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Thread: destruction of money

  1. #1 destruction of money 
    Forum Bachelors Degree
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    is electroplating a quarter or other coin considered a crime?

    i was shining different coins in the same vat of acid when i noticed that the copper from the pennies was slowly plating onto the quarters, dimes, and nickels.

    i was planning on speeding this process by adding an electric current to the solution, but i'm not sure if it would be considered the illegal destruction of money or not, any advice?


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  3. #2  
    Time Lord
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    Well, a lot of tourist locations have machines that will smash pennies and turn them into little medallions, so I think at least the destruction of pennies must not be a crime, or the police would show up and seize the machine.

    Economically I think it would be dumb of the government to pass such a law, because think about it: anytime money is destroyed, the government is allowed to print more to replace it, and that means they get to spend it too. Basically, destroying money is like paying un-demanded taxes to them.


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  4. #3  
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    the value of currency is essentially a function of the value of the groups that accept the money divided by the number of monetary units.

    if the government thinks this function is represented by x/y=z where x is the value of america, y is the amount of money, and z is the amount of money in dollars, then destroying some money(say a thousand dollars in pennies) will make the function actually be x/(y-1000)=z in which z is of course higher.

    by destroying the money in the fashion i'm doing it and not informing the government of it, i'm making the value of the dollar go up, but this will not be reflected in the market because this information will not be available.
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  5. #4  
    Forum Ph.D. Leszek Luchowski's Avatar
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    Quote Originally Posted by saul
    by destroying the money in the fashion i'm doing it and not informing the government of it, i'm making the value of the dollar go up, but this will not be reflected in the market because this information will not be available.
    Yes it will, in principle, be reflected in the market because you will have that much less money to spend. So you are causing deflation. The reaction of markets does not depend on anybody knowing about your strange doings - just on supply and demand. Having destroyed some of your money, you will be able to buy less, and that's a part of demand gone from the market.

    Likewise, if you made fake money so perfectly forged that nobody would be able to see the difference, and spent it, you would be able to buy more, contributing to inflation and increasing prices of stuff - in other words, reducing the value of the currency, because buying the same goods will now take more dollars (or yens, or whatever).

    In both cases, the markets will probably not show any noticeable effect, but that's not because nobody knows what you are doing - it's simply because the amount of money you are removing from, or introducing into, the system is tiny compared to the total amount of dollars in circulation. Unless you really printed billions in fake notes (and got away with spending them), or were rich enough, and crazy enough, to destroy a similar sum in real cash.

    In the case of notes, their material value (how much they cost to make) is usually utterly negligible compared to the value they represent as money. But when you talk about coins, this may not longer be the case. If some are destroyed, the government will have to spend some money on minting new coins to keep the system running, and this cost is a part of the equation. I'm not sure about US pennies (cents, actually), but cases are not unknown in history where a coin cost more to make than its nominal value.
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  6. #5  
    Time Lord
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    I have used Canadian pennies as floor tiles. It costs $3.06 per square foot, somewhat less than fancy ceramic tile.
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  7. #6  
    Forum Professor arKane's Avatar
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    Okay tell me how this scenario will work on the bottom line?

    A buddy ask for you to loan him $100 for one month, sense he's a friend of yours you do not charge him any interest. He takes the $100 and spends it. That same $100 gets spent 10 different times before you get paid back in one month.

    You haven't made a dime, but that $100 has generated $1000 of business. Now how about if every bodies spending money like crazy turning it over as fast as they can? Is that the same as generating new money? I damn well know it's causing inflation.
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