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Thread: The Four U.S. Dollars, or, The U.S. Dollar’s Relationship to Gold

  1. #1

    The Four U.S. Dollars, or, The U.S. Dollar’s Relationship to Gold

    The U.S. Dollar’s Relationship to Gold
    The U.S. Dollar’s Relationship to Gold
    In the current run up in the price of gold, it is time to reassess how gold really relates to the dollar. One has to remember that gold almost never changes in value. It is the dollar that revalues in relationship to gold. For example, in 1920 a good quality men’s suit could be purchased with a typical $20 gold piece. A similar quality suit today can be purchased with about the same amount of gold.

    There is endless discussion regarding officially re-linking the dollar to gold in some manner, but in fact, gold is de facto tied to the dollar, and has been since the birth of the nation. Each time that gold is purchased, the price is different, and reflects the current perceived change in the relationship between gold and the dollar.

    The History of the Dollar’s Connection to Gold – An Outline

    On April 1, 1792, Congress authorizes the striking of gold coins. The dollar is defined as 24.75 grains of pure gold or $19.39 per troy ounce (480 grains [a troy ounce] divided by 24.75=19.39)

    1834 – The gold content of the Eagle ($10 gold) is reduced from 247.5 grains to 23.2 grains, due to the melting of U.S. gold coins in Europe, raising the price of gold to $20.67. The “dollar” (there were no gold dollar coins until 1849) =23.2 grains of pure gold. To confirm this standard, the Gold Standard Act of 1900 defines a “dollar” as 25.8 grains of .900 fine gold or 23.2 grains of pure gold. This dollar, call it Dollar #1 (D-1), isn’t redeemable for gold, it IS gold, since the United States Congress defines the dollar as a specific quantity of gold. Persons who hold U.S. currency, or who have deposits in U.S. banks can immediately convert these instruments into gold in the form of coins.

    In 1934, President Roosevelt, attempts to bring the United States out of a economic Depression by devaluing the dollar from 23.2 grains to 13.71 grains of pure gold, essentially devaluing the dollar by 41%. This raises the official price of gold to $35 per troy ounce. This is Dollar #2 (D-2). In addition, the Presidential decree prohibits U.S. citizens who hold deposits, from converting their dollars into D-2 dollars. In the 1950’s, President Eisenhower extends the prohibition to U.S. citizen’s gold holdings outside the United States. D-2 claims are still honored to foreign institutions; therefore the U.S. standard of value is still gold.

    1971 – President Nixon declares that the U.S. Treasury would no longer pay D-2 dollars in exchange for dollar claims. Gold is soaring in Europe.

    1971 – Only Federal Reserve Notes are printed. The obligation, the promise to pay, is removed from the notes. Though the term “note” implies a promise to pay something, Federal Reserve Notes now represent nothing. Today’s dollar is completely fiat money.

    1973 – Congress creates Dollar #3, 12.63 grains of pure gold and in 1974, Dollar #4, 11.37 grains of pure gold. Both D-3 and D-4 are fictional as no gold coins are coined, nor is any gold available to pay dollar claims.

    One could say that the dollar, though no longer gold, represents a claim on real things in the market place. This is flawed thinking. A unit of account that has no anchor tends to devalue over time, sometimes rapidly. This has been proven in the history of the D-4 dollar since 1971. The rapid run up in real estate prices, gold, commodities and numismatic coins show that people are willing to exchange more and more fiat dollars for other things that maintain real value. Saving fiat money as a store of value is certainly foolhardy.
    More/source: The U.S. Dollar’s Relationship to Gold
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    "The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius
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    Prove all things; hold fast that which is good. Thess. 5:21.

  2. #2
    Senior Member Brian's Avatar
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    Whatever the dollar was, it is no longer that. As bad as it is the only dollars in general circulation that have any value are these:
    http://www.marketoracle.co.uk/images/UScoins.jpg

    It ain't much but it is something: http://www.coinflation.com/

    The only way IMO to walk back what has occurred in the last 100+ years is to force payment in current coin, with the seigniorage being used to extinguish T-bills. However that is very unlikely to happen as that would require discipline that the government does not have. Plus it would be violently opposed by the banks who want to continue issuing their poison coupons aka FRN's.

    So it will likely just implode and the whole system will have to be rebooted. So prepare for the later and keep fighting for the former.

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    It seems that in the world it is primarily Americans who value debt.

  4. #4
    Quote Originally Posted by David Merrill View Post
    It seems that in the world it is primarily Americans who value debt.
    Gold is the currency of kings.
    Silver is the currency of gentlemen.
    Copper is the currency of peasants.
    Debt is the currency of slaves.

  5. #5
    Posted by shikamaru Gold is the currency of kings. Silver is the currency of gentlemen. Copper is the currency of peasants. Debt is the currency of slaves.
    Posted by David Merrill It seems that in the world it is primarily Americans who value debt.
    Why We're Not Returning to a Gold Standard http://www.cbsnews.com/news/why-were...gold-standard/

    Here's another problem: Any country with investments in the United States could demand its gold at any moment. That's what happened in 1971. For years, the price of gold had been fixed at $35 an ounce. Finally, the British ambassador asked that $3 billion of the United Kingdom's investments be converted into gold. The United States soon went off the gold standard. http://www.slate.com/articles/busine...gold_rush.html

    Last Updated Apr 12, 2010 3:46 PM EDT Protected by a 109,000-acre U.S. Army post in Kentucky sits one of the Federal Reserve's most secure assets and its only gold depository: the 73-year-old Fort Knox vault. Its glittering gold bricks, totaling 147.3 million ounces (that's about $168 billion at current prices), are stacked inside massive granite walls topped with a bombproof roof. Or are they? http://www.cbsnews.com/news/is-there-gold-in-fort-knox/

    youtube

    But Greenspan's Stunning Admission: "Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It"
    Last edited by Chex; 08-10-15 at 04:01 AM.
    "And if I could I surely would Stand on the rock that Moses stood"

  6. #6
    Quote Originally Posted by Chex View Post
    ....

    Here's another problem: Any country with investments in the United States could demand its gold at any moment. That's what happened in 1971. For years, the price of gold had been fixed at $35 an ounce. Finally, the British ambassador asked that $3 billion of the United Kingdom's investments be converted into gold. The United States soon went off the gold standard. http://www.slate.com/articles/busine...gold_rush.html

    ....
    Note your usage of the term 'fixed'.

    Valuing metals by paper is a slippery game. Expect the board to shift when conditions warrant, whether by greed or exigent circumstances.

  7. #7
    Your correct. The statutory price of gold is set by law. It does not fluctuate with the market price of gold and has been constant at $42 2/9, or $42.2222, per fine troy ounce since 1973. The book value of the gold held by the Treasury is determined using the statutory price. Source http://www.federalreserve.gov/faqs/d...-hold-gold.htm

    The underground of any city is fascinating
    "And if I could I surely would Stand on the rock that Moses stood"

  8. #8
    Most Interesting . . . It would be really great to obtain a regulatory reference requiring the Federal Reserve system cartel to regard "Gold as Currency", especially in light of the FACT that the board of Governors of the foreign/private Federal Reserve system cartel are required to produce sufficient quantities of their acquired "gold certificates" at times and in amounts the appointed delegate of the Secretary of the Treasury decides are necessary to MAINTAIN the EQUAL PURCHASING POWER of each kind of United States currency . . . Which means that FRN's are considered to be a form of United States currency . . .

    Why else would the foreign/private Federal Reserve system cartel be required to redeem their own "gold certificates" to prop-up the purchasing power of various forms of U.S. issued currency notes/coins/securities???!!!???

    I believe that the answer is simple: the Federal Reserve system cartel is solely responsible for keeping the purchasing power of their elastic currency "notes" at par with various other forms of U.S. issued currency.

    Title 31 U.S.C. §5119. Redemption and cancellation of currency
    (a) Except to the extent authorized in regulations the Secretary of the Treasury prescribes with the approval of the President, the Secretary may not redeem United States currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) in gold. However, the Secretary shall redeem gold certificates owned by the Federal reserve banks at times and in amounts the Secretary decides are necessary to maintain the equal purchasing power of each kind of United States currency. When redemption in gold is authorized, the redemption may be made only in gold bullion bearing the stamp of a United States mint or assay office in an amount equal at the time of redemption to the currency presented for redemption.

    Here's further proof of this fact showing where the U.S. Congress has repealed portions of 48 Stat. 112 [HJR-192] and is no longer liable to assure uniform value (equal purchasing power) to those foreign/private elastic-currency commercial-paper FRN's . . . that duty has now become the joint responsibility of the foreign/private Federal Reserve system and the designated delegate of the Secretary of the Treasury as detailed above in Title 31 U.S.C. §5119:

    91 Stat. 1229, Enacted Oct. 27, 1977, Public Law 95-147 at subsection (c):
    (c) The joint resolution entitled "Joint resolution to assure uniform value to the coins and currencies of the United States," approved June 5, 1933 (P. L. 10 48 Stat. 112; 31 USC 463), shall not apply to obligations issued on or after the date of enactment of this section.


    1. If the Federal Reserve Board of Governors are required by international treaty/agreement and/or federal-venue statute to recognize a certain range of weights and fineness of gold as a specie of tangible "Currency", and;

    2. The U.S. Congress has authorized and established the standard of weight, fineness and dollar-unit value in the money of account for the United States for each of the Gold bearing Coin(s) described in federal-venue Title 31 U.S.C. §5112 (a)(7..10), and;

    3. The U.S. Congress has also authorized and established the standard of weight, fineness and legal tender value expressed in "$50" increments for such U.S. minted and issued Gold bullion bearing Coin that is authorized and described in federal-venue Title 31 U.S.C. §5112 (a)(11), and;

    4. The U.S. Congress has authorized and established that each of these U.S. minted and issued §5112(a)(7..11) Gold bearing/bullion Coins shall be a "legal tender" as described in Title 31 U.S.C. §5112(h), and;

    5. The U.S. Mint and Secretary of the Treasury has been ordered by the U.S. Congress to Mint and to issue a range of these (Constitutionally compliant, Article 1, Section 10, Clause 1) described Gold Coins to meet the needs of the United States, and;

    6. The Secretary of the Treasury must also, by international treaty/agreement and/or federal-venue Statute also recognize those federal-venue Title 31 U.S.C. §5111(a)(1) and §5112(a)(7..10) U.S. minted and issued Gold Coin as a form of "monetary reserve" currency of the U.S., and;

    Title 31 U.S. Code § 5111 - Minting and issuing coins, medals, and numismatic items
    (a) The Secretary of the Treasury—
    (1) shall mint and issue coins described in section 5112 of this title in amounts the Secretary decides are necessary to meet the needs of the United States;


    Title 31 U.S. Code § 5112 - Denominations, specifications, and design of coins
    (a) The Secretary of the Treasury may mint and issue only the following coins:
    (7) A fifty dollar gold coin that is 32.7 millimeters in diameter, weighs 33.931 grams, and contains one troy ounce of fine gold.
    (8) A twenty-five dollar gold coin that is 27.0 millimeters in diameter, weighs 16.966 grams, and contains one-half troy ounce of fine gold.
    (9) A ten dollar gold coin that is 22.0 millimeters in diameter, weighs 8.483 grams, and contains one-fourth troy ounce of fine gold.
    (10) A five dollar gold coin that is 16.5 millimeters in diameter, weighs 3.393 grams, and contains one-tenth troy ounce of fine gold.

    (11) A $50 gold coin that is of an appropriate size and thickness, as determined by the Secretary, weighs 1 ounce, and contains 99.99 percent pure gold.

    Payment is authorized in U.S. minted and issued Gold (or Silver) Coin as reauthorized by the U.S. Congress since October 27, 1977 , Pub. L. No. 95-147, § 4(c), 91 Stat. 1227, 1229. This amendment made clear that parties could include "gold clauses" in their contracts formed after 1977, and this fact is presently described/authorized and codified in federal-venue Title 31 U.S.C. §5118 (a)(1)(B..C) & (d)(2) as shown below.

    Checks/drafts are a "medium of exchange" instrument that is not "United States currency" . . .

    Title 31 U.S. Code § 5118 - Gold clauses and consent to sue
    (a) In this section—
    (1) “gold clause” means a provision in or related to an obligation alleging to give the obligee a right to require payment in
    (A) gold;
    (B) a particular United States coin or currency; or
    (C) United States money measured in gold or a particular United States coin or currency.
    (d)
    (1) In this subsection, “obligation” means any obligation (except United States currency) payable in United States money.
    (2) An obligation issued containing a gold clause or governed by a gold clause is discharged on payment (dollar for dollar) in United States coin or currency that is legal tender at the time of payment.
    This paragraph does not apply to an obligation issued after October 27, 1977.

    Given each of the above shown regulatory facts, shouldn't we be making our Notice/Demand for the use of Lawful money in each of our transactions very specific like the example shown below - because it appears that we currently have the choice of specie available to us in transacting our checks/drafts at Federal Reserve affiliated member banks?

    The front of the check/draft plainly says: Pay to my order (not to the bank teller's order) in transacting it . . . .

    ************************************************** **
    Payee orders payment made in the specie of Title 31 U.S.C. §5112(a)(7..10)
    U.S. issued lawful money of value in legal tender dollar-units ONLY; redeemed
    at par per ch. 6, 38 Stat. 251, Sec. 16 of the Federal Reserve Act of 1913,
    presently codified in Title 12 U.S.C. §411.


    By demand: __________________________________, Payee
    (transacting absent accommodation is authorized per U.C.C. 4-205)

    ************************************************** **

    Also - here are a few federal court cites that support the above:

    [ compare to: "Paper currency, in the form of the Federal reserve note, is defined as an "obligation of the United States" that may be "redeemed in lawful money on demand." 12 U.S.C. §411 (2002). These bills are not "money" per se but promissory notes supported by the monetary reserves of the United States. UNITED STATES of America –vs- Thomas 319 F.3d 640 (2003)


    When the words of a statute are unambiguous, the first canon of statutory construction – that courts must presume that a legislature says in a statute what it means and means in a statute what it says there – is also the last, and judicial inquiry is complete. Connecticut National Bank v. Germain, 503 US 249, L. .Ed 2nd 391 (1992) ]


    What are your (and other forum members) thoughts in regard to the above?

  9. #9
    In continuing with the above (10000 character limit on replies) . . .

    Since the U.S. Congress placed the entire monetary and taxation system under the Uniform Commercial Code (U.C.C.) back in 1966, There can be no refusal in affiliated financial institutions transacting such checks/drafts absent an accommodation endorsement.

    “The entire taxing and monetary system are hereby, placed under the UCC.” 80 Stat. 1125, Pub. L. 89-719, Nov. 2, 1966 - Federal Tax Lien Act of 1966

    Uniform Commercial Code › U.C.C. - ARTICLE 4 - BANK DEPOSITS AND COLLECTIONS (2002) ›
    PART 2. COLLECTION OF ITEMS: DEPOSITARY AND COLLECTING BANKS
    § 4-205. DEPOSITARY BANK HOLDER OF UNINDORSED ITEM.
    If a customer delivers an item to a depositary bank for collection:
    (1) the depositary bank becomes a holder of the item at the time it receives the item for collection if the customer at the time of delivery was a holder of the item, whether or not the customer indorses the item, and, if the bank satisfies the other requirements of Section 3-302, it is a holder in due course; and

    (2) the depositary bank warrants to collecting banks, the payor bank or other payor, and the drawer that the amount of the item was paid to the customer or deposited to the customer's account.

    As plainly shown above, Section 4-205 of the U.C.C. protects our right to abstain from such inducements without compromising our ability to transact such check/draft mediums of exchange.

    Furthermore, U.C.C. Section 3-401 also states that: A signature is defined as something which may be made
    a) manually or by means of a device or machine, and
    b) by the use of any name, including a trade or assumed name, or by a word, mark, or symbol executed or adopted by a person with present intention to authenticate a writing.


    Thus, although in order for an item to be payable it could have a signature, the U.C.C. definition above makes clear that it doesn't just mean a typical handwritten rendition of the payee's name. It's much broader than that.

    For example, the words, marks, instructions or symbols that the payee places on the signature line of the check/draft would arguably be deemed to have been adopted by the payee with the present intention to authenticate their writing or instruction.

    Whereas, Contract originates as a natural event and first requires a meeting of the minds . . . our decision to contract or not to contract is premised on the nature and consideration of the offer. What is the nature and substance of their "offer"? What benefit/consideration is gained by me, you or anyone in exchange for our becoming an accommodation party to their commercial-paper? Each of us has the unlimited right NOT TO ELECT/ACCEPT to participate in their commercial-paper e/indorsment under the right and law of Contract which is in fact CHOICE!

    “An agreement [franchise, contract]obtained by duress, coercion, or intimidation is invalid, since the party coerced is not exercising his free will, and the test is not so much the means by which the party is compelled to execute the agreement as the state of mind induced.”
    Brown vs. Pierce, 74 U.S. 205, 7 Wall 205, 19 L.Ed. 134

    By what delegation of authority does any of these various foreign/private Federal Reserve system cartel-affiliated financial institutions have any right to administrate or interfere with my property by choosing what specie(s) of "lawful money" of value or U.S. issues of statutory authorized forms of "legal tender" currency I must accept in their transacting the check/draft medium of exchange currently placed before them??? . . . and most importantly - how am i, a man made subject to any such delegations of authority absent my consent???!!!???

    I find no tangible "value" and/or "store of value" [wealth] acquired by anyone who engages in the acceptance, transfer and use of such "commercial-paper" FRN's that presently have about 4.5-5.5% of the purchasing power required to successfully obtain the Title 31 U.S.C. §5112(a)(7..10) authorized and U.S. minted/issued Gold (and Silver) Coined dollar-unit counterparts . . . so make your demand for the use of "lawful money" in all transactions known!

    Such repudiation/default of my written order combined with compelling my acceptance of their own choices of "legal tender" in such actions of repudiation/default - would be an "instant" theft of value at the time they transacted the instrument as well as an ongoing theft of the "store of value" (wealth) by their failure in properly filling my order as written!

    Since the U.S. Congressional re-authorization of "Gold Clause" payable contractual obligations in October, 1977 - Where has federal-venue judges been granted any delegation of authority or right to override the standard of fineness, weight and dollar-unit value in the money of account of the United States that has been fixed/established by the U.S. Congress for such Title 31 U.S.C. 5112(a)(7..10) defined U.S. minted and issued Gold bearing dollar-unit Coins?

    The market within this Nation "adjusts" the cost of goods/services to the fixed standard of dollar-unit "value" established by the governing regulatory authority - the standard of dollar-unit "value" does not dynamically change from moment to moment to "chase" the cost of goods/services within a national market . . .

    "All experience shows that a currency not redeemable promptly in coin, but dependent on the credit of a promissor whose resources are rapidly diminishing, while his liabilities are
    increasing, soon sinks to the dead level of worthless paper." Hepburn v. Griswald, U.S. Supreme Court, 8 Wall 634

    A promise to pay, with a reserved right to deny or change the effect of the promise, is an absurdity."
    Murray v. City of Charleston, 96 U.S. 432

    Just writing about this ongoing pervasive "theft of value/wealth" commercial-paper charade imposed upon "We, the People" and our posterity (children and grandchildren) living and working within this Nation makes me angry beyond belief . . .

  10. #10

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