Sunday, July 18, 2010

Melt Value

Recently I have written a good bit about how the government is soon going to destroy the dollar. They may not want it destroyed, but their actions will guarantee it. Siphoning value out of a currency through inflation is a hidden tax increase. They get to spend money, without angering you by taking any of your dollars in taxes. Instead of taking the dollars, they simply siphon the value out of those dollars. This sneaky maneuver leaves you with the same amount of dollars, but those dollars won’t buy as much. The difference in value is in new money that they created. They spend this new money on what they want, the same as if they took it from you in taxes.

The fact is the government has been siphoning off the earnings of the population this way since at least 1913, the year they created the so-called Federal Reserve System. Since that time, the dollar has lost over 95% of its purchasing power. This process has accelerated since 1971, the last year the dollar had even a thin connection to a gold standard. Tying a currency to a fixed amount of gold, silver, or other commodity is a way to protect people who earn a living in that currency from politicians who pull such tricks. That’s why big-spending politicians and the media which enable them hate the idea of a defined currency. It holds them accountable, prevents these hidden tax increases, and forces them to govern more responsibly.

There is now no definition for what the value of a dollar is. At one time, a dollar was defined as 1/20th of an ounce of gold. Twenty dollars purchased one ounce of gold. Less than a century later, it takes $1,200 to buy an ounce of gold. The gold in the dollar from that period would today be worth about $60 today.

A silver dollar was originally introduced as a way to weaken the dollar. At least one election for President was decided by people voting against the rascal who wanted to expand the supply of weaker silver dollars. People correctly understood it was an attempt to siphon value out of the currency. Yet even though the silver dollar was weaker than the gold dollar, it stands as a pillar of strength compared to the fiat dollar that our rulers make our “legal tender.” If you melted down one of those “weak” silver dollars, the value in metal is currently equal to $13.77!

Even lesser coinage has suffered in quality as the pace of siphoning wealth from your pockets to those of the politically well-connected accelerates. During WWII, nickels were made out of one forth silver and the rest copper. The melt value of those nickels today is over a dollar! After the war, nickels went back to being one fourth nickel and three fourths copper, but now the nickel is in trouble. The currency has been so abused that the melt value of a nickel is about worth a nickel. If the dollar loses anymore value the melt value of a nickel will be worth more than its monetary value. The currency will literally not be worth the metal that it is stamped on!

This happened to the penny some time ago. Pennies from before 1983 are copper and have a melt value of almost two pennies! The government “fixed” this problem by changing the composition of a penny. It is now made out of cheaper zinc rather than copper. I expect the same to happen to the nickel soon.


Anonymous Anonymous said...

"The government “fixed” this problem by changing the composition of a penny. It is now made out of cheaper zinc rather than copper."

Look for the government to step up pressure to eliminate the "useless" penny- as if the penny were some ridiculous idea that a bygone era had during a moment of temporary insanity rather than a useful denomination for an honest currency.

7:30 AM, July 22, 2010  

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