The War on Gold Ensures the Dollar's Downfall / Commodities / Gold and Silver 2022
By Matthew Cortez, Last month was the 89th anniversary of oneof America’s biggest blunders on her descent from honest, sound money intoweaponized political money: ExecutiveOrder 6102.
Signed on April 5, 1933, U.S. PresidentFranklin Delano Roosevelt required all persons holding more than five ounces ofgold to deliver their “gold coin, gold bullion, and gold certificates, nowowned by them to a Federal Reserve Bank, branch or agency, or to any memberbank of the Federal Reserve System.”
By outlawing the so-called “hoarding” ofgold, Roosevelt intended to destroy gold as an everyday currency, transferringthe purchasing power of gold to the U.S. government.
In exchange for Americans' gold, thegovernment gave them Federal Reserve Notes at the exchange rate of $20 perounce.
Soon thereafter, FDR devalued the FederalReserve Note by 40% by resetting the exchange rate to $35, fleecing citizenswho complied with the order.
Myths persist today about the likelihood ofanother gold nationalization. Given that the U.S. dollar is no longer backed bygold, it seems highly unlikely.
In 1933, the U.S. government was requiredto have gold in order to expand the volume of currency in circulation. Thosedays have long since passed, as there is no longer any (non-political) standardtied to the increase of America’s money supply.
In 1965, President Johnson passed theCoinage Act, removing silver from coins and replacing them with clad coins, amixture of nickel and copper.
And finally, in 1971, President Nixoninfamously ditched the Bretton Woods agreement and ended the ability of foreigncentral banks to convert their dollars back into gold at a fixed rate.
Removing gold backing from our papercurrency completed the transition of a monetary system rooted in sound money toa purely fiat system, and this move sparked an explosion of debt and inflation.
The Once Mighty U.S. Dollar Is Coming Undone
It's technically incorrect to refer to theFederal Reserve Note as a dollar – the term “dollar” historically referred to acoin containing 27 grams of silver.
More and more people believe ouronce-stable medium of exchange to be a ticking time-bomb, fueled byinflationary policies wrought at the federal level.
Public support for reform is increasing,particularly at the state level where legislationhas been knocking down barriers togetting out of the moribund Federal Reserve Note and into gold and silver.
This long descent of the dollar has come asno surprise; the federal government has been chipping away at its trust fordecades.
Current “economic experts” are seeminglyunable or unwilling to diagnose a simple and obvious problem. Jerome Powell,Chairman of the Fed, was rightfully lambasted for telling the nation thatinflation was “transitory.”
For the past 100 years, we were assuredthat those in charge had the necessary tools to keep inflation from becoming aproblem. All the while, the currency's purchasing power has fallen by more than98%.
Today, inflation sits at a 40-year high of8.3%, according to the latest Consumer Price Index reading. The true inflationrate is likely much higher.
Meanwhile, Bloomberg,one of the nation’s largest financial media conglomerates, recently publishedan article encouraging Americans to eat more lentils while foregoing medicalneeds for their pets as a way to combat the ravages of inflation.
In 2020, in classic “cure becomes worsethan the disease” fashion, the Federal Reserve created $4 trillion in newcurrency units.
Since then, the Fed has continued to createmoney out of thin air to help finance the deficit, including part of PresidentBiden’s latest budget proposal (estimated to cost around $5.8 trillion).
All told, 40%of the dollars currently in circulation were created in the past two years.
As Russia and countries worldwide continueto stockpilegold, and devise alternatives to trading inU.S. dollars, America should reexamine sound money principles.
It’s clear to see that America’s money unithas been dramatically losing value over time. Will the inflation problem becomeso obvious that Americans clamor to jettison the fiat currency altogether?
Matthew Cortez is a policy assistant for the Sound Money Defense League.
© 2022 Copyright Matthew Cortez- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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