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I started collecting coins back in 1976, when I was
just 8 years old. My interest was piqued when a kid brought an old Franklin
half-dollar to school one day. I'd always liked the Kennedy halves since
there were relatively rare, and getting one in change was a special event.
But that Franklin half was something else entirely - like something from
another planet! Even as a second-grader, I could tell there was something
qualitatively different about it. It just felt different. It was heavier, and
had a certain elegant dullness to its finish. It was dirty and worn around
the edges in a way that made you think it was no stranger to work.
But in that glorious year of our nation's 200th birthday, America was far
enough down its current slide into poverty that it no longer minted coins
from silver. The government couldn't afford it any more. That practice had
ended a dozen years earlier, and the silver that had circulated in America
for hundreds of years had quietly disappeared. A silver coin was something
entirely new - and exciting - to my eight-year-old eyes.
 In retrospect, seeing that Franklin half was a life
altering event. It got me interested in coins and money, got me started
collecting, and provided me with an education that I otherwise would have
missed completely in my public schooling. The old coins were elegant and
beautiful. Through them I learned of art, economics, history and culture. At
the same time, the new copper clad bicentennial
coins were making their way into
circulation. I wondered why the new coins were made of silver-colored copper
sandwiches instead of real silver, and was told that "there wasn't
enough" silver to go around. It was only much later that I learned the
real reason - not that there isn't enough silver, but that the value of our
money is being steadily eroded through inflation. The result is that even
pennies today are no longer made of copper.
My education naturally allowed me to understand the language of Ron Paul, back when most others still thought he was a kook. It was through
Dr. Paul that I began to understand the link between sound money and Liberty
- another subject that was somehow missed in public school.
But something I've only recently been coming to grips with was hammered home
this weekend as I read Charles Goyette's excellent new book The Dollar
Meltdown. My entire life
has been lived during a period of declining American living standards. The collective cultural mythology of 'the richest
country in the world' has been so blinding that until recently, I had failed
to acknowledge this simple fact.
The Dollar Meltdown puts America's decline it into a sweeping context that
makes our collective outcome impossible to ignore: Plunging living standards,
a steadily eroding currency and massive inflation in a nation that has lost
its industrial base. If you think things are bad now, they're only going to
get worse. To quote Goyette: (p.9) 7
Gold's recent advances signal that we are in a period of major
transition now. The American dollar's role as the world's reserve currency is
inherently unstable and the signs of a breakdown are all around. Just as the
monetary authorities have been unable to reinflate the high-tech bubble or
the real estate bubble, when the dollar bubble is finally burst, no other
paper currency will be able to take its place.
This is not just gloom and doom. It is a reflection of the simple fact that
actions have consequences. Because consequences are often delayed, this is a
fact that has remained hidden in plain sight, though more and more are
starting to realize it. Intuitively, we feel it - that things are coming
apart at the seams. For those of us who still have homes, and jobs, we hope
against hope that things will somehow get better. But it is becoming ever
more apparent that we've reached a turning point for the US economy and the
dollar as we know it.
Goyette begins his book with a story about a caller to his radio show -- Jim
in Scottsdale -- who finally connected the dots in late spring of 2008. With
his epiphany he took action and completely sold out of the stock market,
putting all of his money into gold.
To the 'cultured' and 'educated' members of our society - those who were
indoctrinated anywhere from the finest pubic schools to Ivy League
institutions - the notion of doing such a thing must have sounded completely
preposterous. After all, in June of 2008 the Dow still wasn't far from its
all time high. We had the finest paper currency that money could buy. In
fact, we had the world's reserve standard, thank you very much, not to
mention an ample supply - nay an unlimited supply - of the 'safest'
risk free investments in the world - US Treasury Bonds.
Why would anyone want that barbaric relic gold?
Today, as gold crosses $1,100 per ounce, and the dollar's reserve status is
in question, Jim in Scottsdale looks pretty smart, and there is a reason for
that. The hour is getting late for our once great nation, which was built and
prospered on the solid foundations of Liberty, sound money and limited
government. To the indoctrinated masses, these words may also sound quaint
and trite, relics of a long bygone era. Because of the current widespread
ignorance and disrespect for our foundational principles, further collapse is
practically inevitable. Goyette writes (p.143-4): "With the citizenry's
willingness to go along with a costly and unnecessary war, and the growing
fiscal recklessness of the Republicans and Democrats, it has become apparent
that the opportunity for collective action to avert the most serious economic
episode in the U.S. since the Great Depression has passed."
Sound money is gone. As government grows, Liberty shrinks. "America is
transforming itself," writes Goyette, "without forethought, debate,
or pause into a command economy." (p.121)
Didn't we learn in the 20th century that command economies don't work?
Apparently we have to learn it again. Our government has already taken over
the former pillars of the US economy: Auto manufacturing, banking, finance,
insurance and mortgage companies. It was done illegally with money created by
fiat, and there is only one-way out for our now rogue state: Inflate or die.
"There is no evidence that US officials have any plan other than
inflation to deal with real-world economic circumstances that are already
underway," writes Goyette. (p.113-4)
And he is quite blunt in his prognosis: The days of hoping to catch a ride on
trendy fad investments are long over. Now is the time to hunker down and get
back to basics and choose investments that will survive the inevitable
inflation. Part IV of his book is appropriately titled, "What To
Do." In it, Goyette explains alternative investments that should remain
strong in the face of howling inflation, and gives readers tools to maintain
the value of their savings and take advantage of inevitable future
opportunities.
The following passage near the end of the book (p.231) poignantly summarizes
America's journey though the designs on our coinage:
America's earliest coins portrayed Liberty. Not rulers and
politicians. Just Liberty. A symbolic representation of the country's highest
ideal. In the beginning, Americans had an affair of the heart with Liberty.
She was their muse and they were aflame in their love for her. They talked
about her everywhere, in their churches and taverns and town squares.
 But she hasn't appeared on our circulation coinage
for more than sixty years, not since the beautiful "Walking
Liberty" half-dollar. It represented Liberty striding gracefully into
the rising sun of the future, arm extended in peace and carrying a bounty of
riches. It was a beautiful representation, because abundance accompanies
Liberty wherever she goes. Our devotion would be no less if it were not true,
but it is one of her secrets: Liberty creates prosperity.
It was the above passage that began me on my reverie of my how my
childhood coin collecting hobby began, and what it continues to teach me.
Goyette continues:
Today's coinage, looking each year more like subway tokens, celebrate the state. Just as words replace deeds
and paper substitutes for gold, politicians have displaced ideals. The
American state, which was created to serve Liberty, is now commemorated
instead.
Note that our current half dollar not only portrays a politician on its
obverse, it features the Seal of the President on its reverse!
Here is the history of our country, in three coins spanning less than 100
years. America's ongoing slide into poverty has coincided with our loss of
Liberty - economic, civil and social. The more the state attempts to control
the people, the more Liberty is lost. Poverty creeps in until it becomes a
rushing torrent. The reason that our Constitution makes nothing but silver
and gold legal tender is to prevent the government from running its printing
presses out of control, creating money by fiat while devaluing the existing
money stock, as it is doing now.
I find it interesting that these lessons can be learned intuitively simply
through the study of money. Ron Paul mentions having been fascinated by coins
at early age in his recent bestseller, End the Fed. Goyette also talks of learning the lesson in the
mid-1960s when his father started sorting out and keeping the silver coins,
while spending the new copper clad ones back into circulation. It is an act
so intuitively common that it has been practiced by millions of individuals
over thousands of years and codified in Gresham's law: Bad money drives out
good. Goyette writes (p.141), "I quickly learned that the value of the coins
comes not from the name of the issuing government, the images represented,
the face values inscribed, or even the stirring mottoes themselves."
Like Ron Paul and Charles Goyette, I was lucky to have started my monetary
education early, through coin collecting, which led to a lifelong interest in
money and the economy. Most people don't get this education - certainly not
in public school system - and now is the time to catch up.
Charles Goyette has written a marvelous book, a comprehensive, guide to what
happened, what is likely to happen, and what to do about it to protect
yourself. It speaks to the very roots of our crisis in a non-partisan way.
This education is invaluable in understanding what you can do to protect
yourself and your family from its inevitable effects.
Michael A. Nystrom
Editor, Bull not Bull
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