Posted on 10/09/2003 10:49:33 PM PDT by Starwind
After repeated warnings from currency analysts and market advisors (including yours truly) that the U.S. currency system is on the verge of becoming a blocked, two-tier system we now have confirmation that the country is one step closer to realizing this. When fully implemented, the new U.S. dollar will mean a "banana republic" type currency and across-the-board devaluation.
According to a CNN/Money news wire report of Oct. 7, the new U.S. $20 bills will be released this week at banks across the country. Meanwhile, the Fed and its Bureau of Engraving and Printing (BEP) will hold a nationwide series of publicity events as part of a $33 million campaign to let the world know of the new bills and to acclimate the public to their strange new appearance.
The new $20s are peach-toned with the presence of blue ink, making it the first time in almost 100 years that a mass-circulation U.S. note has prominently contained a color besides green and black. They also contain an embedded vertical plastic strip and color-shifting ink, whose appearance changes from copper to green as the bill is tilted against the light. Below is what the front of the new $20 bill looks like (from the BEP website).
So what is the significance of this change of color in the U.S. $20 note? Well according to the Feds it is designed as a deterrent to stop counterfeiters. But accordingly to currency analyst Lawrence Patterson, who authored the 1994 monograph titled "Currency Recall", which accurately forecast the new multi-colored notes, the new colored money is part of a two-tiered currency system that will have drastic implications for investors and non-investors alike here in the U.S.
Patterson calls the new notes "crayola currency" and claims they will circulate domestically while the normal green currency that we've grown accustomed to will circulate offshore all over the globe. According to commentator Terry Savage, "Two-thirds of the U.S. paper currency is circulating in foreign countries." With the coming two-tiered currency system, foreigners will continue to be allowed to use the greenback while U.S. citizens will be stuck with the "crayola currency" which cannot be exchanged.
Patterson forecasts the coming use of foreign exchange controls for the U.S. dollar domestically, which would prohibit Americans from transferring capital to any other world currency. Again, this is discussed in Patterson's now-classic monograph "Currency Recall" (which I've read and highly recommend to students of currency policy and investors seeking to retain the value of their investments).
Patterson states, "I want every one...to think carefully about this...because we are coming very, very close to the end of the freely convertible domestic dollar. They cut in value could be as much as 50%...I believe those holding gold bullion bars offshore and bullion coins domestically will be very surprised to find that special regulations will prohibit them from profiting."
He further maintains that coin dealers are under a strict Treasury regulation and must report your sales of some coins but not others. The rule is as follows: Coins with a premium above 15% do not have to be reported. In addition to the 1099 report, filed by the coin dealer, you have to declare any capital gains as well."
He continues, "The existence of this rule, I believe, indicates an intent to outlaw the ownership of bullion coins altogether! However, the rule will not remain at 15% necessarily and could be changed to a higher percentage, which is unknown at this time. Obviously, you do not want to own any investment coins with a premium of 15% or less and better stay at the 25% or 30% level to be safe." Patterson points out that complications for the government would clearly arise should numismatic collectibles be forcibly confiscated since the bullion coins' value can be determined by the London gold fix, but not so for collectibles. "The price of the collectible coin may or may not be easily determined as numismatic valuables are routinely auctioned off at prices of not only tens of thousands of dollars, but hundreds of thousands of dollars per item," he observes. "It is difficult to imagine just how this would all be sorted out by the bureaucracy to come up with a calculation of compensation that would relate to the market value." He advises staying in the "safe zone" and exchanging bullion coins not needed for emergencies (such as food or gasoline shortages, et al) for numismatic coins with higher premiums.
Obviously, the introduction of the new peach-colored $20 bill is a test on the American public to see how they respond to the drastic new changes. The CNN/Money article states that the BEP has launched a multi-million dollar promotional campaign aimed at gaining public acceptance of the new currency. For example, the twenties are being featured on game shows, including "Wheel of Fortune" and "Jeopardy," sporting events, like ESPN's college football telecasts. The bills are also part of some consumer product tie-ins, according to CNN/Money, and pictures of the bills will be on the side of bags of Pepperidge Farm Goldfish. If the government succeeds in getting the American public to accept the bills, the other remaining denominations will obviously follow and plans will proceed for the blocked domestic dollar.
Anybody know this book/Author...have a link to the monograph?
Some strong statements made that need verifying.
Clearly it is new currency distinguishable from the old, and if they can't be exchanged as has been contended:
foreigners will continue to be allowed to use the greenback while U.S. citizens will be stuck with the "crayola currency" which cannot be exchanged.It seems a further restriction on our ability to take our cash where we wish and spend it as we wish.
Presumably there would be some mechanism to take cash on a foreign trip, but the article seems to imply a lot of reporting might accompanying such an exchange (at customs?). It is not to hard to understand how this can be used to 'track' bringing cash resulting from foreign bullion sales onshore.
The point of the post was to vet this article. Might you have any information to support your viewpoint?
It was clear to me at the time that this represented a dual currency system where the "value" (or exchange rate) of the two currencies were *not* linked.
These seem contradictory statements. Could you please clarify? If domestic and foreign bills exchange at a "dollar for dollar basis" wouldn't their value in fact be linked and equivalent? Could you give an example of what you meant by exchange by "value"?
This happens every year for American government, no matter if new design or not. As old bills return to banks, they are exchanged by government for new bills. You cannot ask for old bill.
It seems a further restriction on our ability to take our cash where we wish and spend it as we wish.
Existing bills will be legal for use in America for ever. I do not understand concern.
The government's current change, in the way paper money looks, is to deter fraud/counterfitting.
The article was not clear on this point (perhaps the book/mongraph is) but it would seem to imply the Treasury would print and maintain two sets of currencies - a domestic (new design) and a foreign (old design) US bill set (the old/exising design) but the two would not be exchangable. Worn-out new-design domestic bills could not be exchnaged for old design bills and worn-out old design foreign bills could not be exchanged for new-design domestic bills.
See agitator's post #8 for some hints at prior attempts in congress to establish a dual currency system.
See my post #14 re maintaining and circulating two sets of currencies, and agitator's post#8.
Maybe someone can explain it to me.
I'm looking to figure out what's true and isn't myself.
Old American paper money, that is worn, is redeemable at any bank. The government destroys worn out and defaced money.
These are the FACXTS and NOT the tinfoil, that some here pass off as " fact ".
I agree we are told they are legal tender for all debts public and private, so I wonder how this would work.
But if a distinguishable new currency were introduced for domestic use only, and by law, not exchangable with the old-design currency circulating only outside the US, both could be "legal tender", just not exchangable without explaining where one got the currency they had.
Then there is the issue of exchange rate. Presumably they'd be $1 to $1, but then I assumed the Fed would never induce inflation either. Agitator in post#8 seems to suggest otherwise.
LOL! Thank you no, I'm not interested in trading gold.
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