March 27, 2007

Drop Pennies In The River To Mitigate Inflation

Frequently Asked Questions About Dropping Pennies In The River To Mitigate Inflation:

Q: Why drop pennies in the river?
A: To mitigate inflation.

Q: Does dropping pennies in the river mitigate inflation?
A: Yes.

Q: How does dropping pennies in the river mitigate inflation?
A: Inflation is caused by increased money supply. Dropping pennies in the river effectively decreases money supply by taking currency out of circulation (and into the river).

Q: I don’t understand.
A: Broadly speaking, if we all have less pennies, the pennies we do have become more valuable.

Q: I still don’t understand.
A: Consult your friendly local economics student.

Q: How many pennies ought I to drop in the river?
A: Opinions vary, but it is important to drop no more pennies than you can realistically afford to lose.

Q: What about larger denominations (two pence coin, five pence coin, etc.)?
A: Dropping coins other than pennies in the river is also viable. As ever, please use your own discretion.

Q: Is it more ethical to drop pennies in the river, or give pennies to a beggar?
A: Perhaps surprisingly, the former. If you give pennies to a beggar, only the beggar benefits. However, it benefits everyone to mitigate inflation.

Q: What if I believe the beggar will go on to drop pennies in the river?
A: Then you can feel free to give generously.

Q: Someone told me that dropping pennies in the river does not mitigate inflation.
A: This person may subscribe to the Keynesian school of economics, and ought to be responded to with skepticism.


- One comment Not publicly viewable

  1. Justin

    Isn’t there a limit to the number of pennies that should be dropped in the river? At some point, so many pennies will be in the river that commerce on that body of water will stop. Boats will bottom out on the mounds and mounds of currency. Plus, if there aren’t enough pennies to meet the change demands of local merchants, won’t they have to round their prices up to the next highest even number?

    07 Apr 2007, 00:26


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