Thursday, March 13, 2014

MAIDEN VOYAGE: SILVER & GOLD (WHEN MONEY WAS REAL)




Once upon a time, money was real.

It was minted in silver and gold.


When somebody paid you for your product or service in silver or gold, you knew you had something tangible, an instrument in place of barter that possessed intrinsic value, accepted universally without question for someone else's product or service.


Eventually, the U.S. Treasury created paper money, on the basis that the Treasury backed such paper with silver or gold.



This bank note, printed in 1957 (the last of its kind), declares itself a Silver Certificate, and states:  One Dollar in silver is payable to the bearer on demand.

That quietly changed, with surprisingly little protest, after 1963, the year the United States began its steep decline. 

Today's U.S. paper money is backed by... nothing.  


The Silver Certificate has been replaced by the Federal Reserve Note.


It cannot be redeemed for anything. 


The Federal Reserve prints billions of them out of thin air.  




If you showed up at the U.S. Treasury with their paper dollars and requested an exchange for something real, they would probably call security to escort you out. 


One dollar is now worth less than one-eighth of what it could buy in 1957.


But silver and gold has held its value.


The private bank that the U.S. Government contracted to print and manage its money does not want anyone to use silver and gold as currency anymore.


Certainly, they do not mint it in their everyday coins or offer it in exchange for their fancy inked paper.


Back in the mid-1800s, pioneers rushed west, to Nevada and California, hoping to strike it rich by staking claims to pan gold or mine silver. 




Support services sprang up to relieve these prospectors of their nuggets, which banks would buy and melt into gold coins.




That's when money was real.