Signature Coins & Bullion

The American shame can be explained by the amount of the “Barbarous Relic” the US once held. At the end of World War Two, the United States is estimated to have had around three quarters of all the gold in the world. Today it is around five percent, and even this figure could be over estimated. According to Senator Ron Paul, the Federal Reserve gold holdings have not been audited for fifty years.

It is widely accepted that the United Sates has never defaulted upon its obligations. It is the main reason that the US dollar reigns supreme today. However defaults have occurred, in 1933 and again in 1972. It was not called “default”, but that is what it is called when one does not keep ones promises.

To create a real narrative we must look back to the days of the American “Great Depression” that started with the 1929 stock market collapse. It was during the 1930’s that newly elected president Franklin Delano Roosevelt (FDR) forcefully confiscated gold coins that had been used in circulation. At that time a $20 face value gold coin contained 0.9675 Troy ounces pure gold. Due to the “evil speculators” FDR ordered all privately held gold be handed into the US Treasury. In return, former holders of real gold money were given a piece of paper with $20 printed upon it.

With little hesitation FDR promptly “fixed” an ounce of gold at $34, effectively a default equal to receiving 30 cents on the dollar: “Give me your gold at $20 per ounce and six months from now you will need $34 to buy what $20 used to get”
As late in the day as it was, all was not lost. Following WWII  paper could still be redeemed into gold, but only for governments – (obviously normal citizens could not be trusted, but governments could.) Under the Bretton Woods accord foreign central banks were able to exchange paper dollars for physical gold. Although not perfect, it did leave us with a benchmark of value.

That was until 1971.