ngs Modern Numismatics: Polarizing Impacts of Domestic Currencies on Markets

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A Study on Modern Numismatics: Polarizing Impacts of Domestic Currencies on Markets in Almaris

Dr. Elibar’Indor Hilea

Doctor of Political Economy

Master of Research for the VSSA & Affiliated Research with the NGS

Northern Geographic Society Press

Published 79 S.E.

 

ABSTRACT

     Since the arrival of settlers in Almaris, production of the mina has been stagnant. Prior literature suggests that the Cloud Temple monks have decreased mina production, prompting national treasuries to create domestic currencies in their respective nations. However, the creation of domestic currencies have the potential to create a politically polarized climate in their host nations. This article details the history of numismatics in descendant nations, the economic motivations to transition away from the use of commodity currencies, and the alienating effects of domestic currency reliance.

Note that this study uses the VSSA citation style.

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INTRODUCTION

     For as long as recorded economic literature spans, it is generally implied that the dominant currency has been the mina. The mina has been a convenient form of trade between individuals since its initial production by Cloud Temple monks. Governments, merchants and consumers alike are thought to have favored the mina as a commodity currency, one which is backed by the inherent value of the materials used in production. No matter the economic state of the realm, actors in the economy did not have to worry about the value of the mina in their bank accounts, as its value was backed by inherent worth; the worth of their coin would not fluctuate, even if the real prices of commodities did. These traits defined the mina by three critical properties: universality, accessibility, and abundance. The mina as a commodity currency thus provides denizens with the ability to use the mina as a means of exchange across nations (universality), the acknowledgement of minae at nearly every banking institution (accessibility), and the sheer amount of mina available in the money supply, as it was produced by a central minting authority rather than individual governments (abundance). The abundance of minae is a trait especially enticing the state treasuries as they would not have to invest materials or labor costs into the production of a domestically minted currency. Exceptions to this rule have existed throughout history, such as the series of Halfling societies which instead opted for trade through barter, but the mina remained the dominant currency in nearly all major descendent societies.

 

     However, the arrival to Almaris has been accompanied by a decrease in the amount of mina available to the general public. It may very well be that Almaris is a continent lacking and devoid of the necessary natural minerals used in the production of the mina. Although it is unclear what the physical coin is minted from, other industries have experienced stagnation in natural resources. The eastern Almaris economic crash of the 1860’s was credited to the depletion of precious minerals in the Komnenos mines of Oren (Ana, 1865). The production of jewelry and beauty products which made use of these precious resources became challenging, just as we may assume the production of minae did due to a scarcity in the necessary minerals used in production. Without declassification of the mina production process from the monks, it is impossible to make a definitive deduction, though there is obviously a plausible foundation for correlation. However, the rhetoric of state treasuries implies that the reasons for creating domestic currencies is also tied to politics that are distrustful of foreign societies and currencies.

Nonetheless, the scarcity in mina did begin to spur a wave of domestic fiat currencies in Almaris to replace the mina. These currencies differ from minae in that they are minted by a particular government, backed by the monetary authority of the issuer rather than the intrinsic value of the materials used in production. From Haelun’or to Haense to Uruguan, nations have begun the production of fiat currencies to replace the mina, assuming agency of their own economies. The success of these domestic currencies continues to be a topic of discussion and warrants further research, though the political effects remain completely unexamined in current academic literature. Rather, this study intends to analyze the political origins and influences of domestic fiat currencies on their consumers. How can domestic currencies alienate nations from international markets?

 

HISTORY OF DOMESTIC CURRENCIES

     Early exceptions to the rule of minae dominance included predominantly human examples. On Axios, the Margraviate of Ponce began to issue their own domestic currency, the Silver Pound, produced from their nearby silver mines (Falk, 1634). The Silver Pound was a commodity currency backed by the fluctuating prices of silver, but still represents an exception to the dominance of mina in early societies. More recently, the Imperial Mark was the short-lived currency of the Holy Orenian Empire (Penton, 1836). The Imperial Mint was the first to begin the production of paper bank notes to accompany metallic coins of lower denominations. Initially minted in 1836, the new currency superseded any other domestic currencies minted through the prior edicts of 1765. Nonetheless, Oren had begun to dabble in fiat currencies, creating a means of exchange wherein value was entrusted by the issuer.

 

     Almarian examples begin with initiatives from Haelun’or, where the Silver State sought to escape the “crumbling economy of Almaris” through the creation of their own national currency, the Ibar’thilln (An’asul, 58SE). While the creation of an Economic Reform Committee also created a series of guilds tied to particular industries, it also maintained that the Ibar was the only acceptable means of exchange within Haelun’or. Rhetoric used by the Okarir indicates that there are political motivations to shift “towards freedom from the festering greed of our enemies. For Mali'thill do not need their fruit, their produce, their coin to survive, for we are more than capable of thriving with no more than the efforts of the purest of elves” (An’asul, 58SE). The Haelunorian example makes heavy usage of alienating rhetoric, implying that the “crumbling” economy of Almaris is directly related to the universality of the mina.

 

     Further, the United Provinces of Dùnrath have recently begun minting their own currencies. The Rathonian currency exists in a peculiar space between commodity and fiat currencies, reliant on both the faith of the issuer as well as the fluctuating prices of metal relative to the Almarian mina (Sutharlainn, 73SE). The Monetary Act of Dunrath implies that the mina is an unstable and illegitimate currency, but does not present rhetoric which directly subjugates foreigners or implies that the declining state of the Almarian economy is the fault of non-Rathonians. Recent introductions of new domestic currencies in the Dwarven economy have also been attributed to a declining age of economic expansion. Though the Kingdom of Urguan had previously used a faulty domestic currency – the Karzul – the Grand Bank has recently issued the Minek as a replacement (Goldhand & Grandaxe, 70SE). The Minek is, decidedly, a fiat currency as the conversion from mina is subject to an exchange rate dictated by the Grand Bank. Nonetheless, the Minek is also attributed to a floundering economy of the “Second Age.” Of course, the most prominent and dominant instance of modern domestic fiat currencies rests with the Hanseti Krawn, similarly attributed to fix economic woes, though does not make use of the fiat currency. Introduced in the early 1800’s, the Krawn originally included bronze, silver and gold denominations. Since the Krawn is backed by the value of minerals as an asset, they retain their value as a means to mitigate inflation (Vyronov, 78SE). Economic downturn is also credited as the reason for reliance on domestic currencies, citing the rapid inflation of the price of mina relative to the Krawn, but also the economic ramifications of recent warfare. Perhaps warfare implies increased government spending on expensive military equipment produced by Hansetian industries, increasing the overall demand (and equilibrium prices) of related goods used in military production. The implication is that the inflation caused by militaristic spending would have an expansionary effect on the demand for certain goods, causing an increase in prices. Nonetheless, Hansetians cite the Krawn as a means to prevent creeping inflation and are increasingly proud of their domestic currency.

 

ISOLATION OF DOMESTIC MARKETS

     The effects of domestic currency reliance, in all cases, can imply the isolation of various markets that is no longer reminiscent of the mina. Recall the attributes which define that of the mina: accessibility, universality, and abundance. Without banking institutions which accept a standard international currency, access to domestic currencies becomes difficult to those conducting international trade. Commerce suffers as a result of foreign consumers being unable to access their own money. While a Hansetian may spend their Krawn domestically, visiting Dunrath becomes an issue, should they wish to purchase goods using their Krawns. Conversion of the Krawn to Agra at Rathonian banking institutions may not even be possible, let alone the conversion of Agra to mina, should the Hansetian possess only the Krawn (Sutharlainn, 73SE). The same is true of a Rathonian in Karosgrad, or a foreign consumer in any market which makes use of domestic currencies. Thus, national treasuries have sacrificed the universality of their currency for a marginal increase in agency of their domestic markets, forgoing accessibility and universality. The abundance of domestic currencies may vary between nations.

 

     The result of this alienation is an economy which becomes increasingly reliant on domestic goods rather than international imports. The degree to which domestic currencies may decrease imports is yet to be examined, but conventional wisdom would suggest that the lack of accessibility and universality could create an isolated domestic economy. This is especially true in economies where the domestic currency is considerably weaker with fewer consumers. However, this may be a desirable effect to some nations. For instance, the Ibar is spurred by distrust of foreign banking institutions, accompanied by the desire to create a more intimate domestic labor market (An’asul, 58SE). Perhaps the Ibar creates an incentive to engage in foreign commerce outside of Haelun’or, leaving Haelunorians to their own devices and creating domestic economic activity that is not reliant on exogenous markets. To others with less centralized economic hubs and more rural populations, the decrease in foreign commerce may have an alienating impact on the domestic markets. Without imports, the economies which have a comparative disadvantage in the production of most goods would suffer, unable to capitalize on their abundant resources in exchange for the imports they so direly need.

 

CONCLUSION

     Although domestic currencies are almost sure to isolate domestic markets from international commerce, the effects may be viewed as desirable to some economies. For those with a reliable domestic labor force, suitable capital to produce the demanded products, and the political will to detach from international reliance on the mina, the isolation of domestic economies can arguably be viewed as a favorable outcome. Economic analysts should be urged to conduct cost-benefit analyses when minting domestic currencies, and further research should explore quantitative impacts of domestic currencies on imported goods. There exists a potential field of research to explore the rise of domestic currencies and the differences between means of exchange. I have opted to coin a term for the study of currencies (pun intended), dubbed “numismatics.” Rooted in the Flexian word for coin, “nomisma,” I find that numismatics can be a useful field of study for macroeconomists across Almaris, further informing national treasuries and mints of potential economic policies.

 

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BIBLIOGRAPHY

Ana, J. (1865FE) The Beauty Industry Crash of 1865. Red Rose Industry. ((Link))

Falk. (1634FE) The Silver Pound of Ponce. The Ponce Exchange. ((Link))

Goldhand, H.; Grandaxe, D. (70SE) Urguani Economic Reform. The Grand Bank of Urguan. ((Link))

Penton, H. (1836SE) The Imperial Mint. Ministry of the Treasury. ((Link))

Sutharlainn, D. (73SE) The Monetary Act S.A.73. Grand Governor of the United Provinces of Dunrath’s Office. ((Link))

An’asul, U. (58SE) In Regards to the Economic Reformation of Haelun’or. ((Link))

Vyronov, G. (78SE) Krawn Exchange & New Krawns. Golden Crown Bank. ((Link))

[DahStalker 2858]

Lhoris read over the research paper with a bright smile! She stored away in one of her many piles of papers, though this one was of her favorites.

[KamikazeReaper 400]

The baronet of Westfall stands in his office at his mine in Oren when a scribe comes in with the case study, where the scribe had marked out a line of the text
"Thank you"  the baronet said as he took a look at it , "Depletion of precious minerals in the Komnenos mine in Oren" he said out of loud, before looking out of the window seeing small crates of precious minerals getting packed for shipment
" Depletion my ***, there was an war to deal with and my workers was either drafted or had to flee back to their families my mine is working just fine" he muttered out loud before placing the study on his desk so he could read it at full later 

[GMRO 5252]

Karl III peruses the Haeseni marketplace, having only bought local for some time already.