A 50-Year Lesson on Hard Money

I never met President John F. Kennedy. I was all of 5 years old when the man was elected U.S. president in 1960. I was eight years old when he died in 1963, 50 years ago.

I saw President Kennedy one time. It was 1962, I believe. I was about 7 years old. Kennedy was in Pittsburgh for a political event. He was scheduled to fly out of Greater Pittsburgh Airport (which was not “International” back then) on a Sunday morning.

Here’s what happened that day – plus, a 50-year lesson on hard money…

With the recent 50th anniversary of the death of President Kennedy, it strikes me that JFK was the last “hard money” president.

Bright and early, my parents packed me and my three sisters into the family station wagon — a powder-blue Pontiac, with tail fins. We went out to watch the presidential motorcade. “You’ll remember this for the rest of your life,” said my late-deceased mother. Yep. Still do.

Old “Greater Pitt” was an elegant, elaborate, art deco-style place. The main entrance to the terminal was constructed out of polished gray granite and brushed aluminum. A long driveway led up to the front facade. For about 200 yards, the center median of the road was covered by flower beds. There were wide sidewalks too, which was odd considering that pretty much everyone drove to the airport — then as now.

My dad knew a federal judge who was somehow connected with the U.S. Secret Service. By prior arrangement, the King family had a more or less “reserved” spot right along the presidential path of intended movement. We arrived early and took up position along the road, near the terminal.

We stood around in the warm sun and waited. My mother and father chatted with Secret Service guys and cops from various jurisdictions. It struck me that so-called “law enforcement” guys often have ringside seats to big events.

As we waited, my sisters and I milled about smartly. We were intimidated by so many big people carrying large pistols. We waited some more, and it further struck me that these kind of “drive by” presidential events happen at their own pace.

Eventually, we heard a buzz. There was low-level cheering and applause from the distant crowd. I strained to look down the road, past the flowers. Police radios crackled nearby. Secret Service guys and state troopers started acting jumpy, looking around at the crowd with their heads on that proverbial swivel. There was lots of “cop face” on display.

Then I saw it — the presidential motorcade. In the lead was a vanguard of motorcycle police officers from the City of Pittsburgh, County of Allegheny and Pennsylvania State Police. The riders were in dress uniform, all spit and polish. The bikes were hospital clean, with mirror-like leather seats and glistening chrome and brass. The engines roared like thunder. On the rear of each motorcycle was a small American flag mounted on a staff, with red, white and blue flapping in the breeze.

Behind the motorcycles was an open car full of more cops and a gaggle of local dignitaries, grinning from ear to ear. Then came the presidential limo, with JFK (but no wife Jacqueline) in the wide-open back seat. Then another open car full of cops and smiling digs. Then more cops on motorcycles. Lots of guns and horsepower.

President Kennedy was sitting up high in the limo. He was boosted up on some sort of raised seat or cushion, evidently. Kennedy looked tanned and healthy. He was beaming. He sat there looking around at the crowd as the limo drove slowly. He smiled, and waved at people.

I suppose I could say that Kennedy looked right at me and smiled. He looked at a lot of people and smiled, of course. In my case, I happened to be standing at the curb when the presidential car drove by. I was maybe 15 feet away from Kennedy, with nobody between him and me.

Today, we can only speculate on the kind of country that might have been had JFK not been assassinated. Of course, it’s the same thing with what might have happened post-Lincoln, post-Garfield or post-McKinley, too. Killing a president — as with regicide since time immemorial — bends the arc of history in ways we can scarcely begin to comprehend. We know what happened, after a historical fashion. Or do we?

A presidential life cut short — and with it, the heart of a political administration — makes for all manner of counterfactual speculation in a “what if” sort of way.

Indeed, as the superb instructors at the Naval War College used to emphasize, sometimes you cannot truly understand what happened with a historical event unless you take the facts and dissect what did NOT happen. (For example, “what if” Japanese carriers had been able to launch more fighters as air cover during the Battle of Midway?)

There’s history and there’s karma, too. Not long before he died, President Kennedy approved the assassination of President Diem of South Vietnam. Not long after the JFK assassination, President Johnson escalated the Vietnam War.

As the 1960s wore on, the country’s Roosevelt-era New Deal morphed into the Johnson-era Great Society. Paying for all of this, plus that distant Vietnam War, began to wreck the value of the dollar.

By 1967, the U.S. government was frantically pulling silver out of circulation in coinage. Then in 1971, President Nixon took the U.S. off the gold standard. By 1973, oil prices quadrupled, and by 1979 they quadrupled again. What saved the U.S. economy was an international agreement for oil to be priced in dollars. (That deal is wearing thin, by the way.)

It’s not an overstatement to say that post-JFK, from the mid-1960s to today, our economy has been a credit casino based on Federal Reserve Notes and the government’s promise to tax people in the future to pay for overspending now.

With the recent 50th anniversary of the death of President Kennedy, it strikes me that JFK was the last “hard money” president. Certainly, Kennedy’s was the last administration in which the American people used silver coins for the duration and carried silver certificates (remember those?) in their wallets.

Consider silver coins. Back in Kennedy’s day, a 25 cent “silver” quarter (actually, 90% silver and 10% copper alloy) was worth… well, 25 cents. Today, just based on melt value of metal, an old silver quarter is worth about $3.60 — meaning the current value is about 14.4 times the original value. Or look at it this way — we’ve seen a 93% erosion in the purchasing value of an “old” silver-based dollar versus a new one over the past 50 years.

Or look at the price of gold. In Kennedy’s day, the monetary value of gold was $32 per ounce. Today, it’s about $1,250 — depending on the day, of course. It’s a diminishment of value by a factor of nearly 40, respecting the dollar versus gold. That’s over a 97% decline in 50 years.

Or oil? Back in the early 1960s, a barrel of crude went for $2 or so. Today it’s north of $108 (Brent quote). It’s a change by a factor of 54 — a decline of 98.2% in dollar purchasing power for oil.

Looking back, we may or may not know the truth — and the whole truth — about what happened with JFK long ago. But we can clearly see what has happened with the value of the dollar over 50 years. Its value has plummeted.

Looking ahead, we still may never know what happened with JFK. People have died off. Evidence has gone missing. The “conspiracy” industry has picked up a bad reputation, which is probably what the conspirators always wished would happen.

But also looking ahead, I foresee more and more inflation and further declines in the value of the dollar. I see no coming correction for government overspending and no way for the future economy ever to repay the debts of the past — absent another 97% or so reduction in the value of the dollar.

That’s why we keep looking for ideas to help preserve your wealth and keep you ahead of the inflation curve. Some periods in the market are better than others, but we’re always looking for new ideas in things that will hold their value over time.

That’s all for now. Thanks for reading.

Byron W. King
for The Daily Reckoning

P.S. Are you ready for the kicker? Over the past 50 years the U.S. dollar has lost “most” of its purchasing power, no matter which way you look at it. Over that same timeframe, however, one government sector has seen a predictable, and potentially profitable, ramp-up. I recently gave readers of the Daily Resource Hunter email edition an opportunity to discover this sector for themselves – including one incredible profit opportunity. If you didn’t get it, you missed out on something big. Don’t let that happen again. Sign up for the FREE Daily Resource Hunter email edition, right here.

Original article posted on Daily Resource Hunter

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Byron King

A Harvard-trained geologist and former aide to the United States Chief of Naval Operations, Byron King is our resident gold and mining expert, and we are proud to have him on board as the managing editor of Whiskey & Gunpowder.

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