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Gresham’s law is an economic principle that states: “When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation.”[1] It is commonly stated as: “Bad money drives out good”.
Comment:
Those were the good ole days when the whole world used AU and AG as money. I wonder what was the difference between under and over valued money? Purity of the metals?
Anyway in todays situation, with stocks bonds and real estate and even oil futures commodities used as money, how does this “modern money” fit in to Gresham’s Law? Which is over or under valued “money” today?? The Bonds? General Stocks? Oil?