If George Washington were alive today, he would be angry to see his likeness being used on counterfeit currency. There are trillions of dollars of US currency of all denominations in circulation today, bearing the portraits of various dead presidents. They are all counterfeit. And the US coins you have in your pocket or purse? They’re counterfeit as well.
This is not the work of a huge nefarious counterfeiting ring. Nor is it a plot by some foreign government intent upon destabilizing the US government (although that sort of thing did happen during World War II). No, The United States of America started counterfeiting its own money in 1913. It showed a little more restraint with its coins; it didn’t start counterfeiting them until 1965.
How did we come to this sorry state of affairs? Strangely enough, it all started with the Romans…
Like the politicians of today, the Roman Senators had huge egos. They wanted to build monuments to themselves, and they needed to keep the masses happy. So they constructed huge public works projects, they provided public entertainment (lions eating Christians), and they even had a welfare system.
The problem was that this all cost money – more money than they had. Like all good politicians, their first thought was to raise taxes, and raise taxes they did – right up to the point where if they raised them any further there would have been armed rebellion.
Then one politician (the Roman equivalent of a Liberal, I am sure) came up with a brilliant idea: “Let’s start debasing the coins.”
Now, let’s stop right here and clear a few things up. The reason the Romans didn’t just print more money like Ben Bernanke, the Chairman of our Federal Reserve System, likes to do, is that paper money hadn’t yet been invented. Money was real back then – mainly silver or gold coins that were not so easy to counterfeit as the paper IOU’s our government issues today.
The second point is that we use the word “debasement” today in relation to currency, or paper money. When we say that a government “debases” its currency, we mean that it has issued more dollars (or Euros or pounds) backed by nothing, making all the other currency in circulation worth less. But the word “debase” was originally used for coins, when a government added “base” (worthless) metals to the precious metals in its coins, thus “debasing” them.
Coins meant for circulation are seldom pure gold or silver. For instance, pure gold is so soft that if it were handled daily, as coins used for money would be, it would wear down, bend and be easily nicked. So an alloy, usually containing a small percentage of copper, was used for gold coins intended for circulation by most nations.
Now, back to Rome. As I said, twenty centuries ago their politicians had the same problems ours do today, but they had to be more creative with their counterfeiting. They decided to “clip” their coins. This meant that they shaved a small amount of silver from the edge of the coins as they circulated through the Roman Treasury. Then they used the shavings to make additional coins.
This worked for a while until the people realized that the coins no longer contained the same amount of silver. Then they stopped accepting them, or they required more of them to purchase the same item. For instance, if the price of a loaf of bread was two silver denari, the baker would accept two unclipped coins or three clipped coins.
Take a moment and look at your loose change for a clue as to how the Romans solved this problem. You will notice that your “base” metal coins – the copper pennies, and the five cent pieces made of nickel – have smooth edges. But your dimes, quarters and half dollars, which used to be made of silver (that’s right – I said “used to be”) have ridges on the edges, called “reeding.”
The Roman people starting cutting notches in the edges of their coins so that it would be obvious if they had been clipped. This practice was the inspiration for the eventual invention of the process of reeding that is used by most nations for their precious metal coins (and by many to make their people think certain coins are precious when they are not).
In the case of Rome, once the people realized their coins were being clipped, the government stopped using that particular scam. But they still need to inflate the money so they could spend more and more and more. So the government criminals figured out a new way to rip off the citizens they were supposed to serve. They started debasing the coinage in earnest.
In 54 A.D. the main coin of the Roman Empire, the silver denarius, was 940 fine, meaning that it was 94% silver. The other 6% was base metal used to create a harder alloy. Since the people had caught them in their clipping scam, the government started melting down the silver coins as they circulated through the treasury and adding base metals so that they could produce more and more counterfeit coins.
By 218 A.D. the denarius had been reduced from 94% to only 43% silver. By 268 A.D. it contained less than 1%. There are many theories as to the reason for the fall of the Roman Empire. But one primary reason seems obvious. The Roman soldiers grew tired of fighting and getting paid with worthless money. It’s hard to defend a far-flung empire without soldiers.
I will not go into detail concerning all the governments that have risen and fallen over the last twenty centuries. It is sufficient to say that politicians of every culture and creed recognize a good scam when they see one. Almost every nation since Rome has counterfeited their own money, while piously arresting private entrepreneurs who attempt to horn in on the government’s game. Individuals who print a few thousand worthless dollars in their basements are called criminals. Individuals who print trillions of worthless dollars are called politicians.
Today, The Federal Reserve System of the United States and the Central Banks of most of the world’s developed nations have refined the Roman scam to the point where it’s like comparing a horse-drawn chariot to the space shuttle. Listen to Ben Bernanke, current Chairman of the US Federal Reserve, describe with his smirk how the US will pay off its horrendous National Debt:
"The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost." By saying this he was telling the American people that their money was worthless! In this speech in November, 2002, he also said that it was in the interest of the US Government to create inflation, because it, in effect, reduced the National Debt.
I will not tell the story of the Federal Reserve here. I have done that in a previous article, “The Non-Federal Fed,” which is in the Archives of www.ConservativeTruth.org (see LINK below). For our purposes today, it is sufficient to say that 1913, the year the Federal Reserve System (the Central Bank of the United States) was established, was also the year that the US started to counterfeit its own money.
The real money of the United States, as established by the Constitution was gold and silver coins. By this time we had also printed paper currency that was “demand” money. In other words, these were certificates that certified that, for instance in the case of the $20 bill, “This certifies that there have been deposited in the Treasury of the United States of America $20 in Gold Coin Payable to the Bearer of Demand.” So the paper “demand” money was as “good as gold.”
For twenty years the real money and the fake Federal Reserve money circulated side by side. I believe that this was by design so that the unsuspecting public would get used to the idea of the Fed money and come to believe it was the same as real money. After all, it was designed to look very much like real money. But there was a crucial difference. It was backed by nothing.
Remember that the gold and silver certificates were backed, dollar-for-dollar, by precious metals. Not one gold or silver certificate could be issued unless it was backed by gold or silver. And that is why the politicians hated them so much. They lusted for money that they could print at will, money with no accountability. Money they could for as many “pork” projects as they wished to buy as many votes as they wanted so that they could get reelected forever – every politician’s dream. And the Federal Reserve
System was their dream come true.
Please don’t take my word for this. I have known for years that Federal Reserve “notes” are not real money and are backed by nothing. But I didn’t really expect the government to admit that. So I was surprised to find these words in the Question and Answer section on the US Treasury website (see the LINK below to verify it for yourself):
• QUESTION- What are Federal Reserve notes and how are they different from United States notes?
• ANSWER- Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything. This has been the case since 1933. The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are "backed" by all the goods and services in the economy.
So instead of being able to redeem your $20 Gold Certificate for $20 in solid Gold, you get to wave your $20 Fed “note” (basically an IOU) in the air and claim $20 worth of all the goods and services in the US economy. Good luck with that.
I believe the timing of the creation of the Federal Reserve System twenty years before FDR’s treasonous and unconstitutional Executive Order 6102 in 1933 (which took the US off the Gold Standard) was deliberate and planned. At the same time as he removed the connection between the dollar and gold, FDR made it a felony for US citizens to own Gold coins or Gold Certificates. If they didn’t turn these in to the US government they could be fined $10,000, go to prison for 10 years, or both. This was the first time in the history of the world that a ruler had made it a crime for citizens to own their own money. And he did it without the knowledge or consent of Congress.
The next step in the debasement of our money was the attack on our coins. Starting in 1965 the silver content of our coins was cut in half. Four years later, there was NO silver in our formerly silver coins.
But they want to give the appearance of normalcy, and they do that in two ways. The coins are actually cheap copper, but they are clad with a nickel-zinc coating to make them look silver. And, just as most nations have adopted the Roman custom of reeding the edges of coins to show that they are made of precious metal, as I mentioned earlier, so did the US. Only now that they are made of junk metal the US government still reeds them. I wonder why?
Today you won’t find any pre-1965 US silver coins in circulation. If you want some of them as an inflation hedge, you will have to pay a premium for them at a local coin store. (See my article – LINK below – “The 10-10-10 Financial Survival Plan” for a concise plan for using gold and silver to deal with inflation and potential hyper-inflation.)
Finally, let me suggest that you study the work of Congressman Ron Paul, perhaps the only person in Congress who truly understands money, the economy and the Federal Reserve. I have written a short article about him (see LINK below) which has links to his websites. I particularly recommend that you read his book, “End the Fed.”
Some people (mostly Liberals, but also a few misguided Conservatives) say that we can’t get along without the Fed. I have two things to say to that. First, we got along just fine without it for 60% of our nation’s existence. Second, the dollar had lost 96% of its purchasing power since the Fed was established. The Fed has been bad for the citizens of the United States. It has been very good for the private bankers who own and control it.
Most of all, I would like to respectfully suggest that all of you get your heads out of the sand and start to learn about what is going on in your country. Most Americans are content if they have a job and can pay the rent. They don’t realize that, due to the manipulation of our money, we are handing our children a massive debt that they will never be able to pay.
There is only one way this manipulation of our money can end – the way it ended for France in the 1790’s, for Germany in the 1920’s, for Argentina twenty years ago, and for Zimbabwe four years ago: with massive, crippling hyper inflation.
France ended up sentencing its citizens to death for the “crime” of using gold instead of the worthless national paper money. Germany’s Deutschemark, which traded at 4 to the US dollar in 1919 was at 4.2 TRILLION to the dollar in 1923. To put this into some kind of perspective, prices doubled every 28 hours during a 20 month period in 1922 and 1923.
The US had to bail Argentina out of hyper inflation that reached 23,000% in one month in 1989. Argentine employers paid their employees not twice a month, but twice a DAY because the peso was losing value so rapidly. (By the way, the austerity measures we forced upon Argentina in exchange for our help, including backing all paper money with gold and reducing taxes and the size of government, are the exact opposite of what our government is doing today.)
And Zimbabwe, whose dollar was at $1.25 to one US dollar four years ago, has experienced inflation that is impossible to calculate – estimated in the hundreds of millions of percent. At last count, a single egg cost $35 BILLION dollars.
Many politicians say that could never happen here. “This is America. We are special.” How arrogant! Fully 10% of all modern nations have experienced hyper inflation. And none of them had the level of debt of the United States. In fact, this nation, which just 77 years ago when we were still on the Gold Standard had essentially no inflation and negligible debt, now has more debt than any nation that has ever existed, and a dollar that is worth 4 cents compared to the US dollar of 1933.
The Bible tells us in Proverbs 13:22 that good people leave an inheritance for their children and grandchildren. Do you want to leave lands and gold? Or do you want to leave crushing debt and the bonds of slavery? It’s not too late, but we must act quickly.
NOTE: If you would like to attend free Webinars on either financial topics such as debt reduction, financial planning and investing from a Biblical viewpoint; or Webinars on how to use Gold as a hedge against inflation, write to Webinars@Bellsouth.net for times and links.
Articles and Videos on Biblical Concepts of Finance and Investing
“The Non-Federal Fed”
From the US Treasury Website
“The 10-10-10 Financial Survival Plan”
Who is Ron Paul?