Financial Preparedness

Gold – America’s Misunderstood Money

January 10, 2013
by Jim Deeds
MIA McAlvany Intelligence Advisor

“Paper is poverty, it is only the ghost of money, and not money itself.” Thomas Jeffersoncoins

Both the definition and the purpose of “money” could be completely misunderstood in America today, at least for some of us. Money was invented to facilitate trade (make barter easier) and to enable us to save a common store of value for a rainy day. Gold and silver coins are an improvement on the barter system, and aid in self-sufficiency and peace of mind in old age.

Today, we often see an exaggerated love of money. Love of the dollar is reflected in everyday life, where everything is quickly calculated and priced in dollar terms.

This article is written about what money truly is. Money appears to be the primary focus for American people.

Defining Wealth

Who doesn’t want to be rich? Wealth has been the great motivator for many men since the beginning of time. And the desire to earn and then accumulate money is a primal instinct, or so it seems, in most men and women. Wealth brings us … what? Most people would answer that it brings happiness. But anyone who is rich or closely observes the very wealthy would know this is not true. Nonetheless, illusions are a big part of life, especially in America. We all think we deserve to be rich. We all hope for something for nothing. Not a healthy life-style!

Money, Are You Sure You Know What You Wish For?

“Money makes the world go ’round.” But what really is money? Is it a real physical object? Is it gold or silver, as it was in the beginning? Is it a paper coupon, a credit card, a line of credit at the bank, or maybe even just a hollow promise to pay back a loan sometime in the future? The true definition of money is blurry now. And since government, in a democratic state, is elected based first upon the services they offer, and then later on upon what they can “give” their voting supporters “for nothin’,” it costs a lot of money to be selected ruler of our nation.

Last year’s promotion of Presidential candidates cost over $2 billion. It all comes from somewhere. Could it be that most donors to each party expect multiple returns on their investment? Well, if our government’s record over the past 50 years in spending and subsidizing its way to a $16 trillion current debt, and to somewhere between 80 and 120 trillion dollars of future health care, aid to the poor, and retirement “entitlements” is correct, then, as they say: “At least in Washington, money must grow on trees!”

But, is all that dollar-indebtedness created by big GOV in Washington real money? Or is our paper dollar just a present-day illusion? Is the dollar “people would die for” worth anything, or is it just equal in value to the paper it’s printed on? What is real money, when everyone uses and loves instant cash?

In Washington, Money Really Does Grow On Trees!

For American people today, this seemingly absurd saying is true. It’s true because we collect and covet paper money. And paper is produced from trees (our bills aren’t really paper, per se; they’re made from more durable fibers, but you get the point).

Of course, modern technology has already made paper money antiquated, as the creation of trillions of dollars of computerized credit facilities can now be produced at the touch of a keyboard key at the Federal Reserve. It’s so easy! Why didn’t I think of this a long time ago? says Fed-head Bernanke. As our new Fed-head, Bernanke quickly graduated from dropping paper dollars over cities from helicopters to the magic of computer currency.


But Stop! Are You Sure There Is Real “Moneyness” In Our Present Day Paper And Computer Printout Statements?

Can the past record of the price of gold and silver, the two only “real monies” of the past, explain the true value and staying power of paper money?

In my lifetime, the price of gold (in our paper dollars) has been $20, then $35, then $850, then back down to $265 (over 13 times up from where it started), and now over $1600 (more than 80 times higher than the original $20).

And, with silver now trading at $30 an ounce, an old Peace Dollar I used to carry in my pocket is now selling for over $32 (up 32 times).

Upside Conclusion

Based on the past 80 years, gold and silver coins (as we once knew them) have gone up a lot, while paper dollars have gone down in value. On a gold scale measure, a 1932 paper dollar is worth 1.1 cents. In terms of silver, our paper dollar is worth 2.8 cents today. So there is little argument. Over our normal lifetime, gold and silver are much better long-term stores of value than a paper dollar bill.

But Now, Let’s Look Ahead

The decline of our American $20 bill seems to be accelerating in its plunge down in relation to gold and silver prices (measured in dollars). So, some would say, “you can make money by investing in gold and silver. Let’s look a little closer.

Is Gold Only An “Investment,” While An American Dollar Is “Real Money”?

Most Americans think of gold and silver as investments, and consider them in terms of how they have gone up or down in dollar terms. Few Americans see gold as the ultimate “real money,” priced in paper coupons called dollars. Can it be that gold and silver coins are real currency, as defined in our nation’s Constitution, while the trillions of paper dollars floating worldwide are only imposters?

The Conclusion – That Over 90% Of American People Still Do Not See

Someday soon, the dollar that most people still hold, that has already lost 98% of its purchasing power over the past 80 years, will lose its last two cents’ worth! Then, with a dollar at zero in terms of real money – gold – the false idol stature of our nation’s debt-backed paper currency will be revealed for all to see. How high will gold be then in relation to a worthless dollar?

Anyone who thinks that gold is still just an investment and our dollar is money is playing an all-or-nothing game. If gold is determined to be real money, and the dollar proves to be a fly-by-night paper currency like all the rest have been, gold holders will have the “all” and paper dollar holders will have the “nothing.”

Read this article at Mcalvany Intelligence Advisor:


About myoung

Ben and Marcy Young are the owners of Southern Oregon Survival.


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