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Silver as Money
by Alasdair Macleod
Gold Money
Gold is money, admittedly not often circulating as such today. Fiat currencies issued by governments have driven gold out of circulation. But where does this leave silver?
Money-substitutes, bank notes and bank deposits, were originally backed by physical silver, and were switched in favour of gold-backed money-substitutes over the last two centuries. It was a process that happened first in England, starting with Isaac Newton’s declaration in 1717 that silver would be exchanged at the Royal Mint in the ratio of fifteen and a half ounces to one of gold. While Newton was a towering genius in physical science, he didn’t understand markets, and that an inflexible bimetallic standard not adjusting for the subjectivity of prices would be problematic.
Market preferences in subsequent years deemed gold preferable to silver at Newton’s exchange ratio, because British merchants tended to pay for imports from the Continent with silver while hoarding gold.
Continue Reading at GoldMoney.com…
Source: http://financialsurvivalnetwork.com/2015/10/silver-as-money/?utm_source=rss&utm_medium=rss&utm_campaign=silver-as-money
