04/01/11 Los Angeles, California – Free Baron von NotHaus!
Free our money!
Poor Mr. NotHaus. He thought he was doing something good…something that needed to be done. His idea was to mint silver coins, which he called Liberty Dollars, or simply Liberties.
These were real coins, with real value. In fact, their value has been going up. Silver has been the big star of the latest hard money drama; compared to gold – which has also gone up nicely – silver is at its highest level since 1984. And compared to itself, it is as high as it has been in 30 years.
Silver has now gone mainstream. Even Jim Cramer advises listeners to buy the physical metal. They would be glad if they had. Almost nothing has outperformed it.
Compare Mr. von NotHaus’s money to the money issued by the US Treasury Department. The Treasury’s dollars have no precious metal content – none. At best, their content comes from trees and cotton plants, with a scrap value that is probably negative. Meaning, if it loses its value as money, you’ll have to pay someone to haul it away.
The record on that point is clear. Go back to when the Fed was set up to protect the value of the dollar in 1913. If you want to buy the same things, you’ll need 50 times as many dollars today as you have back then. Since 1971, when the last traces of gold were removed from the dollar-based monetary system, the feds’ money has lost value even faster.
The past is prelude. The feds are working hard to make the dollar worth even less in the future. Given the Fed’s current enthusiasm for debasing it, in a few years, the dollar may have no value left.
Even state governments – hardly visionaries – are looking for ways to protect their citizens from the feds’ fast-disappearing cash. A dozen are considering measures to coin their own money. Smart families are setting up their own reserves of real money – gold. Nobody trusts the dollar over the long term.
So, who do the authorities haul to the hoosegow? The guy who mints honest money in tiny quantities…or the guy who puts out $2.2 trillion in “paper” money that is sure to lose its value quickly?
Go ahead…take a guess.
Poor Mr. von NotHaus got taken to court…and may be taken to prison…for competing with the feds’ monopoly on issuing money. The Constitution – Article 1, Section 8, Clause 5 – gives Congress the power to issue money. Apparently, it makes it a federal offense to compete.
According to the Wall Street Journal report, that provision was cited in paragraph 33 of the indictment against Mr. von NotHaus and then later removed from the charges against him. What was left to convict the man on, we don’t know. But the court did so. And now he must appeal…or face penalties, possibly time in jail…and possibly a long time.
But what about the rest of us? Are we sentenced too? Will we be forced to pay the price for the feds’ goofy monetary policies?
Your editor is now flying back from California. He has no Internet connection, but he has a copy of Barron’s and The Wall Street Journal with him. Alas, he will have to read them.
Among the ideas we found in Barron’s was an article on gold. As background information, throughout the entire 11-year bull market, as far as we know, Barron’s never counseled its readers to buy gold. On the contrary, it generally discouraged them. Whenever it mentions gold, it talks about it as though it were some sort of crank market phenomenon…a marginal investment for the marginally insane.
As Michael Santoli put it in this week’s issue – gold is “not terribly useful.” He quotes a fellow named Jeffrey Christian who believes gold buyers are in for a “gut check” – a drop in the price of 15% to 20%.
He may be right about that. Every bull market has its countertrends and back-stepping. We’d be delighted to see the price 20% lower. “Buy the dip,” we’d tell you.
But as to the usefulness of gold, Mr. Santoli is dead wrong. Yes, gold is useless – most of the time. And, as anything but money and jewelry (a form of money in many countries), it is useless all the time.
But sometimes it is almost essential. When the other money – the feds’ money – goes bad, you need some good money to protect yourself. That’s the role gold has always played; it is natural, uncompromised money.
It does nothing – but it hides no mistakes.
It holds no press conferences – but it tells no lies.
It makes no promises – and never delivers less.
And anyone who bothers to mint coins of gold or silver is doing the world a favor.
Free Baron von NotHaus!
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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Not an April Fool joke this time! I absolutely agree with your opinions and strategy. There’s a name for those who denigrate PM bullion holders–they’re called Road Kill.
Thank you. No one, I mean no one has even mentioned Mr. Nauthaus. Even Ron Paul wouldn’t make an appearance and Nauthaus minted a coin commemorating him. Can you believe,,, convicted for counterfeiting!. Now if that isn’t the pot calling the kettle black…
Americans need to keep their savings in precious metals instead of dollars. We need for states to charter bullion banks that accept gold, silver and dollars. They would earn their profit from fees. If we cannot end the Fed we can take our savings out of the banking system.
Yes, Gold may protect against a devaluation of the U.S. dollar.
But there are many other ways to protect agaist such a decline.
Money invested in stocks or real estate is not invested in dollars as such.
Bill says the dolalr is down some 98% in the last 100 years or so.
So cash in a matress is down that 98%
But wealth invested in stocks or real estate since 1913 is UP in real purchaing power terms.
The way to salvation lies not in Gold alone.
Wouldn’t it be awful if the U.S. dollar depreciates another 98% like it has done since 1913?
I mean the standards of living migh ummm RISE enormously like it has since 1913. How awful.
A little knowledge is a dangerous thing…
The Government will confiscate your gold.
Is there anyone here who can convince himself that this Government will have any scruples at all about seizing your gold???
Why would the government confiscate gold? It did so in the 1930′s, but that’s because it was the backing for circulating currency. Now it’s only good for the government as a small deposit with the IMF that’s worth $50/oz.
The bull market is still intact and that the fundamentals for gold are stronger than ever…Perspective Gold is a commodity that has functioned throughout history as a store of value a refuge from depreciating money of all types. That left the citizens holding 20 dollars in paper money for every once of gold. ..The FED functions today as a governmental body that issues fiat money and influences the level of consumer credit through the manipulation of bank reserves.
I guess in this country all we have left is to run for the hill clutching our gold and hoping that people will be up to taking it as barter for something they probably won’t have anyway. It is just great living in a country that is always looking for a way to cook the books and cheat as many people as possible. And those many people aren’t really interested in stopping the printing presses just so they can keep living the fantasy.
A little knowledge is a dangerous thing…
(Which is why I like to share mine with readers of this site)
@Investors friend, look I have an open mind about many other investments, and I do believe that 100% of the readers on this site realize that there are many other investments that can bring you higher returns than gold. Otherwise they would not even have an internet connection and would be in a cave with their bags of gold.
However, with that being said when you state that while the dollar is down the investments in “stocks and real estate are up” I will ask, which stocks? Which real estate? Although some stocks and real estate are certianly up over the last 100 years, the vast majority are not. Heck MOST of the companies listed on the stock exchange no longer even exist ands many went to zero, same can be said for lots of real estate developments including entire towns.
Now, what we ARE saying is that with gold and silver, when you can’t trust the paper promises of governments, banks, and stock brokers(which is frankly MOST of the time) then precious metals are what people look to for safety security and if you get in at the right time even amazing profit.
But profit is not the main driver of most reckoners I would bet, its safety and honesty in a storm of lies and fraud. Its to “try” to protect yourself and your loved ones from the obvious attempts of the powerful to decieve them and steal their property.
Most of the masses enjoy being lied to, as long as they believe they can recieve more stolen loot than they have stolen from themselves. Or as long as they can get money for nothin.
Gold simply is a statement of “I can see the game is rigged and the people who run it are liars and criminals and con men so I am refusing to play.”
as Eric Cartman would say “Screw you guys, I’m going home.”