Money: It Ain’t Worth What It Usedta Be

Of late, I’ve been rereading the Neal Stephenson classic The System of the World, which is part of The Baroque Cycle trilogy (or octalogy, depending on how you count them).  This book of the series focuses a great deal on Isaac Newton’s attempts to refine and regulate the coinage of Britain: to make sure that each coin minted has the correct amount of metal in it and only that much, since that’s what coins used to be.  A “dollar” or a “pound” was a specific amount of gold or silver that was fixed by law.

These days, that’s no longer the case.  Our money is based on a fiat system and the least expensive possible metals are used to create our coins, which essentially means the government is creating value where there was none before, just by shaping that metal into certain shapes.

I had a grand plan to figure out what the various metals are that make up each kind of coin and then try to figure out what they’re worth in reality, but someone else on the internet already did it! has the “current melt value” of most U.S. coins.  This is a good thing because I can avoid work and my numbers would have been fixed (the site in question uses current prices for each kind of metal.)  I find all this very interesting: Pennies minted before 1982 are worth more than their face value and Nickels are holding their value rather well, but almost all other coins are worth a pittance compared to their face value.

I started thinking about this after obtaining some $1 coins out of the New York City subway system card vending machines.  These coins are cute and I am going to start asking after them at the bank like I do for $2 bills as well.  They look golden, but actually they’re made of mostly copper, with some manganese, zinc, and nickel.  They have some cool printing along the sides as well, instead of the normal grooved edges.  I hope to circulate as many as I possibly can, but that might involve buying some kind of coin purse.

Reading up on these coins on Wikipedia, I discovered that the mint is also offering some pure gold coins as companions to these coins: The First Spouse Program.  First ladies throughout history are being featured on these gold coins, which contain .5oz of gold.  While these coins are worth about $430 in fiat dollars, they are marked $10 on their face.  That’s because, when dollars were fixed to gold, one dollar was defined to be 1/20th of an ounce of gold.  Someone, somewhere at the mint must be nostalgic for those days, to be stamping these coins with that $10 number.


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