22 lines
860 B
Markdown
22 lines
860 B
Markdown
<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-4-chapter-06 -->
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# Melting Pot Effects
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## Definition
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The economic phenomenon where coins are melted down for their bullion value when the metal content exceeds the face value, particularly when there is no seignorage or when degradation creates price differentials between new and old coins. This process removes currency from circulation and necessitates government intervention.
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## Source Chapter
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Book IV, Chapter 6
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## Context
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Smith describes how the absence of seignorage and the degradation of currency create incentives for melting down coins. He uses the metaphor of Penelope's web to illustrate how the mint's efforts to add new coins are constantly undermined by their removal through the melting pot.
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## Economic Domain
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Regulation
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---
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