It is kinda hard to believe people would still think dollars are backed by gold but then again fiat currencies are a relatively new "invention". The Federal Reserve Act lead to the creation of fiat currency in 1913 but National Money still existed along side it in various forums until 1968.
Maybe he saw a really old dollar like this one and assumed the promise was still valid.
Or maybe one of the various silver notes issued over the years. However even if you find these notes today the promise of redemption has been rescinded (US notes in 1953 and silver notes in 1968).
These notes were the last national currency of the United States, issued by an independent treasury, outside the control of any bank, and backed by precious metal. I will say that again since it seems to be something that a lot of people simply don't get.
The United States has not had a national currency since 1968 (and the begining of the end was in 1913). While FRNs may say "US Dollars" the Federal Reserve is a private cartel of corporations, and the private script they issue is as "federal" as Federal Express. If you deposit any of this "legacy" national currency at your local bank it will be replaced with FRNs and the notes sent to Treasury for destruction*. Why? Well banks don't like competition and they fought very hard for nearly two centuries (with lots of setbacks) to eliminate national currency in this country. Federal reserve notes are a currency
in use in the United States, they are even accepted as legal tender in the United States but they are
not money of the United States.
If you didn't know this already likely right not your first thought it "no that can't be right". I would say the majority of Americans don't even realize there is a fundamental difference between the two notes. The United States Notes (and other forms of national currency issued by the treasury like silver certs) were a
bill of credit. Each note being backed by reserves of precious metals (either silver or gold) in US Treasury vaults. In essence if you had a US note (prior to close of redemption) the US government OWED YOU the holder some value. This made it was exactly like buying and selling in physical bullion except more convenient. Federal reserve notes on the other hand are issued by debt. They are issued by the Federal Reserve and the interest becomes a perpetual obligation of the United States. Holding a federal reserve note doesn't mean the federal reserve owes you anything. On the contrary the very fact that you have a federal reserve note in your hand is proof the government is in debt to its bankers. If the US government had no debt there would be no federal reserve notes.
As disgusting as the bait and switch is, I have to give credit where credit is due, the transition (which took decades) was an awesomely well played. It finally (by 1968) gave a private cartel of bankers something they schemed to acquire for nearly two centuries ...
complete and absolute control over the money on the United States.
Give me control of a nations money supply, and I care not who makes it’s laws.
* A little bit of sad trivia. Since US notes were originally issued by the US government they were a liability of the treasury however the Treasury wasn't in debt because for each issued note it held an equal amount of precious metals (assets) thus the net liability on the Treasury was zero ($1 printed = $1 of gold/silver in reserve). However when the reserve was removed and sold off, the notes remained (thus $1 note = $1 liability with no matching reserve to offset it). This means the United States treasury acquired a debt equal to the amount of outstanding notes. By outstanding notes we only mean actual "legacy" national currency. FRNs aren't issued by the Treasury (they are bought by the treasury for debt). While US notes can no longer be redeemed for gold they can be redeemed for FRNs. Banks will do this as part of the normal business. They seperate the US notes from THEIR federal reserve notes and then ship them up to the federal reserve banks. The federal reserve then sells these notes to the Treasury for more debt in FRNs. Slowly overtime as the bills come out of circulation the debt by the Treasury to the holders of the currency is reduced but it is replaced by an equivalent amount of debt owed to the federal reserve. that should be reiterated to everyone more often.
Just as a little add-on about this fiat money thing.
The USA went bankrupt in 1932. (You can 00gle it and find plenty of info. This guy posted just what I believe to be accurate of what it is really "about" Please read his post. I am just showing 1 paragraph of his)
From
https://docs.google.com/document/d/165i0dicryJ_KtzCr6agR6O6v4XaRM2EDr6f1WbmU3Fg/edit?hl=en
The fact of the matter is, the United States did go "Bankrupt" in 1933 and was declared so by President Roosevelt by Executive Orders 6073, 6102, 6111 and by Executive Order 6260 on March 9, 1933, under the "Trading With The Enemy Act" of October 6, 1917, AS AMENDED by the Emergency Banking Relief Act, 48 Stat 1, Public Law No. 1, which is presently codified at 12 USCA 95a and confirmed at 95b. You can confirm this for yourself by reading it on FindLaw. Thereafter, Congress confirmed the bankruptcy on June 5, 1933, and thereupon impaired the obligations and considerations of contracts through the "Joint Resolution To Suspend The Gold Standard And Abrogate The Gold clause, June 5, 1933" (See: HJR-192, 73rd Congress, 1st Session). When the Courts were called upon to rule on various of the provisions designed to implement and compliment FDR's Emergency BANKING Relief Act of March 9, 1933, they were all found unconstitutional, so what FDR did was simply stack the "Court's" with HIS chosen obsequious members of the bench/bar and then sent many of the cases back through and REVERSED the rulings.
and
FDR took us off the gold standard in 1933From
http://www.history.com/this-day-in-history/fdr-takes-united-states-off-gold-standardOn June 5, 1933, the United States went off the gold standard, a monetary system in which currency is backed by gold, when Congress enacted a joint resolution nullifying the right of creditors to demand payment in gold. The United States had been on a gold standard since 1879, except for an embargo on gold exports during World War I, but bank failures during the Great Depression of the 1930s frightened the public into hoarding gold, making the policy untenable.
Soon after taking office in March 1933, Roosevelt declared a nationwide bank moratorium in order to prevent a run on the banks by consumers lacking confidence in the economy. He also forbade banks to pay out gold or to export it. According to Keynesian economic theory, one of the best ways to fight off an economic downturn is to inflate the money supply. And increasing the amount of gold held by the Federal Reserve would in turn increase its power to inflate the money supply. Facing similar pressures, Britain had dropped the gold standard in 1931, and Roosevelt had taken note.
On April 5, 1933, Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 turned in for other money. It required all persons to deliver all gold coin, gold bullion and gold certificates owned by them to the Federal Reserve by May 1 for the set price of $20.67 per ounce. By May 10, the government had taken in $300 million of gold coin and $470 million of gold certificates. Two months later, a joint resolution of Congress abrogated the gold clauses in many public and private obligations that required the debtor to repay the creditor in gold dollars of the same weight and fineness as those borrowed. In 1934, the government price of gold was increased to $35 per ounce, effectively increasing the gold on the Federal Reserve's balance sheets by 69 percent. This increase in assets allowed the Federal Reserve to further inflate the money supply.
The government held the $35 per ounce price until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus completely abandoning the gold standard. In 1974, President Gerald Ford signed legislation that permitted Americans again to own gold bullion.
and
JFK and Real Money? (Again, research yourself and be wiser for it and maybe a little nervous. Some paranoia is safety)
From
http://en.wikipedia.org/wiki/Executive_Order_11110..Executive Order 11110 was issued by U.S. President John F. Kennedy on June 4, 1963.
This executive order delegated to the Secretary of the Treasury the President's authority to issue silver certificates under the Thomas Amendment of the Agricultural Adjustment Act, as amended by the Gold Reserve Act. The order allowed the Secretary to issue silver certificates, if any were needed, during the transition period under President Kennedy's plan to eliminate silver certificates...
What he did was...On November 28, 1961, President Kennedy halted sales of silver by the Treasury Department. Increasing demand of silver as an industrial metal had led to an increase in the market price of silver above the United States government's fixed price. This led to a decline in the government's excess silver reserves by over 80% during 1961. President Kennedy also called upon Congress to phase out silver certificates in favor of Federal Reserve notes.
And so.. this is why we no longer have real money. We have fiat aka promissory notes backed by nothing other than peoples willingness to use them as a means of transfer. The U.S.A. corporation has yet to leave bankruptcy and will always owe more than can ever be "paid" back to cover loans. Anyone that starts to understand and still trusts 100% in the dollar is in for a rude awakening when a wheel-barrow is what's needed for a loaf of bread.
Be well.
T.
