Tomorrow the House will vote on HR 5512 for making pennies out of steel with copper coloring instead of zinc-copper alloy. While this reflects their new reduced value, I think it’s a sad and terrible thing. They’ve completely unhinged the value of money from the value of precious metals. This is up for a vote in the House tomorrow. If they can make pennies the way they can print bills, our currency has lost all traction in its slide to zero value. The bankers win. The only thing holding the dollar up is perception. Any account you have that is valued in dollars (IRA, 401k, stocks, bonds) would be better off if you transferred it to an account in some other currency or used it to purchase material goods, precious metals, real estate, or offshore hedge funds.
The appearance of this bill is evidence of the wrong direction we’ve gone for a third time in our nation’s history with regard to fractional reserve banking. For now, the only thing propping the dollar up is its tie to the value of oil, and you see how that’s slipping, too. As soon as oil is purchased by some other currency, the dollar may crash harder than it did in 1907. The only thing keeping that from happening is our military might. You can see the proportion of our Federal budget which we’re spending on that is putting a strain on every taxpayer and the fabric of our economy.