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Currencies fail, gold doesn’t

The track record of unbacked paper currencies is that they all eventually fail. Since 1975, paper currencies issued by the following countries (and there may be more) have become worthless and were replaced by something else:


Angola, Argentina, Bolivia, Bosnia, Brazil, Chile, Ecuador, Georgia, Israel, Nicaragua, Peru, Romania, Russia, Sudan, Turkey, Ukraine, Venezuela, Yugoslavia, Zaire, Zimbabwe

This list does not include nations that left prior currencies still tradeable but lopped some zeroes off their values. For example, Mexico dropped three zeroes off its circulating coins and currency as of the beginning of 1993, so that the pre-1993 5,000-peso notes are worth just five pesos today.

The list also does not include countries that continue to circulate the same currencies even though today they are worth a fraction of what they used to be. An excellent example is the Indonesia rupiah.

Perhaps what would be even scarier is that the U.S. dollar would belong on this latter list. According to the U.S. Bureau of Labor Statistics Consumer Price Index (which I contend understates the decline), the U.S. dollar in August would take $246.52 to purchase what would have cost only $53.80 as of the end of 1975. That’s right, the U.S. dollar has less than 22 percent of the purchasing power it had at the end of 1975.

To put that loss of value of the U.S. dollar into an everyday context, consider that four U.S. 90 percent silver quarters could have purchased four gallons of gasoline 50 years ago. Today, those four silver quarters could still purchase four gallons of gas. Fifty years ago, a $1 Federal Reserve Note would have purchased four gallons of gasoline, but today you would need about $10 in Federal Reserve Notes.

While the U.S. government tries to foster the image that the U.S. dollar has stable value, it does not. Instead, it is gold and silver that have held their purchasing power over time.

Patrick A. Heller was the American Numismatic Association 2017 Exemplary Service and 2012 Harry Forman Numismatic Dealer of the Year Award winner. He was also honored by the Numismatic Literary Guild in 2017 and 2016 for the Best Dealer-Published Magazine/Newspaper and for Best Radio Report. He is the communications officer of Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at Some of his radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at

This article was originally printed in Numismatic News Express. >> Subscribe today

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