Purchasing Power: Past, Present, Future- Part 4, by L.M.

The real currency of the world has become trust.

Dallas Fed chairman Fisher stated, “Fiat money is a game of CONfidence and faith and if these are lost it is over.” (emphasis added) Did he really just admit that this is a CON game? I thought we were supposed to play our part in this grand charade and pretend it had value? What is the matter with him? What in the world does this even mean? Sadly, we are past the time in history when being honest was considered noble and right! Governments are past it, and soon people around the world will loose “CONfidence” in the current reserve currency (USD) that is over printed, not backed with commodities like gold, silver, copper, et cetera, and has a history of over 2000%+ inflation over the last 100 years, not to mention several defaults!

Perhaps the federal reserve sees the “CONfidence” waning, as they witness the velocity of USD slow!

See item J

This is one of the indicators revealing the strength and growth of an economy: the speed at which a dollar moves from one transaction to another. The more times a dollar is used to buy something, the greater its velocity and the greater the economy can potentially grow. Is this one of the reasons why we are hearing about the beauty of a “cashless” society? Are they trying to avoid the impact of a loss in “CONfidence”? The call to go cashless increases as banks and governments seek total control:

http://www.consolidatedcredit.org/financial-news/article/2113/

http://theeconomiccollapseblog.com/archives/a-cashless-society-may-be-closer-than-most-people-would-ever-dare-to-imagine

http://www.nytimes.com/2014/11/29/upshot/cashless-society-its-already-coming.html?_r=0

Is this happening only in the USA?

http://www.thelocal.no/20120508/bank-tells-customer-we-dont-take-cash-anymore

However, I am reasonable. I can accept this:

http://www.bookofjoe.com/2012/01/we-will-no-longer-accept-money-out-of-undergarments.html

By forcing people and companies to convert their paper currency into bank deposits, the hope is that they can be coerced to spend that currency rather than save it because those deposits will suffer from negative interest rates and/or fees.

This in turn could boost consumption, GDP, and inflation to pay for the massive debts we have accumulated! Then “we” can finally get out of the current economic trap. However, it’s not “we” but you– the federal reserve that has accumulated that debt! Iceland recognized that fact. It shut down the banks and arrested the bankers! How brave! How righteous!

The U.S. adopted a policy with similar cashless goals in the 1930s, eliminating its citizens’ right to own gold so they could no longer “hoard” it. At that time the U.S. was on the gold standard so the goal was to restrict gold. Now that we are all in a “paper” standard, the goal is to restrict paper.

  • Paper money loses value unless it earns a return greater than true inflation. When holding it personally, it could be stolen I suppose. However, converting it into bank deposits will cost you fees and perhaps negative interest. It will also expose you to the promises of the Frank Dodd Act, exposing you to a substantial loss if the bank goes under.
  • This would have grave consequences for retirees, many of whom are incapable of transacting using plastic, not to mention that they will disproportionately bear the costs of having to hold their liquid savings entirely in a bank or den of thieves.
  • The very poor are messed over. This will make them more dependent, in fact exclusively dependent, on government handouts, if they are available.
  • If there is an event that disrupts electronic transactions (e.g. extensive power outage, cyber attack, cascading bank failures), people in that economy will not be able to conduct business.
  • Of course, enforcing a government mandate to ban cash transactions must carry penalties. This in turns means more regulations, disclosure requirements, and compliance costs, potentially exorbitant fees and even jail time.
  • And of course, I saved the best for last. The banks can charge any fees, any amount of negative interest, and inflate to no end the value of your new electronic digits. What are you going to do? Put them in another bank? There will never be a bank run again! It’s good for the banking blood suckers! Their tightening of the noose for you!

Of course, they will try to further deceive the sheep by saying, “Imagine the reduction in crime that would follow if cash were to become a thing of the past.” Right!

By putting all currency accounts under either the actual control of governments or subject to absolute monitoring by governments, nations would finally possess the ability to bring to a close the “boom or bust” economic cycles that prove so deeply damaging to the world’s economies.

They could do that now with proper weights and scales, proper sound procedures, et cetera. Let’s play a game. Suppose a government that deems it is proper and right to make propaganda legal, creates critical economic figures from lies and half truths to steal, threatens punishment if you step out of line, and will throw you in jail if they do not like your speech. Hey, theyll throw you into jail if they do not like your tone! I had a step-mother like that once. They will take your currency through civil forfeiture.

Ah, what have we here? Could this be the best tool to completely control every thought, every action, every belief?

Revelation 13:17 (KJV) – “and that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.”

If you chose not to play their reindeer games, could they simply prevent access to your electronic account? That would make you an utter serf, a complete slave! Mission accomplished. The noose is tight enough.

Are you asking, “Is there any way out?”, or are you suffering from a typical response:

  1. Maybe in third world countries but never here.
  2. We have always come back from slow downs in the economy.
  3. That sounds like conspiracy theory craziness.
  4. Shut up! I don’t want to know.
  5. I was doing just fine until you opened your mouth.
  6. Where did I put those razor blades?
  7. If you were closer, I would kick your behind. (I actually had a guy say that to me once, shortly after he believed.)
  8. We are the world reserve currency; this could never happen.
  9. Now, where did I put that whiskey?
  10. …and so on.

Either way, I will finish by proving my point that there is something that has worked in the past!

The main problem with fiat currencies is that a government is trusted not to print more currency than is actually required or to be more realistic, like we have to be, not print or spend beyond your means. I did say “government”. That is absolutely propaganda garbage!

“Some [Most] people think the Federal Reserve Banks are the United States government’s institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers.” – Congressional Record 12595-12603 – Louis T. McFadden, Chairman of the Committee on Banking and Currency (12 years) June 10, 1932

Currently we, or the federal reserve on “our” behalf, borrows $1 trillion per year. A government can only do this when the currency is fiat. How did it work when we had commodity based money? Inflation was kept low naturally. When the government wanted to expand the money supply, they had to use silver for the coinage and add gold to the vaults at Fort Knox, or wherever, for paper money. Then, they would print gold backed money and create additional 90% silver coinage. Here is an example of how this used to work. When backed by gold, I could go into any approved bank and trade a $10 commodity backed money for $10 worth of gold.

itemk

In 1922, I could have traded the above $10 United States Note for ½ ounce of gold. Today, that ½ ounce of gold would be $628. Again, that’s a 610% increase.

The pre-1965 dimes, quarters, half dollars, and silver dollars already contained 90% silver. You would have had the silver in your pocket or purse! If I had a silver dollar, say dated 1879 or 1925 like the two below, I would have had almost 1 ounce of silver. Today, you need to trade $14.98 of fiat currency to obtain that one ounce of silver. That is 1400% increase.

Here we see an. 90% Silver

iteml

This is a. It is 90% Silver as well.

itemn

All of the above are collector series money and coinage. To have currency insurance, you do not need something like these collector condition items. Common circulated coins are sufficient.

Now, the governments all over the world are printing currency without adding gold or silver to back their currency. The world debt is the highest in history. Boom/bust economic cycles are more dramatic, and the severity of the damage is at extremely dangerous and alarming levels as world debt grows with no underlying foundation.

In the U.S., we backed our money with silver and gold. In 1965, we stopped backing our coinage with silver. In 1971 we stopped backing our money with gold. Now our U.S. dollar is backed by the full faith and credit of the federal government, who is in debt at least $18 trillion and over $240 trillion when one includes the obligations of social security payments, Medicare, federal retirement payments, et cetera. Oh, I almost forgot about the lies, cheating, and utter disgusting filth that has become the USA, Inc. It’s sad, because I loved this country and the God-breathed Bill of Rights!

This fiat currency scheme, which the world has been on since 1971, is running out of steam. The pressures are mounting everyday worldwide. This system will be replaced by something new.

Let us continue with a 50 year review.

Defying Devaluation of the U.S. Dollar, Past, Present & Future

U.S. Silver coinage before 1965 that has been circulated, unlike the two silver dollars above, is known as junk silver. Now let us see how much pre-1965 90% silver U.S. coinage is worth by reviewing a close of an auction of “junk silver” on eBay from last year (2016 figures follow):

$2.50 Junk silver at eBay

In the above auction we have $2.50 of junk silver. That is $2.50 face value. However, the value of the silver has a higher value than that of the face value, $2.50, of the coinage. To determine the current price or value because of the silver, the best place is a recent auction close on eBay. The auction above sold $2.50 Face Value (FV) of junk silver. Let us figure out the silver value that is over and above the face value. This is the calculation:

sold at eBay auction price ‘/ divided by’ face value = the face value multiplier

$41.50 (sold at auction price) / $2.50 (face value or FV) = 16.6 is the face value multiplier (FVM). This means $2.50 in face value (FV) x 16.6 (FVM) = $41.50. That is where the auction closed.

Here is one that sold for a little more:

.45 Face value junk silver at eBay

.45 (FV) x 16.6 (FVM) = $7.47 where as the auction sold for $7.51

Here is one that sold for a bit less. Most likely because the winner had to pay for shipping at $2.04.

.50 Face value junk silver at eBay

.50 (FV) x 16.6 (FVM) = $8.30 where as the auction sold for $5.00 + $2.04 = $7.04

First, let us go back 50+ years to determine the cost of one gallon of gas.

.25 to .29 cents in 1964

1964 gasoline prices

In 1964 gasoline was approximately .25 to .29 per gallon. Prior to 1965, U.S. coinage (.10, .25, .50, and $1) were 90% silver. Beginning in 1965, the U.S. Federal Government authorized the Federal Reserve Corporation to produce the same U.S. coinage without any silver. At that time I could purchase a gallon of gasoline for approximately one 1964 90% silver quarter. This is a critical historical reference point because we need to prove if this 90% silver, U.S. pre-1965: dimes, quarters, half dollars, and silver dollars will store our value. Will they protect our purchasing power?

Today, I sell one pre-1965 quarter to pay for a gallon of gas. Will that work? .25 (FV) x 16.6 (FVM) = $4.15. Wow! It appears that the pre-1965 90% silver quarter stored” my purchasing power!

Pretend with me for a moment. Suppose that in 1965, I saved $1000 FV of pre-1965 .90% silver Washington quarters. Keep in mind that the $1000 I saved could have purchased 4000 gallons of gasoline. Let’s say I was in an accident and then in a comma for 50 years. All of a sudden I woke up, took some Geritol, and grabbed by $1000 worth of 90% silver quarters. I decided to sell all of them. $1000 FV x 16.6 FVM = $ 16,600. That’s not bad. However, I want to know how much gasoline will that buy today?

$16,000 / $4.15 per gallon = 4000 gallons. WOW! I am worth the same today as I was when I sunk into a comma!

Here are the comparisons from today:

$89.99 Face Value / $5.00 = $17.99 Free Shipping. eBay auction number: 311707224163

$29 Face Value / $1.85 = 15.68 SHIP FOR $2.99. eBay auction number: 351854254305

$141.1 Face Value / $8 = 17.63 Free Shipping. eBay auction number: 302082595619

$34.33 Face Value / $2.15 = $15.97 SHIP FOR $2.99. eBay auction number: 252556571503

We just found out that my purchasing power was the same in 1965 as it was in 2015. Oh, and one last little bit, when I traded my $1000 of 90% silver quarters for fiat USD currency, there was no tax man looking over my shoulder. You can pay the tax if you want. However, you already paid the tax in 1965. So, you wake up out of your comma, have your first beer in 50 years, and the tax man says, “Congratulations, you came out of your comma and now you owe me taxes on that USD currency.” Really? I know the correct thing to do by “law” but really? You have to make those decisions on your own.

You can do the same with gold. Gold and silver have always been money. I want to hold it until this fiat currency storm passes, until some new system is put in place. Gold, and to a slightly lessor degree silver, has one quality that surpasses any fiat investment: relentless appreciation. $1,000,000 in 1913 would be worth $20,000 in purchasing power today. (Does that mean I can write of the loss on my taxes?) That same $1,000,000, if used to buy gold in 1913, would be $60,000,000 today. I can hear the tax man come running! This is currency insurance at its best.

Okay, you say to me, I can do the same with the stock market and some bonds. I believe that there is some truth to that statement. There are always investments that will pass gold and silver, if you can pick them. However, that point has nothing to do with the fact that gold and silver have never left the owner wanting when using gold and silver as a store of value. It has never been worth zero. When used as a speculative instrument, meaning you buy it hoping that it will go up, you are at the mercy of the market. Perhaps you can call it correctly, perhaps not. The idea is to put it away and forget about it until you need the currency insurance– a bit of safety. It’s like fire insurance, I suppose.

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