Wikipedia:Reference desk/Archives/Humanities/2016 November 26

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November 26

Metal of a coin more valuable than the monetary value

Can the metal of a coin be more valuable than the monetary value printed on it? In countries like Zimbabwe, for example, due to hyperinflation, the monetary value of their cash might well end up not being much above 0. Or, if the metal prices skyrocket, would the smallest coin of a Western country fall into this category?--Llaanngg (talk) 01:35, 26 November 2016 (UTC)

See Coin#Currency, paragraph 2. Loraof (talk) 01:46, 26 November 2016 (UTC)

Yes. The silver in Canadian quarters was worth more than face value back in the '70s, so people got their mitts on as many as they could and made tidy profits. Clarityfiend (talk) 05:46, 26 November 2016 (UTC)

The production of a Swiss 5-Rappen coin costs about 6 Rappen which led Swissmint to recommend abolishing it a few years ago, but the Federal Council decided on keeping it because of the people's cultural attachment, see also this NZZ article and de:Fünfrappenstück which even gives the Swiss phrase "Chasch nöd s Föifi und s Weggli ha" as an example of the coin's 'cultural significance' (literally "you can't have your 5-Rappen piece and your bread roll", meaning "You can't have your cake and eat it"). ---Sluzzelin talk 06:44, 26 November 2016 (UTC)

Bullion coins have a face value far below their intrinsic worth. The British Sovereign has a face value of one Pound Sterling, but can currently be sold for over £200. Alansplodge (talk) 17:36, 26 November 2016 (UTC)

• Kyle Bass bought US$1,000,000.00 worth of nickles--five cent pieces-- a few years back when their scrap value was 6.8 cents per coin. μηδείς (talk) 18:08, 26 November 2016 (UTC)

So did he get 20 million coins or only 15 million? —Tamfang (talk) 00:39, 28 November 2016 (UTC)

$20 million. I am not aware of the details as to any fees or commissions paid or whether he actually took physical possession of them. And he'd have to take them out of the country to sell them as scrap. I am sure this is googleable, I simply remember it as a news item, I never read past the lead. μηδείς (talk) 04:43, 29 November 2016 (UTC)

The results of a Google search would suggest he did take possession of the nickels, and they are sitting in storage somewhere. Furtheremore, taking it out of the country would not help, as 18 U.S. Code § 333 does not care where the offense is committed. It is sufficiently broad, in fact, that even just selling the coins would probably count as a violation, if there is reason to think the buyer plans to melt them down. Someguy1221 (talk) 04:52, 29 November 2016 (UTC)

• I'd suggest a read of Thomas Levenson (2010). Newton and the Counterfeiter. ISBN 978-0571229932. (Yes, Isaac Newton). This covers the 17th century crisis in England, where the bullion value of the silver currency encouraged clipping and also trading across to Holland, where the metal was worth more and coins were melted. A further problem was the counterfeiting of good coins in pure silver with bad coins in a diluted alloy. This led to an actual shortage of coins, and an inability to mint more at a sensible cost. Eventually this drove England off the silver currency standard and onto a gold standard, where the currency of everyday commerce became a fiat currency, backed by gold held in a robust national reserve bank, but not actually circulated everyday. Andy Dingley (talk) 18:37, 26 November 2016 (UTC)

Your use of the term "fiat money" here is incorrect. Fiat money refers specifically to paper that it not backed by, or redeemable in gold or silver or some other valuable substance. The term for paper money redeemable in a precious metal or similar substance is hard money, referred to as "commerce currency" in the fiat currency article. μηδείς (talk) 19:14, 27 November 2016 (UTC)

No, my use of the term fiat currency was carefully considered and is correct. In Wikipedia's terminology, this situation is more closely described as representative currency, a term which I did consider using instead. However as the first instance of fiat currency in this sense, and the first move towards fiat, rather than simple value based coinage, I consider it as the more illustrative term. Note that, in the sense of England's gold standard after Newton, that form of representative money is considered as a form of fiat.

Also, in Newton's period, currency also became significantly paper based with a growth in various forms of bonds or simple lotteries, the Malt Lottery being the most famous. These were pure fiat, and in turn led to the South Sea Bubble, in which Newton himself lost heavily. Andy Dingley (talk) 00:03, 28 November 2016 (UTC)

You are quite free to make up whatever meaning you like for a term, and government central banks can and do welsh on paper certificates, such as the US going off the Silver certificate (United States). But calling silver certificates fiat money, and money which cannot be redeemed for anything tangible "pure fiat" money is your own idiosyncrasy, and a version of the "No true Scotsman fallacy. μηδείς (talk) 01:01, 28 November 2016 (UTC)

I'm using Keynes' term: fiat money is any money for which the face value is divorced from the intrinsic value of the coinage. This can be of two forms, either a fiat backed purely by trust and confidence, or it can be representative money backed by hard reserves (this has the advantage that the gold, or whatever, doesn't have to be circulated and so susceptible to wear or clipping. Nor would a reserve of diamonds or neodymium be easily coinable.). As the intrinsic value of the coinage itself though is negligible, both of these are fiat monies, according to Keynes. Andy Dingley (talk) 12:32, 28 November 2016 (UTC)

Coin clipping was a risky business in England, where it fell under the offence of high treason. Consider the fate of Thomas Rogers and Anne Rogers who were convicted of clipping 40 silver coins in 1690. "Thomas Rogers was hanged, drawn and quartered, and Anne Rogers was burnt alive". Alansplodge (talk) 18:52, 27 November 2016 (UTC)

Clipping was becoming uncommon by this time, in favour of either shipping the entire coins off as bullion, or as coining (minting counterfeit from debased alloy). Only the lower grades of criminal, without the skills or connections to do any better, were still at it.

Another form of profit to such groups, was in selling out other counterfeiters in exchange for a pardon. There were whole pyramid schemes of betrayal going on, where some of the most successful thief takers were little more than the best connected of the counterfeiters. The Rogers were simply at the tail of such a chain. Andy Dingley (talk) 00:03, 28 November 2016 (UTC)

Why were there so many counterfeiters with such harsh penalties? Did all the counterfeiters who turned in another live? Sagittarian Milky Way (talk) 15:21, 28 November 2016 (UTC)

Yes, they could earn a pardon, see Queen's evidence. See also Bloody Code; "In 1688 there were 50 offences on the statute book punishable by death". Because coinage offences could undermine the whole financial system, the punishment had to be worse than that for common theft, which was hanging. Eventually, we decided to send our thieves to America instead, and when there was some local difficulty there, we found Australia. Alansplodge (talk) 16:39, 28 November 2016 (UTC)

My father was given a warning about defacing the coin of the realm once because he used a whole lot of Nigerian one tenth of a penny coins which were much cheaper and better quality than the washers he could get for a job. Dmcq (talk) 11:49, 27 November 2016 (UTC)

Absolutely. Until the 2008 crash, pre-1992 solid copper coins circulating in the UK were often worth more than their face value. Not really worth the effort as a scrap metal trade, though. Blythwood (talk) 21:48, 29 November 2016 (UTC)

This isn't exactly what the OP may have had in mind, but can someone link them to the article dealing with the long-running controversy over the retention of the U.S. penny, which has long fallen into negative seignorage territory? To quote our article: When copper reached a record high in February 2011, the melt value of a 95% copper penny was more than three times its face value. (The mint has since ditched most of the copper in the penny in favor of zinc, which is cheaper, but has not solved the problem that it still costs more than a penny to manufacture one). At one point, which was a while ago, it cost the U.S. mint 2.8c to produce the penny, which obviously have a face value of 1c. I presume the cost may since have risen. Even the nickel 5c is getting close to this point, if not having already crossed it too. So the answer is yes, even in the modern U.S. of A, the metal value of pennies and nickels has at times exceeded the face value. Ergo, the never ending battle over whether the penny has "had its day". Eliyohub (talk) 14:51, 30 November 2016 (UTC)

Who decides the guest selection for the White House Correspondents' Dinner?

Who decides the guest selection for the White House Correspondents' Dinner? The White House Correspondents' Association, the White House, or both together? Or some third party? ECS LIVA Z (talk) 04:05, 26 November 2016 (UTC)

See here. Deor (talk) 19:26, 26 November 2016 (UTC)