How long will coins and paper money continue to be used?
This has been an ongoing topic of reader input in Numismatic News this year.
We all know how to make payments in ways that do not involve cash.
Can these forms of transactions be substituted at all times and in all places for coins and paper money?
That’s where it gets dicey.
It is easy to imagine a world without cash when you live in a place with reliable electric power, modern banks and merchants and access to the Internet via computer or cellphone – and as important, a world with no hacking.
Take any of these elements away and you can begin to argue that physical forms of cash will stick around for a while.
Another element that argues that coins at least will remain is from another area that interests collectors: Bullion coins.
Many collectors think fiat money poses a threat to their financial well being. They buy bullion coins.
If inflation does get out of hand and the national unit of account of whatever country entirely loses its value, those advocating gold and silver coins as investments/hedges/emergency cash are also making a case that physical forms of cash cannot be eliminated entirely.
The essence of specie is its physical form.
Nations that have experienced high inflation often see its citizens adopt paper money of other countries to make their payments and to value their property.
The U.S. dollar has been used this way for many years.
But let’s say for the sake of argument that the U.S. federal government loses control over the U.S. dollar and it is indeed inflated to nothingness.
What then? In addition to gold and silver coins, would paper money of other nations be used?
Will we be using European euros or Chinese yuan as yardsticks of value for our property and our transactions?
Importing enough euro and yuan notes would probably prove so daunting as to prevent the use of these in any widespread way.
So we are back to gold and silver coins.
Those who believe they need these precious metal coins are also making a case that as long as the U.S. dollar is not backed by gold there will always be a need for them, which means a 100 percent cashless society cannot be achieved.
Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."
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