimed and operational, no one would be allowed to bottle anything because putting a cap on the bottle would be tantamount to counterfeiting!

If you want to find out what happens when life normalizes then play some FO2 or FO:T.