Timeline of Real Money to Fiat Money | The Gold Standard 2405

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Welcome to another enlightening episode of The Gold Standard. In this riveting installment, hostess Jennifer Horn and our special guest, Ken Russo, SVP of the Midas Gold Group, take you on an illuminating journey through the fascinating timeline of how our nation’s real money, once firmly rooted in precious metals, gradually transformed into today’s fiat currency—backed by nothing but trust. Join us as we unravel the historical intricacies behind this monetary evolution and uncover the crucial lessons it holds for safeguarding your financial future.

The gold standard, originating in the early 19th century in the United Kingdom, took a while to find its way to the United States. It wasn’t until the passage of the Coinage Act of 1792 that the US established a bimetallic standard, recognizing both gold and silver as monetary metals. This system remained in place until the early 20th century when the US formally embraced the gold standard in 1900. By 1871, several other countries, including Germany, Great Britain, Portugal, Canada, and Australia, had already adopted their gold standards, contributing to the internationalization of this monetary system during that period.

The Creature of Jekyll Island

In 1913, a clandestine meeting of influential bankers on Jekyll Island marked a pivotal moment in American financial history. These financiers, representing the likes of J. P. Morgan, Rothschild, and Rockefeller interests, conceived a grand plan—the creation of a central bank, known as the Federal Reserve. Their motives were twofold: first, to exert greater control over the nation’s monetary policy and, second, to protect their interests from the boom-and-bust cycles that had plagued the financial system. The Federal Reserve Act, signed into law later that year by President Woodrow Wilson, bestowed immense power upon the newly formed Federal Reserve, enabling it to control the money supply and interest rates and influence the broader economy. This secretive gathering laid the groundwork for a financial institution that would wield significant influence over the nation’s monetary policy for years to come, fundamentally altering the economic landscape of the United States and paving the way for where we are today.

The Roaring 20s and the Bubble Burst

The Roaring 20s were a period of unprecedented economic growth and exuberance in the United States. However, beneath the facade of prosperity, a dangerous bubble was inflating. Speculative fever gripped the stock market, and easy credit fueled a reckless pursuit of wealth. As stock prices soared to dizzying heights, the fundamentals of many companies failed to justify their valuations. This unsustainable euphoria eventually culminated in the Stock Market Crash of 1929, shattering the illusion of wealth and prosperity and triggering the devastating Great Depression. The Roaring 20s is a stark reminder of the perils of speculative excess and the importance of prudent financial stewardship.

The Great Depression & Gold Confiscation

During the Great Depression, President Franklin D. Roosevelt addressed the crisis by issuing Executive Order 6102 in 1933, making it illegal for private citizens to own most forms of gold. This law effectively confiscated gold holdings, requiring Americans to exchange their gold coins, bullion, and certificates for US dollars at a fixed rate. While stabilizing the economy and increasing the money supply were short-term goals, gold confiscation in the 1930s underscored the need to own physical gold as a hedge against unforeseen government interventions and economic volatility.

Bretton Woods Agreement & Dollar Dominance

The Bretton Woods Agreement of 1944 reshaped the global financial system, pegging currencies to the US dollar, which was fixed to gold at $35 per ounce. Exchange rates became stable and elevated the US dollar to the world’s primary reserve currency. However, financing post-World War II and the Vietnam War eroded gold reserves.

Kennedy Assassination, Silver Removal & Fiat Currency

President Kennedy’s assassination in 1963 led to shifts in US monetary policies. President Lyndon B. Johnson removed silver from US coinage, ending silver’s role in coins. Amid mounting economic challenges, Nixon took us off the gold standard and the US defaulted on the Bretton Woods Agreement in 1971, thus suspending the US dollar’s convertibility into gold, severing the last link to precious metals, and inaugurating the fiat currency era, where the dollar’s value was dictated solely by manipulation and government decree.

Gold and Silver Safeguard Wealth & Purchasing Power

Gold and silver have time-tested their ability to preserve wealth and purchasing power. Diversifying assets with tangible gold and silver outside the traditional paper-based system provides stability and security during economic volatility. Their enduring value makes them indispensable for safeguarding financial well-being, ensuring wealth remains protected for generations.

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