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the real $50 please stand up?
How can the United States, the most financially, technologically, and
militarily advanced nation on the planet have two -- or three or four --
contradictory definitions for its U.S. dollar?
Boise, ID – In 1985,
the U.S. Congress authorized the U.S. Mint to stamp gold and silver coins
and sell them to the public. Two basic types of coins are minted: (1)
proof set coins for coin collectors and (2) bullion coins for anybody for
whatever reason. These coins are struck in the following denominations and
- American Eagle $50
One-Ounce Gold, .916 fine.
- American Eagle $25
Half-Ounce Gold, .916 fine.
- American Eagle $10
Quarter-Ounce Gold, .916.
- American Eagle $5
Tenth-Ounce Gold, .916 fine.
- American Buffalo
$50 One-Ounce Gold, .9999 fine.
- Walking Liberty, $1
silver Eagle, 1 troy oz, .9993 fine.
As of October 2007,
the mint proof coins sell for hundreds – or thousands – of Federal Reserve
Notes (FRNs or “dollars”), depending on the mint year and mint location.
The bullion gold coins sell for whatever the current price for 1 troy oz
spot gold happens to be that day, plus a slight markup of, say 5-10%.
So, herein lies the
American Eagle gold coins and 2006-2007 Buffalo $50 gold coins are lawful
U.S. money authorized by the U.S. Congress. Each gold coin states its
weight and measure and face value. For example, the American Eagle $50 gold
coin says “1 oz. fine gold - 50 dollars.” However, the market price for the
American Eagle $50 gold coin at any local coin dealer or U.S. Mint costs
about 790 Federal Reserve Notes or 790 dollars. (Look in your wallet. Each
FRN says “dollars.” That’s our first contradiction.)
So what is the true
value of the $50 gold Eagle: $50 or $790? Do we have two different
monetary standards going on in the U.S., paper Federal Reserve Notes that
say “dollars” and American gold coins that say “dollars” but the two types
of “dollars” are not equal? That is, “50 dollars” in Federal Reserve Notes
do not equal “50 dollars” in American gold coins?
Why is this a
problem, and what does it really show about how the U.S. Government and
private Federal Reserve bankers have been robbing the people for the last
examples of the problem.
The IRS says I can
give $11,000 per year per person to anybody I want without incurring a gift
tax or the recipient incurring income tax for the $11,000. So, let’s say I
give 10,000 in paper Federal Reserve Notes to my first grandson. Lucky
him. Then, let’s say I give 200 American Eagle $50 dollar coins, which
equal 200 x $50 = $10,000, to my other grandson. Is the IRS going to claim
that I gave my 2nd grandson $158,000 in Federal Reserve Notes
because each $50 American Eagle can be sold down at the local coin dealer
for 790 Federal Reserve Notes per coin (200 x 790 FRNs = $158,000)? Thus,
my 2nd grandson owes income tax and I owe a gift tax because I
chose to use the American Eagle $50 coin as legal tender instead of Federal
On the other hand,
if I take my $50 gold Eagle to Albertson’s grocery store and buy milk, eggs,
and bread and hand them the $50 gold Eagle, they will give me change for 50
Federal Reserve Notes. If the IRS rules in the above example that 200
American Eagles = $158,000, then the government should make Albertson’s
Grocery store give me change for 790 Federal Reserve Notes, not for 50 FRNs
when I pay with an American Eagle gold coin.
Let’s say I fly to
Germany and I’m carrying 200 American Eagle $50 coins in my briefcase. Just
before we land at Munich, do I fill out the white declaration sheet that I
am not carrying more than $10,000 in U.S. currency or do I claim I am
carrying $158,000 in U.S. currency?
If my employer pays
me in $50 American Eagle coins, say 200 coins this year, did I earn $10,000
or $158,000? The IRS and my accountant will want to know. In the first
case, I’m living at the official poverty level. In the second case, I’m
doing OK. Buy myself a Mercedes Benz.
Obviously, a dollar
does not equal a dollar in the current U.S. monetary system. It depends on
the face value of the money you are holding and we have two different and
conflicting monetary standards going on in the U.S.
The big question
is: what is the true definition of a Federal Reserve Note or a “dollar” and
how did we get to this ridiculous point?
The answer is:
very slowly and very tricky.
illegally authorized a private central bank called the Federal Reserve to
control and regulate our money so Congress could spend deficit money without
taxing the people. Second, the Federal Reserve switched to a “fractional
reserve” system in which it could issue more paper than the gold held by the
U.S. Treasury. Third, the Federal Reserve convinced FDR to confiscate
everybody’s gold coins and bullion in 1933. Fourth, President Nixon cut all
dollar ties to gold in 1971. Fifth, the Federal Reserve has been
hyperinflating our non-collateralized paper money and credit like water for
the last 36 years and Congress is spending earmarks and pork like drunken
sailors on shore leave.
Now that Americans
can own gold again and Congress authorized – who knows for what reasons --
the minting of new U.S. gold coins in 1986 without thinking about the
current Federal Reserve Note funny money system already in place, the
dummies arbitrarily assigned face values to the gold coins, almost in a
direct ratio of weight and measure: $50, $25, $10, and $5. (Note that the
ratio of gold in the $10 coin to the $50 coin, 25% or One Quarter-Ounce,
should have made the face value $12.50, not $10, but what do the goons in
Congress know about standardized weights and measure for money?)
In other words,
instead of moving onto a gold monetary standard, the Bozos in Congress
simply thought it would be nice to start minting gold bullion coins for the
public without reference to their face values vis a vis the existing market
price for gold or any correlating face value to our current Federal Reserve
Notes. A $50 American Eagle does not equal 50 Federal Reserve Notes. So
will the real $50 please stand up?
dinkleberries in Congress and the IRS and the U.S. Treasury and the private
central bankers of the Federal Reserve and President Bush claim that there
is no meaning, no definition, or any numerically significant monetary
relationship between the number of dollars stamped on the American Eagle
gold coins and their face values relative to our current FRNs, then they
could have just as ridiculously stamped the “square root of two” on the
One-Ounce gold coin, “20 million” on the Half-Ounce gold coin, “the Integral
of F=ma dx/dt” on the Quarter-Ounce gold coin, and “Have A Nice Day” on the
One-Tenth Ounce gold coin.
After all, that’s
just about how much most Americans understand about the nature of money and
credit in the U.S. anyway, isn’t it? Unless, of course, they have read
Parts 1, 2, 3, 4, & 5 of my articles: “Wherein Lies the Value of Today’s
Paper Money?” – FM Duck
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