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Comment by anonunivgrad | Hacker News Reader

You're being pedantic. You can melt down that coin and sell the silver or use it for a myriad of industrial purposes. The value of the coin is based on the market value for the silver contained inside of it. The metal in American coins, the fibers in American dollars, are worthless (relative to the face value). The value of the American dollar derives from the the US government's guarantees of payment on its debt, its status as legal tender within the US, and the requirement to pay US taxes with it.

The value of the dollar derives from the might of the American government and the productivity of its economy. A silver coin is worth its weight in silver even if the government and economy that issued it long stopped existing. The dollar is worthless without the American government and American economy backing it.

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> A silver coin is worth its weight in silver

Which may be essentially nothing.

Native Americans (e.g., the Aztecs) liked gold because it was pretty, but did not use it as any kind of medium of exchange. By all accounts they were quite puzzled by the obsession the Spaniards had for it.

Silver and gold are useful as money because they are scarce, durable, and recognizable.

I think you'd find that producing convincing imitation U.S. bank notes or even coins is considerably more difficult than you're imagining, especially in a global collapse scenario.

> I think you'd find that producing convincing imitation U.S. bank notes or even coins is considerably more difficult

No, actually. The dollar is really quite different than gold or silver.

This is because even after the "american empire" falls, there would still absolutely be people with the ability to replicate dollars very easily, and who would also be willing to do so.

That entity would be whoever owns those US dollar printing presses that are printing the dollars right now.

If the US is in a state of collapse, but people are apparently still accepting US dollars in payment, then there would be a strong incentive for who ever controls those already existing printing presses, to produce more green pieces of paper, and exchange them for goods and services.

The same is not true for good and silver.

> That entity would be whoever owns those US dollar printing presses that are printing the dollars right now.

Except that most "dollars", or any currency for that matter, are not physical but rather digital values in a computer some place.

The modern "printing press" is a computer located at the central bank of the currency in question (Fed, ECB, etc).

(Technically most money is actually created by private banks through loans and entries in banks' ledgers.)

> The modern "printing press" is a computer located at the central bank of the currency in question

Ok, that further supports my point then.

If the US is in "collapse" then the people who control that currency will still have a large incentive to digitally "print" more dollars.

Whereas they couldn't similarly print physical gold in the same way.

If we’re talking about dollars in a post-American-collapse world, only the little green pieces of paper and coins have any hope left. Your digital balance would be worthless.

There's a lot more involved with counterfeiting a modern U.S. Federal Reserve Note than just firing up a "printing press", dude.

Note that government-level entities which happen to be enemies of the United States already have a strong incentive to do this, and they've pretty much universally failed. The press is the easy part. The special watermarked paper, the color-shifting ink, the security threads... all of that requires a functioning industrial infrastructure, dispersed over a large geographic region. And that's exactly what would not be available.

If the U.S. goes down, the whole world goes down with it.

> The dollar is worthless without the American government and American economy backing it.

Now I'm not an economist, but wasn't the dollar originally Spanish? Perhaps the current US dollar would diminish to nill value, but there's no reason why any future evolution or alternative dollar wouldn't be able to survive without the government or bank that minted it.

The Spanish dollar is a silver coin that became the original basis for the US dollar. The US dollar is no longer based on any precious metal and has no connection to other currency (except insofar as other countries peg their currencies to the dollar).

> You're being pedantic. You can melt down that coin and sell the silver or use it for a myriad of industrial purposes.

Assuming the culture you are in has the means to reach those temperatures. A silver coin may be no more than a shiny trinket to those cultures that do not have that (level of) technology.

(I am reminded of the Coca-Cola bottle in the movie The Gods Must Be Crazy.)

> The dollar is worthless without the American government and American economy backing it.

Experience with past currencies suggests the use of coinage can outlive the original creator, and even for completely different purposes (in the case of physical objects):

* https://journals.openedition.org/histoiremesure/886

> Assuming the culture you are in has the means to reach those temperatures. A silver coin may be no more than a shiny trinket to those cultures that do not have that (level of) technology.

Silver has a slightly lower melting point than copper, so any culture that has reached a bronze age level of knowledge can handle it (or even just one with half decent pottery kilns).

Melting silver is one thing. Making good coins is quite another.

The first really good British coins, with totally uniform diameter, thickness, and design, milled edges, and so on, were made by (once again) Isaac Newton. There had been coins of a sort for well over a thousand years by then, but they basically sucked. They were essentially raw lumps of metal that had a design hand-hammered into them.

They looked more like a bad sealing wax impression than anything we'd recognize as a coin today. Identifying a good coin was difficult.

It's true that gold and silver have industrial uses, but you don't see people hoarding bars of chromium as a store if value. I doubt that gold's price is entirely due to industrial demand...

Gold's price is due to intrinsic demand. Whether that demand is for semiconductors or for somebody to buy it and bury it, that's intrinsic. If somebody handed me a bunch of blank pieces of paper from the same source that the US BEP uses to print money, I'd probably start a fire with it.

The year is 3000 AD. Civilization has collapsed, governments are non-existent, and the remaining human tribes need some sort of currency to facilitate trade. I need a goat for my farm, so I walk up to the goat breeder and hand him a pile of gold. Does he take that gold and smelt it into something? Probably not, he's a goat breeder. He might be able to take that gold and trade it to someone else for something he needs, but I'd imagine the person making gold jewelry or semiconductors will also sell goat food. So he'd have to give that gold to a hay farmer, who would trade that gold for a new plow and now the plow maker might be able to smelt that gold into something useful. But the gold has no use for the goat breeder or hay farmer.

Now I hand him a stack of papers with numbers printed on them. The goat breeder has no use for these papers, but he also had no use for the gold. He'd need to trade them for something. Let's run it all back up the same line and we see it doesn't end at "and now the smelter has something useful" because paper isn't useful to the smelter either... but running the paper through that chain of merchants has proven that there's value attached to the paper. The smelter then recognizes the value of the paper and trades the paper to the miners who supply the metal, because the traders who supply the metal want to buy some goat milk from me and they know I accept this weird paper in exchange for my goat's milk.

That's how currency has worked since the beginning of civilization. Ancient people weren't melting down coins to make something more valuable, they were trading the coins as-is without a worry about how useful the raw materials are. They just needed something anything that everyone agreed had a certain amount of value to it that's also difficult to fake. Gold has no intrinsic value for 90% of all humans on the planet, it's just a way to exchange goods and services based on an arbitrary-but-universally-recognized token.

Perhaps a dumb question, but how much does the ability to acquire new money factor into this?

I’d assume it’s more work to dig up and purify gold ore than make linen paper. Wouldn’t this mean some currencies are inherently more stable?

I imagine in this situation the tribes would eventually develop their own currency as they rebuilt and became more complex. The video game Fallout, for example, uses bottle caps as currency even though they aren't making new bottle caps anymore. But given enough time in the game's universe as more people come out of their shelters and return to the surface world, they'd realize that this increasingly rare currency isn't going to last forever. And then they'd start minting new coins or printing new papers.

Gold and silver works great for newer and less technologically advanced civilizations, because it's easier to smelt metal than print new US Dollars on speciality linen paper. It would be easier to lose the ability to smelt metal and then later regain that ability than it is to lose the ability to print USD and try to regain it. But once you reach a certain level of technological sophistication, minting fake gold coins becomes easier than printing new USD and people start to trust the currency less.

So I guess yes, precious metals would be easier to rebuild civilization with because it could be more easily reproduced as technology advances. But no matter what I think every civilization would abandon precious metals as they progressed, because counterfeiting becomes very easy very quickly.

Right. Semiconductor-grade silicon is way more valuable than silver, and some types of semiconductors are, I believe, even more expensive than gold.

But you have to buy them. You can't buy things with them.

You might be able to barter, if you can find someone who has what you want, and also happens to need some 6 9's pure gallium indium phosphide or whatever.

However, the guy at the corner liquor store is unlikely to give you a bottle of whiskey in exchange for it.

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