“Silver and Gold Have I None”

These were words spoken by Peter to a lame beggar.  Yet what Peter did have he gave freely to the lame man, by restoring the man’s ability to walk and produce for himself and his family.

Throughout history men and women have searched for wealth as in silver and gold instead of pursuing true wealth.  This is because to acquire true wealth requires work, education, mutual respect and a faith in the future.

Living in Nevada, silver and gold are part of our history.  Virginia City, sprouted up about 10 years after the California Gold rush.  The Comstock Lode has been reported as having produced more than half of all the precious metals in the United States by the mid 1870’s.  This influx of precious metals reportedly supported the northern cause in the Civil War and deluged the international precious metal markets driving economic changes world-wide.  In 1873, the federal government demonetized silver because of the large amounts of silver flowing out of Nevada.

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This wasn’t the only time that silver had become worthless.  In the first book of Kings 10:21 it is reported that “No silver was used, since it was not considered valuable.”  The wealth that poured into the kingdom during King Solomon’s rule was massive, thus making silver so worthless it wasn’t used for anything valuable.

Silver isn’t the only precious metal which has been made worthless or nearly worthless in history. On April 5, 1933, shortly after being sworn into office, President Franklyn D. Roosevelt signed an executive order making it illegal to own gold in America. This order forced Americans to turn their gold in for $20.67 and ounce. The only exceptions to this confiscatory order were gold coins with dollar values stamped or engraved upon them, jewelry and dental work.

This executive order was ratified and become the Gold Reserve Act of 1934. It was upheld by the United States Supreme Court in order to keep the Federal Reserve Bank (not part of our government) to maintain its 40% gold reserve. This act helped restore the gold reserves required of the Federal Reserve Bank by the Federal Reserve Act of 1913. If Americans didn’t comply with the Gold Reserve Act a criminal penalty of $10,000 and/or 10 years in prison was imposed.

This made gold worthless to most Americans.  Market value of gold was $35 an ounce but the mandatory confiscation act paid only $20.67.  The prison time and penalty didn’t make it worthwhile to hold or sell gold to anyone besides the government and so few people made owning gold a priority because it was valueless.

In 1971 President Richard Nixon took us off the gold standard which had been fixed at $35 per ounce by 44 nations at the Bretton Woods agreement in 1944.  Nixon did this in retaliation to France who had begun to trade in their reserves of U.S. Dollars for gold. This resulted in a down draw on the U.S. Gold Reserves. As the money supply issued by the Federal Reserve had increased nearly 10% since 1944, West Germany left the Bretton Woods agreement and other nations began to demand gold in exchange for their U.S. dollar reserves. In response to this Nixon did three things on August, 15, 1971

1. He ordered the gold window to be closed supposedly to keep foreign governments from exchanging their U.S. Dollars for gold.
2. He ordered a 90 day freeze on wages and prices in attempts to counter the inflation the Federal Reserve had caused by putting too much money into circulation without the proper gold reserves to back it up.
3. He placed a 10% import tax on all goods coming into the United States in an effort to keep American made goods competitive.

The result of what has been called “The Nixon Shock”, was stagflation: an increase in inflation combined with sluggish economic output and rising unemployment rates.  In other words, stagflation is when your money isn’t worth what it was when you earned it, the availability of goods and services is limited and unemployment is high.

Today many believe that hoarding gold and silver is the answer to stagflation, volatile stock markets, uncertain political times and social unrest.  But history is important to learn from because it is often repeated.  If you believe for one nano-second you won’t be penalized, fined, imprisoned or have your money inflated or even confiscated, you need to carefully examine and study history.  And if none of this happens, consider how safe you will be from the looters, rioters and bandits who will come after you to steal your mother lode when you start to use your hoarded treasures to barter or trade for necessary living commodities.

Life is obviously more than silver and gold.  Life is about learning to produce value which others need and desire.  It is about respecting others for what they have to contribute and having a better and brighter vision for the future than what you have today.  Life is about hard work, education, mutual respect and faith in the future, things which silver and gold can never provide.  Interestingly enough, hard work plus education along with a healthy mutual respect of both yourself and others multiplied by your faith can provide you with sustainable wealth.

So even though I, like Peter, have no silver and gold to give to you, I do have something of value from which you can benefit.  Here it is:  Work hard, get educated about how money really works, respect yourself as well as others and develop a faith which ensures that your future will be better than your today and you will have wealth which will sustain you eternally.

Dr. Tomas P. McFie

Most Americans depend on Social Security for retirement income. Even when people think they’re saving money, taxes, fees, investment losses and market volatility take most of their money away. Tom McFie is the founder of McFie Insurance which helps people keep more of the money they make, so they can have financial peace of mind. His latest book, A Biblical Guide to Personal Finance, can be purchased here.