7 replies to this topic

[stocks]

Coins

1792, the Coinage Act was passed. It invoked the death penalty for anyone debasing the money. It provided for a United States mint where silver dollars were coined along with gold coins beginning in 1794. Altogether nearly 900,000,000 silver dollars were coined from that time until 1935 when the treasury stopped minting them.

1933, one month after his inauguration, President Franklin D. Roosevelt declared a national emergency and ordered all gold coins, gold bullion, and gold certificates to be turned in to the Federal Reserve banks

1965 President Lyndon Johnson authorized the treasury to begin issuing debased "sandwich" dimes and quarters with little or no intrinsic value, and the quantity of silver in fifty-cent pieces was reduced to 40 percent.

1970, President Richard Nixon authorized the treasury to issue debased "sandwich" dollars and half dollars.


Paper

Continentals

Congress issued about $240 million in "Continentals"--referring to money of the Continental Congress. It was understood that the money would be redeemed in gold or silver by the states after the war.

by 1780 they were not even worth one cent. No further paper money was issued by the United States for over eighty years.

Private Banks

by the time of the Civil War there were thousands of banks issuing thousands of different kinds of bank notes. Furthermore, many banks were issuing far more notes than they had reserves. There was also a tremendous amount of counterfeiting. Before long the whole system began to falter.

Greenbacks

the Civil War required vast new expenditures, the banks wanted extremely high rates of interest on any loans to the Union (15 to 36 percent), and so Congress felt compelled to issue fiat money. These "greenbacks" could not be redeemed in gold or silver and were limited somewhat in the things for which they could be spent. Their value soon dropped to around 35 cents.

1878-1933 Gold Standard

1878, Congress promised to redeem the greenbacks in gold. This changed the greenbacks from cheap fiat money to debt money, redeemable at face value. At first there was a run on gold as people traded in their greenbacks, but when they found they really could get the gold, then people didn't want it. They returned the gold to the bank and took back paper money instead. This left the United States on the gold standard until 1933.

The Fed

1913 the Federal Reserve replaced the national bank system

1933, the United States abandoned the gold standard

Between 1933 and 1963, all Federal Reserve notes promised to pay (or be redeemed) in "lawful money," which meant silver. Then the wording on the Federal Reserve notes began to be changed to somewhat obscure language, which should have given Americans a warning that the government was planning something.

1968, President Johnson issued a proclamation that henceforth Federal Reserve silver certificates were merely fiat legal tender and could not be redeemed in silver.

1971, many of the European countries had collected so many billions in Eurodollars (foreign aid, money spent by the U.S. military abroad, etc.) that European banks had begun to get nervous about redeeming their money in gold. A threatened run on the U.S. Treasury resulted in the American gold window being slammed shut. This resulted in collapse of the dollar on the world market. Since then it has fluctuated on the world market like any other commodity, since it is no longer redeemable in precious metal and therefore has no intrinsic value

1973, Congress set the American dollar completely afloat with nothing to back it up but the declaration of the government that it was "legal tender," or fiat currency.


http://www.cmi-gold-...ican-money.html

[salsabob]

It actually started with the Phoenicians around 1500 BC. They got tired of hauling their cattle around on boats and came up with the first coins. Those coins had the shape of bull horns representing the real value behind it of one steer -



As you can see, it was stamped on a rock of no particular value. I think the Phoenicians would tell the folks they were trading with that the coin was backed by the full faith of the Phoenician culture, i.e. you'd get your steer eventually, just take this down to the docks and see my cousing Vinnie. If you didn't believe that, they would typically run you through with a sword and take what you had to trade any way.

Since there's not enough gold around for all of us, I guess we can each lug around various commodities. I have a couple of dogs, what do you got?

Either that, or we all carry around swords so as to rid ourselves of those with insufficent faith! That's sort of what happens at the international scale anyway.

[dharma]

and over time, through various sorts of fiats. the one constant that has maintained pp is gold dharma

[salsabob]

and over time, through various sorts of fiats. the one constant that has maintained pp is gold
dharma

You do mean the rock not the price, right?

[uburack]

It actually started with the Phoenicians around 1500 BC. They got tired of hauling their cattle around on boats and came up with the first coins. Those coins had the shape of bull horns representing the real value behind it of one steer -

So let me see if I understand all of this? It started with the Phoenicians and ended with the phony-cians?

[stocks]

Scrap dollar as sole reserve currency: U.N. report

A new United Nations report released on Tuesday calls for abandoning the U.S. dollar as the main global reserve currency, saying it has been unable to safeguard value.

"The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency," the U.N. World Economic and Social Survey 2010 said.

http://www.reuters.c...eedName=topNews

[dougie]

the golden rule : those that make the rules hold the gold? ultimately devalue dollar and all currencies seems more likely to be the strategy of those that make the rules

[stocks]

“The world is at a major crossroads. Some countries are at the end of a dead-end street. Greece has hit the wall. Spain and Hungary probably will be next. The Greek debt crisis was the beginning of markets refusing to finance irresponsible public-sector indebtedness. It will travel from the periphery to the center in coming years. The common denominator in the housing crisis, the euro crisis and the banking crisis is that industrialized economies carry too much debt. These crises show that we have to rewrite our system. We have been living a fiction for the past 20 years in order to enjoy a greater standard of living. Hard times are ahead, and the steps that Europe has announced to contain its crisis are only the beginning. Governments must cut spending and promises, such as entitlement programs, and raise taxes. At best this means stagnation for some years, but it could be much worse. Deflationary pressures will increase.”

Zulauf has proven quite prescient here as well. In the late 90’s he said the Euro was destined for failure and gave it 10 years to survive. He says the currency is structurally flawed and will can no longer be trusted:

“People are losing faith in the central bank and currency. When the euro was introduced in 1999, I predicted that if the European Union stuck to the rules it established, it would be the shortest monetary union in history. I gave it 10 years. After about three years, they broke the rules, which stipulated government deficits couldn’t go above 3% of gross domestic product; no member country could help another financially amid a crisis, and the European Central Bank couldn’t buy the government bonds of any EU nation. Now they have broken them again. How can one trust the currency when the authorities keep breaking the rules?

Like myself, Zulauf believes the EU would be better off without the smaller, weaker nations. He believes the problems will persist until some sort of major structural change is implemented. The endgame here is a break up:

“It would be best if the weaker members left the EU. If they don’t leave, the devaluation of the euro will continue. Eventually it will have to decline to a level at which even the weakest member can compete in the world economy. At the end of the day, the EU will break up, because its other members are using Germany as the payer of last resort for their sins. German citizens will revolt and vote in a new government with a different attitude.

http://www.businessi...ont-hold-2010-6