[Lurker]

Debasing the currency is one of the major warning signs of a collapsing economy.

[JRandomFreeper]

You are only saying that because every time in history a government debased it currency, it collapsed.

We've been told it's different this time. ;)

/johnny

[palmer]

Not debasing, the opposite.

[MediaMole]

In this case, they aren’t debasing the currency, they are moving from 90 percent silver to 99 percent silver.

The cost savings comes because 99 percent silver is a commodity item, while 90 percent silver has to be specially alloyed for the mint.

[UnbelievingScumOnTheOtherSide]

The backing of fiat currency lies in the willingness of the government to take substantial amounts of it back in payment of taxes. In fact, the federal government collects and recycles more than twice the total circulating currency each year.

This would not work in a low-tax environment or one without a steady stream of transfer payments because so little would be needed.

In the 1800s, the U.S. accepted payment of taxes only in gold which limited its ability to create credible paper currency or silver. (Silver thereby caused inflation which was popular with debt-burdened western farmers championed by William Jennings Bryan at the turn of the last century.)