World coins chat: Nicaragua

Nicaraguan monetary history started in 1878, when the peso was introduced to replace the old CAR Reales coins and other neighbouring states' currencies. There was the peso fuerte (strong peso) linked to gold, and a paper peso moneda corriente. By 1912, the peso moneda corriente had devalued to 12.5 to 1 peso fuerte, after which the Córdoba was introduced at par with peso fuerte, and equal to 5 French Francs, just like the other Central American currencies.

The Córdoba is named after Francisco Hernández de Córdoba, a Spanish conqistador who is considered the founder of Nicaragua. He was depicted on the Nicaraguan 5 to 50 centavos coins until 1974.

The currency was relatively stable until the 70's, when a period of severe inflation started during a time of civil and political unrest involving the Sandinistas on the left side of the political spectrum and the US backed "contras" on the other side in a dirty struggle for power. In 1988, the Córdoba was replaced by the 2nd Córdoba at a rate of 1000 to 1, which even suffered from hyperinflation until the 3rd Córdoba replaced it at a rate of 5,000,000 to 1. As such, the current Córdoba now trades 27 to the US Dollar and about 30 to EUR. A Córdoba is worth 62.5 billion old pesos moneda corriente.

The Nicaraguan coins from 50's to 70's are quite easy to find, but the 80's ones are relatively rare, maybe due to the high inflation that quickly made them worthless. For example, I have never seen the 1987 500 Córdobas. Those 80's coins either depict revolutionary Sandino or his hat.

The older Nicaraguan coins look quite special but also these are nowhere to be found except in the Numista catalogue.

https://en.numista.com/catalogue/nicaragua-1.html

These are my two oldest Nicaraguans.



Interestingly, the United States stole Nicaragua's motto off their coins - "In God We Trust". Nicaragua did it first!

I may be wrong, and frequently am, but I believe the first US coin with the motto In God We Trust, was the 1864 two cent piece. I also believe, according to the first sentence in this article, and the Numista catalogue, the first Nicaraguan coin was issued in 1878.  I only did fairly well in math when I was in school, but I think I can work this one out. Did I miss something, such as an earlier coin?

This is what LatinAmerica gets for getting loans from the WB and US. Once Nixon decided to "let the dollar float" and no longer link it to gold, all those loans magically inflated million-fold.
It was an excellent economical measure for the US as it boosted commerce; but condemned most of LatinAmerica to halt their debt payments and then their currencies plummet to hell and beyond. So it is no surprise why there is so much resentment and hate towards the US and their so called "Imperialism" South of the continent. As the saying goes "la burra no era arisca, a golpes la hicieron".

At least now they'll have a competitor at their same level witg the Asian Development Bank. I wonder if China will stab Asia in the back as well.

does it say "everyone else pays cash" on the other side?

Erdvilla, interesting viewpoint. When did things start to go sour? In the 70's when inflation was high in developed economies or in early 80's when interest rates went sky high?

I could imagine that the initial reaction of the dollar float was more capital floating to Latin America, which after the aggressive rate hikes from 1980 quickly turned into capital flight back into the USA. On top of a strengthening US Dollar and declining commodity prices this was dramatic for Latin America.

History might repeat again.

Απόσπασμα: jokinenErdvilla, interesting viewpoint. When did things start to go sour? In the 70's when inflation was high in developed economies or in early 80's when interest rates went sky high?

I could imagine that the initial reaction of the dollar float was more capital floating to Latin America, which after the aggressive rate hikes from 1980 quickly turned into capital flight back into the USA. On top of a strengthening US Dollar and declining commodity prices this was dramatic for Latin America.

History might repeat again.

Yes, this is why in a personal level I've never liked taking loans from banks, because in smaller scale is similar. I know often the capital to start something is not present and you need that sort of credit, but as long as I can I prefer to stay away from it. And when trying to buy something like a TV or a new Washing Machine I prefer to save up and then buy them instead of buying in credit as you will end up paying 1.5 products in the end (with the best interest rates, unless of course it is a "No interest" promotion; which in the end you will pay through your annual credit card fee).

They say that banks lend you an umbrella on a sunny day and claim it back when it starts to rain.

I was raised to never borrow money for consumer goods. I also saved for a reasonable downpayment on my house so that even a 25% drop won't bring me in trouble. For real investments I find it reasonable to borrow money as long the risk reward is fairly balanced.

Uncle Bob

You are right. The first U.S. coin to have that motto was the 1864 two cent piece. And, as with many smaller countries, some Nicaraguan coins were even minted in the United States.

The motto in God We Trust can be traced back to Salmon Chase, the U.S. treasurer during the U.S Civil War. I am sure he did no intend to steal the motto from Nicaragua.

As far as politics go, I follow the forum guidelines and refrain from that debate.

One of my favorite coins is this 1939 10 centavos

https://en.numista.com/catalogue/pieces5139.html   

Απόσπασμα: frncsbrennanAs far as politics go, I follow the forum guidelines and refrain from that debate.

Not really politics. It is economics; which is bonded with numismatics like Copper and Nickel in coins  

Or like fake dollars with North Korea... wait, that is politics  

In Guatemala things started to go sour in the mid 70s. I remember when Q1=US$0.99 when I was a kid. By the 80s it was about Q8/$. I'm sure that's about the same time things went wrong with other Latinamerican countries as well. Since there are already a few countries already using the USD, do you guys think we're going to go the European way and have a unified currency, maybe can it the Amero, or something like that? I think that would be a disaster if it happens.

No way that Latin America will coordinate their budgets and money supply with each other and with the USA. Some countries have chosen to work only with US Dollars to stabilise inflation. The problem that now arises is that the USD is strong and commodity prices are weak, leading to bankruptcies and deflation. Some countries, like Suriname recently, have moved their Dollar peg to devalue. Others, like El Salvador and Ecuador have little choice than to keep wages low and tighten budgets or else reintroduce their own currencies but that's risky.

Maybe the Federal Reserve will throw the towel and start devaluing the Dollar again. The current situation is similar to the first half of the 1980's in the sense that US monetary tightening is leading to collapsing commodity prices and a surging Dollar. What's different today is that the rest of the developed world is printing paper money like no tomorrow and that deflation is a larger risk than inflation. Back in the 1980's inflation was a huge threat to the international monetary system. Now it's not, but who knows what will happen when it becomes one.