Discussing the benefits and costs of such a metallic monetary system Essay

Discussing the benefits and costs of such a metallic monetary system for an aspiring new country - Essay Example In as much as metallic money has its advantages, it also has its dark sides. For metallic money to be effective in any country, it requires a large amount of gold and silver (Poor, 121). Since gold and silver are highly valued metals, there are used in place of monetary value. This can, however, be an expensive the metallic monetary system, for a young nation. The initial cost of producing metallic money is also expensive because of the machinery and equipment used, and the high labor cost required. This can be a burden to the country’s resources. Due to the expensive nature of gold and silver used in production of metallic money, their circulation in the economy can be limited. A new nation cannot afford to purchase a large number of these metals. It is hard to make metallic money distinctive enough so that large denomination of money can be produced (Poor, 127). There are few metals used to make money and so a limited color choice. Metallic money is, therefore, not desirable to make large denomination of money. . Metallic money is a durable type of money system. To a new country, this is advantageous because the nation will spend once on their manufacture. The metals are highly resistant to wear and tear as compared to paper money (Poor, 120). This is because most of the metals used to make money are combined with other metals to make alloys which make them last longer. In the long run, the metallic monetary system can be cheaper to produce and are cheaper to count as compared to paper money. Metal money is valuable. The main metals used for making metal money are gold and silver, which are expensive metals. The value of the currency of a nation will still be controlled by gold and silver, which hardly lose value in the world. Therefore, if a new nation decides to use metallic monetary system, its currency will be stable for a long time. Metallic money is made from gold and silver, which are very expensive. This will make the