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A Chapter in Monetary History


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Think it's a good idea to cram through legislation that hasn't even been read? You might want to think again. Think the Federal Reserve can be trusted, as it is chartered, to protect the value of the dollar? The dollar has lost 96% of its purchasing power since the inception of the Fed in 1913. In my view they are now at destroying the dollar in grand style.

In 1933 FDR ordered all U.S. citizens to surrender their gold (with a few exceptions). At the time gold was worth $20.67 per ounce. Several months later FDR arbitrarily decided gold to be worth $35 per ounce. Every dollar a citizen had saved lost 70% of its value overnight.

The government is now speaking openly about effectively "confiscating" trillions of our 401(k) dollars. You may count me among those deeply worried for those with large 401(k) holdings.

As I write this the Stock Market is in its third day of a steep downward spiral as OBAMA! attempts to demonize the banking industry. You might care to wonder what he is preparing us for . . . :unsure:

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"A key piece of legislation in this story is the Emergency Banking Act of 1933, which Congress passed on March 9 without having read it and after only the most trivial debate. House Minority Leader Bertrand H. Snell (R-NY) generously conceded that it was "entirely out of the ordinary" to pass legislation that "is not even in print at the time it is offered." He urged his colleagues to pass it all the same: "The house is burning down, and the President of the United States says this is the way to put out the fire. [Applause.] And to me at this time there is only one answer to this question, and that is to give the President what he demands and says is necessary to meet the situation."

[...]

"For the next six months President Roosevelt pursued an erratic monetary course. Every day a new gold price was declared, on a basis no one could figure out. Private lending in effect came to a halt, with the value of the dollar in constant flux amid the prospect of ongoing devaluation. As Senator Carter Glass (D-VA) put it, "No man outside of a lunatic asylum will loan his money today on a farm mortgage." And thus the government could triumphantly announce that since the private sector was cruelly depriving Americans of credit, it would have to step in and provide relief."

[...]

"The general rule (to which there are occasional exceptions) that no senator should ever be listened to on anything holds here: the power of Congress over money is in fact very limited. It has the power to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures."

[...]

"The Court declared that the plaintiff was indeed entitled to his gold, since the government had an obligation to live up to its promises. But in not paying him his gold, the government wasn't really wronging him, since gold was now illegal to hold. In other words, if the government paid him in gold, it would then have to confiscate that gold from him anyway since holding gold was against the law."

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Read The Great Gold Robbery of 1933 here: http://mises.org/story/3056

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There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. - Ludwig von Mises

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Gold is off almost 10% from its 1220 high a couple of months ago.

Don't say you weren't warned. ;)

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Easin' down the highway in a new Cadillac,

I had a fine fox in front, I had three more in the back

ZZTOP, I'm Bad I'm Nationwide

Greg

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Gold is off almost 10% from its 1220 high a couple of months ago.

Don't say you weren't warned. ;)

Yes, I'm fortunate to be able to "buy on the dips." ;);)

Posted Image

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. - Ludwig von Mises

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