GOLDBUG: The FED “preserves the dollar’s value

Tracing the Fed’s Vital Role in the Decline of the US Dollar
by Eric Fry

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… let’s consider the plight of two hypothetical buddies from 1914. The first buddy, Caleb, stashes a $500 “rainy day” fund under the floorboards of his house – a roll of ten $50 Ulysses S. Grant dollar bills. The second buddy, Josiah, also stashes $500 under the floorboards – he walks into the neighborhood bank with ten $50 Ulysses S. Grant Gold Certificates and exchanges them for gold. Josiah then takes his gold and hides it under his floorboards.

Both buddies forget about their hidden stashes. Eventually, let’s say 2010, the respective heirs of these two long-deceased buddies happen to conduct simultaneous renovations of their respective residences. Caleb’s heirs find the ten ancient $50 bills. “How quaint,” they think to themselves. Josiah’s heirs find $32,172 worth of gold!

Thus, 98 years of history demonstrates conclusively that a blind monkey could have preserved the dollar’s purchasing power better than a Federal Reserve Chairman. Unfortunately, it’s tough to find a blind monkey who will take the job.

Reprinted with permission from The Daily Reckoning.

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A longer version of my summation: “Which would you rather find? A pirate’s chest of gold coins, a chest full of Confederate money, or a chest full of Federal Reserve Banknotes?”

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