bad money drives out good

bad money drives out good

The presence of counterfeit currency keeps genuine money out of circulation. Bad money drives out good. And that is what will happen if the value of gold keeps dropping.

See also: bad, drive, good, money, out

Bad money drives out good.

Prov. If there is counterfeit or inflated currency in circulation, people will hoard their genuine currency; worthless things will drive valuable things out of circulation. (This principle is also known as Gresham's Law.) When the government reduced the amount of copper in the pennies it produced, we saw that bad money drives out good; everyone saved copper pennies and only spent the less pure ones. Ever since cheap, flimsy furniture began to be manufactured in large quantities, it has been very difficult to find solid, well-made furniture. Bad craftsmanship, like bad money, drives out good.

See also: bad, drive, good, money, out