You don’t see them much anymore, but every so often, when going through your change, you may catch a glint of something. It’s a whiter metal, with a unique luster, like moonlight reflecting off honey. Silver. It’s what made up America’s coins when we had a government with a little more integrity and a Dollar with real value.
Or maybe you got a few bills in change and noticed an odd one. The seal and the serial number were different, blue or red ink perhaps, or there was a little extra printing that spelled out how the instrument worked.
THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND
PRIVATE, AND IS REDEEMABLE IN LAWFUL MONEY AT THE UNITED
STATES TREASURY, OR AT ANY FEDERAL RESERVE BANK.
The note made no pretense of being lawful money itself, it simply promised to pay up if the bearer chose to redeem it for lawful money.
What then is “lawful money”? Lawful in the context of American money means in accord with Constitutional principles. Article 1, Section 8 spells out the delegated powers of the Congress, and Paragraphs 5 and 6 stipulate that the Congress shall have the power to Coin money and regulate its value, and to provide for the punishment of the counterfeiting of the coin and securities of the United States. It goes on to state, in Section 10, Paragraph 1, that no State shall make anything but Gold and Silver Coin a tender in payment of debts. Lawful money then, in America, at least, is either Gold or Silver Coin, or reliable receipts (bank notes, warehouse markers, merchant chits, or even government bonds) that may be redeemed for a specific quantity of Gold or Silver. Congress has the power to COIN money and to regulate its value. To coin money is to stamp an image into a disc of precious metal. It is not to delegate to a private cabal of bankers the authority to print piles of paper notes having no intrinsic value themselves beyond the “full faith and credit” of the government. The promises of the government have a way of being easily forgotten whenever it’s convenient for the Congress or the White House to infuse a batch of paper into the economy to stimulate some favored sector or to enrich well-connected contributors.
If I had my way there’d be a silver dollar in the hand of every American, and gold coins in the bank for every worker or investor cashing a dividend or paycheck.
Before 1913 and the passage of the unlawful Federal Reserve Act, the “price of gold” was $20.67 per troy ounce. Of course, in that context, the “price of gold” is a misnomer. It wasn’t that gold was found to have that temporary market value in dollars, but that the dollar was defined by statute to be that specific quantity of metal. Today, in violation of the Constitution, our government no longer guarantees the value of our currency. Democrat Lyndon Johnson’s debasement of silver coinage and Republican Richard Nixon’s repudiation of the gold standard unleashed the inflation that has savaged our savings and eviscerated our investments for three decades. Gold now trades for about $300.00 to the ounce, and silver about $5.00. Or thereabouts. Try to pin it down sometime and it will wiggle away. It’s not the metal that fluctuates. Gold and silver are material, and their supply is fairly stable. It is the value of the dollar that won’t sit still, because it is not fixed to anything solid.
Ironically, today’s dollar is backed up by something more rare even than silver or gold, its value is guaranteed by political integrity. Consider this, when you fill a tire or bubble gum with hot air, you call it inflation. When something is filled up with nothing of value, it is inflated. It may look impressive, but it is light and insubstantial and its value is diminished. Inflation is good for balloons or anything else that you’d like to float, but we want our money to hold value and to retain that value over time. Once, it did. Of course, after it got to be considered inconvenient to carry around a lot of gold or silver coins, people came up with the idea of carrying warehouse receipts, notes that indicated that someone you could trust would hold your metal, and redeem it in coin or bullion when you turned in the note. Or you could trade notes. Easier on the pockets than jing jing jangling through the market. As long as the notes were understood to be redeemable, and the banks or merchants or refiners issuing them were known to be honest there was no problem. Bank notes were considered to be “as good as gold.” (And haven’t you ever wondered where THAT expression came from?)
Once governments discover the power to create money from paper, backed up by nothing more tangible than a politician’s promise, they inflate themselves into poverty and tyranny. The temptation is just too great. Many of us remember the near panic at the end of the seventies when silver soared to fifty dollars an ounce, and gold was pulled along with it to nearly a thousand. After twenty years of relative fiscal restraint, prices seem to be less volatile. But Ronald Reagan is out of office, and we can’t count on Alan Greenspan living forever. Sooner or later, an indulgent Congress or an adventurous President will unleash the power of the printing press and we’ll find ourselves reliving the horror of Weimar Germany. Or worse. It may appear that we’ve Whipped Inflation Now, but we cannot afford to push our luck.
As the Century of the Leviathan State withdraws into history, it is altogether fitting and proper that we return to the principles that bore this Republic, and restore honesty and durability to our national currency. It is the Federal government’s responsibility, and as your Congressman, it will be my duty, to insure a stable, inflation resistant currency based on Gold and Silver Coin.
update 180129: Okeh, swiping text from “Honest” Abe doesn’t seem either fitting or proper, but we fail now and then, and move on.
In 2002 much of America was still enamored of the Maestro (Mister Andrea); real estate just kept boomin’ along… Selling out and moving to the mainland in 2007 was probably my second best financial maneuver. Most lucrative remains that “honorable discharge.” Riding the real estate bubble might have been possible without it, but things were generally tight. Nevertheless, when a guy with a family and a steady job shows up at the mortgage office and says, “VA,” their eyes just light up! Following the philosophy of The Confederate Mint, I’ve squirreled away a bit of gold, silver, copper, and lead. Not enough gold or silver to inspire too many would be free lance socialists, but enough copper-jacketed lead to dissuade those who might otherwise be tempted.