Sound money is money that is not affected or prone to depreciation or appreciation in the long term. This causes a disconnect between the supply and demand of money in the economy. The sound money here had the real authenticity and a show of real wealth as opposed to paper, plastic and electronic debt instruments that are being used nowadays. Sound money was phased out when Romans replaced the real silver with metallic objects, that is why there are no longer in use nowadays but have become crucial today since the value of money used today has come up with so many problems. Here are some of the benefits of using silver sound money as currency in today’s world.
As mentioned above the main advantage why silver sound money should be used is the ability to stay intact and not get controlled or affected in terms of either depreciating or appreciating. This particular advantage made it widely accepted by the constitutional convention in the history of the USA.
Through the use of sound money as a means of exchange, individuals, firms, and governments are able to caution themselves whenever financial disaster looms. Sound money basically has the advantage of ensuring even when there is a boom or recession in the economy the value of currency remains the same. It may seem hypocritical but with the realization of what paper money does.
That is why nowadays lenders and borrowers enter into gold-clause contracts that ensure that either party get paid in the form of gold or silver coins in the future. The agreement entails only repayment of debt in sound money and not any other form like paper money. The problem of unsafe conditions that warrant most lenders not to provide loans to borrowers has been completed eliminated by the use of sound money.
With these benefits in place various countries have begun steps in the adoption of sound money to perform various transactions in the free market states. Some countries who have adopted partial use of sound money charge taxes on the use of gold or silver to undertake any transactions. It is a diversification mechanism that can save everyone in the case of inflation especially those investing in bonds and pensioners since these items are what they depend on to either get loans, perform other money-related transactions and having to settle for assets when the maturity of the instruments is achieved.
As time goes the reliability of sound money is becoming a hard reality for governments, individuals and firms. It has become necessary that fresh policies are to be made considering the fact that the longer we wait, the more the apparent danger of inflation faces everyone in the economy. Various individuals in the government have developed bailouts that are not necessary, sabotaging of the economy and printing of money recklessly to reward themselves. Advocation for sound money is the right direction everyone should undertake and better legislation being put in place to protect owners of sound silver currency or money.