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editorial vault |
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Uploaded on Wednesday 30 April, 2014 to the money trust |
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Demonetizing silver currency for the gold standard |
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Abraham Lincoln was gone by 1866. America's economy was in a period of transition after the country had gone through the hardships of the Civil War. People required liquidity to rebuild their lives which they could obtain through their own assets or through the acquisition of bank loans.
The process of retiring the debt-free United States notes (greenback) had begun after Congress passed the Funding Act of 1866, thereby contracting the money supply. America thus returned to a specie standard "hard money" of bimetallism incorporating gold and silver mint reserves. But, with the market price for silver depreciating to such an extent, the bimetallic standard was short lived. Gold, however, remained strong. America was on course for a gold standard after Congress passed the Coinage Act of 1873, effectively demonetizing silver and contracting the money supply further.
There are various debates about what caused the downfall of silver. Some put it down to supply and demand mechanisms with miners discovering vast quantities of silver on America's western territories, whilst others refute this by declaring that the money trust conspired to devaluate silver and appreciate the price of gold to drive Congress towards adopting a gold standard. The reasons given for this theory are that the money trust controlled gold, since it was scarce, whereas silver they could not control as it was plentiful and easily available; and the gold standard held the key to claw back control by snatching the money supply power out of government hands and force Congress to reinstate their central bank, which Andrew Jackson killed off in 1836.
There is considerable scope to this theory when one considers that the worldwide gold price is set by just a handful of banks: Goldman Sachs, UBS, Barclays Plc, Bank of Nova Scotia, HSBC Holdings Plc and Société Générale SA. |
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