Dollars Are Not Real

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It’s all a sham.

With the price of gold going north of $4,000 per ounce this month for the first time in history, I started checking out prices on old coins just to see how much they’ve changed since the last time I was curious about it (over 10 years ago).

There was one coin in particular that caught my eye: a $10 gold piece from the 1880s. Lady Liberty on the front, eagle on the back, about the size of a modern day quarter but a little thicker and heavier. At the time they were going for about $750 on eBay.

Today, that coin is worth over $2,000.

Once as a much younger man I tolerated an exhaustive rant from a “fed”-up Libertarian about the US dollar being a total sham since we went off the gold standard. It was a friend of a friend, getting hotter and hotter for over an hour of how the Fed manipulates the economy through interest rates, how inflation was uncommon and now it’s a constant IV drip of devaluation, keeping us citizens on the hamster wheel.

“Ok, guy.”

That’s what was going on in my mind. I’ve heard a lot of rants. I didn’t want to hear it.

But here’s the thing…

He was right.

A dollar bill used to be a promissory note from the United States government, guaranteeing value of one dollar’s worth of gold, that was actually sitting in Fort Knox

That meant that there was scarcity. There was an actual end to how many dollars there could be in circulation, because there was an end to how much gold we had.

I always thought it was President Nixon who took us off the gold standard – and that’s half of the story – but it was actually FDR that took back the physical gold currency in 1933 in order to artificially inflate gold and bolster the USA’s economic sway in the world economy.

Get this: he ordered a buy-back of gold at $20/ounce, and immediately raised the estimated value of gold to $35/ounce.

Can you imagine that happening today?! There would be riots.

Here’s what’s wild. Technically even though the feds “bought” back gold from citizens, the dollar was actually still a promissory note for gold, just in theory. You couldn’t actually exchange it for physical gold, it was merely a representative.

Because of this, gold stayed at $35/ounce for nearly the next 40 years!

(For scale, gold went up that much just over this past weekend)

That is, until Nixon completely separated the dollar from gold, allowing the mint to print away without consequence.

Why? cough-war-cough I have no idea.

Now, they don’t even have to print bills. They can just print and mail “stimulus” checks, and devalue the dollar without having to use all that pretty green ink. Maybe one day we’ll really go green and just get automatic credits to the chip in our wrist.

At least bitcoin is scarce, even if you can’t touch it.

Time to rethink where your money sits?

P.S. – Personal finance is hard. So is business.

That’s why I created Profit Hiker.

Profit Hiker is my program to help business owners discover hidden profit, create margin, avoid financial struggle, and finally feel the freedom of a business that works for you.

There are 11 trails to gain lasting elevation in your business, and I have the maps waiting for you.