“The wealth of Moria was not in gold or jewels but mithril.” – Fellowship of the Ring
Steel suppliers are facing high iron prices and low finished steel prices. They say it’s a terrible ore-deal.
What we call money was for the longest time gold. For . . . a long time, really. It has never quite been valueless and even jungle savages and pyramid builders (who had, I must remind you, no iPhones™ used it for trinkets because it was pretty.
But cash has gone to zero.
The phrase “Not worth a Continental” came about because the Continental Congress decided to print a lot of cash to fight the Revolutionary War. It worked, but the cash became valueless because they printed too much.
How bad was it?
Bad enough that a wheelbarrow of Continentals might buy you a loaf of bread, if the baker was using them to start his fire. It was a bad enough experience that the Framers of the Constitution tossed in the whole, “No State shall make anything but gold and silver Coin a Tender in Payment of Debts.”
Then we went to gold because the Constitution said so. Gold worked for a while. There was a reset during the Civil War with the National Banking Act, which made paper “greenbacks” official tender. Lincoln needed cash to fund the Union army, so they cranked up the presses again. By war’s end, greenbacks were worth about half their face value, and people grumbled, but hey, at least the North bankers won.
I’m in shape for that, though. I exorcise regularly.
Then in the awful year of 1913, the Fed® was put into place, and the monkey business began anew. Another currency reset, first for World War I, where they suspended gold convertibility to print for the war machine. Huh. It’s like I’ve heard that before. When the value of the dollar started to increase in the Great Depression, Roosevelt came in and made owning significant amounts of gold illegal.
I mean, illegal for the plebs. Rich dudes could still own all they wanted, because, well, they’re rich. What don’t you understand about that, pleb? FDR’s Executive Order 6102 forced folks to turn in their gold at $20.67 an ounce, then he jacked the price to $35 overnight.
Instant 69% profit for Uncle Sam. Nice work, if you can get it.
Eventually, LBJ took all of the silver out of the money, too. In 1965, quarters went from 90% silver to clad junk, because Vietnam wasn’t going to fund itself. People hoarded the old real silver coins, and Gresham’s Law kicked in: bad money drives out good.
Finally, Nixon took the dollar off of the gold standard as a “temporary emergency measure” in 1971. Temporary, my foot. It was the final nail in the gold coffin, all because we were spending like drunken sailors on wine, women, wars and welfare.
Was there panic? Confusion? Market turmoil? Riots in the streets?
Nah. None of that happened at any of these currency resets. Partially because people are distracted. Back then it was Vietnam protests or bra burnings or Watergate scandals.
Despite the name, when I wore The Mrs.’, I couldn’t do any more than usual.
And, partially because people still had dollars to spend that were worth something, right? I mean, until the inflation of the 1970s hit. People adapted, grumbled, but kept chugging along because what else were we gonna do? Start a revolution over milk prices?
All of these resets, every single one of them, happened because the United States government (or its precursor) had spent way too much, had too much debt, and didn’t want to pay it. It’s the old, “Hey, let’s you and me split the bill. Half is fair right? I mean, I had the steak and lobster and you had a salad, so 50-50 works.”
Except you don’t get to object.
This confiscation is what gold (and silver) holders, real physical metal holders, now worry about: the government coming for their gold and silver.
I am here to tell you that will never happen.
Never.
What’s the zodiac sign for a donut? Torus.
Why bother with door-to-door confiscation when they can just make it painful to use? History shows they prefer the sneaky route. What will happen is, say, that .gov will tax people who sell gold at a profit at a huge rate. 70%? 90%? Heck, maybe 110% if they get creative with penalties.
And no one will care. Why? Well, rich people will have insulated themselves from this by offshoring those investments: think Swiss vaults or Cayman trusts. The tax will probably only apply to individuals (so those with corporations won’t care, they’ll just LLC their stack), and the people who don’t have silver and gold will think that anyone who had any silver and gold probably deserves such a high tax rate.
“Greedy hoarders,” they’ll say, while scrolling through their InstaFace© feed of dancing feminists.
That’s one way. What’s another?
Mandate reporting on all precious metal sales over, say, $100. Turn your local coin shop into a snitch for the IRS®. Or tie it to “anti-money laundering” laws, making grandma’s heirloom coins suspicious. It’s not confiscation; it’s just “regulation for your safety.
“You can sell your gold and silver. And dollars, even, into a new currency!”
And only into that new currency. This new currency will be great! We’ll call it a Central Bank Digital Currency (CBDC). It’s like crypto, but now the Fed® controls it!
I have a friend who is half-Indian. His name is Ian.
What could go wrong?
Well, from the perspective of the Fed©, absolutely nothing. They can make your CBDC evaporate unless you spend it: like digital milk in the fridge with an expiration date enforced by big brother. “Use it or lose it, citizen!”
They can track every cent (oops) dime that you spend. Bought too much ammo? Flag. Donated to the “wrong” cause? Freeze. They can stop transactions they don’t like. “Sorry, no more red meat, your carbon score’s too high today.”
They can use it to create an activity profile: “John’s been buying survival gear again; better send the social worker. Have her bring cigars and scotch to calm him down.”
It will, of course, all be for your own good. It’ll stop crime. And money-laundering.
And those rich people! It will stop them. I mean, sure they’ll have the fancy estates in France and Bill Gates will own half of the farmland in the country and also own Picassos and Renoirs and Monets and Manets and a Chinese antibiotics manufacturer, but it’ll really get him.
Bill Gates caught a very strong STD: Herpules.
Us plebs? We’ll get the full surveillance package.
Boy, those rich people are sure going to suffer if we force them to use CBDC.
So, we can keep our gold and silver. It’s just a barbaric relic. And we’re awful if we want to keep it since it’s probably anti-patriotic or pro-colonialism (depending on who is in office) to keep the gold and silver, which should be safely stored.
In a Central Bank.
For your own good.
And the CBDC? That’s as good as gold. It’s not like the Continental at all. And, it comes with a new iPhone® app.
What a deal!
