Gold and Silver Is Real Money by the US Constitution

Gold and silver were indeed considered money under the US Constitution, and the Constitution granted Congress the authority to coin money, regulate its value, and specify the standards for coinage. Thomas Jefferson, one of the Founding Fathers of the United States and the third President of the United States had strong opinions about central banking and the power of banks. While the specific wording may vary in different accounts, one of his well-known quotes expressing his skepticism about central banks and bankers is:

“I sincerely believe that banking institutions are more dangerous to our liberties than standing armies. The issuing power should be taken from the banks and restored to the people to whom it properly belongs.”

The Coinage Act of 1792 introduced gold and silver coins as real money

The Coinage Act of 1792, also known as the Mint Act or the Mint Coinage Act, was a significant piece of legislation passed by the United States Congress on April 2, 1792. This act played a crucial role in establishing the nation’s coinage system and monetary standards during its early years. Some key provisions and aspects of the Coinage Act of 1792 were the establishment of the US Mint, which

  • defined the dollar as a specific weight of silver
  • recognized both gold and silver as official forms of money
  • specified the weight and composition of various denominations of gold and silver coins
  • specified the denominations and designs of coins to be minted, including the eagle, dollar, half dollar, quarter dollar, dime, and half dime in silver, as well as various gold coins

Coins minted under the authority of this act were declared to be lawful money and legal tender for all debts, public and private, within the United States. The Coinage Act sought to regulate private coinage, making it illegal for individuals or entities to create their coins for use as currency. The Coinage Act of 1792 laid the foundation for the US monetary system and played a vital role in the development of the nation’s coinage standards. It helped establish the US dollar as a stable and recognizable currency, which was essential for economic growth and trade during the early years of the United States.

The Gold Standard Act of 1900 established the gold standard

The Gold Standard Act of 1900, formally known as the Currency Act of 1900, was an important piece of legislation in the United States that officially established the gold standard as the basis for the nation’s monetary system. It declared that the gold dollar was the standard unit of money in the United States, and all forms of money, including paper currency, were to be defined and maintained in terms of a specific quantity of gold. The act authorized the US Mint to produce gold coins in various denominations, including the Double Eagle ($20), Eagle ($10), Half Eagle ($5), and Quarter Eagle ($2.50). These gold coins were to be used in circulation and for settling international transactions.

The Gold Standard Act also made provisions for the conversion of existing silver certificates into gold certificates upon request. This conversion was intended to facilitate the transition to the gold standard and reduce the circulation of silver-backed currency. The act required the US Government to maintain significant gold reserves to back the currency in circulation. The Gold Standard Act aimed to provide monetary stability and ensure the value of the US dollar by tying it to a fixed quantity of gold. While the Gold Standard Act solidified the use of gold as the primary monetary metal, it had the effect of devaluing silver, which had previously been used as a standard alongside gold. This contributed to the decline of silver’s role in the US monetary system.

The Fed was formed in 1913 to provide a more flexible monetary policy

In the late 19th and early 20th centuries, the United States experienced a series of financial panics and banking crises, including the Panic of 1907. These crises were characterized by bank runs, financial instability, and a lack of a central authority to provide liquidity and stabilize the banking system. The United States did not have a central bank at that time, and its banking system was fragmented with numerous private banks issuing their currency. This lack of central control over the money supply and banking system contributed to economic instability and made it difficult to respond effectively to financial crises. By having a central authority that could influence interest rates, money supply, and credit conditions, the government aimed to better manage the economy, stabilize prices, and promote full employment.

The Federal Reserve Act of 1913 aimed to reform the banking sector by establishing a system of federally chartered banks and member banks. Member banks would be required to hold reserves with the Federal Reserve, which would serve as a lender of last resort in times of financial stress. The push for the creation of the Federal Reserve was influenced by a combination of political and economic factors, including the growing Progressive Era’s focus on reforming institutions, as well as concerns about the concentration of financial power in the hands of a few influential bankers. The Federal Reserve Act of 1913 strengthened government control on monetary policy but just chopped a leg off the US Constitution and what real money was supposed to be. Bankers began replacing constitutional law.

FDR devalued the dollar in 1933 by changing the original gold standard

President Franklin D. Roosevelt took the United States off the gold standard in 1933 as part of a series of measures to address the economic crisis of the Great Depression. This decision was primarily driven by the need to combat deflation, stimulate economic recovery, and stabilize the financial system. Roosevelt and his economic advisers believed that abandoning the gold standard would provide the flexibility needed to implement monetary policies aimed at stimulating economic recovery. By allowing the government to increase the money supply, lower interest rates, and devalue the US dollar, they hoped to encourage investment, boost exports, and create jobs. Other countries were also abandoning the gold standard during this period.

As a response to these economic challenges, President Roosevelt took a series of actions. On April 5, 1933, he issued Executive Order 6102, which required US citizens to turn in their gold coins, gold bullion, and gold certificates to the federal government in exchange for paper currency. This effectively ended the ability of individuals to use gold as a form of currency in everyday transactions. Then, on June 5, 1933, Congress passed the Gold Reserve Act, which authorized the President to reduce the gold content of the US dollar and made it illegal for private individuals to own most forms of gold. This effectively abandoned the gold standard as it had existed. Our dollar would never be the same.

The Bretton Woods Conference pegs gold at $35 per ounce

The Bretton Woods Conference, held in July 1944, was a landmark international gathering that established a new global monetary order after World War II. The conference took place at the Mount Washington Hotel in Bretton Woods, New Hampshire, and was attended by representatives from 44 Allied nations. The primary outcome of the conference was the creation of the Bretton Woods system, a new international monetary framework.

Under this system, participating countries agreed to peg their currencies to the US dollar, which was convertible into gold at a fixed rate of $35 per ounce. The US dollar became the world’s primary reserve currency, and the system aimed to provide stability and prevent competitive devaluations. The IMF and the World Bank were formed. Member countries committed to maintaining the convertibility of their currencies into US dollars at the agreed-upon exchange rates. This allowed for the relatively free movement of currencies for international trade and finance. Other member countries held significant dollar reserves, as the US held the world’s largest gold stockpile.

The United States ended the silver standard with the Coinage Act of 1965

Did you ever notice that your dimes, quarters, and half dollars were 90% real silver before 1965? The United States ended the silver standard in 1965 primarily due to economic and fiscal considerations, including rising production costs, the depletion of silver reserves, and the need to manage the federal budget more effectively. The cost of producing silver coins, particularly dimes and quarters, was increasing over time. As the price of silver on the open market rose, the metallic value of the coins exceeded their face value. This led to a situation where people began to hoard and melt down silver coins for their intrinsic value, resulting in a shortage of circulating coins.

The US Treasury’s silver reserves were rapidly depleting due to the production of silver coins and the redemption of silver certificates. This depletion of silver reserves raised concerns about the ability to maintain the fixed silver content of coins. The federal government was facing budgetary pressures, and the rising costs of producing silver coins contributed to these fiscal challenges. The government was looking for ways to reduce expenses, and the silver content of coins was a notable expense. This modernization included the introduction of the copper-nickel clad coins that are still in use today, such as the Kennedy half-dollar, which was first minted in 1964.

The Coinage Act of 1965, signed into law by President Lyndon B. Johnson, authorized the US Mint to begin phasing out the use of silver in coins. The act allowed for the production of copper-nickel clad coins for dimes and quarters, reducing their silver content to virtually zero. The 1965 act also authorized the issuance of new coins with different designs, including the Kennedy half-dollar, as part of the modernization effort. The Act also provided for a transition period during which both the older silver coins and the new copper-nickel clad coins would circulate simultaneously.

This period allowed the government to gradually withdraw silver coins from circulation. This marked the end of the silver standard in US coinage and a shift toward modern coinage materials that were less costly to produce. The change was intended to address practical economic and budgetary concerns while ensuring the continued availability of coins for everyday transactions. I wonder how many Americans were realizing how their money was being devalued right before their eyes. Coincidentally US involvement in Vietnam picked up significantly in 1965. Constitutional silver money was a thing of the past after 1965.

The Bretton Woods system fails as countries prefer gold to US dollars

The Bretton Woods system, established in 1944, faced numerous challenges and ultimately failed in the early 1970s. The United States was running substantial trade deficits, which meant that it was consistently sending more dollars abroad than were returning to the US. This resulted in other countries accumulating large amounts of US dollars. The accumulation of US dollars by foreign countries created a dollar overhang problem. As more dollars circulated internationally, the fear arose that these dollars might not be redeemable into gold at the fixed rate of $35 per ounce, as the US gold reserves seemed inadequate to back all the outstanding dollars.

The United States experienced periods of inflation during the 1960s, which eroded the real value of the US dollar. This led to doubts about the sustainability of the fixed exchange rate system, as the value of the dollar in terms of gold and other currencies was diminishing. To maintain the system, the US was expected to provide gold in exchange for dollars held by foreign central banks. The drain on US gold reserves became unsustainable as other countries began to convert their dollars into gold at an accelerating pace. Nixon had to pull the plug in 1971 as the world preferred physical gold to paper US dollars. Do you blame them?

Gold Standard completely ended in 1971 changing real money forever

The gold standard was effectively abandoned by the United States in 1971. On August 15, 1971, President Richard Nixon announced a series of economic measures known as the Nixon Shock, which included the suspension of the dollar’s convertibility into gold. This action marked the end of the Bretton Woods system and the final break from the gold standard. The fiat experiment was started 52 years ago. This fiat experiment is the same system that is on fire today as governments print currency into oblivion. These Federal Reserve Notes are now backed by nothing.

Federal Reserve Notes are the currency today backed by nothing

The Federal Reserve Act of 1913 granted the newly established Federal Reserve Banks the authority to issue Federal Reserve Notes. These notes were a form of US currency and became a significant part of the nation’s money supply. The first Federal Reserve Notes were issued in 1914 by several of the Federal Reserve Banks, with the notes being denominated in various denominations, such as $1, $5, $10, $20, $50, and $100. Federal Reserve Notes gradually replaced National Bank Notes and other forms of currency issued by private banks. This transition allowed for a more uniform and standardized currency system under the oversight of the Federal Reserve.

Federal Reserve Notes were designated as legal tender for all debts, public and private, within the United States. They became the primary form of paper currency used in everyday transactions. Federal Reserve Notes have gone through various design changes over the years, with updated security features and anti-counterfeiting measures to ensure their integrity and security. I’ve never seen the term Federal Reserve Note mentioned in the US Constitution. The biggest change that these notes have gone through is that they are no longer backed by any gold or silver.

The fiat monetary system, in which a currency’s value is not tied to a physical commodity like gold or silver but is based on the trust and authority of the government that issues it, has several advantages. Fiat currencies are highly flexible, allowing governments and central banks to adjust the money supply as needed to respond to economic conditions. This flexibility can be essential for managing inflation, deflation, and economic stability. Fiat currencies are highly liquid and widely accepted, making them suitable for everyday transactions and international trade. Fiat currencies can provide stability in times of economic crisis or uncertainty. Central banks can act as a lender of last resort, providing liquidity to stabilize financial markets during crises.

The fiat system has allowed the United States to build bridges, roads, tunnels, and airports. The US dollar serves as the world’s primary reserve currency, which provides several advantages, including reduced borrowing costs for the US Government and businesses. The dollar’s status as the global reserve currency facilitates international trade and finance and contributes to the country’s economic influence. The fiat system has allowed the United States to lead in financial innovation, including the development of sophisticated banking systems, electronic payment technologies, and digital currencies. This innovation has improved the efficiency and accessibility of financial services and promoted economic growth.

The reality of our fiat system is that it is on its last leg. The experiment started in 1971 is failing. Every currency has a life cycle. We are coming close to the end of ours. This is because of the greed and corruption of the government and central banks. The size of the fakeness and manipulation has just gotten too big. One of the most significant risks of a fiat system is hyperinflation, where a country’s currency rapidly loses its value. Fiat currencies can experience sudden and severe currency crises, often triggered by a loss of confidence in the currency. These crises can lead to sharp devaluations, capital flight, and economic instability. A lack of responsible fiscal and monetary policies can lead to the erosion of a fiat currency’s value. Irresponsible spending, excessive debt accumulation, and failure to control inflation can all contribute to the failure of a fiat system. Does this sound familiar?

How do fiat systems typically end you say? Well, that’s fairly simple. Let’s see hyperinflation, currency crisis, government mismanagement, political instability, loss of trust, excessive debt, and economic imbalances. These will lead to a severe banking crisis, economic depression, a severe devaluation of our currency, and the biggest destruction of wealth that all this fake money can buy. Nothing can stop what is on the way. We have our government and the greed of Wall Street to thank for that. It is inevitable back when they started changing the definition of money from gold and silver to whatever form of paper currency would benefit them and their system. Now they want our money to run this sick system. If you don’t want to comply with that, go back to constitutional money. That folks is and has always been gold and silver.

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