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To: Elroy Jetson who wrote (28623)	3/24/2005 2:50:57 AM
From: gpowell	Respond to of 306849

The litany of money counterfeiting which Adam Smith lists, illustrates the clarity provided by money which has its own intrinsic value, when compared to monetarist or fiat money…..Over time a Ducat is a Ducat. The price of most things, when priced in Ducats, declines as society becomes more efficient / more wealthy. Ducats had a fairly reliable gold content for centuries. Let’s assume that as a full-bodied gold coin its purchasing power was dependent upon the purchasing power of its gold content. If true, then as the purchasing power of gold drops, such as might happen with an influx of gold treasure from the new world, the value of the ducat would fall, as well. Thus, assuming it was valued for its gold content alone, your assertion that the ducat always rose in value relative to other goods is false. But let’s assume you are correct - the ducat's value always rose relative to other goods. Then as the new world treasure lowered the purchasing power of gold, some portion of the purchasing power of the ducat became, defacto, fiat. And thus, Elroy you treat us with yet another irony, your standard of monetary excellence must be… is, in fact, partially a fiat currency.

To: Elroy Jetson who wrote (28623)	3/24/2005 1:24:20 PM
From: GraceZ	Respond to of 306849

the clarity provided by money which has its own intrinsic value Gold doesn't have an intrinsic value. It only has a value people are willing to put on it, same as fiat money. Someone who calls a half-ounce a full-ounce is quickly exposed as a fraud. The inflations that Adam Smith detailed in his book happened over long periods of time with little awareness on the part of the people. Apparently even today people who claim to know a great deal about the history of money are largely unaware of the extent of inflationary policies in the past. Monetarists can increase the supply of money in a dark corner with none being the wiser, at least for a while. You mean they had better communication about these things back in the Dark Ages than we have now with every third Internet chattie railing about the Federal Reserve, with their every action posted in near real time on their website? People had more accurate scales back in the time you had to bite your coins to tell if they were genuine? Ha! I can picture you dressed in sack cloth back in the 1300's standing on a stump in the public square warning about the loss of gold in the coins, people pitching the occasional rotten tomato at you to get you to shut up. A simple householder knows when there is inflation just by going to the store and paying the bills, inflation cannot be hidden. You know when your money isn't buying what it used to buy.