I know most of you may be tempted to concur with me on the worthless of bond coins, but as for the US dollars you are probably thinking ‘what is this guy saying? ‘Anyway brace yourself for a brief history lesson by the end of this you will understand why i have espoused the above remarks.
Before money was invented mankind relied on barter trading. It was simply an exchange of one item for another item. If a carpenter wanted fish from a fisherman, he would simply give the fisherman a few wooden implements in exchange for a few trout’s. That is how people got to have the things that they needed from others.
Barter trade had its shortfalls. What if the person who wants something from me is offering me what i does not need or what i already have? That was a problem. To ameliorate that, seashells and some rare precious gems were adopted. These acted as the first form of currency.
Then the use of gold was adopted, people with more gold were considered rich. Royal families became rich because they would get tribute from their people. The adoption of gold as a currency was a bit problematic. It became dangerous for people to travel long distances with their gold because robbers would pounce on them. Pirates started robbing ships for these precious stones.
People started leaving their gold with people they trusted. Thus began the banking system. When travelling, people with gold would leave their gold at a bank, that bank would issue that person with a receipt confirming that the holder of that receipt had gold reserves. When that person traveled he would simply produce that receipt to another bank and they would give him the equivalent gold to the one indicated on paper. Just like what western union or mukuru.com does nowadays.
Then people stopped travelling with gold altogether but with receipts. These receipts became a form of currency which all transactions were conducted. The receipts had value because they were backed by gold. The US dollar prior to 1971 was receipt money with value because it was backed by gold. Back then, it was possible to save money for years because it had value. In 1971 president Nixon removed the US dollar off the gold standard, this meant that the American dollar was no longer backed by gold, it ceased to be money it became fiat money. Just a paper! It ceased to be an asset but a liability backed by debts.
The US dollar ceased to be money on August 15 1971. The Federal Reserve Bank of America which is neither federal nor a reserve is responsible for printing money out of thin air. They just print trillions of papers backed by nothing. If the government wants to bail out ailing banks it simply prints money. If the government wants to go to a war (war is costly) they simply borrow from the fed, the fed simply print more papers. The debt is to be paid by the taxpayers.
For us Zimbabweans, this is not a new phenomenon we experienced it during Goons reign at the Reserve Bank of Zimbabwe. He would just buy bond papers, or maybe used newspapers and print money backed by nothing. That money would be used to steal foreign currency from the unsuspecting citizens. Two days later those papers became useless and the cycle would recur.
The same process in 1933s happened in the USA. People were told to bring in all the gold that they had and the government would pay $20.22/ounce those who refused to hand in their gold were fined a lot of money. After all the gold had been collected the price of gold increased $35 /ounce thus people were duped.
Now our bond coins are backed by US$50 million. So it is believed that they have value! Well i do not think so mr governor. That money is nothing. Do your corrections and come back with correct answers, in the time being we will continue declining those bond coins.