At age nine I became a
magician. A chum and I called ourselves "The Mystic Brothers" and
boldly set out on the local performance circuit, quickly
exhausting the limited venues. My friend soon tired of rehearsals
and I became a solo act.
By the time I got to high
school I found part-time employment with Mike McManus, who ran a
novelty shop which specialized in magic and photos-while-you wait, 3
for 25¢. My job was to shoot and develop pictures and also
demonstrate magic.
One of my favorite tricks
involved a blank slip of paper the size of a dollar bill. Right
under the customer's nose I would carefully fold the paper into a small
bundle, remarking that this was a good trick to know when one comes up
short of cash. Then, without removing the folded paper from the
customer's sight, I slowly began to unfold it. To the
astonishment of the beholder it was - - a crisp $1.00 silver
certificate!
Effects involving the
creation of money out of thin air go over very well. The U.S.
Congress has been pulling a trick similar to this since the end of
World War 2. The public eats it up. We fall for the
trick hook, line, and sinker.
Consider those $1.00 silver
certificates of long ago. Prior to the mid 1960s anyone could
take a silver certificate into a bank and swap it for the real thing -
a U.S. silver dollar. In fact, banks were usually busy around
Christmas time exchanging paper certificates for silver dollar coins.
. Tellers would even hand them over in exchange for Federal
Reserve notes, which were clearly imprinted with a promise they would
be redeemed "in lawful money." The promise was dropped from the
notes in late 1963 when we were all occupied with the assassination of
President Kennedy.
In the 1960s the Treasury
Department quit redeeming silver certificates. It didn't matter
how many you had - you were out of luck if you showed up in
Washington after July, 1968, demanding silver. By that time they
had been handing out little vials of silver pellets valued at $1.00 to
people who came to the Treasury Department to redeem their silver
certificates. Suddenly silver certificates stopped being
certificates. They were treated just like Federal Reserve notes -
- not redeemable in anything but copper and nickel coins - if you chose
to go to the trouble of handling such bulk. Most people
didn't.
A friend called a few years
later to say that he needed to redeem his mother's suitcase-full of
silver certificates. She was ill and he needed to raise cash from
her hoard. She had run a restaurant many years before and had
carefully saved those certificates over the years. He thought I
might know how to go about "cashing them in.
Twenty years or more had
passed since the government honored its solemn pledge. If some of
the silver certificates were in crisp condition collectors might
offer a small premium above face value, but the government had long ago
quit the old "lawful money" system and was doing business only in
debt-based fiat currency. Automatically, the certificates weren't
any more valuable than the paper notes...which were only IOUs.
Quite a trick, when
you examine it closely. The central government of the United
States converted the entire monetary system from the sound
formulation established by the Constitution to the spectacle of a
society trading government IOUs with each other. The
transactions don't even involve paper currency to the extent they used
to. Digital numbers flash across the Internet and we regard our
financial condition by the numbers that appear on our computer
screen. And those numbers represent debt - - a record of dollar
obligations owed by the federal government to the Federal
Reserve. We carry on under the illusion that promises to pay are
the same as payment! We were led into believing that non-payable
IOUs are money! The main culprit is the United States
Congress. And members of Congress will say they are only "doing
the bidding of the people." If that be true we must all go look
in the nearest mirror to see whom to blame.
Where is
this fiscal hocus pocus leading? I noticed the other day that the
U.S. dollar of the year I was born is now worth less than a
nickel. I'm beginning to think I might live long enough to see it
reach 2¢. . . or even zero! Imagine! All in one lifetime
Congress has been able to make the once mighty dollar all but disappear!
People are still scratching their heads wondering how the trick was
done.
