Wayback Wednesday: The Gold Repeal Resolution 1933

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Gold Repeal Image One
Image Credit: loc.gov

Eighty-six years ago, today, following President Franklin Roosevelt‘s signing of Executive Order 6102 on April 5, and Executive Order 6111 on April 20, the 73rd U.S. Congress enacted House Joint Resolution 192 (48 Stat. 112), abolishing payment in gold. These steps eventually led to the Gold Reserve Act of 1934. The ownership of gold coins, gold bullion and gold certificates was forbidden. The Executive Order(s) required all persons to deliver on, or before, May 1, 1933, all but small amounts of gold. Violation of the order was punishable by fine up to $10,000 or up to ten years in prison, or both.

From The History Channel:

On 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 […] but, bank failures during the Great Depression of the 1930s frightened the public into hoarding gold […].

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 […] owned by them to the Federal Reserve by May 1 for the set price of $20.67 per ounce. 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.

Executive Order 6102 Image Two
Image Credit: gumroad.com

From Peter Schiff:

After the bombing of Pearl Harbor, President Franklin D. Roosevelt called Dec. 7, 1941, “A date that will live in infamy.” When it comes to the US monetary system, June 5, 1933, should share that ignoble title because that date marks the beginning of a slow death of the dollar.

Roosevelt signed Executive Order 6102 […] touted as a measure to stop hoarding but, was, in reality, a massive confiscation scheme. Even in the heat of Roosevelt’s confiscation scheme, government troops did not break into people’s homes… Ironically, all the gold actually collected by the Treasury was willfully surrendered in a wave of misguided patriotism, while many ‘law-breakers’ simply kept their gold.

The purpose of Roosevelt’s executive order was to remove constraints on inflating the money supply. The Federal Reserve Act required all notes have 40% gold backing [but], the Fed was low on gold and up against the limit. By increasing its gold stores, the Fed could circulate more notes.

Roosevelt’s [actions] in 1933 set off a dollar devaluation that continues to this day. In 1913, prices were only about 20% higher than in 1775 and around 40% lower than in 1813, during the War of 1812. Whatever the mandates of the Federal Reserve, it is clear that the evolution of the price level in the United States is dominated by the abandonment of the gold standard in 1933 and the adoption of fiat money, subsequently. One hundred years after its creation, consumer prices are about 30 times higher than what they were in 1913.

In 1964, the minimum wage stood at $1.25. To put it another way, a minimum wage worker earned five silver quarters for every hour worked. Today, you can’t even buy a cup of coffee with those five quarters [but], the melt-value of those five silver quarters, today, stands close to $15! Roosevelt’s moves, culminating in the June 5 congressional resolutions, initiated a process of monetary deformation that led straight to Nixon’s abomination at Camp David, Greenspan’s panic at the time of the 1998 Long-Term Capital Management crisis and, the final destruction of monetary integrity and financial discipline during the BlackBerry Panic of 2008.

The legacy of June 5, 1933 continues today. The dollar continues to devalue. That means over the long-term, the price of gold in US dollars will almost certainly continue to rise.

Yay for us. ~Vic

17 thoughts on “Wayback Wednesday: The Gold Repeal Resolution 1933

    jmshistorycorner said:
    June 6, 2019 at 3:35 AM

    Good grief.

    Like

      The Hinoeuma responded:
      June 6, 2019 at 2:35 PM

      Yeah. My words were far uglier.

      Don’t let ANYONE tell you that Nixon took us off the Gold Standard. That is a lie. He just put the final nail in the coffin with Bretton-Woods.

      Liked by 2 people

        jmshistorycorner said:
        June 6, 2019 at 7:13 PM

        I think it’s law in Australia that all gold found is automatically the property of the federal government.
        Yeah, uglier words are coming to mind…

        Liked by 1 person

          The Hinoeuma responded:
          June 7, 2019 at 12:05 AM

          Wow. I’d be hiding it.

          So, you can’t own gold, at all?

          Liked by 1 person

            jmshistorycorner said:
            June 7, 2019 at 12:05 AM

            Apparently not.
            (And I had a similar thought. Unfortunately, I haven’t found any yet 🙂 )

            Like

    the britchy one said:
    June 6, 2019 at 10:56 PM

    Government. Another term for Legalistic Pimps.

    Liked by 1 person

    badfinger20 said:
    June 11, 2019 at 2:23 PM

    I would have been hiding it no doubt. That is just wrong…on so many levels.

    Like

      The Hinoeuma responded:
      June 11, 2019 at 2:35 PM

      I agree. I think that’s where the Mason jars in the backyard came from.

      Liked by 1 person

        badfinger20 said:
        June 11, 2019 at 2:47 PM

        The strangest things pop in my head on certain words.
        Mason Jars… A few years ago John Lennon’s 60s house in England was getting remodeled. They found some mason jars…either that or bottles with corks with…with his old LSD in it that he would hide in the garden. Most were cracked though.
        How is that for off topic lol

        Like

          The Hinoeuma responded:
          June 11, 2019 at 3:12 PM

          OMG! That is wild. That was the thing to do. Hide it & bury it.

          Max, you crack me up. If you get lost in the woods, I want to be your traveling companion…just to see where we wind up. Between the two of us…”Hey. Look at this. Wait? Where the hell are we?” (Max pulls out his phone…”Jen? Yeah. Honey, fire up the helicopter. We’re lost…again.”)

          🤣🤣🤣🤣🤣

          Liked by 1 person

            badfinger20 said:
            June 11, 2019 at 3:23 PM

            That is me! My mind won’t turn off…it just keeps turning down roads and alleyways… Yea it would be a hell of an adventure though! I would welcome you… No telling where we would end up.

            My sense of direction is awful. My shortcuts are usually an adventure.

            Like

              The Hinoeuma responded:
              June 11, 2019 at 3:32 PM

              I’m beginning to think we were separated @ birth. 😆

              My brother from another mother…🤓

              Liked by 1 person

                badfinger20 said:
                June 11, 2019 at 3:35 PM

                I think you are right… we were not meant to be navigators I don’t think. Life is a bunch of adventures and I’ve had mostly unplanned ones. My plan is usually two words…. Wing It.

                Like

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