Gresham's Law

Posted by Bob on April 16, 2006

In Reply to: a "bad penny" posted by Smokey Stover on April 14, 2006

: : : Where does the expression about a "bad penny" come from what does it mean, what is the real expression anyway

: : The expression I always knew invariably went along the lines of "he's turned up like a bad penny",
: : i.e. he's unwelcome, just as a "bad"(counterfeit) penny was unwelcome if given to you in change. Remember, the saying must be very old, certainly going back to times when a penny was worth a bit!

: The "real" saying might be (or might not), "A bad penny always turns up." Or maybe it's "bad pennies always turn up." The reason for this is that no one wants to hang on to a bad coin, so if someone gives you a bad penny, you make sure to pass it on to someone else, thus becoming part of the cycle of bad pennies turning up. Like Canadian quarters. SS

It's Gresham's Law come to life. Bad money drives good money out of circulation. You get rid of the bad penny as soon as possible, and the grocery store gives it back to you in change tomorrow for the same reason,