Forever Stamps, Forever Currency?
June 14, 2011
I am a fan of the post office’s forever stamps. I can buy them today for 44 cents each and whatever the cost of first class postage in the future, they will be good at that rate.
What about forever paper money? Pick a federal service for the $1 Federal Reserve Note and say it will always be good for it.
That would be a nice hedge against inflation and convenient, too.
Too strange, you say?
Could be, but in the heyday of precious metal money, the United States issued various kinds of paper money with various kinds of redeemability clauses. Somehow the public was able to sort through them.
The federal government already issues bonds that adjust for inflation over time.
Give the new issue the familiar design but with a different color seal.
I had great fun as a kid getting Blue Seal Silver Certificates, Red Seal United States Notes and Green Seal Federal Reserve Notes. Most people didn’t realize that there were different forms of paper money until the Silver Certificate redemption fever struck in late 1967 and lasted until the silver window closed June 24, 1968.
Would it be practical?
The Red Seals had their roots in the Civil War. It was then that the Union government, which was short of gold, basically threw everything against the wall to see what stuck. It was a time of crisis, inflation and financial improvisation.
The Treasury succeeded in its goal of funding the Civil War and keeping the rest of government functioning.
Can a federal government, short of gold, come up with a latter-day equivalent of its Civil War success?
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