The Continental Congress of The United States, authorized the creation of, and issuance of a ‘Continental Currency’ in 1775. This was obviously before the War of Independence, and Jefferson’s “Declaration of Independence.” The early citizens needed a currency, and there was indeed a Continental Congress governing the 13 initial states. A year or so later, after the ‘Declaration of Independence’ from mother England, the war began, with George Washington as the head of the primitive, struggling forces, who began fighting the well armed British Red Coats. I have always thought that the Almighty God intended for there to be a free nation on earth, and his guiding force enabled America to win that war, impossible as it seemed as each month and year passed.
Obviously, that war for independence cost a lot of money for arms, uniforms, and rations for the troops, so continental dollars were used to wage the fight for independence. Continental dollars were not backed by anything, as current dollars now, with what then seemed to be an absurdity, as it is now, and that was and is, the ‘full faith and credit of the United States Government.’ The presses rolled on and on, turning out billions of continental dollars to pay the bills. America won the war using the iron will and divine blessing of our new found nation, but at a cost of the value of its money.
By the end of 1778, the continental dollar retained from 1/5th to 1/7th of its original value, so many had been printed. Congress attempted to stop the inflation by limiting the printing of the continental, but that didn’t work. By May of 1781, the ‘continental’ had become worth 1% f its original value, and had ceased to be used as money. Like Germany after WW I, the continental was used as insulation in primitive walls, or to start a fire perhaps. Hence the old expression, “not worth a continental.” Germany fought WW I with their unbacked currency, the ‘reichsmark.’ It was worth a U.S. quarter before that war, and after it in 1924, it took a wheelbarrow full of defeated German reichsmarks to buy a loaf of bread, and I am sure the continental had the same value. Those who had saved in continentals or reichsmarks, had saved in utter futility, as their savings were worthless, and could buy nothing. The War of Independence was fought with unbacked paper money, which became useless. WW II was fought the same way, and in less than four years, the dollar had lost 50% of its value, and never regained its pre WW II value.
Our 2018 dollar, compared to the dollar of 85 years ago, can be compared to the purchase price of an ounce of gold. In 1932, an ounce of gold was $20.67, and today the spot price of an ounce of gold is over $1300, or 65 times its price of 1932. Had you saved in dollars or bought a life insurance policy in 1932, (I guess it’s possible, since I am 84 and was born in 1934) your savings being passed on to your offspring, or cashing in at death, would be worthless. I KNOW that sounds to be an exaggeration, but let’s go back to 1958, or 60 years ago. I was 24, and can well remember those prices. A new home? $20,000. Average yearly wage? $4500. New Ford? $2500. Gallon of gas? 27 cents. The dollar today, is worth less than a tenth of its purchasing value of 60 years ago. If your parents bought you a $5,000 life insurance policy at your birth in 1958, and you are now 60. Your policy would be worth $500 in purchasing power, and the premiums had been paid regularly over 60 years in decreasing dollars. What a waste? You bet.
Oh yes, Here’s another comparison. Had you saved silver quarters in 1958, instead of paper dollars, guess what? A silver quarter today, will buy a gallon of gas, and 10,000 of them would buy a new Ford. And to carry it on, 100,000 silver quarters today, would buy a new home. This is why I own no stocks, bonds, and have no savings account. I save in gold and silver. That’s what we do, in case you need a place to get it. – David, Melissa, and Morgen are at your service.
– Don Stott – 1-888-786-8822