spot price is used to describe the value given to a coin because of its metal content.
spot price is used to describe the value given to a coin because of its metal content.
what term is used to describe the value given to a coin because of its metal content?
spot price
coins may be in circulation with fiat values lower than the value of their component metals, but they are never initially issued with such value, and the shortfall only arises over time due to inflation, as market values for the metal overtake the fiat declared face value of the coin. examples are the pre-1965 us dime, quarter, half dollar, and dollar (nominally containing slightly less than a tenth, quarter, half, and full ounce of silver, respectively), us nickel, and pre-1982 us penny. as a result of the increase in the value of copper, the united states greatly reduced the amount of copper in each penny. since mid-1982, united states pennies are made of 97.5% zinc, with the remaining 2.5% being a coating of copper. extreme differences between fiat values and metal values of coins cause coins to be hoarded or removed from circulation by illicit smelters in order to realise the value of their metal content. this is an example of gresham's law. the united states mint, in an attempt to avoid this, implemented new interim rules on december 14, 2006, subject to public comment for 30 days, which criminalized the melting and export of pennies and nickels. violators can be fined up to $10,000 and/or imprisoned for up to five years.
coin
standardized roman currency was used throughout the roman empire. important roman gold and silver coins were continued into the middle ages (see gold dinar, solidus, aureus, denarius). ancient and early medieval coins in theory had the value of their metal content, although there have been many instances throughout history of governments inflating their currencies by debasing the metal content of their coinage, so that the inferior coins were worth less in metal than their face value. fiat money first arose in medieval china, with the jiaozi paper money. early paper money was introduced in europe in the later middle ages, but some coins continued to have the value of the gold or silver they contained throughout the early modern period. the penny was minted as a silver coin until the 17th century.
coin