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The Silver Standard
#1
As it says on the can, Zenrax is strongly considering housing its long-standing policy of using hard silver as legal tender in legislation. At this time, we don't have units of currency, and instead just treat silver bullion in terms of weight as its own independent standard for us to use. Given the fact that we cannot afford to mint coins at this time, instead we chose for a long time to allow the trade of any amount of silver, based on minimum standards of weight, purity, and determinable authenticity of the metal(s) being traded.

For a while we pegged this unset standard to the US Dollar, but with this currency's inflation and movement against other world currencies, silver's fluctuating market value, and our desire to use an independent means of trade, we de-pegged it quickly from the Dollar, opting instead to use standard weight such as grams and ounces (with Troy and Imperial both being used) for trading. Since our local trading in silver very rarely exceeded that we could physically carry on our person, the need for "silver certificates" and other silver "replacements" or "supplements" for very large transactions (in bars of silver, gold bullion, bank notes, and related material) never arose.

This all being said, we will need to establish a base unit with which to carry on with the establishment of the "Trade Dollar" (as it was known worldwide in the 19th century) as a legal tender in Zenrax for years to come with the people of Zenrax and those they deal with. At the moment, we don't plan on establishing a set name for the currency (because it's just silver), nor minting rounds until we have capital to afford doing this in large quantities. However, is this advisable? Also, what's a good base weight in which to strongly peg other currencies and commodities against our official legal tender (USD and hard silver)?

We face these and other questions as we attempt to open ourselves up to more trade with the outside world. Other concerns include online transactions, which at the moment cannot be done without a named currency pegged to hard silver -- again, which we do not yet have and likely cannot have in large physical quantities for at least several more years. (As an example, I only have about one kilogram of hard silver in a "treasury fund.")

What other advice can others offer on the matter?
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#2
Of course, this gives rise to the concept of a 10th century Saxon or Danish Thegn hording his wealth and burying coins under his throne, or weaving silver rings into his chainmail... of which I heartily approve.

As to your question, though, I would think that grams or ounces would be the most applicable base weight. Ounces are probably the most convenient, and since silver weighs in around $17.58 USD/oz, this would be fairly manageable (as opposed to Gold which is over $1000 USD/oz) and minor transactions would come out to half an ounce or a quarter ounce, rather than 500 grams, etc.

While this may leave you open to speculation - with foreign investors playing current valuations of silver against marketable goods, it also allows for investment, since holding your money itself would be an appreciating asset rather than a depreciating one.
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#3
Indeed it would. I suppose that security could be worried about farther down the road, but we'll still need something to safeguard against scams, like someone else minting steel rounds and passing it off as currency.
Either way, I'm thinking that a standard round only weigh in at 25 grams, just to keep things very stable. This allows for easy trade without much changing coins around from grams to ounces.
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#4
Very thoughtful! Andany also uses a Silver Standard. Our exchange rate is currently 4 ounces of Andanian silver is equivalent to §1 Regal (REG). Like the U.S. used to do it, for every Regal bill printed, we have to have the same amount of silver. If we don't, the bill is destroyed or stamped worthless for collection. Below is an image of the genuine silver leaf the Bank of Andany has to compensate for the Regals.


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"If it was the truth, there would only be one way of explaining what it is. If it were a lie, there would be a million ways to describe it."
~ Pablo Macías, 2018

His Majesty Prince Pablo Ailani Macías of the Principality of Andany

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#5
Is Andanian silver any different than regular silver? What is a Regal in a current exchange with other foreign currencies - US Dollars for instance, or British Pounds Sterling?

Emperor Thomas, in view of the ancient concept of scrap silver, or silver jewelry used currency akin to silver minted coins (people would often cut links of chain from necklaces, or weights of a bracelet to pay for items) it reminds me of the significant amount of "in use" silver that I have in Siar Fordell - heirloom flatware, mint julep cups, champagne coolers, makeup compacts, etc. that were inherited from ancestors (I'm southern... its what old families do apparently) rather than putting ancient pieces and art work into circulation, I will consider using the value as security on a loan into USD, or as viable credit for extended operations.
"Sola Virtus Nobilitat!"
Virtue (Valor) Alone Enobles!

Ser John Marshall, Thegn of Siar Fordell

The Thegn-Hold of Siar Fordell

Wiki Page for Siar Fordell
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#6
I like the concept of credit issued based on national assets, but I'm still unsure of how to securely issue such tender, and build on the full faith and credit of our small government.

How would you go about this?
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#7
(7 Jun 2018, 20:57:07)Thomas Merrell Wrote: I like the concept of credit issued based on national assets, but I'm still unsure of how to securely issue such tender, and build on the full faith and credit of our small government.

How would you go about this?

It is tough to do using your own currency, and might involve simply trading notes based on good faith (and backed up by national assets) until national credit is truely established. Admittedly, my focus has been based on using US Dollars with national (or feudal estate) assets as collateral - most likely done in collaboration with a bank. The idea being that a loan of several thousand dollars secured through assets and thus at a low interest rate, would be put into good use and turn a profit, while keeping the assets within the estate.
"Sola Virtus Nobilitat!"
Virtue (Valor) Alone Enobles!

Ser John Marshall, Thegn of Siar Fordell

The Thegn-Hold of Siar Fordell

Wiki Page for Siar Fordell
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#8
That would be an interesting idea. It's not hard to amass enough capital over time to build an adequate treasury for a small polity such as Zenrax, though. We really only need about 5% to 10% of national GDP in reserves if we're trading notes and minting/issuing rounds.

Given that figure, having that number might only take a few short years to achieve.
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#9
(7 Jun 2018, 16:45:40)ThegnSiarFordell Wrote: Is Andanian silver any different than regular silver? What is a Regal in a current exchange with other foreign currencies - US Dollars for instance, or British Pounds Sterling?

Emperor Thomas, in view of the ancient concept of scrap silver, or silver jewelry used currency akin to silver minted coins (people would often cut links of chain from necklaces, or weights of a bracelet to pay for items) it reminds me of the significant amount of "in use" silver that I have in Siar Fordell - heirloom flatware, mint julep cups, champagne coolers, makeup compacts, etc. that were inherited from ancestors (I'm southern... its what old families do apparently) rather than putting ancient pieces and art work into circulation, I will consider using the value as security on a loan into USD, or as viable credit for extended operations.

Hello! Our silver is the same as real and regular silver, we just call it Andanian to differentiate it from foreign silver in the open market. Okay, so §1 (one Regal) is equivalent to $67.12 USD according to the following website: https://www.xe.com/currencyconverter/con...XAG&To=USD . This is because one Regal has 4 ounces of genuine silver on it, that's why it is 4. I just realized that it's actually worth A LOT of money and now I'm excited!
"If it was the truth, there would only be one way of explaining what it is. If it were a lie, there would be a million ways to describe it."
~ Pablo Macías, 2018

His Majesty Prince Pablo Ailani Macías of the Principality of Andany

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#10
(2 Jun 2018, 19:23:51)Cosmic Fury Wrote: As it says on the can, Zenrax is strongly considering housing its long-standing policy of using hard silver as legal tender in legislation. At this time, we don't have units of currency, and instead just treat silver bullion in terms of weight as its own independent standard for us to use. Given the fact that we cannot afford to mint coins at this time, instead we chose for a long time to allow the trade of any amount of silver, based on minimum standards of weight, purity, and determinable authenticity of the metal(s) being traded.

For a while we pegged this unset standard to the US Dollar, but with this currency's inflation and movement against other world currencies, silver's fluctuating market value, and our desire to use an independent means of trade, we de-pegged it quickly from the Dollar, opting instead to use standard weight such as grams and ounces (with Troy and Imperial both being used) for trading. Since our local trading in silver very rarely exceeded that we could physically carry on our person, the need for "silver certificates" and other silver "replacements" or "supplements" for very large transactions (in bars of silver, gold bullion, bank notes, and related material) never arose.

This all being said, we will need to establish a base unit with which to carry on with the establishment of the "Trade Dollar" (as it was known worldwide in the 19th century) as a legal tender in Zenrax for years to come with the people of Zenrax and those they deal with. At the moment, we don't plan on establishing a set name for the currency (because it's just silver), nor minting rounds until we have capital to afford doing this in large quantities. However, is this advisable? Also, what's a good base weight in which to strongly peg other currencies and commodities against our official legal tender (USD and hard silver)?

We face these and other questions as we attempt to open ourselves up to more trade with the outside world. Other concerns include online transactions, which at the moment cannot be done without a named currency pegged to hard silver -- again, which we do not yet have and likely cannot have in large physical quantities for at least several more years. (As an example, I only have about one kilogram of hard silver in a "treasury fund.")

What other advice can others offer on the matter?

Issue certificates.
You don't need to have ANY silver in your treasury to issue a silver certificate, as long as you ensure you purchase silver with the money you got from selling the certificate.

Beyond that it's like any other business venture, charge more than the item costs you, I would invest in a good safe/vault as well to store your silver, preferably with an alarm and fireproof, or probably safer would be a safety deposit box (though a bit pricier). Create a tracking system for the certificates, each getting a unique number, and destroy the certificates upon redemption to prevent yourself from paying both a fraudulent certificate and a bonafide one.

I might also suggest hiring a lawyer to help you figure out the best way to handle the liability here, you'll probably want to incorporate to shield your assets from any liabilities on behalf of your new bank.

If you're interested in doing this, what you want to look up on google is "commodity backed bonds". As I understand it, just about anyone can issue a bond, so it shouldn't be impossible for you to do, I would make sure you follow the laws pretty closely though, it protects you and the people using your currency.
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