Could we deflate the dollar by factor of 10? (1 Viewer)

[Gawain]

Pennies are dumb and nickels aren't much better.

Remember the first couple of times in your life when you had a $100 bill? You felt like the world was your oyster and you could buy anything short of a car.

Now, $100 won't cover a decent dinner for two.

Would there be a way to deflate the worth of a dollar by 10? Make a "New Dime" that was worth a dollar and kickstart the entire penny candy industry again?

Failing that, can we ever get a $500 bill back in circulation?

 

[Dan Lambskin]

We can't bust heads like we used to, but we have our ways. One trick is to tell 'em stories that don't go anywhere - like the time I caught the ferry over to Shelbyville. I needed a new heel for my shoe, so, I decided to go to Morganville, which is what they called Shelbyville in those days. So I tied an onion to my belt, which was the style at the time. Now, to take the ferry cost a nickel, and in those days, nickels had pictures of bumblebees on 'em. Give me five bees for a quarter, you'd say.

Now where were we? Oh yeah: the important thing was I had an onion on my belt, which was the style at the time. They didn't have white onions because of the war. The only thing you could get was those big yellow ones...

 

[Jayrod]

Pennies are dumb and nickels aren't much better.

Remember the first couple of times in your life when you had a $100 bill? You felt like the world was your oyster and you could buy anything short of a car.

Now, $100 won't cover a decent dinner for two.

Would there be a way to deflate the worth of a dollar by 10? Make a "New Dime" that was worth a dollar and kickstart the entire penny candy industry again?

Failing that, can we ever get a $500 bill back in circulation?

1. Where are you eating that you can't get a decent meal for $50?

2. The $500 bill was never really in mass circulation...but was primarily used for transactions between banks.

 

[Gawain]

Pennies are dumb and nickels aren't much better.

Remember the first couple of times in your life when you had a $100 bill? You felt like the world was your oyster and you could buy anything short of a car.

Now, $100 won't cover a decent dinner for two.

Would there be a way to deflate the worth of a dollar by 10? Make a "New Dime" that was worth a dollar and kickstart the entire penny candy industry again?

Failing that, can we ever get a $500 bill back in circulation?

1. Where are you eating that you can't get a decent meal for $50?

2. The $500 bill was never really in mass circulation...but was primarily used for transactions between banks.

1. NYC

2. I have one somewhere that I bought on ebay a while back.

The 500 was last printed in 47 IIRC. We've seen about 10X inflation since then. (you can buy for 10 bucks now what would cost a dollar then).

The 500 would be basically a 50 from back in the day. I realize counterfeiting is a major issue, but the 100 is pretty fancy these days. We could have a tricked out five hundo.

It would make large bank withdrawals much easier and you could go to Vegas without a wallet that won't fit in your pants,

 

[TheIronSheik]

I think there have been some countries that have done this, but I can't wrap my head around how it would work. I mean, the only way to do this would be to surprise everyone in the middle of the night and just announce it one day with no warning, right? I think Germany may have had to do this after WWI, just told everyone to pencil in an extra zero on every bill or something.

Years back, Dodds suggested one day they'll just make the penny worth a nickel. Same issue, I can't figure out how the government could manage that without financial chaos. I mean, let's say this plan gets announced, in a month all pennies are worth 5 cents. Wouldn't you go to the bank with every dollar you had and demand rolls of pennies? Take your $100 bill, ask for 10,000 pennies, wait a month, cash them in for $500. Do this with every spare dollar you could find and instantly quintuple your wealth. Obviously they'd have to put stops in place and freeze the penny instantly as soon as the announcement comes out. No pennies from the bank. Stores would stop giving them out, too, for the same reason. Everyone would hoard the ones they have, and then you get a change crisis.

Doing it with all cash at the same time would be crazy. The economy would grind to a halt as people waited to buy things until after the deflation event.

As far as your examples, if you deflate by 10 (add a 0 to every bill), then prices go up, too. If you can't find a dinner for two under $100, well, prices are just going to jump up and you can't find one for under $1000. Everything moves.

Venezuela did it, but for different reasons. They lopped maybe 3 zeros off their bills. I forget how many. I just remember you'd have a bill that was like 20,000 and it equaled like $5 US. The big problem was that when they did that, they introduced the new currency, but you still had the old currency in circulation. It was very confusing.

 

[Gawain]

I think there have been some countries that have done this, but I can't wrap my head around how it would work. I mean, the only way to do this would be to surprise everyone in the middle of the night and just announce it one day with no warning, right? I think Germany may have had to do this after WWI, just told everyone to pencil in an extra zero on every bill or something.

Years back, Dodds suggested one day they'll just make the penny worth a nickel. Same issue, I can't figure out how the government could manage that without financial chaos. I mean, let's say this plan gets announced, in a month all pennies are worth 5 cents. Wouldn't you go to the bank with every dollar you had and demand rolls of pennies? Take your $100 bill, ask for 10,000 pennies, wait a month, cash them in for $500. Do this with every spare dollar you could find and instantly quintuple your wealth. Obviously they'd have to put stops in place and freeze the penny instantly as soon as the announcement comes out. No pennies from the bank. Stores would stop giving them out, too, for the same reason. Everyone would hoard the ones they have, and then you get a change crisis.

Doing it with all cash at the same time would be crazy. The economy would grind to a halt as people waited to buy things until after the deflation event.

As far as your examples, if you deflate by 10 (add a 0 to every bill), then prices go up, too. If you can't find a dinner for two under $100, well, prices are just going to jump up and you can't find one for under $1000. Everything moves.

It would have to be a massive event where you converted your holdings from Old USD to New USD. For electronic assets, (bank accounts and the like), it could be as easy as a "Convert Now" button at a 1:10 rate. For physical currency, you would need all new coinage and bills. Give a two year window where Old USD is still legal tender, but offer incentives to businesses to issue paychecks in New USD and for banks to give withdrawals in New USD. Offer small tax incentives for public companies to convert their stock to New USD.

I agree you can't keep the same currency and just say that it's worth ten times more. There's have to be a gradual replacement at all levels of the system.

We did away with silver certificates, can't we do the same now?

 

[Fat Nick]

I think there have been some countries that have done this, but I can't wrap my head around how it would work. I mean, the only way to do this would be to surprise everyone in the middle of the night and just announce it one day with no warning, right? I think Germany may have had to do this after WWI, just told everyone to pencil in an extra zero on every bill or something.

Years back, Dodds suggested one day they'll just make the penny worth a nickel. Same issue, I can't figure out how the government could manage that without financial chaos. I mean, let's say this plan gets announced, in a month all pennies are worth 5 cents. Wouldn't you go to the bank with every dollar you had and demand rolls of pennies? Take your $100 bill, ask for 10,000 pennies, wait a month, cash them in for $500. Do this with every spare dollar you could find and instantly quintuple your wealth. Obviously they'd have to put stops in place and freeze the penny instantly as soon as the announcement comes out. No pennies from the bank. Stores would stop giving them out, too, for the same reason. Everyone would hoard the ones they have, and then you get a change crisis.

Doing it with all cash at the same time would be crazy. The economy would grind to a halt as people waited to buy things until after the deflation event.

As far as your examples, if you deflate by 10 (add a 0 to every bill), then prices go up, too. If you can't find a dinner for two under $100, well, prices are just going to jump up and you can't find one for under $1000. Everything moves.

Venezuela did it, but for different reasons. They lopped maybe 3 zeros off their bills. I forget how many. I just remember you'd have a bill that was like 20,000 and it equaled like $5 US. The big problem was that when they did that, they introduced the new currency, but you still had the old currency in circulation. It was very confusing.

They're basically the model of what NOT to do with your currency. I talked with our company controller for the Venezuela market and she basically said that you go out and spend your paycheck as soon as you get it because you never know how much it'll buy tomorrow. They're expecting another devaluation any day now.

It wreaks havoc on any multi-national companies doing business there because basically your ability to cash out your accounts receivable is almost nil. Extending payment terms to customers is complete BS because they'll just withhold payment another devaluation, and you'll get pennies on the dollar and never be able to get your money out of the country.

 

[Don Quixote]

Upside: Skinnier wallet to Vegas

Downside: Trigger an unncessary global banking crisis

...tough call.

 

[Fat Nick]

I think there have been some countries that have done this, but I can't wrap my head around how it would work. I mean, the only way to do this would be to surprise everyone in the middle of the night and just announce it one day with no warning, right? I think Germany may have had to do this after WWI, just told everyone to pencil in an extra zero on every bill or something.

Years back, Dodds suggested one day they'll just make the penny worth a nickel. Same issue, I can't figure out how the government could manage that without financial chaos. I mean, let's say this plan gets announced, in a month all pennies are worth 5 cents. Wouldn't you go to the bank with every dollar you had and demand rolls of pennies? Take your $100 bill, ask for 10,000 pennies, wait a month, cash them in for $500. Do this with every spare dollar you could find and instantly quintuple your wealth. Obviously they'd have to put stops in place and freeze the penny instantly as soon as the announcement comes out. No pennies from the bank. Stores would stop giving them out, too, for the same reason. Everyone would hoard the ones they have, and then you get a change crisis.

Doing it with all cash at the same time would be crazy. The economy would grind to a halt as people waited to buy things until after the deflation event.

As far as your examples, if you deflate by 10 (add a 0 to every bill), then prices go up, too. If you can't find a dinner for two under $100, well, prices are just going to jump up and you can't find one for under $1000. Everything moves.

It would have to be a massive event where you converted your holdings from Old USD to New USD. For electronic assets, (bank accounts and the like), it could be as easy as a "Convert Now" button at a 1:10 rate. For physical currency, you would need all new coinage and bills. Give a two year window where Old USD is still legal tender, but offer incentives to businesses to issue paychecks in New USD and for banks to give withdrawals in New USD. Offer small tax incentives for public companies to convert their stock to New USD.

I agree you can't keep the same currency and just say that it's worth ten times more. There's have to be a gradual replacement at all levels of the system.

We did away with silver certificates, can't we do the same now?

I think it's a lot more complicated than this. I mean, even with silver certs, or moving off the gold standard, a dollar was still a dollar...it was just what you backed it with. You gave a $1 gold coin and got a $1 bill, etc. Still $1.

You've got the issue of legal contracts to pay a certain dollar amounts, etc. I don't think most contracts would have clauses that would allow for the adjustment of currency if we arbitrarily changed the value. Multiple currencies would be horrific for retailers having to keep track of them. You think the cashier at Wal-Mart has a hard time giving you change for your items now? Imagine if you handed her one old $10, and one new $5. Her head would explode trying to figure that out.

Besides all this...what would be the benefit of doing this?

 

[TheIronSheik]

I think there have been some countries that have done this, but I can't wrap my head around how it would work. I mean, the only way to do this would be to surprise everyone in the middle of the night and just announce it one day with no warning, right? I think Germany may have had to do this after WWI, just told everyone to pencil in an extra zero on every bill or something.

Years back, Dodds suggested one day they'll just make the penny worth a nickel. Same issue, I can't figure out how the government could manage that without financial chaos. I mean, let's say this plan gets announced, in a month all pennies are worth 5 cents. Wouldn't you go to the bank with every dollar you had and demand rolls of pennies? Take your $100 bill, ask for 10,000 pennies, wait a month, cash them in for $500. Do this with every spare dollar you could find and instantly quintuple your wealth. Obviously they'd have to put stops in place and freeze the penny instantly as soon as the announcement comes out. No pennies from the bank. Stores would stop giving them out, too, for the same reason. Everyone would hoard the ones they have, and then you get a change crisis.

Doing it with all cash at the same time would be crazy. The economy would grind to a halt as people waited to buy things until after the deflation event.

As far as your examples, if you deflate by 10 (add a 0 to every bill), then prices go up, too. If you can't find a dinner for two under $100, well, prices are just going to jump up and you can't find one for under $1000. Everything moves.

It would have to be a massive event where you converted your holdings from Old USD to New USD. For electronic assets, (bank accounts and the like), it could be as easy as a "Convert Now" button at a 1:10 rate. For physical currency, you would need all new coinage and bills. Give a two year window where Old USD is still legal tender, but offer incentives to businesses to issue paychecks in New USD and for banks to give withdrawals in New USD. Offer small tax incentives for public companies to convert their stock to New USD.

I agree you can't keep the same currency and just say that it's worth ten times more. There's have to be a gradual replacement at all levels of the system.

We did away with silver certificates, can't we do the same now?

I think it's a lot more complicated than this. I mean, even with silver certs, or moving off the gold standard, a dollar was still a dollar...it was just what you backed it with. You gave a $1 gold coin and got a $1 bill, etc. Still $1.

You've got the issue of legal contracts to pay a certain dollar amounts, etc. I don't think most contracts would have clauses that would allow for the adjustment of currency if we arbitrarily changed the value. Multiple currencies would be horrific for retailers having to keep track of them. You think the cashier at Wal-Mart has a hard time giving you change for your items now? Imagine if you handed her one old $10, and one new $5. Her head would explode trying to figure that out.

Besides all this...what would be the benefit of doing this?

Yup. This is exactly what I was talking about when I was in Venezuela. You'd have two bills that looked completely different and had different numbers on them, but were equal in value.

 

[msommer]

I think there have been some countries that have done this, but I can't wrap my head around how it would work. I mean, the only way to do this would be to surprise everyone in the middle of the night and just announce it one day with no warning, right? I think Germany may have had to do this after WWI, just told everyone to pencil in an extra zero on every bill or something.

Years back, Dodds suggested one day they'll just make the penny worth a nickel. Same issue, I can't figure out how the government could manage that without financial chaos. I mean, let's say this plan gets announced, in a month all pennies are worth 5 cents. Wouldn't you go to the bank with every dollar you had and demand rolls of pennies? Take your $100 bill, ask for 10,000 pennies, wait a month, cash them in for $500. Do this with every spare dollar you could find and instantly quintuple your wealth. Obviously they'd have to put stops in place and freeze the penny instantly as soon as the announcement comes out. No pennies from the bank. Stores would stop giving them out, too, for the same reason. Everyone would hoard the ones they have, and then you get a change crisis.

Doing it with all cash at the same time would be crazy. The economy would grind to a halt as people waited to buy things until after the deflation event.

As far as your examples, if you deflate by 10 (add a 0 to every bill), then prices go up, too. If you can't find a dinner for two under $100, well, prices are just going to jump up and you can't find one for under $1000. Everything moves.

Venezuela did it, but for different reasons. They lopped maybe 3 zeros off their bills. I forget how many. I just remember you'd have a bill that was like 20,000 and it equaled like $5 US. The big problem was that when they did that, they introduced the new currency, but you still had the old currency in circulation. It was very confusing.

Brazil did that too in the 90'ies a couple of times, with 3300% inflation thenumbers add up pretty quickly. Once or twice they kept the old bills and the banks would stamp their new name and value e.g. 20,000 Cruzados would get a slash through the last three digits and be stamped 'Novos' to become the new 20 Cruzados Novos bill.

 

[Fat Nick]

I think there have been some countries that have done this, but I can't wrap my head around how it would work. I mean, the only way to do this would be to surprise everyone in the middle of the night and just announce it one day with no warning, right? I think Germany may have had to do this after WWI, just told everyone to pencil in an extra zero on every bill or something.

Years back, Dodds suggested one day they'll just make the penny worth a nickel. Same issue, I can't figure out how the government could manage that without financial chaos. I mean, let's say this plan gets announced, in a month all pennies are worth 5 cents. Wouldn't you go to the bank with every dollar you had and demand rolls of pennies? Take your $100 bill, ask for 10,000 pennies, wait a month, cash them in for $500. Do this with every spare dollar you could find and instantly quintuple your wealth. Obviously they'd have to put stops in place and freeze the penny instantly as soon as the announcement comes out. No pennies from the bank. Stores would stop giving them out, too, for the same reason. Everyone would hoard the ones they have, and then you get a change crisis.

Doing it with all cash at the same time would be crazy. The economy would grind to a halt as people waited to buy things until after the deflation event.

As far as your examples, if you deflate by 10 (add a 0 to every bill), then prices go up, too. If you can't find a dinner for two under $100, well, prices are just going to jump up and you can't find one for under $1000. Everything moves.

It would have to be a massive event where you converted your holdings from Old USD to New USD. For electronic assets, (bank accounts and the like), it could be as easy as a "Convert Now" button at a 1:10 rate. For physical currency, you would need all new coinage and bills. Give a two year window where Old USD is still legal tender, but offer incentives to businesses to issue paychecks in New USD and for banks to give withdrawals in New USD. Offer small tax incentives for public companies to convert their stock to New USD.

I agree you can't keep the same currency and just say that it's worth ten times more. There's have to be a gradual replacement at all levels of the system.

We did away with silver certificates, can't we do the same now?

I think it's a lot more complicated than this. I mean, even with silver certs, or moving off the gold standard, a dollar was still a dollar...it was just what you backed it with. You gave a $1 gold coin and got a $1 bill, etc. Still $1.

You've got the issue of legal contracts to pay a certain dollar amounts, etc. I don't think most contracts would have clauses that would allow for the adjustment of currency if we arbitrarily changed the value. Multiple currencies would be horrific for retailers having to keep track of them. You think the cashier at Wal-Mart has a hard time giving you change for your items now? Imagine if you handed her one old $10, and one new $5. Her head would explode trying to figure that out.

Besides all this...what would be the benefit of doing this?

Yup. This is exactly what I was talking about when I was in Venezuela. You'd have two bills that looked completely different and had different numbers on them, but were equal in value.

I was just running some currency reports this AM...I wondered why we had two different Venezuela currencies. VEB and VEF...Now I know.

 

[Gawain]

I think there have been some countries that have done this, but I can't wrap my head around how it would work. I mean, the only way to do this would be to surprise everyone in the middle of the night and just announce it one day with no warning, right? I think Germany may have had to do this after WWI, just told everyone to pencil in an extra zero on every bill or something.

Years back, Dodds suggested one day they'll just make the penny worth a nickel. Same issue, I can't figure out how the government could manage that without financial chaos. I mean, let's say this plan gets announced, in a month all pennies are worth 5 cents. Wouldn't you go to the bank with every dollar you had and demand rolls of pennies? Take your $100 bill, ask for 10,000 pennies, wait a month, cash them in for $500. Do this with every spare dollar you could find and instantly quintuple your wealth. Obviously they'd have to put stops in place and freeze the penny instantly as soon as the announcement comes out. No pennies from the bank. Stores would stop giving them out, too, for the same reason. Everyone would hoard the ones they have, and then you get a change crisis.

Doing it with all cash at the same time would be crazy. The economy would grind to a halt as people waited to buy things until after the deflation event.

As far as your examples, if you deflate by 10 (add a 0 to every bill), then prices go up, too. If you can't find a dinner for two under $100, well, prices are just going to jump up and you can't find one for under $1000. Everything moves.

It would have to be a massive event where you converted your holdings from Old USD to New USD. For electronic assets, (bank accounts and the like), it could be as easy as a "Convert Now" button at a 1:10 rate. For physical currency, you would need all new coinage and bills. Give a two year window where Old USD is still legal tender, but offer incentives to businesses to issue paychecks in New USD and for banks to give withdrawals in New USD. Offer small tax incentives for public companies to convert their stock to New USD.

I agree you can't keep the same currency and just say that it's worth ten times more. There's have to be a gradual replacement at all levels of the system.

We did away with silver certificates, can't we do the same now?

I think it's a lot more complicated than this. I mean, even with silver certs, or moving off the gold standard, a dollar was still a dollar...it was just what you backed it with. You gave a $1 gold coin and got a $1 bill, etc. Still $1.

You've got the issue of legal contracts to pay a certain dollar amounts, etc. I don't think most contracts would have clauses that would allow for the adjustment of currency if we arbitrarily changed the value. Multiple currencies would be horrific for retailers having to keep track of them. You think the cashier at Wal-Mart has a hard time giving you change for your items now? Imagine if you handed her one old $10, and one new $5. Her head would explode trying to figure that out.

Besides all this...what would be the benefit of doing this?

Main benefits:

1) Let children know the joy of penny candy

2) Skinnier wallet

3) Job creation

4) Less zeroes

5) Lead the world in currency value

This wouldn't be like Germany or Venezuela where currencies inflated and deflated due to lousy economies. This would be a move to keep the USD the world leader in value. Why shouldn't the USD be the highest valued currency in the world?

 

[TheIronSheik]

I think there have been some countries that have done this, but I can't wrap my head around how it would work. I mean, the only way to do this would be to surprise everyone in the middle of the night and just announce it one day with no warning, right? I think Germany may have had to do this after WWI, just told everyone to pencil in an extra zero on every bill or something.

Years back, Dodds suggested one day they'll just make the penny worth a nickel. Same issue, I can't figure out how the government could manage that without financial chaos. I mean, let's say this plan gets announced, in a month all pennies are worth 5 cents. Wouldn't you go to the bank with every dollar you had and demand rolls of pennies? Take your $100 bill, ask for 10,000 pennies, wait a month, cash them in for $500. Do this with every spare dollar you could find and instantly quintuple your wealth. Obviously they'd have to put stops in place and freeze the penny instantly as soon as the announcement comes out. No pennies from the bank. Stores would stop giving them out, too, for the same reason. Everyone would hoard the ones they have, and then you get a change crisis.

Doing it with all cash at the same time would be crazy. The economy would grind to a halt as people waited to buy things until after the deflation event.

As far as your examples, if you deflate by 10 (add a 0 to every bill), then prices go up, too. If you can't find a dinner for two under $100, well, prices are just going to jump up and you can't find one for under $1000. Everything moves.

It would have to be a massive event where you converted your holdings from Old USD to New USD. For electronic assets, (bank accounts and the like), it could be as easy as a "Convert Now" button at a 1:10 rate. For physical currency, you would need all new coinage and bills. Give a two year window where Old USD is still legal tender, but offer incentives to businesses to issue paychecks in New USD and for banks to give withdrawals in New USD. Offer small tax incentives for public companies to convert their stock to New USD.

I agree you can't keep the same currency and just say that it's worth ten times more. There's have to be a gradual replacement at all levels of the system.

We did away with silver certificates, can't we do the same now?

I think it's a lot more complicated than this. I mean, even with silver certs, or moving off the gold standard, a dollar was still a dollar...it was just what you backed it with. You gave a $1 gold coin and got a $1 bill, etc. Still $1.

You've got the issue of legal contracts to pay a certain dollar amounts, etc. I don't think most contracts would have clauses that would allow for the adjustment of currency if we arbitrarily changed the value. Multiple currencies would be horrific for retailers having to keep track of them. You think the cashier at Wal-Mart has a hard time giving you change for your items now? Imagine if you handed her one old $10, and one new $5. Her head would explode trying to figure that out.

Besides all this...what would be the benefit of doing this?

Yup. This is exactly what I was talking about when I was in Venezuela. You'd have two bills that looked completely different and had different numbers on them, but were equal in value.

I was just running some currency reports this AM...I wondered why we had two different Venezuela currencies. VEB and VEF...Now I know.

Yup. I remember those initials. I think I still have a bunch of them tucked away somewhere. If I remember correctly, the old bills were like ours. But the new bills, if you looked at them, they were longways. Just very confusing and everyone down there used to complain about them.

 

[Quez]

You can't even get a decent hoodie for under $100 these days.

 

[Slapdash]

Pennies are dumb and nickels aren't much better.

Remember the first couple of times in your life when you had a $100 bill? You felt like the world was your oyster and you could buy anything short of a car.

Now, $100 won't cover a decent dinner for two.

Would there be a way to deflate the worth of a dollar by 10? Make a "New Dime" that was worth a dollar and kickstart the entire penny candy industry again?

Failing that, can we ever get a $500 bill back in circulation?

This would wreck the economy.

 

[Gawain]

I think there have been some countries that have done this, but I can't wrap my head around how it would work. I mean, the only way to do this would be to surprise everyone in the middle of the night and just announce it one day with no warning, right? I think Germany may have had to do this after WWI, just told everyone to pencil in an extra zero on every bill or something.

Years back, Dodds suggested one day they'll just make the penny worth a nickel. Same issue, I can't figure out how the government could manage that without financial chaos. I mean, let's say this plan gets announced, in a month all pennies are worth 5 cents. Wouldn't you go to the bank with every dollar you had and demand rolls of pennies? Take your $100 bill, ask for 10,000 pennies, wait a month, cash them in for $500. Do this with every spare dollar you could find and instantly quintuple your wealth. Obviously they'd have to put stops in place and freeze the penny instantly as soon as the announcement comes out. No pennies from the bank. Stores would stop giving them out, too, for the same reason. Everyone would hoard the ones they have, and then you get a change crisis.

Doing it with all cash at the same time would be crazy. The economy would grind to a halt as people waited to buy things until after the deflation event.

As far as your examples, if you deflate by 10 (add a 0 to every bill), then prices go up, too. If you can't find a dinner for two under $100, well, prices are just going to jump up and you can't find one for under $1000. Everything moves.

It would have to be a massive event where you converted your holdings from Old USD to New USD. For electronic assets, (bank accounts and the like), it could be as easy as a "Convert Now" button at a 1:10 rate. For physical currency, you would need all new coinage and bills. Give a two year window where Old USD is still legal tender, but offer incentives to businesses to issue paychecks in New USD and for banks to give withdrawals in New USD. Offer small tax incentives for public companies to convert their stock to New USD.

I agree you can't keep the same currency and just say that it's worth ten times more. There's have to be a gradual replacement at all levels of the system.

We did away with silver certificates, can't we do the same now?

I think it's a lot more complicated than this. I mean, even with silver certs, or moving off the gold standard, a dollar was still a dollar...it was just what you backed it with. You gave a $1 gold coin and got a $1 bill, etc. Still $1.

You've got the issue of legal contracts to pay a certain dollar amounts, etc. I don't think most contracts would have clauses that would allow for the adjustment of currency if we arbitrarily changed the value. Multiple currencies would be horrific for retailers having to keep track of them. You think the cashier at Wal-Mart has a hard time giving you change for your items now? Imagine if you handed her one old $10, and one new $5. Her head would explode trying to figure that out.

Besides all this...what would be the benefit of doing this?

Businesses would be the biggest beneficiary.

 

[Gawain]

Main benefits:

1) Let children know the joy of penny candy

2) Skinnier wallet

3) Job creation

4) Less zeroes

5) Lead the world in currency value

This wouldn't be like Germany or Venezuela where currencies inflated and deflated due to lousy economies. This would be a move to keep the USD the world leader in value. Why shouldn't the USD be the highest valued currency in the world?

The "currency value" has nothing to do with how many $Whatevers buy a Thing.

If it costs 100 "Dollars" to buy a new gadget or 50,000 "ShruteBucks" to buy the same gadget, it doesn't mean the Dollar is better or stronger or anything compared to ShruteBucks. It's just an exchange rate.

I mean, we could start reporting prices in pennies and everything is the exact same. The gadget costs 100 "dollars" or 10,000 "pennies" doesn't mean our currency got 100 times weaker in the conversion.

I'm not saying this would make the dollar stronger or better, but it would change the exchange rate.

What the South American countries tried to do was from a position of necessity, not from a position of strength.

I'm saying the US should act now before our paper currency becomes almost worthless.

In a little under 70 years the buying power of a dollar decreased by a factor of 10. That's not a terrible rate.

But, if we extrapolate, what happens in 2080 when a McDonald's value meal is $100 and that's the biggest note that we print?

How can you pay cash for anything? Maybe we're in a paperless society by then, but I doubt the world is. How do you use USD when you need so many of them they're as bulky as gold?

ETA: I think a little of this came from the McD's menu posted. A Quarter Pounder, fries and a drink were a buck. Now they're $8, just 43 years later. Assuming the increase continues, what happens when the largest bill printed can't buy you a simple meal?

 

[Fennis]

Pennies are dumb and nickels aren't much better.

Remember the first couple of times in your life when you had a $100 bill? You felt like the world was your oyster and you could buy anything short of a car.

Now, $100 won't cover a decent dinner for two.

Would there be a way to deflate the worth of a dollar by 10? Make a "New Dime" that was worth a dollar and kickstart the entire penny candy industry again?

Failing that, can we ever get a $500 bill back in circulation?

Yes

 

[FUBAR]

Now, $100 won't cover a decent dinner for two.

FWIW I spend maybe $20 cash on average, per month.

 

[The Duff Man]

Go the other way and eliminate the penny.

Too much weight to carry around to make it rain with pennies and nickels.