The Value of Money

[joshua geller]

> The idea is to create a unit of currency whose value is convenient for 
> typical transactions.  Some amount that is easily grasped by the average 
> person.  Originally the US dollar was 1/20th of an ounce of gold.  That 
> amount of gold, today, has the buying power of US$18, or so.  A bag of 
> groceries more or less.  The amount of gold determines the total value of 
> the money supply, but the number of people and transactions in which it 
> must take part determines the number and denomination of bills and coins 
> to be printed and minted.

in 1875 you could get a colt .45 for a $20 gold piece. you still can.

I am sort of confused by all these folks talking about precious metals
as if they still have something directly to do with currency. I thought
they hadn't for some decades.

josh