Viewpoint: Revalue Currency to Save the Dollar By Bruce R. Frohman, Numismatic News August 22, 2013 This article was originally printed in Numismatic News. For over 200 years, we have had the present decimal configuration of coins and currency. Looking at Krause’s world coins catalog, one may note that many countries have revalued their currency during the same period. In some countries, new money has been issued using different names for denominations, making old coins and currency obsolete. Rather than abolish the cent and nickel, the United States can do what other countries have done. For example, we can revalue $10 into a new super $1 in a 10 for 1 exchange. Old dollars would be exchanged for new dollars. The new cent would have the purchasing power of the present dime, while the new dollar would have the purchasing power of the present $10 bill. Every existing denomination of coin and currency would be revalued. We would then be able to maintain the current decimal system of money. If a candy bar presently sells for 50 cents, it would be sold for about a nickel under revaluation. A $3 loaf of bread would be sold for 30 cents. Existing coins and currency would become obsolete after a certain deadline to make an exchange. Wages would also be revalued. The minimum wage would drop to about 85 cents per hour from the present $8.50. Many rents would drop to $100 per month or less. Gold would cost only about $120 per ounce and silver would be about $2 with the same purchasing power for goods and services! The Mint could sell commemorative 90 percent silver dollars for $5.50 instead of $55. If we don’t create a super dollar, then over time, we will need larger amounts of dollars to buy things. The mathematics of purchases will become more difficult to figure. If we don’t revalue the dollar, inflation will make the dimes, quarters and halves obsolete like the cent. Another advantage of revaluation is the elimination of counterfeit currency from the money supply. All money turned in will be replaced with new bills that are much more difficult to fake. Drug dealers and terrorists will find themselves with obsolete currency. Offshore money would become worthless if not exchanged for new dollars. The cost to revalue the dollar would be considerable. The U.S. dollar could lose its status as the world’s currency. The savings in long term printing and minting costs via the use of more valuable currency would partially offset the cost of the revaluation. For example, the new pennies and new nickels will once again cost much less to mint than they will be worth. Collectors and the general public will be less inclined to hoard new coins because of the greater purchasing value. The Mint will need to make fewer coins for circulation and the dollar bill can continue in its present form. Regardless of whether one agrees that this proposal should be implemented, the way our government is printing and spending money, revaluation of the dollar into a super dollar appears inevitable. The main question is whether to do it sooner or later. At the point in time that the penny and nickel are to be eliminated, is that the time to revalue the dollar?
Posted on: Sat, 28 Sep 2013 00:33:14 +0000
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