first majestic silver


August 26, 2002

What is a "buck?" The term's origin may interest you. It seems that well over a hundred years ago, in Oklahoma, George Washington Miller, a budding entrepreneur, started what became America's first theme park. Called the "101," it featured bareback riders, Indian raids, roping, bronc riding, fake bank robberies, and a host of other amusements to thrill the johns. The show had a lot of employees, who lived on the property, and who shopped at company stores for their clothing, food, and life's necessities. There were no cars with which to go shopping. The park's owner printed "bucks," as scrip for his employees to use for purchases at the company store. The term "buck" has stood the test of time, and we still use it as a synonym for "dollar." What is a dollar, or buck?

It gets a bit more complicated at this point. Congress enacted the "Coinage Act" in 1792, which fixed the dollar at .7734 troy ounces of silver, which is what the US silver dollar had, when it was made. That is the only definition of the dollar there was originally. One would think that quarters would be a fourth of that, dimes a tenth that, and they were for about 50 years. In 1853, half dollars were changed to contain .3617 instead of .39, quarters .1808 instead of .19, and dimes .07234 instead of .077 ounces of silver. Early day theft? I guess so.

The gold content of the dollar has been changed a few times also, but the final value, as of 1932 anyway, was one ounce of gold equaled 20.67 dollars. The law states that "United States coins and currency are legal tender for all debts." Get it? In 1985, the "Gold Bullion Coin Act," ordered the US mint to produce one troy ounce gold coins with the imprimatur of $50, half ounce gold coins of $25, quarter ounce coins of $10, and tenth ounce coins of $5. Hence we have the Gold Eagle, which is perhaps one of the most beautiful coins in the world. It is very similar to the famous "double eagle," which was last produced in 1932. Production was stopped, because FDR made gold ownership illegal, ordering all holders of such to turn theirs in, to be exchanged for a $20 paper bill. After that, FDR raised the price of gold by 40%, which was one of the greatest thefts by government of its citizens in history. Millions did, and millions didn't, but confiscation was never even tried. It was an order, which few obeyed, probably. Coin dealers have numismatic double eagles for sale, (any price over $350 is robbery) along with fake ones that the communists made in the late 1970's and early 80's. They contain .9675 ounce of gold in them, fake or real.

At the same time, the "Liberty Coin Act," also of 1985, ordered the mint to produce what we now call the American Silver Eagle, which is denominated as $1. It features the famous 'walking liberty' on the obverse, as was featured on older silver coinage of half dollar denomination, and on the reverse is the US bald eagle crest, topped with 13 stars, signifying the original 13 states. Miss Liberty isn't walking on the double eagle.

Well now, isn't that nice! These "dollars" or "bucks" are legal tender, and usable for all payment for debts, according to law. This means that if a seller is willing to accept a US (silver eagle) DOLLAR COIN for something worth $6, it is perfectly legal. If a seller wishes to accept a US 50 DOLLAR COIN (one ounce gold eagle) for merchandise normally selling for $350, and show a loss on his books, it is perfectly legal. If a seller of real estate was willing to accept 500 - $50 face value gold eagles (which are official US coinage) for a $160,000 piece of property, it is legal. The dollar is an official trade vehicle, and the $50 gold eagle is also an official US minted coin. The official US minted coin says it is $50, and who would be the buyer or seller to question that? The seller may wish to store his $50 gold coin, and deposit a $50 bill when he goes to the bank, but so what? Both are officially $50. Caveat Emptor means "let the buyer beware," and who is to dictate what prices are paid for anything?

A friend of mine owed $100 (true story) to someone. He placed 5 silver eagles on a table, along with a $100 bill, and offered the man his choice. He instantly took the silver eagles, saving the man $70. Most waiters who are left a silver eagle tip consider them to be worth at least $50, they are so beautiful. I will be on vacation when you read this, and will be back Sept 5th. I am taking a supply of silver eagles with me, and plan on having some fun with them.

So what is a buck? A buck is slang for a dollar. What is a dollar? It reminds me of an old Jimmy Durante (RIP) routine. He was asked, "What is the Grand Canyon?" His reply was, " The Grand Canyon is a hole in the ground, and what is a hold in the ground? Nothing, and if you think I am going to sit around and talk about nothing, you are mistaken." What is the dollar? It is absolutely NOTHING. It is "legal tender," that's all. The dollar is the denomination we use to pay our debts. It is a decreasing length ruler that we measure our wealth, surplus assets, value of property, price paid for gasoline, milk, bread, and homes. The dollar is a faded shadow of its former self, and its purchasing power decreases daily. It is a "leaky vessel" the Bible speaks about, and which is a poor place to store wine. The "legal tender" dollar is a poor place to store anything, as its power to purchase things decreases daily, just as a bucket with a hole in it. The bucket may be dripping a drop a minute, a drop an hour, or a drop a month even, but it will eventually be empty, and purchase nothing.

The omnipresent US government is now printing dollars in various colors, supposedly to thwart the drug trade. Pink dollars overseas, and green ones here? Maybe the opposite, I don't know, nor care. The point is that the fraud continues, regardless of the color. The dollar's value is represented by the "full faith and credit of the US government." Isn't that reassuring? The US government owes more than any other government or nation on earth! It is estimated that the US government owes from $10 to $20 TRILLION. It regularly gives dollars to anyone who wants them, and seems especially fond of people and nations who probably won't repay them. Small Business Administration loans are notorious fails, as are loans to third world nations, euphemistically called "developing nations."

"Developing nations," are "developing," as surely as the dollar is increasing in value, or Humpty Dumpty can be put back together again. Why save in a decreasing value denomination?

Tennessee Ernie Ford used to sing about "owing your soul to the company store," in his song, "18 Tons." The inference was that the coal mining company had their employees trapped into buying from the company store, because others were too far away, and virtually impossible to access. The "company" then, raised prices to extreme heights, further increased its profits, and debased the miner's well being. From what I hear, some mining companies did just that, but most didn't. In Colorado, the gold miners would go to Silverton, Ouray, Leadville, or Telluride to spend their money as they saw fit…usually on girls and booze, but it was their choice. The American citizen is in virtually the same boat as owing to the company store, because we owe to the government dozens of various taxes, and we are locked into paying with their scrip, called dollars.

As our wages go up, we are trapped, just as was the miner. Our wages must go up to stay alive in a land with decreasing value currency. As this happens, we automatically are in a higher tax bracket, which is the same as the company store raising prices to shaft the miners. We make less value dollars, and must pay more of them as taxes, and that other fraud, Social (in)Security. Like the miners, we are in a "Catch 22" situation. What to do?

Simple…to a degree anyway. Just get the hell out of dollar denominated instruments…if you have any extra ones after living expenses. Never buy another new car, which goes down thousands by merely driving it around the block, and making it "used." Keep that 30 year mortgage with locked in monthly payments. The payments will seem ridiculously cheap as time passes. Save surplus assets in things, not pieces of paper with ink on them. I happen to like gold and silver, with a few old cars, antiques, and original art thrown in, but suit yourself. Protect yourself. No one else will.

According to the Talmud you should keep one-third of your assets each in land, business interests, and gold.
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