One of the brightest minds our nation has ever known, Thomas Jefferson, once wrote, “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”1 Yet despite this warning, a battle between banks and government has ensued since that writing and continues today, constantly changing our economy and our monetary system. While this statement has many ominous overtones, it does help explain the constant change in the numismatic world and why we have a never ending fascination with its history as well as speculation to its future.

This article is not intended to offer you investment advice since I do not hold a license to advise anyone on investments. However, it is intended to avail you of some cold, hard facts about some of the driving forces behind the value of the dollar and precious metals so that you can make decisions for yourself.

Governments and banks have manipulated their money systems for centuries, some historians say since before Julius Caesar, for many different reasons. However, in the end, the ultimate reason is to create more wealth; be it for the people, the politicians or the bankers.

One of the best examples in U.S. history can be found in 1933 when President Franklin D. Roosevelt and Fed Chief Eugene Black confiscated America’s gold and devalued the dollar, helping the stock market and the depressed economy to reach its bottom. The U.S., however, was not the first or only country to use this technique during the great depression. Australia and Japan were just two of the first countries to come off the gold standard in 1931 and devalue their currency, along with others. Once other countries saw that this restarted their economies, they followed suit the next year with the U.S. following after them.

While devaluing the currency may have restarted the economies of many countries, it was the individual who suffered. Production began again and jobs were created, but what the masses had possessed before was no longer worth as much. Conversely, their wages, while at the same rate of pay, bought less.

Many of the conditions seen during the Great Depression can be seen today. Although our government has not confiscated gold again, and I doubt they could if they wanted to, they have the Fed printing money as if it were going out of style. The more Federal Reserve Notes in circulation, the less they are worth, and they are not slowing down in printing them. With the value of the dollar going down, the U.S. will be paying back its debt to foreign countries with cheaper dollars, therefore, making it easier to pay off the debt at a fraction of the actual cost. The real kicker though is that there is a push by many major world economies to do away with the U.S. dollar as the reserve currency for the World Bank and the International Monetary Fund and replace it with the Euro or a new world currency called the Globo. Either way, the value of the dollar would most certainly plummet with little hope of ever fully recovering fully.

These are the facts our government schools should have been teaching us in high school but did not. There are many other details to the past and current value of the dollar, but that will have to wait until my next article. Here is the point I am getting at; the fastest way for the government to cause production to restart is by devaluing the dollar. This will, in turn, devalue all of your assets.

Wouldn’t it be nice if you could have an asset which is not affected by the devaluing of and possible crash of the dollar? Wouldn’t it be nice to own something that, in the long run, would continue to grow in value, or at least maintain its value during the toughest of times? If you have precious metals, such as U.S. gold, silver or platinum coins or bullion then, historically speaking, you stand a much better chance of not suffering these declines in value.

Take a look at the chart which shows how the value of gold, silver and the dollar through the past several years. Most years gold and silver gained value, while it took more dollars year after year to equal just one dollar from 1913, the start of the Federal Reserve System.

(It is not the intent of The Coin Wholesaler or its contributors to endorse any political candidate or party. As regarding the current economic policies of President Obama, we neither endorse nor reject either him or his policies. Rather, we do reject the out of control printing of money richly earning of the phrase "Obama Dollars" to finance out of control government spending which we believe will have an inflationary effect on goods, services and interest rates. Such inflation will inevitably slow economic growth, cause an increase in unemployment and delay our economy's recovery.We are all for the proliferation of prosperity totally aside from politics)