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The One Ring Forums: Tolkien Topics: Movie Discussion: The Hobbit:
A probably pointless thought
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The Shire

Feb 15 2013, 9:58am

Post #26 of 28 (314 views)
This thread has strayed far from the original topic but one last word [In reply to] Can't Post

on the subject of currency before I put a fork in say I am done with it.

All modern monetary systems are based on the principle of fiat currency. This means that the value of money is derived not from any intrinsic value (as if it were made from precious metals) or the promise to redeem them for a set amount of precious metals but because the government dictates that it must be accepted as currency. The value of money is set by a mixture of what the government says it should be and what private and public speculators say it should be.

A coin valued at $20 will likely not have $100 worth of gold put into its making.


Feb 15 2013, 1:55pm

Post #27 of 28 (301 views)
Initially, no [In reply to] Can't Post

A coin valued at $20 will likely not have $100 worth of gold put into its making.

The American Gold Eagle coins are not used for their face value; rather, their weight in gold. The $20 dollar coin is currently worth around $1800 in gold. This is one of those times where reality is crazier than my example. The only difference is the govt. recognizes this and you can't buy them at face value to make unlimited money.

The Hobbit is the same situation. The gold and silver in the coin would be worth much more than the face value of the coin. It doesn't matter what the coin says; Bilbo is not using it as cash. He's using it as a precious metal. Nobody in their right mind would use an American Gold Eagle as cash, and neither would Bilbo.


Feb 15 2013, 3:54pm

Post #28 of 28 (417 views)
I doubt that Middle-earth is subject to modern economic theory... [In reply to] Can't Post

The currency used in the Shire was probably primarily bronze, copper and tin coins with the occasional silver piece. Gold coins may well have existed, but they would rarely be seen or used in such a rural setting--only for very large expenditures of cash. I'm sure that barter would have been common and that would require no coinage.

It would not be surprising if the larger kingdoms of Middle-earth were on some sort of standard based on precious metals (either gold or silver); until recently, that was the historical norm. The electrum coin (a mixture of gold and silver) was not an invention of Dungeons & Dragons; it was highly valued (even above pure gold) in Ancient Egypt.

'There are older and fouler things than Orcs in the deep places of the world.' - Gandalf the Grey, The Fellowship of the Ring

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