Hard money (policy)
Hard money policies (as opposed to fiat currency policies) support a specie standard, usually gold or silver, typically implemented with representative money.
In 1836, when President Andrew Jackson's veto of the recharter of the Second Bank of the United States took effect, he issued the Specie Circular, an Executive order that all public lands had to be purchased with hard money.
Dual definition
The term “hard money” may refer to either of two things.[1] It can, first of all, be used for actual gold or silver coins, for example. Using this definition, one can say that a hard money policy is one in which the government recognizes currency which is based on an actual, fixed item which is considered valuable.
Hard money is also considered the opposite of fiat money, which is currency that takes its value from the government declaration or law which assigns the said value to it.[2] As such, this kind of money is not inherently valuable, but may be used in transactions as long as it is said to be legal tender. The use of fiat money is now more common than the use of hard money, especially on an international level. The US dollar, for instance, is an example of a fiat currency.
On the other hand, hard money can also refer to funding received from a government or other entity. Rather than issuing the entire amount all at once, however, the government or organization releases the funding at regular intervals, thus providing a steady inflow of financial resources to the beneficiary.
Hard money is usually issued by the government for the advancement of certain projects or for the benefit of specific agencies. Community healthcare, for instance, may be supported by the government by providing hard money. Since funds are disbursed regularly and continuously, the offices in charge of such projects are able to achieve their objectives more effectively than if they had been issued one-time grants.
See also
- Bullion coin
- Digital gold currency
- Fractional reserve banking
- Gold standard
- Hard currency
- Libertarianism
References
- ↑ "Hard money definition". Retrieved 2012-08-20.
- ↑ "Fiat money definition". Retrieved 2012-08-20.
Further reading
- How Gold Coins Circulated in 19th Century America David Ginsburg
- North, Douglas C. (1966). The Economic Growth of the United States 1790-1860. New York, London: W. W. Norton & Company. ISBN 978-0-393-00346-8.