Thursday, July 18, 2013

i spy

I've been watching episodes of the 60's series "I Spy" on DVD.  Each evening I try and watch one episode of this series featuring Robert Culp and Bill Cosby as secret agents.  I remember back when it was on prime time my best friend, Michael Jones and I used to pretend we were Alexander Scott and Kelly Robinson, making missions of our own.

Last night I watched an episode I found interesting because of its relevance to today.  The agents job was to keep a U.S. diplomat out of trouble while he was in Japan meeting with someone high up in their finance department.  The purpose of the meeting: to dissuade Japan from redeeming U.S. dollars for gold.  The reason: because as Scott put it, the reserves at Fort Knox were a bit low and the redemption of paper money for gold would put too big a dent in those reserves.  In other words, the U.S. didn't have enough gold to give in exchange for the dollars.

How many dollars was Japan planning on redeeming?  $3 million. I found that rather funny, being a drop in the bucket compared to our current national debt that is roughly 5,333,000 times that amount. But back then, everything was cheaper. $10,000 was considered shock value when used as a figure for the cost of something, or a reward being offered. $100,000 meant you could probably retire if you had that much. So I suppose $3 million was quite the sum of money in those days (1965).

Perhaps Richard Nixon happened to be watching that episode because only a few years later, he took the dollar off of the gold standard reserve so that the U.S. wouldn't have to worry about anyone trying to redeem paper for gold.

Since that time, tons of paper money has been issued with no gold in reserve to back up or support the face value of that money.  Just how much gold is there in Fort Knox, or in reserve in this country?  They're not saying. Things are probably no different today than they were back then when it came to understanding the concept of money and what makes paper money worth anything - most people have no understanding.

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