Dollar's Decline Catches Up With U.S. Mint
by Bob Adelmann
of each other, two announcements concerning the future of the US
currency appeared in the popular press, and each avoided any mention
whatsoever of the primary driver of the changes.
was the announcement on November 26 from Secretary of the Treasury
Timothy Geithner that the U.S. Mint will begin removing pennies
and nickels from circulation starting the first of the year, supposedly
because they’re too expensive to make. It costs the mint nearly
5 cents to make each penny while it costs more than 16 cents to
make a nickel. This is costing the mint a lot of money, an estimated
$187 million last year alone.
days later CNN reported that the Government Accountability Office
(GAO) called for the United States to stop printing one-dollar bills
and switch instead to one-dollar coins. The GAO claimed that such
a move could actually make the government some money:
A $1 coin
typically costs about 30 cents for the U.S. Mint to produce, but
then the government can sell them to Americans for a dollar each.
That financial gain is called seigniorage, and over a period of
30 years, it could [make] the U.S. government about $4.4 billion,
the GAO said.
real issue, the GAO said that although the coins cost more to make,
they would last longer, thus turning a profit to the government:
to believe that replacing the note with a coin is likely to provide
a financial benefit to the government if the note is eliminated
and negative public reaction is effectively managed through stakeholder
outreach and public education.
there is little likelihood that any of that “outreach” and “education”
will include any attempt at explaining why the change is necessary.
The real issue
is the declining purchasing power of the currency. And that goes
back to the year 1913 when
the Federal Reserve System was successfully foisted upon the American
public as a result of the banking establishment's antipathy
towards the gold standard, which prevented them from creating fiat
(unbacked) money out of thin air. Perhaps no one understood that
antipathy better than Alan Greenspan. In 1966, prior to becoming
chairman of the Fed, Greenspan championed gold, writing
in The Objectivist:
hysterical antagonism toward the gold standard is one issue which
unites statists of all persuasions. They seem to sense ... that
gold and economic freedoms are inseparable.
He then went
on to explain that the real reason for the push behind the scenes
for the Federal Reserve was to finance the welfare state:
of its academic jargon, the welfare state is nothing more than
a mechanism by which governments confiscate the wealth of the
productive members of a society to support a wide variety of welfare
schemes. A substantial part of the confiscation is effected by
the rest of the article
© 2012 The New American