Give No Quarter

By the time you read this, the new California quarter will be in circulation. It’s said to be quite pretty, with a picture of John Muir on it, contemplating Half Dome, in Yosemite. A condor is flying overhead.

The mint is going to turn out 500 million of these tokens, so they’re not likely to become scarce. Mint spokesman Michael White tells us, "They’re fun, and they’re educational. We’re not advising people to invest in them." I should think not!

Fun? We’re talking about coins here, not books, or movies. Is there any reason whatever why a monetary device need be "fun?" And educational? Well, if you think about it, there is something to be learned from the new quarter. It is, by definition, one quarter of a dollar. The problem — and this is where "educational" comes in — is that there is no definition of "dollar." The IRS, for example, expects you to swear to the correct value of your income in dollars, but admits that it cannot define "dollar." The Treasury department acknowledges that no value is established for the dollar. And the money, of which the "dollar" is a unit, is evidently imaginary. So the new quarter is one-fourth of an unspecific amount of nothing in particular. And to think you have to work to acquire it! Talk about fun!

In the eyes of many, I suppose, the dollar is any coin bearing the word "dollar," whether it be made of platinum, gold, or copper — and the mint is turning out all three. The commonest of these "dollar" coins is the Susan B. Anthony token, which consists of a core of pure copper clad with a nickel coating to make it resemble silver. It weights 8.1 grams. The state quarters have an identical composition, but weigh 5.67 grams. Now if words have any meaning, a fourth, or quarter, of 8.1 grams is 2.025 grams. Thus, if the dollar is truly a copper token of 8.1 grams, the "quarter" in circulation today is actually 70 cents. On the other hand, if the state quarters are actually quarters, than the "dollar" must be a coin of similar copper composition weighing 22.68 grams. That means that the Susan B. Anthony "dollar" is, in fact, about thirty-five cents. Mr. White was right: this IS educational!

His final words of advice ring true, even if inadvertently: "We’re not advising people to invest in them." Anyone investing in something, the nominal "value" of which cannot be calculated, representing money that has no tangible existence, and which has lost 90% of its purchasing power in recent decades, is going to lose his shirt. Educational, perhaps, but not funny.

The mint says that the coins cost a nickel to produce. Americans will have to pay 25 cents apiece for them. This is a "profit" of 20 cents per coin, and the mint, remember, is going to stamp out half a billion of them, for a net gain of 100 million bux. Nonsense! The actual cost of producing the coins is — nothing. If you can pay for money with money, how can it cost you anything? How much would a bunch of grapes cost if you could pay for it with a couple of grapes? Suppose you pick up a large bunch of juicy, delicious grapes at the supermarket. The checkout clerk says, "Those will cost you three grapes." So you pick off three grapes and give them to her. Were the grapes expensive? Can you continue to afford them, even if the cost doubles to six grapes?

Of course, the tokens are not paid for with tokens. The same people that stamp them out also print currency. All the costs of printing, or minting, can be paid by simply printing a few more bills, to pay for the bills already printed, or the tokens already minted. Money is free to those who can create it, as long as the victims of the money continue to accept it in exchange for their labors. Any return on an investment of zero is, mathematically, infinite.

Let’s hope that Mr. White is correct, and the public becomes educated by the new California quarters. When that happens they will realize the folly of expending their lives working to obtain "money" that its issuers obtained for nothing. If a slave-owner in the 19th century printed up some nice chits bearing pictures of himself (using his slaves to do the work, and produce the paper and ink) and then distributed them to the slaves as "payment," they could exchange the chits among themselves as money. Of course, they would have no claim on any assets of the master, but that wouldn’t occur to them. That is precisely what defined their slavery, even if they thought of themselves as free: their chains were made of paper. So are ours.

Dr. Hein [send him mail] is a retired ophthalmologist in St. Louis, and the author of All Work & No Pay.