What is Grensham's Law?

Grensham's Law is the dictum that "bad money drives out good" where a government assigns the same nominal value to two or more forms of circulating money whose intrinsic values differ. The "bad" money will be used as a medium while the "good" money based on precious metals will be hoarded. Although the law was named after sir Thomas Gresham, he did not originate or formulate it. It was accepted economic belief before his time.