The Federal Reserve, JFK’s Assassination, and the Silver Dollar – Connecting The Dots.
During the year of 1963, President Kennedy began a series of Executive Actions to take back control of America’s money (and monetary policy) from the Federal Reserve that included his ordering the US Treasury to begin printing money again (something it hadn’t done since 1913) and issuing Executive Order 11110 authorizing some of this official government (not Federal Reserve) currency to include certificates backed by silver.
The critical importance of President Kennedy’s actions, this report says, lie in his following the Coinage Act of 1792 that established the silver dollar as the unit of money for the United States, and instituted the death penalty if anyone tried to debase it.
However, in barely less than a decade after President Kennedy was assassinated, all of his efforts to free the American people from the economic stranglehold put on them by the Federal Reserve (and following, exactly, the US Constitution) were undone by his two predecessors—President Lyndon Johnson, who singed the Coinage Act of 1965 smashing the American founding father’s Coinage Act of 1792, and President Richard Nixon, in 1971, who shocked the world by ending America’s obligation to pay its debts in gold.
Kennedy Was Our Last ‘Hard’ Money President
President Kennedy was the last U.S. president who defended the traditional role of silver in U.S. coinage. His successor, Lyndon B. Johnson, sowed the seeds of future inflation with his “guns and butter” spending policies (paying for rising war and welfare costs at the same time).
Barely 20 months after Kennedy was killed in November, 1963, silver demand rose so fast that Johnson opted to take silver out of most U.S. coins.
On June 23, 1965, while signing the Coinage Act of 1965, Johnson proudly stated that he made “the first fundamental change in our coinage in 173 years. The Coinage Act of 1965 supersedes the act of 1792. . . . Since that time our coinage of dimes, quarters, half dollars and dollars have contained 90 percent silver. Today, except for the silver dollar, we are establishing a new coinage. . . . The new dimes and quarters will contain no silver. They will be composites, with faces of the same alloy used in our 5-cent piece that is bonded to a core of pure copper.”
Despite saying that “silver consumption is now more than double new silver production each year,” he defied all laws of economic supply and demand by adding, “Our present silver coins won’t disappear and they won’t even become rarities. . . . If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.”
Johnson was very, very wrong. Today, the price of pre-1965 “junk” circulating silver coins is about 18 times their face value. A 1964 dime trades for about $1.80, while most U.S. dimes minted after 1965 are worth just 10 cents.
About the Author
Mike Fuljenz is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the NLG award winning Michael Fuljenz Metals Market Weekly Report. Discover more by Clicking Here Now.
LBJ and the Destruction of American Currency
Our nation’s founders had no illusions about the danger of bank- and government-controlled currency. See, for example, the following words from Jefferson:
If the American people ever allow private banks to control the issue of their currency … the banks … will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered[.] I believe that banking institutions are more dangerous to our liberties than standing armies[.]
Nearly a century later, Lincoln spoke with equal criticism of banking:
I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country … the money power of the country will endeavor to prolong its reign … until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.
Fast forward to 1961, when, during the first year of his presidency, Kennedy addressed the Secretary of the Treasury:
On the basis of your recommendation I reached the decision that silver should gradually be withdrawn from the monetary system [Congress and the Nation — Item 4841961][.]
Noteworthy from that quotation is Kennedy’s clear desire to let the record show that he had been strongly encouraged by the Secretary of the Treasury to withdraw silver from U.S. currency.
Following the Bay of Pigs, however, we see Kennedy more determined to trust his own instincts, and on June 4, the president signed Executive Order 11,110. This document amended EO10289, returning increased power to the Treasury and allowing it to directly issue silver certificates for currency rather than Federal Reserve Notes (which the U.S. uses today). Kennedy seemed to be reinvigorating America’s ties to gold and silver.
The silver certificates were issued as interest-free and debt-free currency backed by silver reserves in the U.S. Treasury — as opposed to Federal Reserve Notes, which pay interest to the privately held Federal Reserve. This order led to the issuance of approximately 750 million certificates — the last time silver certificates were printed.
Then came the presidential succession to Lyndon Johnson — a watershed moment for the American currency, as Johnson became a cheerleader for a Fed agenda and severed ties between the U.S. dollar and silver.
Just two months after Kennedy’s assassination, in his first economic report to Congress, Johnson recommended that America “expedite the release of silver from the coinage.” Johnson discontinued the issuance of silver certificates in 1964, and the process of retiring the outstanding certificates began. As if that were not damaging enough, Johnson followed with his second major monetary reform in 1965, claiming that “the growing shortage of silver” had to be addressed.
On July 23, Johnson signed the Coinage Act of 1965, smashing the founders’ Coinage Act of 1792. Whereas our Founders instituted the death penalty for debasing the currency of American citizens, Johnson arrogantly justified his move in the name of potential “coin shortages.”
Ignorant of financial history dating to ancient Rome (which made the same mistake), Johnson bellowed:
If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.
Johnson could not have been more wrong, and his advice was devastating to those who listened to him. Indeed, the Coinage Act of 1965 is what makes pre-1965 dimes valuable to this very day.
Public Law #90-29 further authorized an accelerated phase-out of silver backing for Treasury silver certificates. On a day infamous to American prosperity — June 24, 1967 — Johnson commenced a one-year sunset provision on Americans’ ability to exchange paper currency certificates for silver metal. This act would decimate the American middle class in the years ahead, expanding government’s ability to take on unsustainable debt while destroying lasting wealth for American workers saving in their own currency.
The law also allowed Johnson’s administration to jettison the precious metals that had been acquired since our nation’s formation. In 1967, the Treasury transferred 116 million ounces of silver from the supply that had backed currency certificates into a reserve created to maintain a “fixed price” in silver. Just two weeks later, Johnson’s Treasury abandoned the fixed price agenda, having sold much of America’s silver at the self-imposed price of $1.29 per ounce.
Johnson’s predecessor may well have foreseen these disasters when he warned his country that, “[t]he complacent and self-indulgent are about to be swept away with the debris of history.” And when looking at the exodus of gold from America, Kennedy foresaw “a dangerous international advantage,” according to aide Arthur Schlesinger.
If there is any truth to what the Founders said, then getting real money — aka gold and silver — into the hands of the American people is a necessary step to taking America back from our inept government. As our founders highlighted, when the American people have real money, they have the power that government needs.
About the Author
Drew Mason is a principal with St. Joseph Partners (StJosephUSA.com), a precious metals boutique that assists clients in sourcing physical gold and silver globally. Previously he worked on Wall Street for fifteen years after graduating from Wharton.
The Nixon Shock
The Nixon shock was a series of economic measures undertaken by United States President Richard Nixon in 1971, the most significant of which was the unilateral cancellation of the direct convertibility of the United States dollar to gold.
While Nixon’s actions did not formally abolish the existing Bretton Woods system of international financial exchange, the suspension of one of its key components effectively rendered the Bretton Woods system inoperative. While Nixon publicly stated his intention to resume direct convertibility of the dollar after reforms to the Bretton Woods system had been implemented, all attempts at reform proved unsuccessful. By 1973, the Bretton Woods system was replaced de facto by a regime based on freely floating fiat currencies that remains in place to the present day.