Great Debasement

The “Great Debasement” (1542-1551) occurred when the English Crown reduced the gold and silver content in its coins, saving the government money. The name “Great Debasement” was used in Adam Smith’s An Inquiry Into the Nature and Causes of the Wealth of Nations (1776):
 
“This event was the great debasement of the silver coin, by clipping and wearing.”
 
The term was further popularized by the publication of John Dennis Gould’s book, The Great Debasement: Currency and Economy in Mid-Tudor England (1970).
 
The term was repopularized and reinterpreted by Craig R. Smith and Lowell Ponte’s book, The Great Debasement: The 100-Year Dying of the Dollar and How to Get America’s Money Back (2012). The authors (who also own The Great Debasement website) have argued that since the establishment of the Federal Reserve System in 1913, the value of a 2012 has only two pennies of its 1913 purchasing power.
 
 
Wikipedia: Great Debasement
The Great Debasement (1542–1551) refers to the English Crown’s policy of coinage debasement during the reigns of Henry VIII and Edward VI. Coinage debasement occurred when governments replaced to a significant degree the gold or silver content of coinage with a base metal such as copper. By reducing the value of gold or silver content relative to face value, governments extracted usable revenue from domestic money stocks. This stratagem was called debasement because each coin was worth less in terms of its precious metal content.
 
Normally, the face value of the coined money exceeded its production cost, including the cost of the precious metals. This difference, which the Crown earned as a profit, was called seigniorage. The Crown of England, like many governments, held an exclusive monopoly on the privilege to coin money from precious metals, and used the profits of seigniorage to help pay for government expenditures.
 
During the Great Debasement the English crown’s profits from debasement rose to unreasonable levels. In March 1542 the value of the silver content of each English coin averaged 75 percent of each coin’s face value. By March 1545 the value of the silver content had fallen to 50 percent, and by March 1546 to 33.33 percent. The value of each coin in silver content fell to only 25 percent of face value by the time the debasement had run its course in 1551.
 
Google Books
An Inquiry Into the Nature and Causes of the Wealth of Nations”
Volume I
By Adam Smith
London: Printed for W. Strahan and T. Cadell
1776
Pg. 244:
This event was the great debasement of the silver coin, by clipping and wearing. This evil had begun in the reign of Charles II. and had gone on continually increasing till 1695; at which time, as we may learn from Mr. Lowndes, the current silver coin was, at an average, near five and twenty per cent. below its standard value.
 
OCLC WorldCat record
The great debasement : currency and economy in Mid-Tudor England.
Author: John Dennis Gould
Publisher: [Oxford] : Clarendon Press, 1970.
Edition/Format:   Book : English
   
New York (NY) Times—“The Conscience of a Liberal” by Paul Krugman
COMMENTS
November 24, 2007 1:54 pm
Massive injections of cheap credit seem to be the only way to sustain our economic sandcastles as the tides of reality rushes in. At a cost of course. The great debasement has begun.
— Ravi Masand
     
Ron Paul Forums
davver
01-24-2008 01:58 PM
The great debasement begins
http://quotes.ino.com/chart/?s=NYBOT_DX&v=w
Dollar down 2% since rate cut.
   
The Market Oracle
Gold, In the Shadow of the Castle
Mar 18, 2010 - 05:09 PM GMT
By: David_Galland
(...)
While there will be no straight line up or down for any asset class in the unsettled times we will live through, using periods of weakness to build your exposure to tangible assets – most notably gold, whose primary and best use is as sound money – is the only way to protect yourself from the Great Debasement that’s coming.
 
OCLC WorldCat record
The Great debasement : the 100-year dying of the dollar and how to get America’s money back
Author: Craig R Smith; Lowell Ponte; Pat Boone
Publisher: Phoenix, Ariz. : Idea Factory Press, 2012.
Edition/Format:   Book : English
 
Zero Hedge
DoubleLine’s Gundlach Likes Silver As “The Great Debasement” Will Continue For Years (Not Months)
Submitted by Tyler Durden on 03/05/2013 17:49 -0500
With central bank monetization supporting gold prices and fiscal deficits, DoubleLine’s Jeffrey Gundlach’s latest chart extravaganza contains more than a few charts you will have seen browsing these very pages. From Japanese demographics (and their apparent love of debasement) to US deficits (and US ignorance of them), from structural unemployment to ongoing private-to-public risk transfer, and from the diminishing returns from QE programs to the illusory nature of inflation; the new bond guru, as we noted yesterday, raises more than a few ‘doubts’ about the new reality in which our markets live - Gundlach fears ‘trade protectionism’ is coming (and will hurt the global economy); sees monetary easing going on for years (not months); dismisses the ‘money on the sidelines’ myth by noting that retail involvement is about the same as in 2007; thinks a 2% 10Y is ‘reasonable’ value; says to avoid banks; likes Silver; thinks the Student Loan debt market is a bubble set to burst; sees the perceived strength in housing as ‘overblown’; blows the ‘great rotation’ meme away - “there can be no net rotation, for every buyer there’s a seller”; and is sticking to his long Nikkei, Short S&P 500 trade.