Should The Dollar Be Backed By Gold?

[corbe]

Should The Dollar Be Backed By Gold?

by Tyler Durden
Monday, Aug 26, 2024 - 07:05 PM

Amidst all the talk about the Federal Reserve’s high interest-rate policy to combat its many years of monetary expansion and debasement, some people advocate the restoration of the monetary system on which the United States was founded — one in which, they say, the dollar was “backed by gold.”

But there is one great big flaw in that idea: Under America’s founding monetary system, the dollar never was “backed by gold.” Instead, the official money of the nation for more than 125 years was gold coins and silver coins. Those coins didn’t back anything because they constituted the nation’s official money itself.

The Framers wanted nothing to do with paper money. They knew that historically paper money had been the way that governments had plundered and looted people through monetary expansion — that is, inflation of the paper-money supply. By printing up ever-increasing amounts of paper money to fund its operations, the government’s inflation of the money supply would cause the value of everyone’s money to fall. That decrease in value would be reflected in rising prices of the things that money would buy.

At the time the Constitution was being proposed, Americans themselves had just recently experienced the ravages of inflation with the paper money that the Revolutionary Congress had issued during the Revolution. The basic unit of money during that time was called the Continental. The Revolutionary Congress printed so many Continentals that the value of everyone’s money dropped to near zero. A popular refrain became “Not worth a Continental.”

Thus, the Framers wanted to come up with a monetary system that prevented government officials from debasing the value of people’s money. They knew that a paper-money system would not be likely to accomplish that goal. So, they came up with a system in which the official money of the country would be gold coins and silver coins. They knew that government officials could not print up vast quantities of gold coins and silver coins, like they could do with paper money.

<..snip..>

https://www.zerohedge.com/political/should-dollar-be-backed-gold

[Smokin Joe]

Sorry, but the dollar was backed, by gold and silver, as these notes will attest.




Gold certificates were redeemable in gold, silver certificates in silver.

[Smokin Joe]

The promissory note (United States Note), directly from the Treasury, came in this form:

Aside from fractional currency issued during the Civil War because of a shortage of coins, the rest of the banknotes issued since 1860 by the United States were Federal Reserve Notes (actually a debt instrument of the Federal Reserve), after the Federal reserve Act of 1913.


and later, in a more familiar form,


Note the statements of legal tender status, especially in the last image. "...redeemable in lawful money at the United States Treasury or any Federal Reserve Bank."
Lawful money being gold or silver (though private ownership of gold was banned by then).

[Free Vulcan]

Maybe after the next crash.

[roamer_1]

I don't think it can be backed by gold and silver... there just ain't enough. But it should be backed by substance.

[Hoodat]

Should The Dollar Be Backed By Gold?

If your objective is to protect America, then yes.  But if your objective is to protect the politicians who are running America into the ground, then no.

[Smokin Joe]

I don't think it can be backed by gold and silver... there just ain't enough. But it should be backed by substance.

It'd be 1933 all over again, turn it in. There's a tremendous amount in private hands without even melting down Grandma's tableware.

[IsailedawayfromFR]

Should be interesting to watch the new gold-backed currency issued by the state of Texas being handled.

A buck of it may be worth a lot more than a US dollar over time..

The US currency will be so devalued that feds will have no choice but to squash the attempt by states to exercise their rights under Art I Sec 10