1933: TERRORIZING PEOPLE INTO HANDING OVER GOLD

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I was moping about the internet, feeding various words into Time Magazine’s archives.  I was curious about any possible cases against gold hoarders in the Great Depression.  I came across one name, Mr. Frederick Barber Campbell.  His case was supposed to go to the Supreme Court but didn’t so the various laws and regulations of gold remained on the books.  It was very difficult to find contemporary information about Mr. Campbell.  The Wikipedia entry found the exact same information I found, independently.  That is, the same Time Magazine article I found.  Wikipedia also had an editorial claiming that we online investigators were lying about people being arrested for ‘hoarding gold.’

First, a review of both the Wikipedia stuff and the laws that were used to arrest Mr. Campbell and confiscate all his gold:

 

Executive Order 6102 – Wikipedia, the free encyclopedia

Executive Order 6102 is an Executive Order signed on April 51933 by U.S. President Franklin D. Roosevelt “forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates.” It required all persons to deliver on or before May 11933 all gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve….

Despite the dire threat of ten years in prison there was only one prosecution under the order and the order was ruled invalid by federal judge John Wolsey in this case on the technical grounds that the order was signed by the President, not the Secretary of the Treasury as required.[1] The circumstances of the case were that a New York attorney, Frederick Barber Campbell had on deposit at Chase National over 5000 ounces of gold. When Campbell attempted to withdraw the gold Chase refused and Campbell sued Chase. A federal prosecutor then indicted Campbell on the following day (September 27, 1933) for failing to register his gold.[2] Ultimately the prosecution of Campbell failed but the authority of federal government to seize gold was upheld. The case forced the Roosevelt administration to issue a new order under the signature of the Secretary of the Treasury, Henry Morgenthau, which was in force for a few months until the passage of Gold Reserve Act on January 30th, 1934….

The limitation on gold ownership in the U.S. was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars and certificates by an act of Congress codified in Pub.L. 93-373 [1] [2] which went into effect December 311974. P.L. 93-373 does not repeal the Gold Clause Resolution of 1933, which makes unlawful any contracts which specify payment in a fixed amount of money or a fixed amount of gold. That is, contracts are unenforceable if they use gold monetarily rather than as a commodity of trade.

First of all, I own a ‘gold certificate’ which was not turned in.  It was, in classic Great Depression fashion, hoarded by being kept in a metal container where it was forgotten until the death of the owner and his grandson, curious about what was in the can, opened it up.  FDR was very anxious to get all of the paper money that said, ‘Gold Certificate’ on them because he was planning to unilaterally drop the value of the dollar by up to 70%, all at once.  The reasons for the destruction of the paper certificates and negation of all previous contracts involving gold certificates will be explained later by an article by Jacob Hornberger, in a Future of Freedom Foundation article. 

 

It is obvious that people who want us to believe in a benevolent government would be very anxious to cover up obvious confiscations and draconian measures like the War on Drugs, just for one glaring example.   The War on Drugs involves confiscating all the property of anyone caught either using or selling illegal drugs.  The State doesn’t even have all that much interest in imprisoning most of these pathetic people but has a very powerful interest in confiscation of maximum property and goods.  It gives a great excuse to pry into private affairs and spy on citizens as well as terrorizing them unnecessarily.

 

Executive Order 6102 – Wikipedia, the free encyclopedia

 

Circulating on internet are false rumors that Executive Order 6102 led to the seizure or freezing of safe deposit boxes in 1933. There are also falsified versions of the text of the order which imply that “Internal Revenue Service agents” managed this supposed freezing of safe deposit boxes. The actual text of the order which can be viewed in the PDF file below has no reference to IRS agents or safe deposit boxes.

In actuality despite the threat of criminal prosecution no safe deposit boxes were forcibly searched under the order and the few prosecutions that occurred in the 1930s for gold hoarding were executed under different statutes.

 

This is totally insane and betrays the political slant of the anonymous editors of Wikipedia.  These two paragraphs hide the truth.  Namely, if we read the news carefully from back then, the government THREATENED to raid safety deposit boxes and imprison people for many years unless they flushed out all their hoarded gold and turned it over to the government which then handed it over to a private bank consortium run by the richest men in America!  Now, when an entity armed to the teeth and with a record of imprisoning people for, say, drinking wine, made at home, at dinner….threatens to imprison people for simply owning gold, this is no small thing!

 

The very threat is a threat!  Seriously!  HAHAHA.  Obviously, if a thug says he is going to kill you if you don’t hand over your gold, it is still robbery if you comply with his demands.  Right?  IRS agents came into being at the same time as the Federal Reserve and WWI and all the new, draconian laws.  After the Civil War, the reaction to a dictatorial state caused most Civil War emergency laws to be voided.  But not after WWI.  After WWII, even more laws were added and the Cold War saw more erosions of the balance of power in the government and more draconian laws.  The War on Drugs and the War on Terror has nearly totally destroyed our civil liberties.

 

The government in 1933 took severe measures, unilaterally, without debate or Congressional approval, in order to kill the value of the currency, not protect  it.  This was viewed, back then, as astonishing and horrible by people who saved money.  People who were relabeled as ‘hoarders’ rather than ‘savers.’  The basis of all banking is savings.  When the banks make too many loans and these go bankrupt in concert, as all bubbles do, the banks have to pay off the dead loans and their capital declines.  They need more savings.

 

When the banks are bankrupt, there is no point in supporting the currency so the need to reduce debts becomes all-important.  Devaluing and debasing the currency and then letting people pay debts with fake money, is the ideal solution.  For borrowers, that is, not savers.  Savers are simply cheated.  Cheated savers hide wealth when this happens.  Instead of parking it in banks, they hide it in tins like the example I gave, earlier.  Banks need to be recapitalized and to do that, they have to charge a sufficient interest to attract savings.  But the government needs cheap lending so it can pay for a depression so it wants ZIRP.  To recapitalize the banks, confiscating gold and handing it over to bankrupt banks is the ideal way for dealing with savers.  

 

In all depressions, trade countries that export a lot of stuff try to undercut rivals by dropping the value of their currencies.  In olden times, to resolve trade issues, they had to back their paper IOUs with gold promissory notes.  The US needed to double its gold values so it could make the dollars worth a lot less than say, British pounds.  Everyone was trying to beggar their neighbors, of course.  Now, let’s go to the very few stories, online, that talk about all this:

 

Monday, October 9, 1933:  Gold Indictment No. 1 – TIME

 

On Oct. 11, 1932 an elderly Manhattan attorney named Frederick Barber Campbell marched into Chase National Bank followed by an armed guard trundling 13 bars of gold. Mr. Campbell had just drawn this bullion from the Federal Reserve Bank in return for gold certificates. Each bar, worth approximately $5,000, had been cast by the U. S. Treasury and bore its stamp and number. Lawyer Campbell arranged for the Chase Bank to act as hired custodian for his bullion.

On Jan. 25, 1933 Mr. Campbell again appeared at Chase National with 14 more gold bars which were stowed away in the vault with the first batch. By gold standard reckoning his total deposit of metal amounted to $135,000.

On March 9 Congress passed the Emergency Banking Act which empowered the President to call all gold into the Treasury, with heavy penalties for those who disobeyed his orders. At that time $1,400,000,000 in gold was in circulation, most of it hoarded. In the next 30 days more than one-third of this was turned in to the Treasury.

On April 5 President Roosevelt issued an executive order requiring holders of gold to turn it into the Treasury in exchange for paper currency under penalty of ten years imprisonment and $10,000 fine. Department of Justice agents began visiting known hoarders who, to date, have surrendered $38,901,009 in gold. During the same period unknown hoarders have given up more than $300,000,000. Attorney General Cummings issued threat of prosecution against recalcitrants who still held $560,201,000.

On Aug. 28 President Roosevelt issued another order requiring every possessor of gold to register his holdings with the Treasury before Sept. 18. Those who failed to do so were also to be punished by ten years imprisonment, $10,000 fine.

 

OK: Money Matters: New Century’s Collapse Is The Beginning Not the End

Dead_gold_certificate

 

 

 

 

 

 

 

 

 

 

And here is a very precious gold certificate! It was recklessly issued by the fools running the Federal Reserve fund. They thought the boom in first, real estate and then stocks and then bonds would be a fundamental basis for generating wealth so they printed up many more certificates for gold than there was gold in the USA. People snatched these certificates up and assumed, like the gold bugs today who buy CERTIFICATES giving them ‘value’ in some fabled gold stock, these things were worth more than the paper they were printed on.

Then the whole system imploded. Holders of these bills ran to their banks to get their gold out. The banks closed their windows. I remember seeing movies about this horrible year, the year the economic system totally collapsed. It showed people demanding PAPER MONEY. And the banks ran out.

This is beyond stupid. Never in history has any bank or government ‘run out of money.’ This is because they print this stuff! Germany managed to print money for so fast, the inflation rate nearly hit infinity. No, the people at the banker’s doors were all demanding silver or gold.

Reserve_bank_collapse

Instead of being a stable position, after the very wealthy banker, Mr. Mellon, strewed gold certificates all over kingdom come, he fled when the stockmarket collapsed. His bank still exists, by the way. Ahem. Insiders never go down with the ships they launch.

 

 

 

Back to the curious case of Mr. Campbell: he held paper money that swore, up and down, that he could redeem it for gold at any Federal Reserve Bank!  Not some local hayseed bank.  From Mellon Banks!  From JP Morgan holders!  HAHAHA.  From the Octopus System, itself!!!  So, Mr. Campbell, reading the news and listening to gossip in Manhattan, where he lived, decided to take in all his gold certificates and redeem them as gold at the going rate!  

 

He didn’t even try to remove the gold from the banking system.  He simply wanted to get it from the Federal Reserve bank in Manhattan, the one Geithner used to run, the most important, by far, of all the Federal Reserve banks.  Talk about poking a rattler with a stick!  The snake hissed and lashed its tail as he did this.  But he bravely held out his hand and said, ‘Hand it over.  It is mine.’

 

My own gold certificate above was issued in 1928 by Mr. Mellon, he signed it.  And if we read the fine print, it is definitely a contract.  Both the Treasury and the Federal Reserve were to pay gold on demand.  Those words are dire words.  Not next Tuesday or a year later or never—but now. Period.  There are no words describing other situations.  So Mr. Campbell was exercising his legal rights when he took this document, called a ‘dollar’ and demanded it be turned into gold.  The fear was, there were lots of these contracts floating about America and not nearly enough gold to cover them.  Indeed, if it could cover just 10%, Fort Knox and the Bank of NY would have none left.  When Mr. Mellon, one of the creators of the Federal Reserve, signed this contract, he knew very well, there wasn’t enough gold to fulfill these contracts.

 

So he had to convince everyone to hold and that the money represented by this dollar would not be inflated to nothing.  The gold certificates were a huge problem for the government and the bankers pulling the strings behind the curtains.  They had to issue them during WWI to convince people, the huge loans to England and France were not going to come back home and bite everyone in the ass.  These things were time bombs. Even so, Mr. Mellon kept issuing them all the way up until the banking collapse.  

 

For a while, people listened to President Hoover who assured them, these gold certificates were going to be honored and please wait, things would turn around, don’t cash them in for gold.  But when Roosevelt was elected, before he entered his office, all the gold certificate holders could see, he was going to devalue the dollar and thus, render their gold certificates pretty much worthless.  So they staged a huge run on the banks…for gold redemptions.  The entire banking system froze up.  Foreigners flooded the Fed with demands for gold.  This was a crisis.  

 

Gold Indictment No. 1 – TIME

 

On Sept. 16 Lawyer Campbell appeared at Chase National Bank, demanded his 27 bars of gold. The bank told him that under the law it could not deliver them to him but would have to surrender them to the Government in accordance with the President’s orders.

On Sept. 26 Mr. Campbell started a civil suit in Manhattan Federal Court to compel the bank to release his gold deposits. In his petition he argued that the President’s orders which prevented him from regaining his property were unconstitutional.

On Sept. 27 after an 18-minute session a Federal grand jury in Manhattan indicted Frederick Barber Campbell for failing to register gold now valued at $200,574.34 before Sept. 18 as required by the Aug. 28 order. Also imminent was a second indictment charging actual hoarding of gold in violation of the April 5 order.

Thus last week was President Roosevelt’s whole gold policy started on its winding way to the Supreme Court for a major test on constitutionality. If Defendant Campbell is convicted by a jury, and the Supreme Court sustains his conviction, the Department of Justice will be on solid legal ground to move against some 30,000 citizens who have so far defied the President’s gold orders. If Defendant Campbell wins a Supreme Court appeal the Administration’s whole gold program will be set at naught and President Roosevelt will have to start all over again conserving the Treasury’s gold supply.

 

One thing about most savers and gold hoarders is this: they find it hard to go to jail. Gandhi and Dr. King didn’t mind going to jail over and over again in civil disobedience campaigns.  But not staid, upright, moralist savers.  Mr. Campbell finally backed down and gave up.  The power of the State was aiming its guns straight at his physical body.  Jails are not pleasant places.  Note how Madoff isn’t in jail.  

 

Mr. Campbell, since he was defying the Octopus of Power, wasn’t going to be left alone to sit in his apartment, awaiting various appeals.  No, he would be sent to Sing Sing and suffer hideous torments there.  While cut off from all society, the news, etc.  On top of this, he didn’t have the public behind him.

 

This is a very strong warning to all gold hoarders today: far from gaining public accolades for this, you will be robbed.  In all times of distress, people can and do and will turn to overt robbery.  So poor Mr. Campbell couldn’t call upon the masses to support his defiance of the state any more than Jewish bankers in Germany could call on the public to support them against Herr Hitler who was also confiscating wealth at the same time as Roosevelt.

 

Gold Indictment No. 1 – TIME

 

In Defendant Campbell the Government picked for this test not only the largest “gold hoarder” on its list but also a respectable lawyer whom Prosecutor Medalie called “exceedingly able.” Born in Brooklyn, Mr. Campbell was graduated from Harvard Law School in 1894, is a director of U. S. and British insurance companies, belongs to such swank Manhattan clubs as Union, Metropolitan (where he lives) and Century. When he filed his civil suit against the Chase Bank, he well knew he was inviting the Government to prosecute. His argument in that suit will become his defense in the criminal action, to wit: 1) Congress has no Constitutional power to delegate its legislative authority over gold to the President; 2) the President is prevented by the 5th (“due process of law”) Amendment to the Constitution from depriving him of his property. The “property” in this case is not only the gold bars in the Chase vault but his $65,000 paper profit incident to the rise in gold from $20 to $31 per oz.

Mr. Campbell, who promptly pleaded not guilty to the indictment and was released on $1,000 bail because no moral turpitude was involved in the charge, was thoroughly aware of the risks he was running in this contest with the Government. If convicted, he could be disbarred, fined $10,000, imprisoned for ten years. But he was, he intimated, making a fight for his Constitutional rights and “if I have to go to jail, I don’t care.”

 

He did care about going to jail.  Especially, since he saw little public support from either the people or businesses.  Businesses wanted dollars devalued and if the government had to void all those paper certificates, then fine!  Just do it!  Just like LBJ and then Nixon’s destruction of the currency was cheered, not jeered, by business interests.  

 

Gold Was Never Illegal

Michael E. Marotta

Despite numerous claims by coin dealers and conservative patriots (sometimes the same people), it was never illegal for Americans to own gold. It is true that ownership of gold was closely defined. It is also true that zealous government agents took gold from people under the guise of law. However, for most people — including coin dealers — there was never any practical limit on the ownership of gold.

Presidential Executive Order 6102, April 5, 1933, made it illegal to “hoard” gold. The order exempted anyone whose “usual and customary” business required gold. (Dentists and jewelers come to mind. Electronic fabricators would come under this once electronics was invented.) Anyone could own up to $100 in gold coin. In 1933, $100 was two or three months wages for the average worker, about $6000 to $10,000 in today’s money.

Numismatic Scrapbook magazine was founded three years after this executive order. In the pages of that publication, the London Spot Price for Gold was often published along with the London fix for Silver. Gold coins such as the U.S. $3, $10, and $20 were offered for sale by dealers to the public in display ads at prices within a few cents of the London fix.

On the other hand, numismatist Tom DeLorey recounts a story told to him by Abe Kosoff. “Abe Kosoff once told me how he had arranged, on behalf of a few wealthy clients, to have bags of U.S. $20s shipped to a European bank PRIOR to the Gold Surrender Act, in anticipation of it and in the expectation that the price of gold would be raised. It was. He was then visited by a U.S. Treasury agent AFTER the Gold Surrender Act who told him that they had been examining bank records to see who had been withdrawing gold coins in the six months prior to the Act, and that according to the records he had withdrawn x number of bags of $20s. He was given a fixed amount of time to return the coins to the Treasury, or face prosecution. He got them back and returned them.”

In addition, another individual (Frederick Barber Campbell) lost a large holding of gold bullion stored in the Chase Manhattan Bank in 1933. It is true that in 1963, federal agents seized gold coins from the Witte Museum in San Antonio.

However, it is also true that the Thomas Elder catalog of April 14-15, 1933, carried a letter from William H. Woodin assuring collectors that they could own gold coins — both rare examples and souvenirs. Furthermore, in 1954, the Federal Reserve Bank of Cleveland sent a letter to its members telling them not accept gold coins from depositors, but to direct people to take their gold coins to coin dealers.

 

This guy is a total fraud.  He talks like a con man.  No one ever claimed that the government outlawed all ownership of gold.  But it restricted ownership tremendously.  And besides, the entire thing misses the point: it wasn’t the gold, itself, that was the problem.  It was the gold certificates that was the problem.  If people went into the streets and used silver certificates to buy gold from merchants, that was OK.  But to go to a government bank or worse, a Mellon bank, and demand gold from the reserves was dangerous.   If one gold buyer bought from another, it mad zero difference to the capitalization of the Federal Reserve.  But to go to them for gold was highly dangerous!  So it was made illegal!

 

Until…after the devaluation.  Even if gold could still be bought by redeeming dollars, only foreign governments could do this.  NOT AMERICANS.   From that day forwards, the US public had two things happen: all the gold the draconian laws flushed into the Federal Reserve could NEVER be recovered by American and this money would be used ONLY for capitalizing US government borrowing and Federal Reserve manipulations of interest rates!  We were free to buy gold from South Africa or Canada and to wear gold jewelry.  But not to use it as money.  Period.  Worse, gold wasn’t even a commodity! 

 

This is significant: it wasn’t until Nixon cut the golden Gordian knot, did gold actually become a marketable commodity in the US.  Up until then, one could not buy and hoard it without the government snooping around and rigging up various excuse with various laws, to make your life a perfect hell, without once invoking gold hoarding laws.  Ask anyone who dares to defy the State in this sort of way!

 

Now, for a saner voice, talking about the mechanics of all this:

 

2006:  The Federal War on Gold, Part 3

Jacob Hornberger is founder and president of The Future of Freedom Foundation.The Supreme Court

The constitutionality of Roosevelt’s gold-confiscation decree was never addressed by the U.S. Supreme Court. There were few federal prosecutions, possibly because Roosevelt didn’t want to take the chance that the Supreme Court would declare his confiscation unconstitutional. Better to simply let the lambs who were meekly complying with the law continue filling the government’s coffers with gold and leave the ones who weren’t obeying the law alone.

The gold-clause cases did reach the Supreme Court. Unfortunately, a majority of the Court declared the nullification of the gold clauses in private contracts to be a constitutional exercise of the president’s power. While it declared the nullification of gold clauses in government notes to be unconstitutional, the Court also held, in a twisted form of logic, that the holders of government debt had suffered no damage because gold was then illegal to own anyway.

The Supreme Court’s opinions in the gold-clause cases are worth reading. (SeeNorman v. Baltimore & O.R. Co.). The most persuasive arguments, not surprisingly, were published by the dissenters — McReynolds, Sutherland, Van Devanter, and Butler, who often voted to declare much of Roosevelt’s New Deal unconstitutional:

 

Good old catch-22!  Again, the power of the State is huge and horrific and very dangerous.  Defy it at your own risk!  Union organizers were accustomed to murder, terrorization and being hammered by the courts and the banks.  They were prepared to literally die for their cause.  But not gold certificate holders.  And the State knew this.  Aside from public campaigns mocking savers and demonizing them, not the bankers, public ire was turned on the very people who did not create the lending bubble: savers.  So it will be, this time around, too, I might suggest.  Let’s go back in time to a later TIME magazine article which talks about how the FDF gold theft excited many governments to imitate him:

 

January 29, 1934: “Roosevelt Money” – TIME

When Franklin Delano Roosevelt was first swaddled, Japan’s present Finance Minister was already approaching middle age. Today a tottering but keen-witted patriarch, Mr. Korekiyo Takahashi was the first statesman of world prominence to seize last week on President Roosevelt’s devaluation project as a basis for local action.

Calling in Tokyo correspondents, Mr. Takahashi revealed that his Finance Ministry was rushing into shape a bill to make ”Roosevelt money” out of the yen—i.e. to devalue it and presumably pounce on the profit to be had by seizing gold held by Japanese citizens and banks.

“If America returns to the gold standard with the gold content of the dollar reduced, as seems likely,” Mr. Takahashi said, “Japan probably will be compelled thereafter to devalue the yen similarly in order to resume gold payments. Preparations for such an eventuality will be necessary to strengthen the nation’s gold reserves.”

Same day in Canada, where seizure of private property is repugnant to every Methodist fibre of rich and pious Premier Richard Bedford Bennett, the project of reducing the gold content of the Canadian dollar—without confiscation—became an active issue in the Dominion Press. Usually well posted, Toronto’s Globe said that Premier Bennett was expected shortly to ask Parliament to devalue the Canadian dollar 33⅓%.

“The adoption by statute of such a lower gold content of the Canadian dollar would,” said the Globe, “undoubtedly have widespread reaction. It would in due time reduce by one-third the burden of all indebtedness payable in Canadian currency, and would tend to increase prices of commodities in the domestic trade of Canada in similar proportion.”

Time’s reporter is amusing in how clear he is about what is really going on!  Japan’s central bank and the exporters who hold the most power in Japan, decided to raid the savings of all Japanese.  Who saved in gold, whenever possible.  If they were conned into holding gold certificates, they could be cheated instantly via government fiat!  Everyone was devaluing like crazy because otherwise, the industrial rivals would flood a nation with cheaper goods and thus, end up closing domestic factories.  And how is this different from today?  Heh.  Nothing ever really changes.

 

“Roosevelt Money” – TIME

In South Africa wild rumors that “Roosevelt will buy unlimited foreign gold,” caused a near riot on Johannesburg ‘Change as frantic brokers bid up “kaffirs” (mining shares) to dizzy highs on orders from London and towns all over South Africa.

Meanwhile Argentina, which pegged her peso to the French franc when sterling went off gold, pegged back to sterling last week as South Americans awaited a “devaluation race” between the dollar and the pound. Stormed bellicose Baron Beaver-brook’s Daily Express in London: “The revalued dollar demands an answer and the British answer should be a revalued pound. A great world currency war has been begun by President Roosevelt and he will fight America’s trade battle with £400,000,000 of conscripted gold.”

In the eyes of French editors, long used to Marxian proposals for a capital levy or seizure of prosperous people’s wealth, President Roosevelt’s devaluation move seemed precisely that. They concluded that his 40% to 50% devaluation of the dollars in every U. S. citizen’s pocket will so cheapen the U. S. national debt that in “real money” it will be less under President Roosevelt this year than it was under President Hoover.

All banking collapses lead to gold rushes.  The 1848 California Gold Rush, the 1890 Alaskan and South American and Brazilian gold rushes, etc.  Note how the reporter also casually mentions Marx.  Karl Marx has been totally obliterated from all talk about money.  This is very stupid.  People have to grope around in dark mazes, trying to figure out the simplest things, due to the annihilation of all Marxist thought.  Like with Freud: the baby has been thrown out with the bath water.  Marx was 100% right about the seizure of savings.  

 

“Roosevelt Money” – TIME

Officially the French Government remained more than ever determined last week to keep the franc on the gold standard at full present value, but ominous rumblings were heard among France’s allies. Decidedly slick was a move proposed in Belgium and favorably discussed among members of the Chamber. While the dollar is cheap and the belga is dear, proposed Deputy Marquet, let the Government borrow enough belgas to pay off Belgian debts in the U. S. at the present attractive discount. Later, if the belga is devalued, the Belgian Government will merely find it that much easier to repay the people from whom it borrowed.

From Czechoslovakia, another ally of France, came strong rumors that perpetual President Masaryk and perpetual Foreign Minister Benes were about ready to devalue their crown.

In Germany, where Minister of Propaganda and Public Enlightenment Dr. Paul Joseph Goebbels tries to make all news-organs play the same tune “like a great organ of many pipes,” Organist Goebbels seemed unable to make up his mind about Roosevelt money, permitted a divergence of expression unprecedented since he sat down at the Fatherland’s Press keyboard. Led by the Vossische Zeitung, one section of the German financial Press flayed President Roosevelt for “disturbing the world with a rubber dollar” expanding and contracting between 50¢ and 60¢. Other equally authoritative papers echoed the Berlin Börsenzeitung’s declaration that “President Roosevelt’s return to the gold standard would be particularly pleasing from the German point of view.”

In Basle, Switzerland officials of the World Bank voiced conviction that the Roosevelt Administration in seizing the world’s largest gold hoard would set a “bad example” to politicians of other countries.

This is how debts are destroyed: if you destroy the currency, then debts can be paid off with cheaper paper currency promissory notes!  Wow!  Talk about sharp.  HAHAHA.  This brings me to this week’s news: the US, EU and Japan, all being ZIRPed to death, need to have China raise the value of the yuan.  Nothing is stopping them all from killing their currencies further.  But if China matches this, these currency devaluations don’t work.  They are supposed to flood trade rivals with trade goods!  HAHAHA.

 

‘Free trade’ is an oxymoron.  Everything and I do mean, everything, hinges on relative value of paper money in the Floating Currency Regime which Nixon and Burns unilaterally launched in the early 1970′s.  The US dollar’s strength has been totally fake for a quarter of a century so that trade rivals could overwhelm all our markets.  Then, once we are totally deindustrialized, they will come in and buy up everything when their currencies go up and up vis a vis the hyper-inflating dollar.  This is our dire future unless we figure out a better system.  Like, reverting to the gold standard again.

 

The Federal War on Gold, Part 3

Nullifying the gold clauses

Roosevelt and his Congress did not stop at seizing the gold of the American people and making it illegal for them to protect themselves from the ravages of inflation. They also nullified every clause in every contract, both government and private, that tied the financial obligation to gold.

How did these gold clauses operate? Let’s say a corporation issued a 100-year bond for $20, promising to pay 3 percent interest. Any lender would ask himself the obvious question, “Why wouldn’t this bond be worthless in a hundred years because of inflation?” To ensure that that wouldn’t happen, the note would contain a “gold clause” which stipulated that the company had to repay the bond, both principal and interest, in the same standard of gold that existed at the issuance of the note.

So let’s say, for simplicity’s sake, the $20 bond was issued in 1885, with $20 equal to a one-ounce gold coin. Let also say that because of inflation, when the bond became due 100 years later, it would take $100 in paper notes and bills to buy one ounce of gold. With the gold clause in the $20 bond, the debtor would have to pay the creditor either a one-ounce gold coin or $100 in paper notes (plus interest). With the gold clause nullified, all the debtor would have to pay would be $20 in paper money (plus interest), even though it would purchase only one-fifth of an ounce of gold at the time of repayment.

And the connection between interest rates and gold have been utterly routed.  Deliberately.  After 1971, the Fed grandly announced, they will control both the gold and the paper currency markets via buying and using US Treasuries, not gold.  Gold became immaterial to them because it was harder to manipulate.  Since then, the Fed, after a rough start that involved hyperinflation waves, settled in with a regime of dual interest rates: super high, usurious rates for regular lenders [credit cards, etc] and super cheap rates for banks.  And this hammered savers to death.  

 
They got precious little return if they saved at banks!  And this leads us to  today: us people simply don’t save money anymore, in banks.  They hand it all over to Madoff and his ilk, instead.  Cows to the slaughter!  This makes the Fed happy.  No hoarders!  Oh!  Wait!  No one is giving either the banks or the any Madoffs, their savings!

 

 They are….BUYING GOLD!!!!

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Filed under free trade, money matters

2 responses to “1933: TERRORIZING PEOPLE INTO HANDING OVER GOLD

  1. Pingback: 1933: TERRORIZING PEOPLE INTO HANDING OVER GOLD « Culture of Life News

  2. Editor

    The difference between socialism and capitalism? Under socialism, banks are first nationalised and then go bankrupt. In the capitalist system it appears to work the other way around.
    Read more on Crunchreport.com.

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