Dust flux, Vostok ice core

Dust flux, Vostok ice core
Two dimensional phase space reconstruction of dust flux from the Vostok core over the period 186-4 ka using the time derivative method. Dust flux on the x-axis, rate of change is on the y-axis. From Gipp (2001).

Tuesday, October 12, 2010

Monetary debasement and Canadian coins

As the value of money has declined over the past several years due to government mismanagement of the economy, the price of commodities has similarly risen. As a result, the metal content of numerous coins in the late 1990's greatly exceeded the face value of the coins.
In particular, Canadian nickels (pre-1982), each contain 1/100 of a pound of nickel and are worth about 10 cents each (metal content), but were as high as 27 cents a couple of years ago.

Canadian pennies were made out of copper until 1996, and are worth more than face value.

In 2007, the Canadian Mint began its Alloy Recovery Program, by which it removed old circulating coins and melted them down for the metal content, replacing them by clad steel coins, which are nearly worthless.

The problem I have with this is that coins are traditionally the only way the general populace has to protect itself against financial mismanagement by government. As coins were gradually debased, far-seeing individuals would hoard valuable coins (normally gold or silver) and only spend the debased coins.

But the Canadian government has jumped the gun, and is pre-empting the Canadian citizen. Poor Canadians no longer have any reasonable way to protect themselves from inflation, except by waking up and buying gold or silver. Luckily for the Canadian government, most Canadians are asleep at the switch. If they were to wake up in large numbers and start hoarding copper and nickel coins (still lots of pennies and nickels, though the dimes and quarters are effectively gone), the government's plan would fail.

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