Jenny Beth Martin asks whether America is debauching its money the way ancient Rome did, and Lawrence W. Reed says yes, and points to the evidence in your pocket.
Rome cheapened its coinage by pulling the precious metal out and putting in junk. America did the same in 1964: dimes and quarters were 90 percent silver until then, and hold none today. The paper money kept some gold backing until Nixon cut the last tie in the 1970s, and now the penny costs more to make than it is worth. Reed has seen the end of that road. In 1985 he went to Bolivia during its runaway inflation to see how people were coping; the smallest note in circulation was 10,000 pesos, and it was nearly worthless.
Then the Federal Reserve, America's central bank, which Reed calls one more step governments take to consolidate control over money. Early on, every dollar had to carry a 40 percent gold cover. That was repealed. And in April 1933, Franklin Roosevelt ordered Americans to turn in their gold coins by May 1 under penalty of a 10,000 dollar fine, ten years in prison, or both. Reed's explanation is the sentence the clip ends on: Roosevelt wanted to pump up the money supply to cover federal deficits, gold is honest money and a drag on that, so a president who wanted to be dishonest with the money had to seize it.
This is part three of a four part economics series with Lawrence W. Reed, president emeritus of the Foundation for Economic Education.
Watch the full episode and the rest of the series at jennybethshow.com. Learn more about Tea Party Patriots Action at teapartypatriots.org. To tell your senators and representative to stop spending, call the Capitol switchboard at 202-224-3121.
00:00 — Is America Debauching Its Money Right Now?
00:24 — Dimes and Quarters Were 90 Percent Silver Until 1964
00:57 — Nixon Cut the Last Tie to Gold
01:07 — The Penny Costs More Than It Is Worth
01:35 — Depreciating the Currency to Cover Federal Spending
01:55 — Bolivia, 1985: Reed Inside a Runaway Inflation
02:40 — America's Own Runaway Inflations
03:12 — Jimmy Carter and Double Digit Inflation
03:48 — What Is the Federal Reserve?
05:11 — 1933: Roosevelt Seized Your Gold
05:22 — A 10,000 Dollar Fine or Ten Years in Prison
06:28 — Gold Is Honest Money
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