Remember those sayings? Ever try taking a Confederate $20 bill to a store and buying something? I bought some Confederate money when I was a kid because it was cool looking. Cool looking, but almost worthless. 50 cents I paid for each $20 bill, I think. My Dad said I was foolish to waste my money on it. Guess what, folks? A Confederate $20 bill is now worth a lot more than $20. Go figure. Maybe its just because they aren't printing more of them every day. And remember the story of George Washington and the Continental dollars? It took a wagon load of continentals to buy a wagon load of supplies. "Not worth a Continental" was the saying, and the result was that in the Constitution, nothing but gold or silver was permitted to be used for payment in order to prevent that disaster from ever occuring again. The Germans still cling to their gold. Maybe it was 1921 to 1923 or maybe it was 1946 to 1948 they remember. BTW, a Continental is now worth a lot. Go price one out on ebay. Even the REPLICA's cost more than a dollar each.
So were any of their military winning the war when their fiat currency was worthless? Did they have the biggest economy in the world? Did they have the most powerful military and nuclear weapons that can destroy the whole world 10x over? There is also a failure to understand the US Constitution by gold bugs. Article 10 section 2 of the Constitution limits the rights of States to mint coins to that of gold and silver; it does not limit the federal United States from making bank paper a legal tender. The Constitution of the United States : defined and carefully annotated / by George W. Paschal, 1868 http://books.google.com/books?id=S9...&hl=en&sa=X&oi=book_result&resnum=2&ct=result P.S. This is also the same article that makes the 'confederation of states' or Confederates, unconstitutional.
I guess Madison and Jefferson's fears have been realized, but that wasn't really my point. My point was that for a hundred years people have made fun of the Continental dollars and Confederate dollars being so worthless, and now we find that our "real" money is not even worth half as much as either of them.
A bit off topic here, but if a business barters a good for a service, etc, is there any sort of taxation or reporting required? There's a point when the inefficiency of bartering (tax savings, liquidity) is less than the price of uncertainty in a currency's value or carrying that currency.... Bottom line is you're free to pay for goods and services whichever way you want, racoon pelts, gold coins, seashells, etc. Isn't the world literally "voting with its wallet" when it comes to the USD fiat currency?
There was recently a case where an employer paid his employees in US silver and gold coin at face value and the IRS tried to nail them for it, but from what I read the IRS lost the case. Bartered goods are taxed at their value. I don't think its so bad that dollars won't be accepted by foreigners, yet, but I think the added debt from the bailouts and stimulus, on top of what we already owe, and adding the structural trade deficit, will put us there in the next year. My guess is it all blows sky high when the stimulus has failed and they try to borrow for another round. I think the recession or depression lasts at least till the trade deficit ends.
When I was in the second grade, I traded my pocket knife for some stone arrow heads, a stone pipe and a roll of confederate bills. They must have been worth something because eventually they were all stolen from me. My friend told me that his father had a trunk full of this stuff. Merry Christmas all.
Interesting on the case of paying employees in US gold/silver coinage at face value. Guessing the litigation was costly. I'd gladly take 20$/hr paid in US double eagles...
Or in Morgan dollars, or old dimes, even I've never met anyone daring enough to try such a thing. Better to not do business than risk a jail term over it, IMO.