The gold standard is a well-known monetary system. In the US it was abandoned in 1971 when Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed price. Less well known is the fact that the US dollar was initially tied to the price of silver, and until 1965 silver was essentially a currency.
The original US Dollar was introduced in 1785 and was based on the Spanish milled dollar — a silver coin used widely around the world. The Coinage Act of 1792 made the silver US dollar the standard unit of money in the United States.
The act defined a dollar as 371.25 grains (equal to 24.056 grams) of silver. At that stage, gold coins were valued in relation to the price of silver.
Numerous changes to the monetary system were made between 1792 and 1965, but silver and gold both remained official units of currency. However, starting in 1913 when the Federal Reserve was created, silver and gold’s part in the monetary system began to be undermined.
The last president to defend silver’s role as a currency was John F Kennedy. In 1963, he signed Executive Order 11110, authorizing the Secretary of the Treasury to issue silver certificates. This was the first series of moves to take control of US money back from the Federal Reserve by giving greater power to the Treasury. There is even speculation that his opposition to the Federal Reserve was the reason for his assassination but we’ll probably never know for sure.
After Kennedy was assassinated, his successors, Lyndon Johnson and Richard Nixon, set about reversing his actions and removing gold and silver as components of the monetary system. In 1965, Johnson signed a new Coinage Act which eliminated silver from the circulating United States dime and quarter coinage as well as reduced the silver content of the half dollar. In 1970, silver was entirely eliminated from coins.
In 1971 Nixon announced that the US would no longer convert US dollars to gold. This, and the elimination of silver from the monetary system, meant the US dollar was no longer backed by a real asset in any way. These actions effectively moved the US Dollar from money that was represented by real assets to a fiat currency. That means the value of the currency is at the mercy of government action and can be devalued by money printing or unsustainable debt issuance.
With US government debt standing at over $30 trillion dollars, it’s only a matter of confidence before the US dollar is debased in order to monetize that debt. One way or another the buying power of fiat currencies will diminish.
The good news is that there’s now money that is redeemable for silver. Each SilverToken represents ownership of physical silver that is stored in one of the 12 private vaults. Tokens can be so easily and efficiently exchanged that they can be used as money. SilverTokens can also be, instantly exchanged (by smart contact) for USCD, sold for fiat cash, or redeemed for physical silver.
SilverTokens can be used as money that cannot be devalued by the government’s money printing, while also offering investors a safe haven against the inherent volatility in markets.