It plumb evaded me…
— Lord Buckley, by way of Jimmy Buffet.
In July, 2023, I wrote about gold.
Last December I followed up on the subject.
The July, 2023 ‘spot price’ of gold was hovering around $1,900 per ounce. In December the price was around $2,700. As I write this today, the spot price of an ounce of gold is approaching $3,400.
What a profitable investment, right?
Wrong! As I explained in the December column, it’s not the price of gold that is rising. It’s the value of the U.S. dollars you need to buy gold that is dropping.
Consider this: In 1933, when President Franklin Roosevelt ordered confiscation of all privately-owned gold money, you could buy a top-quality, custom-tailored business suit for the cost of one U.S. minted, 1oz, $20 gold coin. That same gold coin today could still get you the same quality business suit.
The gold in that coin has not changed. It is still a just shy of a troy ounce of element #79 (symbol Au) on that periodic chart hanging on the wall of your high school chemistry classroom.
The physical nature of gold has remained the same for the last 5000 years — and has retained its purchasing power for 90. What has changed are those paper dollars in your wallet, and the digital blips representing the ones in your bank accounts — that have not retained purchasing power.
So why are we not using gold (and silver) as a medium of exchange instead of paper (fiat) currency? Dr. Edwin Vieira explains why in Pieces of Eight a two volume, meticulously researched, treatise on the subject.
It has been out of print for over a decade, but I managed to locate a copy through a library exchange program – and was hard pressed to read it in the time I could borrow it. You can read an example of his thoughts on the subject of money here.
The fight against the use of silver and gold as money that has been waged by bankers and rogue politicians since the 1870s as to silver and the 1930s as to gold ◊ and will intensify as fiat currencies collapse throughout the world — is ultimately directed against America’s national independence, her constitutional government, and every common American’s individual liberty and prosperity.
The Constitution of the United States adopted a monetary system consisting of silver and gold coin, in which the standard is the “dollar,” containing 371 1/4 grains (troy) of fine silver, with the values of gold coins to be measured in “dollars” according to the free market’s rate of exchange between silver and gold. Neither the general government nor any state is authorized to emit paper currency.
These restrictions prevent rogue public officials from turning public debts into currency, as a means for redistributing wealth from society to political elitists and their clients in special-interest groups.
In previous columns I’ve recited what I’ve learned about economics, and the creation of the Federal Reserve System (“the Fed”) by the elites.
Here’s what Dr Vieira has to say about “the Fed”,
“Under the Federal Reserve System, Americans no longer enjoy “money” in the economic sense but are subjected to what must be denoted as “political currency,” with emphasis on the adjective. Political currency is emitted on the basis of political debts –that is, either 1) public debts or 2) private debts for the payment of which the creditors expect public bailouts if their debtors default.
Unfortunately, the Federal Reserve System is inherently unstable, and must lurch from one self-generated crisis to another, each increasing in severity, until its house of financial cards self-destructs.”
So why am I talking about this again? For two reasons.
First, the Fed has been in the news lately because of the public war of words between Fed chairman Jerome Powell, and President Trump — particularly since the most recent Fed meeting announcement that their interest rate will remain the same.
An acquaintance who is nervous about his “stock portfolio”, and who mistakenly thinks I have acquired some expertise on the subject, asked me what I thought of the Fed’s announcement. My reply was that I didn’t pay any attention to it because I doubt Powell or the rest of the members of the Fed have a clue what they are doing – other than attempting to manipulate the currency for the benefit of the elites.
In Dr Vieira’s words, this is just another “lurch” in a “self-generated crisis”.
The second reason I’m again writing on this topic is that the Florida legislature has passed a new law making gold and silver “legal tender”. Governor Desantis says he will sign it.
Florida has joined seven other states that have made gold and silver legal tender. They have done so in an effort to free their citizens from the consequences of incompetent management of our currency by the federal government.
Which brings up the other question my acquaintance asked me. Should he take his money out of the stock market and buy gold? Damn if I know! I’m about as qualified to give financial planning advice as I am to explain quantum physics – the science of which plumb evades me.
All I know is that gold clearly holds its value far better than paper currency. Gold was important enough that the federal government confiscated all of it from the citizenry in 1933. The legislature of seven states think gold is important
What’s probably more telling… you can now buy gold at Costco! Which means you can pick up a bar of gold in the same location as a super-sized package of toilet paper – which, if you recall, a few years ago was worth its weight in gold!