Cost Vs. Functionality (and other considerations)
But where is the Functionality? Who can make change for that? Commercial Functionality, as a Medium-of-Exchange, is served best by a unit which is: Very Inexpensive; Easily Identified; and, Not Bulky, but easy to transport in pocket or purse, and large enough to not lose.
Also, one may note that when it comes to Cost Vs. Functionality, we naturally move from large Gold bars to small Silver coinage… Large to Small – Gold to Silver.
So, if you want to Invest in Precious Metals: Go Large and Go Gold.
If you desire Greater Commercial Functionality: Go Small and Go Silver.
Either way, you’ll possess (in hand) Precious Metals as a hedge against inflation and a defense against currency devaluation.
Small Silver coinage costs less to accumulate, but Small Gold coinage generally offers better value (more value density). The fabrication cost to mint, say, a one ounce U.S. Gold Eagle might be about the same as, say, to strike a Silver Manatee.
Why not attempt to find a balance between Cost and Functionality? Great idea, but what would it be? That one ounce U.S. Gold Eagle referenced above has a current value just under $3,900.
It might be difficult to find change to give someone attempting to use that to purchase normal goods and services; not to mention, it fails to meet the Florida Standards, because it fails the (.999 Silver/.995 Gold) Purity Standard.
A one-tenth ounce Canadian Maple Leaf could, for example, fit the bill (meeting the Florida Standard), but we’re giving up Cost efficiency for Functionality, as its price per unit content runs about 16% higher to purchase than it’s one Troy ounce big sister.
At a current price/value of roughly $450, it could be used for larger purchases, with a higher likelihood that change could be provided in, say, one-tenth Troy ounce Silver Tokens, such as the Sunshine Token “Manatee” which has a current value of roughly $7.50.
One can’t get away from the Cost versus Functionality Rule-of-Thumb. Fabrication (minting costs) handling, distribution, and the like, all factor into this equation.
Traceability:
Most of us know that currency (paper money) has serial numbers, and coinage does not. In addition, some currencies may possess additional tracking qualities. Take a stack of U.S. one-hundred dollar bills, orient them in the same direction, then press your fingers around the blue stripe. Feel anything funny? Try it.
Some may say, “Why do you want something untraceable?” One might answer that in a number of ways, i.e., for keeping transactions discreet (so as not to be profiled by the digital world) to one’s right to privacy provided by the Bill of Rights (penumbras implied by the First, Third, Fourth, Fifth, and Ninth Amendments to this U.S. Constitution).
What about “Constitutional Coinage,” often referenced (generally) to pre-1965 U.S. Silver dimes, quarters, halves, and dollar coins?
They all have one problem. They do not meet the Florida Standard of bearing weight and purity (Fineness) of their respective Silver content.
Beyond that, few people can recognize a 40% Silver content half-dollar minted in 1965 through 1970 (from a 90% half-dollar mounted prior to that) or a special collector coin 40% Silver content minted once again in 1976 (after a five-year break). How confusing!
And, also, beyond too difficult to figure out, they fail the Florida requirements.
One last thought on Traceability. Every Central Bank style Gold bar, and most 100 Troy ounce and larger Silver bullion pieces, bear serial numbers for trackability (and traceability). Block Chain technology could easily record ownership positions and transfer history if (when) applied to these holdings. Not so with smaller coinage units.
Question: If the U.S. Mint (Treasury Department) ceases to mint coinage, would the existing coinage be “called in” or simply deemed valueless after a certain date? Answer: What does U.S. history reveal?
In 1933, U.S. Gold Pieces were recalled, leaving a handful per family
In 1934, U.S. Silver Coinage was recalled
In 1968, Silver Certificates could no longer be exchanged for physical Silver (reflecting what happened to Gold Certificates 34 years earlier)
In 1971, the U.S. entirely abandoned the Gold Standard in favor of a “print, baby, print” monetization system
Could this happen again? Nobody knows for sure. But, just in case, 7DF has created “Religious Based” Silver and Gold Tokens, claiming right to the First Amendment provision for freedom to exercise one’s religion without Government intervention or hinderance.
Currently, we know of no other Silver or Gold coinage that meets the Florida weight and Purity Standard… which boasts this protective claim.
Bottom Line for This Discussion:
Note: If you’re a “cash stacker” who loses 3% on average per year to inflation, why not consider an alternate holding in Functional Precious Metals?