Very cool little video vignette’s from the NYT and Floyd Norris

click for interactive video

Category: Commodities, Inflation, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

17 Responses to “January 1934 and the Gold Reserve Act”

  1. gms777 says:

    Was in a coin shop before Christmas. Said to the owner, “You must be doing a great business now.”

    “No,” he replied. “No one has any money to buy coins.”

  2. richard says:

    “Hoarders in Fright Turn in $30,000,000″ says the headline. Will “hoarders” be so easily and fearfully stampeded should Obama and this Congress ban private possession of gold? My guess is not.

  3. jswap says:

    Ever notice that when I stock up on something, it’s “saving”, but when you stock up on something, it’s “hoarding”?

    BTW, I enjoyed Floyd’s video until the last sentence. Then I wanted to punch him in the face.

  4. Graphite says:

    This is why it’s a good reason to hold your gold offshore. If your country resorts to blatantly socialist power grabs like this one, you just take your capital out of the country, simple as that.

  5. Jojo99 says:

    Barry – Your post from a few hours back (from my RSS feed):

    http://www.ritholtz.com/blog/2009/01/4-crashes/

    gets a

    Not Found
    WTF, dude? Why are you harshing my mellow?

  6. Hume says:

    I hear you jswap. Btw, according to Milton Friedman and Anna Schwartz, the amount of gold outside the Treasury and the Fed in 1933 was $1,220 million. Out of that, $287 million or 23% was not turned in to the Treasury at $20,67, but mainly retained illegally and possibly converted later at $35.

  7. DL says:

    The issue here is fundamentally that of currency devaluation, and contracts that make provision for a course of action to be undertaken in the event of devaluation.

    It seems that the way for the government to avoid the legal issue (that was faced by the Supreme Court) is to (a) devalue the currency slowly, rather than abruptly, and (b) understate the actual rate of devaluation.

    This, of course, is what we have seen, and will continue to see.

  8. algernon says:

    This was an egregious example of government lying to its people. The US gov’t had promised that a US$ was redeemable for a set amount of gold. So much for building confidence, FDR, the “all we have to fear” con man.

    Rumors that FDR would do this had a lot to do with the last run on banks that provoked the banking holliday. FDR & Hoover both contributed to the deepening & lengthening of the Depression tremendously

  9. ronin says:

    So I guess NYT is setting us all up for something. Obama is coming into office and NYT is spinning its propaganda machine.

    I can see the headlines on Alex Jones’ site now, “Gold grab coming!” or “Obama’s Same Old Deal!” or maybe “NAU currency just about to be introduced, Dollar worth lint!”

    Sooner or later the conspiracy theorists will get it right–everyone gets something right once in a while.

  10. dgov says:

    Spot on, jswap. Spot. On.

  11. AGG says:

    FDR was adept at PR. The common people swallowed it but the rich knew it was coming and hid their gold or sent it overseas. Cheating the American people out of a fair gold price was quite a scam. I still wonder if it really helped our country or not.
    At any rate, we are here. Read this and weep:
    http://www.regressiveantidote.net/Articles/So,_How'd_You_Like_Your_Beer.html

  12. Minmex says:

    Link not working for me in Opera, Firefox, or GoogleChrome. Do I have to be a NYT subscriber?

  13. gamingthemarket says:

    We mentioned the Gold Reserve Act being part of a fiat money system which is designed to fail. It is a good example of what a future police state can do:

    Our Engineered Market Meltdown: Part 1
    http://www.gamingthemarket.com/2008/10/end-of-monetary-system-videos.html

  14. Pat G. says:

    Once the government recapitalizes everyone, they will need to be recapitalized too. Not only are they currently spending our children’s futures they are confiscating our savings. They confiscated gold once and they might try it again. I will take my chances. We have learned alot about our government’s inner workings since the 30s and are not as naive. We have all been effected by the government’s shenanigans including soldiers and police. While they follow orders, it is not blindly. Does anyone really believe that they would turn on average citizens like themselves, neighbors or family?

  15. jrhyno says:

    RE: GMS first post. I talked at length with a coin shop owner here in Baltimore before Christmas. He stated that he wasn’t doing any business, because of the scarcity of gold coins or bullion. The mark-up on anything was tremendous.

    On a different tack on this subject, this BR post is now the 3rd reference to some sort of gold re-valuation that I’ve seen since Nov. The first one is here:
    http://www.moneyandmarkets.com/the-g-20s-secret-debt-solution-27996
    and I swear that it sounds completely crazy, but it might provide a work-around to the global meltdown.

    Here is a link to the second one:
    http://www.kitco.com/ind/nadler/jan162009B.html

    Nadler mentions it at the end of his piece.

    So BR, I’m wondering why you posted this piece? Do you see something really strange coming to pass with gold, the gold standard, etc?

    JR

  16. That was a sad time and a sad turning point for America

    @Pat G. Says: January 19th, 2009 at 11:24 pm

    We have learned alot about our government’s inner workings since the 30s and are not as naive.

    Yes, many Americans have invested as much in lead as they have in gold and probably won’t accommodate being robbed blind the next time around.

  17. gamingthemarket says:

    Pat G. makes a good point, but also consider how the police treated peaceful demonstrators at the RNC/DNC rallies during the election. They have their marching orders and are conditioned to think of peaceful demonstrators as domestic terrorists. Acts of civil disobedience have been reclassified under the Patriot Act. Argentina’s police trampled grandmothers who rallied in the streets during their banking failure of 2001:

    Our Engineered Market Meltdown: Part 2 (Argentina)
    http://www.gamingthemarket.com/2008/10/our-engineered-market-meltdown-part-2.html