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Watching the Death Dollar

Paul Craig Roberts
Mar 17, 2008

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review.

I've been watching the dollar die all my life. I sometimes think I will outlast it.

When I was a young man, gold was $35 an ounce. Today one ounce gold bullion coins, such as the Canadian Maple Leaf, cost more than $1,000.

Our coinage was silver. Our dimes, quarters, and half dollars had purchasing power. Even the nickel could purchase a candy bar, ice cream cone or soft drink, and a penny could purchase bubble gum or hard candy. If a kid could collect 5 discarded soft drink bottles from a construction site, the 2 cents deposit on the returnable bottles was enough for the Saturday afternoon movie. Gasoline was 32 cents a gallon. A dollar's worth was enough for a Saturday night date.

Our silver coinage was 90% silver. People sometimes melted coins in order to make silver spoons, known as coin silver, which can still be found in antique shops. Except for the reduced silver (40%) Kennedy half dollar which continued until 1970, 1964 was the last year of America's silver coinage.

The copper penny departed in 1982. As Assistant Secretary of the Treasury, I opposed the demise of America's last commodity money, but I couldn't prevent the copper penny's death.

During World War II (1941-1945), nickel was diverted from coinage to war, and the US mint issued a wartime silver (35%) nickel.

It is not easy to find items to purchase with today's US coins, but the silver coins of the same face value still have purchasing power. The 10 cent piece of my youth contains $1.42 worth of silver at today's silver price. The quarter is worth $3.55, and the half dollar contains $7.10 of silver. The silver dollar is worth 15.2 times its face value. These are just the silver values of coins that might be worth far more depending on condition and rarity. The silver in the wartime nickel is worth $1.10, which is 22 times the coin's face value. Even the copper penny is worth 2.5 cents.

When I was a young man enjoying travels in Europe, the German mark or Swiss franc traded four to one US dollar. The euro, which is today's equivalent to the mark or franc, costs $1.55.

People who haven't accumulated much age have little idea of the corrosive power of "acceptable" inflation. Unlike gold and silver, fiat money has no intrinsic value. When money is created faster than goods and services it drives up prices, thus driving down the value of the money. If freely traded currencies are excessively printed or if inflation, budget deficits, and trade deficits drive currencies off their fixed exchange rates, prices of imports rise as the foreign exchange value of the currency falls.

Today the US, heavily dependent on imports, is subject to double-barrel inflation from both domestic money creation and decline in the dollar's foreign exchange value.

The US inflation rate is about twice as high as the government's inflation measures report. In order to hold down Social Security payments, the government changed the way it measures inflation. In the old measure, inflation measured the nominal cost of a defined standard of living. If the price of steak rose, up went the inflation rate. Today if the price of steak rises, the government assumes that people switch to hamburger. Inflation doesn't go up. Instead, the standard of living it measures goes down.

This is just one of the many ways that the government pulls the wool over our eyes.

With the dollar value of the euro rising through the roof, today a vacation in Europe is far more costly than in the past. Thanks to China, so far Americans have been sheltered from the greatest effects of the dollar's declining value. Our greatest trade deficit is with China. The prices of the goods from China have not risen, because China keeps its currency pegged to the dollar. As the dollar goes down, China's currency goes with it, thus holding down price rises.

The resignation of Admiral William Fallon as US military commander in the Middle East probably signals a Bush Regime attack on Iran. Fallon said that there would be no US attack on Iran on his watch. As there was no reason for Fallon to resign, it is not far-fetched to conclude that Bush has removed an obstacle to war with Iran.

The US is already overstretched both militarily and economically. An attack on Iran is likely to be the straw that breaks the camel's back.

Paul Craig Roberts

Don't stop reading yet there more to read.

You Just Said A Mouth Full

Article written by "Bruce Beach" <language@webpal.org>

Wow!

The Dow jumped up over $400 today, the dollar is shooting back up also

Well no, the world is illusionary and in this case I think delusionary.

Everyone else is wrong (anyway those buying the stocks) and I am right.

Now there, that can only be a statement by a sick mind, one that just can't see reality so less contribute it to age.

When I first got an automobile I was worried about filling the gas tank I watched gas prices, a dime was hard to come

by in those days.

One day I said to the attendant "Well, today is the last day that we will see gas under a dime," he looked at this big

eared kid like he was nuts not yet dry behind the ears.

If I could have told him that I would live to see gas over $4 a gallon he would have known I was nuts, of course I didn't

know that then either.

Nevertheless, you have to been around for a long time to have seen gas under a dime

in these parts, (It is still under a dime in some parts of the world and it is waaay over $4 in other parts.)

None of us are able to truly understand reality but having been around long enough

to have seen dime gas I have seen a lot of it reality.

I have learned that I am a lot better at being able to tell what is not real

than being able to tell what is real.

The Dow is not real, The dollar is not real, and I suspect that the reported sale

of Bear Stearn's is not real.

There are little matters involved like stockholder approval, and the lawyers haven't yet begun, but whatever.

Years ago when I first heard about the PPT (Plunge Protection Team) I thought "Oh' no that can't be for real, that is just

 conspiracy theory."

The free enterprise competitive market system can't be controlled like that especially at its pinnacle.

But now, we know or everyone should know that the Dow is completely controlled, At least they try to, events - reality -

may eventually - will eventually - over-ride them.

Same with the dollar, I love fiat currencies they are the best that there are.

I won't begin to try to explain why to all you gold bugs out there.

William Jennings Bryan said it best "Crucify me not on a cross of gold!" great line, but wrong sentiment.

He was actually a bimetallist who wanted free-coinage of silver.

hem differently and saying anything differently

just causes them to leave this newsletter as thousands have already.

About the only thing that can knock them off quicker is when they find out that

I am an advocate of a New World Order, not that gold isn't good, but Jesus is better, Yep one needs Jesus and gold.

Just don't need to be looking in the clouds for Jesus to come to the rescue of humanity nor to gold either.

Gotta love that price for oil, especially if you are an oilman like Bush and most of his cohorts.

Every jump up in price makes bundles and we are talking about billions for the oil companies.

All that oil they have stockpiled is suddenly worth a lot more.

So they raise gas prices based on what oil now costs and not on what they paid for it.Just as bad, Same song, Different tune, but like I said I am not going to go there.

People who believe in gold are like people who believe Jesus is going to come down on a cloud you can't convince

As Joel Grey would say "Money, money, money, "doesn't hurt truckers that much either especially if you have a

contract that includes fuel surcharge.

A little tough on you if you don't, but the state, provincial and federal governments love's it.

They charge taxes as a percentage of the price of gasoline, the more gas goes up the more they collect.

Go gas go.

It would be disastrous for them if gas went back to a dime a gallon.

I am just lucky that they still let me run around loose when I see the world so differently from most people.

Once in a while I do hear of someone with an idea similar to one that I may have.

One of my readers sent this quote and source yesterday, of a statement by Paul Craig.

"The resignation of Admiral William Fallon as US military commander in the Middle East probably signals a Bush

Regime attack on Iran. Fallon said that there would be no US attack on Iran on his watch. As there was no reason

for Fallon to resign, it is not far fetched to conclude that Bush has removed an obstacle to war with Iran."

Paul Craig Roberts (Assistant Secretary of the Treasury in the Reagan administration.

Associate Editor of the Wall Street Journal editorial page Contributing Editor of National Review.)

Most people wouldn't call him a crazy old coot, Hm mm well he is old and a gold bug.

Money, money, money, saw a list of people the other day worrying about getting theirs money out of the bank, well

that is one worry I don't have.

Not worrying some other people either, now they used to think they had a lot more there, one local fellow saying that

he has lost a million on the stock market, Kept hanging in waiting for the stocks to come back up.

Market did his didn't, Bear Stearn's investors may find it a bit disconcerting.

Stock was selling at $150 per share, and is now down to $2 per share.

Suppose that you took and plunked down $1500 to buy ten shares and today you get a letter saying "Thank you very

much here is $20 total for your ten shares, Oh, well, Easy come, Easy go, like Joe Lewis, I am not talking about the

Brown Bomber, (Joe Louis), although this present Joe also got bombed, he had a billion dollars in BS

(I am sure he thinks those to be appropriate initials).

When Forbes publishes its new billionaire list next year(if we get that far)

there may be some names missing from this year or at least the list will be rearranged.

One fellow I read about had a billion and a half invested in BS.

Now suddenly he only has 13 million dollars.

As I go to cash my $400 SS check, I will cry for him all the way to the bank.

But, I am sure that it stresses him, one third of the stock of BS was owned by BS employees, they lived in fancy big

apartments and big condominiums drove fancy big cars belonged to fancy big clubs took fancy big vacations and lived

a fancy big lifestyle and I am sure with all that they mostly all have big fancy debt.

It is probably stressing them also when they go home this week and say "Well, dear, it is all gone, I wonder if I can

get a job down at McDonald's flipping hamburgers," nope that latter reality hasn't set in yet, but there are about 20,000

(at least) that will get laid off on both sides of the fence as a result of that merger / buyout.

BS was not the only one to take that kind of hit this week financial market listings show others with 80 percent, 70

percent, 60 percent losses on their stock in just one week, not all of them are in the US, Germany, Italy, and

elsewhere are hearing the same song.

But the Dow is up today, Life is good, none of this bothers those with real wealth, now I have a problem, I want to talk

about real wealth being spiritual.

But not today, I will keep talking about money.

Even in this world those with gigantic wealth are beyond money, people like Buffet and Gates whom most people

consider to be the wealthiest persons in the world they are pikers.

Their money can disappear just like that of Joe Lewis they and all those Arabs

who build their fancy gold castles, with their fleets of fancy automobiles,

are what we call the nouveau riche.

Real money, old money, makes sure that its name isn't known.

Ok, we still know the names of some of them like the Rothschild but they try to keep their names out of the news,

many of these people never touch money.

They fly from winter estate to summer estate on company airplanes stay at company resorts eat in company

restaurants move about in company chauffeured limousines.

Their suites in the hotels are permanent, Their names are never on the registers.

They are never asked to sign so much as a check in the restaurants.

If they should go out into the rest of the world they go incognito, no mention or evidence of such wealth is ever shown.

I used to be fascinated about such people and studied them, in my early economic days, you too can look up

America’s Sixty Families Lundberg, Ferdinand. 1937.

The Rich and the Super-Rich. Lundberg, F., 1969

The Founding Fortunes:

A New Anatomy of the Super-Rich Families in America.

by Michael Patrick Allen

But the real wealth isn't just in America, these people are beyond national boundaries the Bilderbergers and such are

 wanabees, these people are even beyond money they control the central banks of the world including the US Federal

 Reserve.

Money up, Money down, Means little to them Peace are war it is all the same.

Their fortunes increase all the same.

Their fortunes are so immense and secure that to talk about their view of the world is non-meaningful to the rest of us.

But these mountains too shall pass away.

What more can I say, In fact there is much more I would like to say.

But perhaps thats for another day.