If a coin is minted the material might cost less or more then the monetary value on it how are the governments assigning values to it?
In: Economics
Guys, money isn’t real. It’s a concept created to make you believe that you either have lots or very little.
The reality is that we all have the same. It’s all relative. Unless you are super rich, and in a position whereby society pays you. We’re all poor
Ignoring the incoherent babble that rises up any time anybody asks a question related to the concept of fiat currency, the real answer here depends on whether the materials are worth more or less than the face value of the currency.
If the materials are worth less (like in a $100 bill), then everyone is content to treat that object as if it has its fiat currency value. That $100 bill doesn’t get more valuable if you use it just like paper (e.g. toilet paper, lighting a cigar). Not much value in expanding further on how/why fiat currency works.
If the materials are worth more (like a penny), then people would rather have the material value than the fiat value and may try to melt those pennies down for the metal. The government typically passes laws to prevent people from doing this, though really the only sensible option after a coin passes this threshold is to redesign or retire it. Otherwise you’re just sucking value out of the economy.
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