Bet your bottom Thaler

26 September 2012 By Martin Hutchinson

Goldman boss Lloyd Blankfein reckons the dollar’s reserve status may be at risk. Having no dominant currency would hark back to the 18th century, when silver pieces of eight competed with many other coins. Specialist currencies might emerge, but trading costs could rise.

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Lloyd Blankfein, speaking at a Clinton Global Initiative conference on Sept. 24, said that the so-called fiscal cliff, faced by the United States if Congress does not reach a compromise before Jan. 1 on spending cuts and tax increases, could put the dollar’s reserve currency status at risk.

Pieces of eight, Spanish silver coins of eight reales, were minted by Spain after currency reform in 1497 and circulated widely in the American colonies, remaining legal tender in the United States until 1857.

The Maria Theresa Thaler, marked with a portrait of the 18th century Austrian Empress, was a coin containing 0.752 ounces of silver that was adopted across the German-speaking world by the Bavarian monetary convention of 1751. About 389 million were minted in Birmingham, Mumbai, Brussels, London, Paris, Rome and Utrecht as well as in the Habsburg Empire mints after 1751. They circulated widely in Africa and the Middle East through the 19th and 20th centuries. Following formal requests from the Austrian government, the United Kingdom was the last government to cease minting Thalers in 1962.

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