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History of ‘Dollar’ made Simple!

January 2, 2013

What is a ‘Dollar’?

History of the American Dollar (a general overview)

1785: Thomas Jefferson proposed that the Name ‘Dollar’ be adopted as the American unit of account, standard of value, medium of exchange, and store of value. Our Continental Congress agreed as we had declared Independence from King George III and the British monetary regime of pence, shillings, and pounds.

1792: Our newly formed Congress (1789) reviewed and evaluated the ideas of Jefferson and Hamilton and then implemented the Coinage Act of 1792. This Act defined our unit of account (the Dollar) and the other subsidiary units. Our first coinage facility (MINT) was established in Philadelphia and coins emerged as supplies of silver and gold were brought to the Mint. Americans mostly used silver and gold coins as their money units until the Great Depression Era of 1929 – 1934. Paper Notes were mostly redeemable (at bearers discretion) for silver or gold during this period.

1792 – 1834: 

Dollar defined as: 371.25 grains of Silver (Ag) – this was the official definition of our ‘dollar’

Dollar also = to 24.75 grains of Gold (Au) – gold was also viewed as money and official legal tender

Silver/Gold ratio (value) remained at 15:1  –  throughout history the silver/gold ratio was mostly 15:1

1 ounce (480 grains) Silver = $1.29

1 ounce (480 grains) Gold = $19.38

1834 – 1933:  

Dollar = 396 grains of Silver (Ag) – silver was dropped as the official unit of account (1873)

Dollar = 23.2 grains of Gold (Au) – the gold standard was officially recognized by our Congress (1873)

Silver/Gold ratio (value) became 16:1 – vast supplies of silver were discovered in the Americas

1 ounce (480 grains) Silver = $1.21 

1 ounce (480 grains) Gold = $20.67

1934 – 1971: 

Dollar = 13.71 grains of Gold (Au).  FDR called in gold and re-defined the ‘dollar’ to fund programs

1 ounce (480 grains) Gold = $35.00

FDR simultaneously demonetized AU for Americans and established our Paper Dollar as official legal tender and unit of account. Foreigners were allowed to exchange their excess Dollars (via their Central Banks) at the ratio (value) of $35/1 ounce Au. Gold bar supply (at Fort Knox) was approximately 740 million ounces in 1944 and gradually this supply declined to about 272  million ounces in 1971. President Nixon then ‘closed the gold window’ (to foreigners) on August 15, 1971. Result was:  global ‘floating’ currency regime as of 1973.

1973 – 2013:

Dollar = no thing (nothing physical or material) – the definition of ‘dollar’ was dropped

Dollar = 0  (in terms of a definition) – and zero in terms of exchange-ability

Dollar = a unit of Consciousness (psychological) – this emerged from Nixon Shock

Dollar = now a weighted average of some 6 fiat currencies (a math formula)

Dollar = a paper note as (legal tender) 1971 – 1998 (prior to computer digits)

Dollar = a virtual digit (within the computer screen)  1998 – 2013 (virtualization occurred)

Dollar is now created from Consciousness or ‘Out of Nothing’ (the Mind)

Dollars now mostly mathematical units (numbers) displayed via the computer screen and within Cyberspace. Casino Capitalism emerged by default.

2013 – ???        Dollar may need redefinition and/ or elimination as the Reserve Currency of the World as Foreign Governments (China, Russia, Brazil, Iraq, Germany, etc.) lack a desire to continue providing ‘value’ (consumer goods) to Americans for the exchange of ‘no thing’ units of consciousness (imaginary money). China now has some $3.2 trillion of our units, Japan some $1.2 trillion units, and Euro-zone some $900 billion units (actually virtual digits within the computer screen). Our total Public Debt now exceeds $11 trillion and our National Debt exceeds $16 trillion. We have a problem it appears!

This overview prepared by Don Swenson: Pass this on to interested persons!

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