The Reality of the Dollar Bill
By Charlie Morningstar
Does anyone really know the truth about money?
As a citizen of the United States, I was under the assumption that the government had complete control over the financial and monetary well-being of our country. I am sure you can imagine my reaction, when I found out I was wrong. Not just wrong, but inadvertently lied to.
The bad news is that it could take me all day and a novel to truly explain the past and present of the currency that we use today. The good news is that I can make it quite simple for you to understand what happened and why the growth of crypto-currency is rightfully booming.
Many years ago, before the printed tender, costs of goods were traded and paid in metals. Silver and gold were highly sought after and quickly became the currency of its time. As the weight of silver and gold became too much to, we will call it carry, the federal reserve began issuing paper certificates in exchange for the precious metals. This was a great idea, being no-one would want to walk around with bags full of quarters if you could hold a few pieces of paper in your wallet. (gold vs USD)
Silver and gold were melted down and the owner was given legal certificates that could be used as currency or traded back to the reserve in exchange for their weight in metal.
Over time, following the rise and fall of metal value, changes were made to the way the dollar would be used today. The first thing that you need to know is that the Federal Reserve is not owned by the government. They do not control or police the activity, other than a few laws and policies in place to ensure that they get their portion at the end of the year. Sounds familiar, I know.
The reserve had to take action to avoid crashing the dollar, so they began issuing legal tender bills. Without the trade for silver and gold, they could control the value based on supply and demand versus paying out based on the noted value. This would save them from paying anything other than the cost of printing.
In 1963, the words “PAYABLE TO THE BEARER ON DEMAND” were removed from all newly issued Federal Reserve notes. Then, in 1968, redemption of pre-1963 Federal Reserve notes for gold or silver officially ended. Meaning, there was no way to trade it for silver and gold unless you were sitting on the 10k gold certificate. Those still exist but not many remain.
Fast-forward to today and the dollar we buy milk and bread with. The current dollar only has value as long as it is in circulation. Like any other form of coveted payment, the number of pieces in circulation is the determining factor for value.
Everyone has asked themselves, “How is our country trillions of dollars in debt if they could just print more?” Ah ha. This is where the dollar falls flat. One of the perks to the dollar bill is that we can print more but the value drops and so does society. The government borrows currency from the reserve to pay bills. Plain and simple. When they are out of money, they send the mail clerk over to the real bank owners that make up the board of the reserve and pay a very small interest rate. (Probably not the mail clerk, but you get the sarcastic point)
Did you miss that? Bank owners and their selected board run the federal reserve. They profit off of the dollar, in the form of the dollar, to print dollars. They hold the future of our financial stability in their hands. Or at least they did.
Crypto currency is not owned by anyone other than the holders of the coin. Unlike our past selves, we are not walking around with pockets full of gold and silver. No, we are able to mine and mint the preferred coin from the comfort of our own home. Bitcoin paved the way for the future of currency by creating a system that allowed those with “super computers” and an abundance of energy waste to ‘mine’ blocks of coin and create their own. With that theory in mind, it became a tradable currency due to the fact people wanted them, but didn’t have the resources to mine them.
Bitcoin was never taken seriously by the government, until now. With the fear and corruption that clouds our government and leaders, Bitcoin has seen more than a steady increase of value over the nine years in existence. When the coin released, it was valued at tenths of a penny. Today, the market for bitcoin has increased the value to over $3000 per coin. At a high, the bitcoin valued at $4987 only a few short weeks ago.
The crypto currency ledger has made it possible for people to take back the value of their possessions. There are many high-level and well-paid executives worldwide that have converted to the Bitcoin era out of fear of a monetary collapse. The digital age has boomed and with that a digital currency was born, grew up and has finally become noticed as a threat. Holders of the coin have profited immensely from the bitcoin and alt-coin industry.
Alt-coins are like the penny, nickel, dime and quarters to the dollar. They have value, they are traded and they are more cost efficient to mint rather than mine. The energy costs are ridiculously lower and anyone with a computer can invest. Don’t panic – Like the change in the jar on your dresser, it can be traded for a ‘crypto-dollar’ (bitcoin), then sold for USD at the current market value versus the mishap printing of the federal reserve. Many online businesses accept bitcoin as a form of currency based on market value, putting the control back in to the people’s hands.
In short, crypto currency and the coin holders have made a stand and is taking back the future of currency within a digital age.
The truth is, the Federal Reserve was established to serve the public interest and is not owned by anyone. To fulfill our monetary policy goals (full employment and stable prices, often referred to as our “dual mandate”), the Fed operates as an independent entity within the government. Not owned by the government, only associates with them
The Federal Reserve Banks are not a part of the federal government, but they exist because of an act of Congress. Their purpose is to serve the public. So, is the Fed private or public? While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations.
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