Dollar Facts
- How big is the current US debt? At 5 million dollars a day it would take
40,000 years to pay it off!
(Note: As of 11/09 the debt is much, MUCH larger now )
- The US Constitution defined the US Dollar as a silver coin that weighs 371.25 grains. This made it a pure Commodity money
- .Our current dollar is a Fiat dollar. Does this mean one dollar is worth one Fiat?
- The constitutional clause that makes silver coin the legal money of the US has never been repealed, but it has been both sidestepped and ignored by Congressional action and Presidential executive order.
- Since the creation of the Federal Reserve Bank in 1913, the purchasing power of the dollar ( its real world value) has steadily decreased. Today’s dollar has the purchasing power of approximately four 1913 pennies. Minimum loss: at least 95%.
- THe first Dollar in America was a milled Spanish silver coin which had been in circulation since colonial times. The first gold dollar
was minted in 1849. - The private coinage of precious metal coins used to be legal in the US. The first US gold coins were privately minted as a result of the California gold rush.
- Gold coins and gold holding were made illegal by FDR in 1933 and all privately held gold was ordered to be turned in under penalty of a questionably applied Trading With The Enemy Act originally written in 1917 for WWI. Citizens surrenduring their gold were “compensated” with Federal Reserve Notes that were redeemable only in other FRN. The exchange ratio was set at $20/ounce. Then, within months, FDR devalued the dollar by 40% with the loss borne by the US people. This same action raised the price of the confiscated gold sixty percent, and netted a $12 per ounce profit for the US Govt. through the exercise of executive power.
- Pennies and nickels cost more than their face value to produce and are worth more currently as scrap metal than for face value (March 2007). The practice of Base Metal coinage in the US began in 1968. Base Metal coinage has a much longer history in Europe.
- The value of redeemable US banknotes (gold backed paper money) stemmed from the fact that they were redeemable in gold or silver upon demand.
- The last US gold coins were minted in 1932.
- The last silver coin were minted in 1968
When President Nixon closed the “gold Window” in 1971, the last vestige of US commodity money was gone. At that time gold redemption had been available only to foreign holders of us currency.
- A “fiat” currency is one that is not redeemable in any commodity. Its value exists because people believe it is valuable. Historically this belief unravels in times of economic stress or upheaval. Fiat currency has no intrinsic value and must commonly be supported by “legal tender” laws and the requirement that taxes be paid with it.
- During the revolutionary war Congress issued Continentals, paper notes that soon became “worthless as a continental”.
- Lincoln issued “greenbacks” which were fiat notes used to finance the War Between the States. Their inflationary influence caused them to be revoked after the war.
- No fiat currency in history has yet survived inflationary meltdown. See revolutionary currencies of the US and France. Also Weimar Germany in the ‘20’s and more recently Brazil in the ‘90’s.
- Inflation is not the effect of rising prices but the cause of them. Every additional dollar that is printed lowers the purchasing power of previous ones.
- Under the US system of purely fiat currency and Keynesian monetization of debt, every dollar in circulation represents someone else’s debt. Money is “loaned” into existence. If all private and public debts were erased, all circulating currency would need to be retired – unless of course more notes were printed.
- Because of the requirements of debt to earn interest, the size of the money supply must constantly increase with each new round; thus fiat currencies are inherently inflationary. Rather than being a cure for inflation, the Federal Reserve Bank is a major cause of it.
- The effects of inflation are not uniform in society. Those that get “new” money first (banks, governmental departments and government contractors to name a few) reap its rewards, but the effect of more money chasing the same amount of goods and services tends to push prices up. Those lower down on the monetary food chain ( you and I for instance) mostly get higher prices and lowered value.
- Production costs are the same for a $100 dollar bill as they are for a $1.00 dollar bill. There is consequently a significant profit to be made in the printing of money.
- The rise of unlimited warfare is directly related to the rise of deficit financing. So are bloated “defense” budgets.
- back to orcaspod.com