"The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves liberals, but they are intent upon abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office. Every man but one a subordinate clerk in a bureau. What an alluring utopia! What a noble cause to fight!" ~ Ludwig von Mises
Confederate Blue Backs and Our Dollar
Exclusive to STR
March 29, 2007
I remember as a child during the tumultuous '60s contemplating what value money had. I realized at a young age that the older silver coins still circulating at the time were more valued than the newer, nickel-clad copper coins they replaced. I didn't like the fact that our 'new' money was a lot less valuable than the old silver and gold, and I was a child. Still, JFK looked pretty cool on the 50 cent piece, and a few were silver. I understood the paper silver certificates, especially the two dollar variety. I had a few of them back then, with their crisp, red ink and 'silver certificate' written across them. They were pretty.
I was told that there used to be gold certificates, in fact that all paper money up until about the time right before I was born was based upon gold and silver, but that bankers had stopped that practice completely in the '50s (it began much earlier). By 1983, even the venerable old penny, which was made of copper, at last became merely a worthless zinc coin electroplated with a very thin coat of copper to 'look like copper' but not be. The newest 'gold coins' printed at U.S. mints are non-gold-containing alloy that give a golden sheen in appearance, and none of them are worth much of anything metallurgically speaking, nor monetarily speaking either.
I helped my grandmother collect all the barber head dimes and any other pure silver coins (mostly quarters) that came across my palm as change back in the day. And they used to cross my palm a lot more often then than they do now, which is hardly ever. I used to look at what was then the newer paper money and wonder at what it was really worth. Not much, I thought, as I considered the then-worthless Blue Back; it was simply printed paper too. How right I was.
After all, I was raised in the poorest regions of Arkansas , and there we had our own currency at one time that ended up being worthless piles of scrap paper. I had seen plenty of Confederate Blue Back bills in my life. My great grandmother told me stories of how her grandfather (my great-great-great grandfather) had carried a wheelbarrow filled with different denominations of Confederate Blue Backs to buy one loaf of bread from the local store. He got the bread, but only after a long argument and several threats. Confederate currency was based upon a commodity, the commodity of cotton.
Cotton for the south was nearly as good as gold, since most cotton produced in the south was sold to England . Confederate Blue Backs were never legal tender. Worth 95 cents on the dollar in gold when first issued, Confederate currency dropped to 33 cents by 1863, and 1.6 cents by Appomattox (April 9, 1865). May 1, 1865 was the last active trading in Confederate notes at 1,200 for 1. By way of comparison, the lowest point of the legal tender Greenbacks of the North was 39 cents on the dollar in gold on July 11, 1864 . That is why my great-great-great grandfather had to have a wheelbarrow filled with Confederate cash to buy a loaf of bread.
Our current US dollar is not based upon gold or silver--or any other commodity (cotton)--but rather on the debt of international banks. Hmmm, what could possibly go wrong, one might ask?
I was utterly astounded in May 2003 when I got wind of our national shipment of $2.4 billion (that's right, with a 'b') in shrink-wrapped bricks of $100 bills to Baghdad , Iraq , via military airlift. The pallets of cash were stacked high and piled deep, and it took two C-130 Hercules aircraft to perform the job. The cash weighed in at 360 tons. Didn't you read about it? The mass media did report it, just on page 6 on the last column on the right, and only in passing on Faux news channel. I get blank looks from so many people I mention it to, who didn't even know it happened.
I wondered at the conjecture of a warehouse filled with a couple of billion dollars, with armed guards and escorts, and the long line of people (crooks, thugs, murderers all) who this money was to be earmarked for. What a mental picture. It was supposed to be payment for the oil revenue for the 'Iraqi people.' In the end, only 'some' people benefited, and those were warlords to a man, so the coalition could use them to 'secure' areas for cash payment. I am certain it was cash chaos for at least a month. As I understand it, that's about as long as the huge pile of cash lasted.
Several military type folks were caught trying to abscond with some of it, some prosecuted. Many more were not caught. It was an orgasm of paper money exchange in Iraq . Money not secured by any commodity whatsoever, not a loan to be repaid, just a handout of paper printed out of our treasury to cover the 'seized assets' from the 1991 sanctions by the UN. No big deal. We have 'paid them' now, and we can do what we want. America said the oil was Iraq 's, America paid for the oil, and (some) Iraqis got the cash: $8.8 billion so far, and counting.
With the US dollar falling ever lower in value both here and across the globe, and based upon nothing other than direct greed, with taxes raised higher and higher with nothing to base it on other than more direct greed and government largesse, it is easy to see where this will eventually lead: Big Macs are eventually going to cost $10, and at some point, we might just need a wheelbarrow filled with different paper currencies to get a loaf of bread, like my venerable ancestor.
There are hundreds of articles, many here at STR , even hundreds of books, that are telling us this is coming, the why and wherefore. Nobody will do anything to stop this except a very few principled folks in Congress, like Congressman Ron Paul of Texas . He is a lonely minority of one, with scant chances of being elected president by his own party, and has written some books on this subject as well. Nothing will stop this train wreck coming short of a miracle, it appears.
And that falls cleanly in line with several theories out there that are of the opinion that no one in power really wants to change things. They keep applying festering band-aids to the corpse so that their special interests (all of them) get their little cut of the mincemeat pork-pie of tax revenue. It is at the brink of being too late, and with all the inaction by the duly elected, it appears to be too late by design.
And if by design, then who is designing it, and why, and what are they trying to achieve? It is frightening to consider, but consider you better. A paper one hundred dollar bill won't be able to purchase what an old mercury silver dime will buy within the next few years.
Unfortunately, almost everything I own is in paper money investments. I am SO screwed. At least my Granny left me the old silver coins. I'll be seeing you. I'll be the one with the wheelbarrow filled with worthless $100 bills in line at the grocery store only to hear that it will only purchase at best, a loaf of bread today, replete with my Southern accent. Just like Confederate Blue Backs in 1865.
So what do you have for your financial security? Or is Uncle Sugar ready to provide you with every thing you need when the bottom drops out? Just like our leaders say concerning terrorism, it isn't a question of 'if'; it's more a question of when.
Things are about to get really interesting. What's in your wallet?