Viewpoint: Revaluing Currency Deserves Thought|
September 26, 2013
I read with interest the Sept. 10 “Viewpoint” article written by Bruce Frohman about the United States revaluing its currency. For years I have had similar thoughts to Frohman’s idea of dropping one decimal place in our currency so that the number of dollars required to make a transaction will be reduced, making the math easier for everyone.
Additionally, all denominations including the cent and nickel would actually have some purchasing power and be used again, as they did many years ago. So far, this sounds like a good idea.
One word Frohman used that needs to be better defined is obsolete. Although the dictionary defines obsolete as “no longer in use,” obsolete does not mean something is no longer any good. A very old car that runs, old electronic equipment, etc., may be obsolete but if it works it’s still usable even if some people would call those old items junk.
If (when) the United States decides to revalue its currency and require everyone to turn in their old currency or face the fact that their old money will be demonetized, I believe that will be the time the U.S. dollar will lose its status as the world’s reserve currency. To the best of my knowledge, the United States is the only country in the world in which any currency it produced since its inception (except the Trade dollar) would be honored as legal tender.
The Coinage Act of 1965 assured all coins produced by the U.S. are legal tender, thereby making the Trade dollar legal tender again. Anyone can take any coin or note ever produced by the U.S. mints or Bureau of Engraving and Printing facilities and receive “lawful money” in exchange, if they so desire. Perhaps this is one of the biggest reasons why people all over the world have some faith and trust in the U.S. dollar, even when the dollar has its problems. No other country can boast that their currency is that dependable.
If all the old currency lost its legal tender status, collectors (especially of paper money) would have to make tough decisions on what to hold onto and what to discard. For coins of precious metal it would hardly matter as just about no one has used them for face value since the late 1960s and the face value stamped on them is almost meaningless now.
But what about the collector who may have nice BU rolls of early clad coinage, the collector who has series 1934 Federal Reserve Notes in AU-Unc. condition, and the list goes on. Do they hang onto them or turn them in? Just in face value, there must be at least billions of dollars of pre- 1996 paper money and billions more in coins tucked away in collections alone. The government would only be too happy to “flush out” a lot of the old money and attempt to find out who has what.
At the same time, hanging onto too many common items in hopes of future appreciation might be fruitless. As an example, circulated Ike dollars, circulated Silver Certificates and U.S. notes (later series) have proved to be losers for people who have hung onto them for many years. Although I don’t see revaluation happening anytime soon, it’s something to think about that would affect people all over the world.
This “Viewpoint” was written by Stan Kijek, a collector from Aurora, Ill. To have your opinion considered for Viewpoint, write to David C. Harper, Editor, Numismatic News, 700 E. State St., Iola, WI 54990. Send email to firstname.lastname@example.org.
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