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18+ Facts about Gold

    Precious Metals 101

    Gold, and silver, have been used as money for over 5000 years. Here’s 18+ facts about the stuff.

    18+ Facts about Gold

    • 1. Pure Gold: It’s possible to produce gold to a purity of 99.9999%. It takes 480 grains of gold to = 1 ounce of gold. Gold is nonreactive to air and water and doesn’t tarnish making it the perfect currency.
    • 2. Gold and Silver became fungible (interchangeable by weight) around 650 B.C.
    • 3. Since 1493, 91% of all gold mined has been produced from 1900 to the present day.
    • 4. The United Kingdom adopted a gold standard in 1821 with the release of the gold sovereign coin.
    • 5. In 1854, the San Francisco Mint was built to serve California’s “gold rush” miners.
    • 6. During the “classical gold standard” period of 1880 to 1914 U.S. inflation only rose 0.01%.
    • 7. In 1912, a $20 gold coin could buy a suit. Today, a $20 gold coin can buy a suit.
    • 8. After its creation in 1913, the U.S. Federal Reserve took over the US Treasury Department’s role of currency creation. The newly formed US Central banking system reduced the backing of U.S. currency with gold from 100% to 40%. U.S. dollars are not backed by gold. The U.S. Federal Reserve Note (today’s “dollar”) is merely a paper note that’s designated value ($1, $2, $5, $10, $50, $100) represents an amount of U.S. debt. In other words, modern paper dollars are actually IOU notes. Before 1913, all paper dollars could be redeemed in physical gold coins at banks. Since 1913, the U.S. Dollar has lost over 95% of it’s purchasing power. ie; inflation.
    • 9. After the stock market crash of 1929, people began to redeem their convenient paper dollars to physical gold.
    • 10. In 1933, US president Franklin D. Roosevelt signed Executive Orders Pertaining to the Regulation of the Acquisition of, Holding of, or Other Transactions in Gold making it “illegal” to own gold. Gold ownership by U.S. citizens, excepting numismatic(collector) coins and jewelry, became illegal by Executive Order 6102 on April 5th, 1933. A month later, on May 10th, 1933, $300 million of public gold coin and $470 million of gold certificates were taken in by U.S. banks in return for paper dollars. Some citizen actually had their gold confiscated by the government. It wasn’t until 40 years later, on Dec. 31st, 1974 that U.S. President Gerald Ford revoked Franklin’s executive order declaring gold, once again, “legal” for common citizens to own, buy, and sell starting on January 1st, 1975.
    • 11. In 1934, U.S. currency lost a whopping 40% of it’s purchasing power overnight when gold was officially revalued from $20.67 to $35. per ounce. Raising the value of gold, after declaring it illegal for common citizens to own, added 69% to the Federal Reserve Bank’s balance sheet.
    • 12. In 1944, the U.S. Dollar gold backing ratio was set at 35% as per the Bretton Woods Agreement among 44 allied nations. The famous conference yielded an accord that pegged world currencies to the U.S. Federal Reserve Note. After WW2, much of Europe’s gold was being held in Manhattan bank vaults. During 1959 to 1971, those countries reclaimed 50% of their gold held by the U.S.
    • 13. On August 15th, 1971, U.S. president Richard Nixon took the U.S. off the Bretton Woods system. U.S. debt owed to foreign countries was no longer honorably paid back in physical gold. Those nations were forced to accept paper dollars as payments of the U.S. debt to them. Nixon also devalued the dollar by revaluing gold to $38.00 an ounce in December of 1971. By 1971, the ratio of printed Federal Reserve Notes to U.S. gold ratio was about 12 to 1. The U.S. government claims to hold a significant amount gold, although without an official audit of the U.S. gold holdings at Fort Knox and West Point since the 1950s, it’s hard to confirm. What we do know is that for the U.S. to back the dollar with gold to even 10% would revalue the price of the yellow metal to the moon. The average life span for currencies not backed by either physical gold or silver is 35 years. The dollar became a fiat currency on August 15th, 1971.
    • 14. In 1973, the U.S. government, under president Nixon, again devalued the Federal Reserve Note by revaluing the price of gold to $42.00 an ounce on February 12th, 1973.
    • 15. The Swiss franc was the last currency backed by gold when it became fiat in 2000.
    • 16. All central banks hold gold in reserve as a primary global currency. The IMF(International Monetary Fund) holds 3000 tonnes of gold “for reasons of financial soundness, but also to meet unforeseen contingencies.”
    • 17. Legal or Lawful? By law, gold is the only constitutional money: All States are in violation of Article I, Section 10 of the U.S. Constitution. “No State shall…coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts.” In 2011, the State of Utah declared U.S. silver and gold coins as legal tender in 2011. Kansas and South Carolina did the same in 2013. The State of Oklahoma in 2014. Arizona in 2017. Since then, many more states have passed laws recognizing gold and silver as legal tender. ie; money.
    • 18. Gold has no 3rd party credit risk. Gold is both a currency and a commodity. Throughout recorded history, every single paper currency ever issued eventually lost 100% of it’s value. Got gold?