Coin Futuristics

[Sparky]

So, just trying to think outside the box. In the next year or so, coin composition is going to change, most likely to some steel composition. I'll call these "Ferro" coins, since steel is mostly ferrous, or iron.

So we'll end up with a coin system with a complete hybrid of compositions. If, at some point, the face values become irrelevant compared to coin content (as they currently are with pre-1965 silver coins), there will need to be a conversion rate that disregards face value. The lowest-valued coined would be the "FerroDime", because it would be the smallest in size and cheapest in composition. The value of all other coins would then need to be determined in terms of FerroDimes, so that the proper conversions could be made. So our futuristic coin monetary exchange would look something like this:

1 FerroPenny (post-2012) = 1.5 FerroDimes, or FD
1 ZincoPenny (1982-2012) = 4 FD
1 CuproPenny (pre-1982) = 20 FD

1 FerroNickel (post-2012) = 2.5 FD
1 CuproNickel (pre-2013) = 50 FD

1 FerroDime (post-2012) = 1 FD
1 CuproDime (1965-2012) = 20 FD
1 ArgoDime (pre-1965) = 4,000 FD

1 FerroQuarter (post-2012) = 2.5 FD
1 CuproQuarter (1965-2012) = 50 FD
1 ArgoQuarter (pre-1965) = 10,000 FD

Taking this one step further, the government will insist on using the FRN as the standard, with 1 FRN equivalent to 10 FerroDimes. So if paper money does ultimately become "sort of worthless", this would mean that a mercury dime (i.e. an "ArgoDime"), which would be the equivalent of 4,000 FD, would become equivalent to 400 FRNs, or $400 USD. The current CuproNickel would be worth $5 USD. Wild, huh?

Just a thought. Regardless, I like the idea of referring to coins in terms of metal and size designation, so that we can easily refer to them, such as FerroPenny, ZincoPenny, and CuproPenny. This will be easier than saying "Pennies minted between the years 1982 and 2012", or "Nickels minted after 2012", etc.

[madfranks]

Very interesting analysis, but I wonder, how did you get the ratio of 4000:1 for the silver dime vs. the steel dime? Is that an accurate ratio of the price of equal weights of silver to steel?

Also, I think your conclusion about the AgroDime being worth $400 USD is faulty because the "fiat" value of the FerroDime is much higher than its intrinsic metal value, much like how right now the fiat value of the CuproDime is worth much more than it's intrinsic value (approx 2.2 cents).

[Sparky]

Very interesting analysis, but I wonder, how did you get the ratio of 4000:1 for the silver dime vs. the steel dime? Is that an accurate ratio of the price of equal weights of silver to steel?

Yes, roughly, plus also assuming some increase in silver relative to steel sufficient to get it to a round number. I think the current ratio is something like 117:1, and I bumped it up to 200:1, thinking both would increase in value with silver increasing faster.


Also, I think your conclusion about the AgroDime being worth $400 USD is faulty because the "fiat" value of the FerroDime is much higher than its intrinsic metal value, much like how right now the fiat value of the CuproDime is worth much more than it's intrinsic value (approx 2.2 cents).

Two step process:
1) A FerroDime gets anchored at 1/10 of a FRN.
2) All other coinage gets converted to FerroDimes based on real value.

It works; trust me. ;)

Actually, madfranks, I'm just appreciative that you can make it all the way through my techno-nerd posts! :)

[madfranks]

Thanks Sparky, I certainly enjoy reading your posts. But I still don't understand how this works:



Two step process:
1) A FerroDime gets anchored at 1/10 of a FRN.

This is in the realm of "fiat", meaning the steel token is designated to be worth 1/10 the designated worth of the fiat FRN.


2) All other coinage gets converted to FerroDimes based on real value.

Now you've jumped to intrinsic value to intrinsic value. Your 4000:1 ratio for silver dime to steel dime value is based on metal value, so you can't use the fiat value of the dime as a basis for the 4000x increase in the value of the silver dime. I don't know what a dime sized piece of steel is worth, but assuming it's 1/10 of one cent, you can't claim 10 cents of value for each portion of the silver dime which equals the 1/10 cent metal value of the dime.

[Sparky]

...
Now you've jumped to intrinsic value to intrinsic value. Your 4000:1 ratio for silver dime to steel dime value is based on metal value, so you can't use the fiat value of the dime as a basis for the 4000x increase in the value of the silver dime. I don't know what a dime sized piece of steel is worth, but assuming it's 1/10 of one cent, you can't claim 10 cents of value for each portion of the silver dime which equals the 1/10 cent metal value of the dime.

Madfranks, you're stuck in FRN-think. In my futuristic scenario, the FRN is exposed for its true value when converted to metal. You see, right now PMs are "increasing in value" because the intrinsic value is catching up with the FRN value. Five years ago, a "dime" had a spendable value 0.1 FRN, but it's metal content was worth less than 0.005 FRN. Now it's metal content is worth 0.02 FRN. This relative value continues to increase until my futuristic scenario, in which the metal content of a "dime", which by then will be a FerroDime, will be worth 0.1 FRN, and then the FRN value of all other coins will be repriced accordingly.

Didn't you read the part where I said "trust me"? ;)

[TomD]

the FRN is exposed for its true value when converted to metal.

You can see that playing itself out now. A lot of people think the value of PM's are going up when, in reality, the value of fiat is going down.

Anyone remember Firesign Theater?:

-The sun is going down.

-Oh, no, no! You are confused! The horizon is moving up!