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Wednesday, November 12, 2014

Commodity Prices in US Dollars 1831-1881, Gold @US$20.67

All prices for all commodities were remarkably stable during this period in which gold was fixed at US$20.67 per ounce by the US Treasury from the time of our country's founding. Gold remained at that price until Congress surrendered its authority to the Federal Reserve in 1913. So, an ounce of gold would have exchanged for 20 silver dollars. This means of commerce would have been accurately termed a "Gold Coin Exchange Standard", and NOT a "gold standard", as the money was in the hands of the people. 

Note particularly the surge of commodities in gold terms, especially cotton during the US Civil War (1861-1865 + military occupation until 1877) and the North's blockade of the Confederate southern ports. What had been the cotton price range of .06-.10 gold cts/lb suddenly powered ahead to over .55 in 1863. Mark this down in your history textbook margins as the first unprovoked and US Constitutionally unlawful invasion (Mexican War excluded) by the United States of a foreign and sovereign nation.

Keep this in mind as we come up on the Fed's 100 year anniversary this December.