From a column I wrote 19 years ago… I love to investigate funny money. “Red Dog”, and “Blue Pup,” monies, are actual facts of history. I can’t find any of either, even on the internet, but they did exist, when banks actually could issue money. New York banks, issued dollars, just like the Fed does currently. It was very common for banks to issue money, with their names on the bills. Issuing banks, had to have adequate reserves to cover the issuance, and in the case of New York, the free system of banking wasn’t quite so free. Banks in New York State, which wanted to issue money, had to approach the state comptroller for permission. The comptroller required issuing banks to deposit securities to the state, to be certain that the dollars were covered, and that a responsible party was issuing them. When approval was obtained, the dollars that bore the certification of the comptroller or his officer, had a large red seal affixed to their backs.
These notes became known as “Red Dogs,” or “Red Dog money.” The public didn’t take to them very well, since they weren’t issued by the U.S. Treasury. The dollars were good, and were backed by securities, physical cash, or even gold. Compare that with today’s ‘money,’ backed by Biden’s full faith, any other being illegal. This brings us to “Gresham’s Law.” Sir Thomas Gresham, was the founder of London’s Royal Exchange in 1566. His law states that, “Bad money drives out good money.” In Michigan, the same thing applied to banks issuing money. Michigan money, became known as “Blue Pup money,” and like Red Dogs, they were both good, but weren’t appreciated or favored by the public. Bad money, (U.S. Treasury dollars), drove out good money, issues by banks and fully backed.
Gresham’s Law applied, when the U.S. Mint ceased making 90% silver dimes, quarters and halves in 1964, substituting them with base metals. The silver coins disappeared like magic, and are still in existence today, as collectables, at a premium over their contents in silver. Bad money drove out good money, thanks to U>S. Treasury action. In 1979, the Treasury issued the Susan B. Anthony one-dollar coins, which looked almost exactly like quarters, fooling so many millions, that they were removed in 1981. They were ‘bad money,’ so they simply ceased to exist, but are collectable now, even though they are made of base metal. In Canada, the government found out that their one and two dollar paper bills, had short lives, so they began making $1 and $2 coins, which have a long life. The $1 coins are called “Loonies,” because they have a picture of a loon on them, and the $2 coins are called “Toonies.” It would save the U.S. treasury a lot of money to follow our Canadian neighbors, by following their idea.
Over a hundred years ago, J.P. Morgan saved the U.S. economy, which had about fizzled, thanks to goofs by the U.S. Treasury. It was selling bonds for paper dollars, and using the money to buy gold. It then sold more bonds, converting the proceeds into gold, and allowed U.S. citizens to instantly convert their bonds into gold. People were acquiring gold for the bonds, depleting the U.S. Treasury of gold needed to back the dollar. That’s ancient history. Ft. Knox has no gold in it, despite what “Goldfinger” inferred, and when the World Trade Centers went down, there were thousands of pounds of gold in their basements, which were salvaged, but the tags on them said that the U.S. was merely, ‘holding the gold for other nations.’
As an aside, I was in the theatre business for eleven years, with several movie theatres. As an exhibitor, I was always invited to screenings of soon to be released pictures, so as to know whether to bid on them or not. I was watching “Goldfinger,” and if you remember, Sean Connery, 007, had been knocked out, and when he awoke, didn’t remember where he was. He asked Honor Blackman who she was, and she smiled and said, “My name is Pussy Galore,” and I am laughing as I write this. No other exhibitors were there, and when it came time to book Goldfinger, I knew what was going to happen, but other exhibitors were in the dark. After the bids were in, it opened at Philly’s downtown Fox, and broke all the records. I had it, and they didn’t. I coined money on Goldfinger!
Through fake ‘elections,’ Putin now claims part of Ukraine is part of Russia, and he is losing his illegal war. He threatens nukes. China’s economy continues to crumble with its yuan worth seven cents, the riots continue in Iran, America’s vice president, doesn’t know the difference between north and south, and Biden is equally embarrassing. I’ve never seen a better time to get OUT of U.S. dollars or stocks, and into gold. The Dow has now lost almost 10,000 points. Is it flirting with 1929? No one can predict the future, even ten minutes from now, but common sense, indicates that pieces of paper’s promises, often times aren’t worth a ‘hill of beans.’
Don Stott don@coloradogold.com or 1-970-249-4646, if you wish to talk.