hat's because economics is an art, and not science. Nobody in this world knows how the world's economy will play out just a few years ahead of us, and none knows what will happen in the long term. Nobody.
When the U.S. was only a few years old, coins were minted and had value based upon their silver content.
After the American Revolutionary War began in 1775, the Continental Congress began issuing paper money known as Continental currency, or Continentals. Continental currency was denominated in dollars from 1/6 of a dollar to $80, including many odd denominations in between. During the Revolution, Congress issued $241,552,780 in Continental currency.
Continental currency depreciated badly during the war, giving rise to the famous phrase "not worth a continental". A primary problem was that monetary policy was not coordinated between Congress and the states, which continued to issue bills of credit. "Some think that the rebel bills depreciated because people lost confidence in them or because they were not backed by tangible assets," writes financial historian Robert E. Wright. "Not so. There were simply too many of them." Congress and the states lacked the will or the means to retire the bills from circulation through taxation or the sale of bonds.
Another problem was that the British successfully waged economic warfare by counterfeiting Continentals on a large scale. Benjamin Franklin later wrote:
The artists they employed performed so well that immense quantities of these counterfeits which issued from the British government in New York, were circulated among the inhabitants of all the states, before the fraud was detected. This operated significantly in depreciating the whole mass....
By the end of 1778, Continentals retained from 1/5 to 1/7 of their face value. By 1780, the bills were worth 1/40th of face value. Congress attempted to reform the currency by removing the old bills from circulation and issuing new ones, without success. By May 1781, Continentals had become so worthless that they ceased to circulate as money. Franklin noted that the depreciation of the currency had, in effect, acted as a tax to pay for the war. In the 1790s, after the ratification of the United States Constitution, Continentals could be exchanged for treasury bonds at 1% of face value.
After the collapse of Continental currency, Congress appointed Robert Morris to be Superintendent of Finance of the United States. Morris advocated the creation of the first financial institution chartered by the United States, the Bank of North America, in 1782. The bank was funded in part by specie loaned to the United States by France. Morris helped finance the final stages of the war by issuing notes in his name, backed by his own money. The Bank of North America also issued notes convertible into specie.
The painful experience of the runaway inflation and collapse of the Continental dollar prompted the delegates to the Constitutional Convention to include the gold and silver clause into the United States Constitution so that the individual states could not issue bills of credit, or "make any Thing but gold and silver Coin a Tender in Payment of Debts." This restriction of bills of credit was extended to the Federal Government, as the power to "emit bills" from the Articles of Confederation was abolished, leaving Congress with the power "to borrow money on credit."
Mathematical solutions will invariably miss out on some important variables. That's because economics is an art, and not science. Nobody in this world knows how the world's economy will play out just a few years ahead of us, and none knows what will happen in the long term.
Disagree; currency has everything to do with economics. Like 100%.
That's Econ 101.
If you disagree with what I post, say what the disagreement is, and stop your ad hominems. It only makes your case look weak.
The best you can do is give me a thumb's down? LOL You're a ****'g loser.
You are clueless, and don't even know what you are talking about. If you do, you'll be able to challenge what I said by explaining why. You can't.