Bad money drives out good.
So runs the colloquial summary of Gresham’s Law. While it may sound too trite to be significant,this is the crux of problem: Lies are easy to believe, and easy to assume; untruth creates a pit all too easy to fall into — and one that is laborious to escape.
Once a people embraces the fiat money myth, or begins to treat a fiat substance as currency, how is it possible to reverse this engagement in the minds of the people, and in the transactions where it really counts?
If the goal is to return to a mode of exchange which is truly “value for value,” then, leaving aside governments, corporations, and international commerce, how can this proposition — only abandoned in the last few generations in America, and not at all abandoned in some places — be presented to the people?
If Gresham’s Law holds, then the best method may be to engage on its own terms. Through a contrivance of the system, if actual gold and silver could be seen at least for a while as “bad money,” then it should drive out the paper stuff. Imagine that! People hoarding dollars and spending gold and silver…
Unfortunately gold and silver have inherent value and there doesn’t seem to be a way to shoehorn them into the “bad money” category. Futures of course fit that representation swimmingly, but are so divorced from the actual hard currency as to be unpractical for such purposes.
Anyways, this is the sort of thing that keeps me awake at night.
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