Thursday, April 21, 2011

Silver and Gold

The price of gold will likely close above $1500 today. It has been breaking record highs every couple of days recently. Silver is almost $46 an ounce right now, just a few dollars short of its all-time high from 1980, when the Hunt brothers tried to corner the market.

What does this say about our fiat currency Federal Reserve Notes? They are federal notes, all right. But there is no "reserve" except for more federal notes. Increasing the number of "dollars" in circulation serves only to dilute the value of existing dollars, the very definition of inflation.

I am encouraged by the potential minting of State coins in gold and silver, especially in the Commonwealth of Virginia. Dear reader, before you say "Your stupid," consider Article I, section 10 of the U.S. Constitution. It reads, in part, "No State shall...make any Thing but gold and silver Coin a Tender in Payment of Debts..."

Paper money is a joke without gold or silver to back it up. History is littered with examples of the failure of fiat currency.

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