Decline Of the US Dollar
In 2013, the Federal Reserve will celebrate 100 years of taking from the American people their income tax and gold. They will raise their glasses, toast one another, laugh and say what suckers the American people are.
In 1913, the Federal Reserve Act granted sole authority to the Federal Reserve to act as a banking cartel, not a governmental branch with the right to issue legal tender and in effect steal from the American people their money in the form of income tax.
The dollar bill has experienced greatly depressed purchasing power of more than 95% since the Fed began printing legal tender in 1914 and has gained momentum more like a snowball going downhill.
But its very rapid progression toward zero value feels more geometric than arithmetic.
The year the Fed began circulating dollar bills, 1914, the mints also inserted 700,000 new $10 Indian Head Gold Eagle coins. Once the working citizens had possession of the coin, each would buy its face value in goods or services, $10. Similarly, the crisp new $10 bill of the Federal Reserve would buy $10 worth.
Over the ensuing 98 years, successive Federal Reserve Chairmen have attempted to protect the purchasing power of their paper money, their soft money, leaving the Gold Eagles to take care of themselves. The value of this unprotected “hard money”, the Gold Eagles, shot skyward, and the soft money which had the Fed’s “protection” disintegrated. Considering the chemical make-up and actual metal content of the 1914 $10 Indian Head Gold Eagle, its worth today is around $800.00, while the 1914 $10 bill is still worth ten dollars.
From a different perspective, we can consider the similarly divergent paths of two $50 bills. On the one hand, a 1913 “Gold Certificate,” issued by the US Treasury and completely convertible into gold; on the other, a $50 bill issued by the Fed in 1914, convertible into nothing. Both circulated in American commerce with no limitations.
One possessing the $50 Gold Certificate actually was in possession of 2.41896 troy ounces of gold, at the fixed rate of US $20.67 per troy ounce, a calculated value of $49.9999032. Until 1933 when Franklin D. Roosevelt made it illegal to hold ownership of gold, these certificates could be redeemed at any bank or from the US Treasury on demand, at any time. Referred to as the “Great Gold Robbery” President Roosevelt, who should have outlawed the Federal Reserve System at the same time, forced the American people to turn in their gold and gave it to the Fed.
Hypothetically, consider two buddies who might have lived in 1914. Joe, the first guy, buries a $500 rainy day fund in his back yard, a stack of ten $50 Ulysses S. Grant bills. The other guy, Fred, took ten $50 Ulysses S. Grant Gold Certificates into his bank and exchanged them for gold. Fred then buries his gold in his back yard, too.
Years and years pass, the stashes forgotten. Heirs of these long-deceased friends decide to start a garden in each back yard and happen upon the stash. Joe’s heirs find the ten $50 bills, which have a current worth of $500. Fred’s heirs, however, find his gold with a current value of $40,000!
The protection of the purchasing power of the dollar is better left to a blind pig than a Federal Reserve Chairman., but finding a blind pig who wants the job is next to impossible.
Notably, the 15 Most Important Issues list of the Tea Party and other Patriot Groups does not include the Federal Reserve. It should be, however, the top item on the list because they are more dangerous than standing armies.
In summary, “there’s a thousand people chopping at the limbs, but only one chopping at the roots.”