Raw Coin Purchases Come with Risk
■ Shouldn’t I be given the time to submit a raw coin I just purchased to a grading service to ensure it is graded correctly before I decide if I want to return the coin or not?
I can’t imagine a coin seller allowing anyone that option, but if someone were to give you that opportunity in writing, then that would be fair. Otherwise, accept the fact that you have purchased a coin based on someone else’s opinion rather than on the opinion of a grading service. You might want to ask, in advance, why that coin had not been sent to a grading service prior to it being offered for sale.
■ Was the U.S. dollar actually backed by gold at the time of the Bretton-Woods Agreement?
Although Gold Certificates were no longer in circulation even before World War II, the circulating U.S. dollar was still backed by an estimated 20,000 metric tons of gold at that time.
■ Didn’t government spending deficits impact the international trade in gold at that time? Even if gold coins weren’t circulating, didn’t we remain on a gold standard?
Government deficits are actually encouraged when you have a fiat money system since the amount of money in circulation can be artificially expanded. As a plus, such a system also encourages faster economic growth; however, to prop up such a deficit-oriented system, it also involves manipulation of tangible asset values, including that of gold.
■ Are we less stable economically today than at the time of the Bretton-Woods Agreement due to our fiat money system?
The system through which the U.S. guaranteed the dollar could be converted into gold ended with the Nixon Shock when Richard M. Nixon was U.S. president. The president acted without consulting any advisers or the American-dominated international monetary institutions, taking the U.S. off the gold standard. Since that time, monetary crises and recessions have continued to be almost in a cycle. Foreign exchange speculation is commonplace. The spot price of gold and silver bullion and coins as commodities has skyrocketed. This may make me appear to be a “hard money” proponent, but I am only trying to illustrate the many problems our fiat money system brings to the table.
■ If our present monetary system is based on governmentcontrolled fiat money, couldn’t it be argued that cyber currency is the next step in this “system?”
The theory behind the many cyber currencies is that they are fiat money, but they are an alternative privately issued fiat money to government-issued fiat money. In both situations, the money itself is worthless. A gold or silver coin is always worth its intrinsic value. A base metal coin, bank note or electronic currency has no value itself, although it can be converted to something tangible such as land, groceries, gold and the like as long as someone is willing to accept it. If the public’s faith in a fiat currency is lost, that fiat money can no longer be converted to something tangible.