Watching the Dollar Die
by Paul Craig Roberts:
"I’ve been watching the dollar die all my life. I sometimes think I will outlast it.
When I was a young man, gold was $35 an ounce. Today one ounce gold bullion coins, such as the Canadian Maple Leaf, cost more than $1,000.
Our coinage was silver. Our dimes, quarters, and half dollars had purchasing power. Even the nickel could purchase a candy bar, ice cream cone or soft drink, and a penny could purchase bubble gum or hard candy. If a kid could collect 5 discarded soft drink bottles from a construction site, the 2 cents deposit on the returnable bottles was enough for the Saturday afternoon movie. Gasoline was 32 cents a gallon. A dollar’s worth was enough for a Saturday night date.
Our silver coinage was 90 per cent silver. People sometimes melted coins in order to make silver spoons, known as coin silver, which can still be found in antique shops. Except for the reduced silver (40 per cent) Kennedy half dollar which continued until 1970, 1964 was the last year of America’s silver coinage. The copper penny departed in 1982. As Assistant Secretary of the Treasury, I opposed the demise of America’s last commodity money, but I couldn’t prevent the copper penny’s death.
During World War II (1941-1945), nickel was diverted from coinage to war, and the US mint issued a wartime silver (35 per cent) nickel.
It is not easy to find items to purchase with today’s US coins, but the silver coins of the same face value still have purchasing power. The 10 cent piece of my youth contains $1.42 worth of silver at today’s silver price. The quarter is worth $3.55, and the half dollar contains $7.10 of silver. The silver dollar is worth 15.2 times its face value. These are just the silver values of coins that might be worth far more depending on condition and rarity. The silver in the wartime nickel is worth $1.10, which is 22 times the coin’s face value. Even the copper penny is worth 2.5 cents.
When I was a young man enjoying travels in Europe, the German mark or Swiss franc traded four to one US dollar. The euro, which is today’s equivalent to the mark, costs $1.55.
People who haven’t accumulated much age have little idea of the corrosive power of “acceptable” inflation. Unlike gold and silver, fiat money has no intrinsic value. When money is created faster than goods and services it drives up prices, thus driving down the value of the money. If freely traded currencies are excessively printed or if inflation, budget deficits, and trade deficits drive currencies off their fixed exchange rates, prices of imports rise as the foreign exchange value of the currency falls.
Today the US, heavily dependent on imports, is subject to double-barrel inflation from both domestic money creation and decline in the dollar’s foreign exchange value.
The US inflation rate is about twice as high as the government’s inflation measures report. In order to hold down Social Security payments, the government changed the way it measures inflation. In the old measure, inflation measured the nominal cost of a defined standard of living. If the price of steak rose, up went the inflation rate. Today if the price of steak rises, the government assumes that people switch to hamburger. Inflation doesn’t go up. Instead, the standard of living it measures goes down.
This is just one of the many ways that the government pulls the wool over our eyes.
With the dollar value of the euro rising through the roof, today a vacation in Europe is far more costly than in the past. Thanks to China, so far Americans have been sheltered from the greatest effects of the dollar’s declining value. Our greatest trade deficit is with China. The prices of the goods from China have not risen, because China keeps its currency pegged to the dollar. As the dollar goes down, China’s currency goes with it, thus holding down price rises.
The resignation of Admiral William Fallon as US military commander in the Middle East probably signals a Bush Regime attack on Iran. Fallon said that there would be no US attack on Iran on his watch. As there was no reason for Fallon to resign, it is not farfetched to conclude that Bush has removed an obstacle to war with Iran.
The US is already over stretched both militarily and economically. An attack on Iran is likely to be the straw that breaks the camel’s back."
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Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: PaulCraigRoberts@yahoo.com
Actually at this late time we are more prepared than most!
Virtually no one seems to know what is going to happen.
I'd say a good 70% and certainly everyone watching Fox and the rest are not going to react until too late.
So it seems to me we have a few more months to do what we need to do.
The minimum is protect your money.
So commodities look good.
Gold and Silver mining.
And we can't leave out oil.
Which is why we are in this mess!
Remember all things are relative.
So it would be sweet to be doing this in Euro's which would give you the intrinsic value gain in the commodity coupled with the gain of the Euro against the dollar.
Ah! You say.
That's why the dollar is falling! Well, try doing it and you'll have the IRS and homeland dysfunctional all over your ass (I'm guessing) since you must be a lousy terrorist (not free).
Anyway this was a pretty good explanation I stumbled upon, although the site is a bit 'out there'.
"When this nation was started, it was founded on a monetary system of fixed value. The dollar is, as originally defined, a weight measure of silver, 371.25 grains, to be exact. Our American silver dollars are actually heavier, since other metals were added for durability. But that 371.25 grains of silver WAS the dollar, matching in weight an unbroken chain of accepted monetary units that reached back through the Spanish Milled Dollar, the Dutch Daller, back to the German Thaler; the product of a silver mine which sold its product in coins of an exact weight. The Coinage Act of 1792 defined our dollar to exactly match in weight the silver dollars in use around the world, and then defined the gold dollar to be that amount of gold which would equal the worth of silver in a silver dollar, 24.75 grains, 1/15 the weight of the silver in a silver dollar.
When you, as a citizen, hold a silver dollar or a gold dollar in your hand, you hold that actual worth of metal. Nothing the government can do can change the worth of the money in your control.
But greedy bankers and corrupt politicians pulled a fast one over Christmas holiday back in 1913, suspended the requirement for a Quorum, and voted in the Federal Reserve Act. Later that same year, the 16th Amendment was falsely declared ratified, allowing a direct non-apportioned tax on the income of Americans, to cover the ocming debts.
The swindle of the system is simple. The Federal Reserve Bank hires the US Treasury to print up some money. The Federal Reserve only actually pays the treasury for the cost of the printing, they do NOT pay $1 for each 1$ printed. But the Federal Reserve turns around and loans out that money (or credit line) to banks at full face value, those banks which have exhausted their deposits then loan that Federal Reserve fiat money to you, and you must repay it in the full dollar value (plus interest) in work product, even though the Federal Reserve printed that money for pennies, or created it out of thin air in a computer.
As the Federal Reserve overprints more money, the money supply inflates, and too much money starts chasing too few goods and services, which means prices go up. But contrary to the charade put on by the Federal Reserve, inflation doesn't just come and go due to some arcane sorcery. The Federal Reserve can halt inflation any time it wants to by simply shutting down those printing presses. It therefore follows that both inflation and recession are fully under the control of the Federal Reserve. This means the cycle of inflation and recession is an intentional one; a gigantic heartbeat that pumps paper certificates out to the working class, while pumping real wealth in to the owners of the banks."......
whatreallyhappened.com
They have a radio broadcast but I've never heard it.
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http://www.youtube.com/watch?v=CrHmwiMgE74
http://www.youtube.com/watch?v=01kcqKd2Tag
Watch and feel the power!!!!!!!!!!!!!!!!!
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http://www.youtube.com/watch?v=sw6zhIiGCvg
http://www.youtube.com/watch?v=CrHmwiMgE74
http://www.youtube.com/watch?v=01kcqKd2Tag
Watch and feel the power!!!!!!!!!!!!!!!!!
I wouldn't hold Euros
but, other than that, nice post.
Once you hold an ounce of 9999 gold, the scam becomes all too clear.
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Good luck to us all,
Lisa C.
www.women4ronpaul.com
Ron Paul "Sign Wave Across the USA" -- November 5th!
Ron Paul said essentially the same, and more, yesterday
on the Alex Jones show:
http://video.google.com/videoplay?docid=2093986012016035260&...
-$1000 gold
-Dollar plunge
-Plunge Protection Team
-Bear Stearns
-Inflation, Stagflation
-Recession, Depression
-North American Union
-Fallon forced to resign to allow War with Iran
-Oil prices
... and so much more I forget!
Yeah. If you took this piece
Yeah. If you took this piece and put Dr. Paul's name on it I wouldn't know the difference. They are both speaking the truth here, which makes it easy to be on the same page.
"Freedom suppressed and again regained bites with keener fangs than freedom never endangered." -- Cicero
I really like Paul Craig
I really like Paul Craig Robert's work. He's an honest and intelligent man who tells it like it is.
One major point of difference between Dr. Roberts' and Dr. Paul's economic views, where I think Dr. Roberts is right, is tariffs. Dr. Roberts thinks that we need to rebuild the productive base of the economy by making the price of imports higher so our American industries can be more competitive. I have to say that I see this as our only viable option of rebuilding the manufacturing base. It would be one thing if we hadn't sent our knowhow over to China (and India to a lesser extent, they don't have slave camps) but now they have nearly as good, and improving, manufacturing technology and a near limitless cheap labor pool. Combine that with the VAT taxes in most of the world and it adds up to the bleak outlook all American manufacturing faces. There are evils to tariffs, and in an idealized world Dr. Paul and the rest of the hard line free trade advocates would be right but the world isn't ideal. In a finite world with collusion, imperfect information and "illogical" motives markets don't work as well as the theory would suggest (don't bother starting an ideological argument, I'm a free market advocate but I see mathematical and observed limitations, no socialism).
This is something that the freedom movement is going to need to understand if we wish to continue to grow. I haven't gone through all the Austrian economics literature yet but I see very little that takes the work of Nash (Game Theory), Stiglitz (sp?) (Economics of Information) or Behavioral Economics (forget the guys name, sad thing is he was a prof in my department at school) into account. If we can correctly incorporate these ideas into Austrian economics then we can make major inroads in converting the well meaning socialists. If we can't incorporate these things because we have a rigid ideology then this movement will sputter because we will not be fully correct.
"Freedom suppressed and again regained bites with keener fangs than freedom never endangered." -- Cicero
Tariffs
I completely agree with you on the tariffs. You can't have completely free trade if other countries are willing to work 16 hours for pennies. In order to protect ourselves and our workers, American goods need to be cheaper then what other countries are sending us. This could be done through tariffs. If a tariff was put on things from China making them more expensive then our own goods, we would protect jobs here. Less people would be buying goods from China. The trade deficit would be reversed. Things would start to improve. The only thing we are doing right now is building up China and their military.
Don't worry, you'll come to
Don't worry, you'll come to love the amero almost as much.
Dr. FiatSlavery: Or How I
Dr. FiatSlavery: Or How I Learned to Stop Worrying and Love the Amero
"Freedom suppressed and again regained bites with keener fangs than freedom never endangered." -- Cicero
Oh no!
I've been exposed!
The Dollar is fine
It's these damn FRN's that are dropping like rocks. Can't say I have ever seen a real dollar.
_________________
Want Ron Paul? Register Republican Now
Murdered!
The dollar is being killed by the greed of our politicians and the Federal Reserve. Long Live Gold!