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The Only Thing We Have To Fear Is Fear Itself… And Governments Telling Us What To Fear: Why The Beginning Of The End Started With FDR’s Confiscation Of Gold
Posted By yihan On September 5, 2011 @ 2:24 am In Money Watch | Comments Disabled
Zero Hedge 
Monday, September 5, 2011
As is well-known by now, following America’s collapse in the first Great Depression back in 1929, one of the first decisions undertaken by president FDR, not even a month following the first of four inaugural speeches (in which he notably said that “the only thing we have to fear is fear itself“) was to respond to the rolling bank runs and shutdowns, by doing something unprecedented: confiscating the gold of American citizens.
And then he logically followed up by doing the only thing that insolvent governments know how to do: he debased the US Dollar overnight by 40% by changing the official exchange ratio of the USD to gold from $20.67 per ounce to $35.00 per troy ounce. Alas, since exchanging such gold would be impossible until 40 years later, nobody could take advantage of this generous offer. It is this point in history that to William Buckler of the famous Privateer newsletter marks the transition of American government from republican (on behalf of the people) to being authoritarian (in control of the people).
It also begs the question: what did FDR offer in return for gold confiscation – after all if gold confiscation is not “something to be feared” then there is a quid pro quo. Why he gave us Social Security and the Welfare state. The same “welfare” state whose unfunded obligations amount to roughly $80 trillion, and whose increasingly tangible insolvency is precisely the reason why ever more capital is shifting right back to, you guessed it, gold. Perhaps FDR should have added that in addition to fear itself, the one other thing everyone should fear is governments believing they they know what they are doing when transitioning to central planning an an authoritarian regime based on nothing but faith.
From the latest Privateer  newsletter:
The US banking collapse which occurred early in 1933 was the result of a huge withdrawal of Gold by both foreigners and Americans. There was real fear that the incoming government would repudiate the Gold standard – just as the UK government had done in late 1931. The worst nightmare of all central bankers was taking place. Just as Mr Bernanke does today, Fed Chairman Eugene Mayer had access to (primitive) helicopters and printing presses. What he did not have was a “fiat” currency. As long as foreigners – AND AMERICANS – could redeem their US Dollars for Gold, his hands were tied.
As already stated, FDR declared a bank holiday immediately upon his inauguration on March 4, 1933. The banks had already ceased making payments and were paying out only five percent of deposits. The bank holiday merely froze this last gasp of bank activity – for a week. It took a lot more to “scare” Americans in the early 1930s than it does today, but the bank collapse of early 1933 was the culmination of the aftermath of the stock market crash of October 1929. For three-and-a-half years, Americans had been rocked by a series of economic and financial calamities – each one of them worse than the one that preceded it. The bank holiday was the last straw. Something RADICAL had to be done.
Something radical was done. When the bank holiday ended, thousands of US banks had ceased to exist. The ones that remained were “SOUND” – so said FDR. Most Americans could no longer afford not to believe him. The Gold poured back into the still standing banks. No sooner had it done so than the US government literally stole it – on April 5, 1933 – by making it illegal for Americans to hold or own Gold. From that day to this, the US economy has run on a totally fiat currency. Until December 31, 1974 – the day it once again became legal for Americans to buy, sell and hold physical Gold – there was no escape.
Gold confiscation was all it took to turn the form of US government from being republican (on behalf of the people) to being authoritarian (in control of the people). It is all it took for that same US government to start to nurture the attitude among Americans that they were dependent on their government. To nail down that attitude, “social security” (a contradiction in terms), old age pensions and unemployment insurance were all enacted into law by 1935. By the end of the 1930s, they were electorally sacrosanct. Deprived of the means to maintain independence, Americans were given the substitute of “welfare”.
Segment courtesy of Bill Buckler and his prior permission.
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URL to article: http://www.prisonplanet.com/the-only-thing-we-have-to-fear-is-fear-itself-and-governments-telling-us-what-to-fear-why-the-beginning-of-the-end-started-with-fdrs-confiscation-of-gold.html
URLs in this post:
 Zero Hedge: http://www.zerohedge.com/news/only-thing-we-have-fear-fear-itself-and-governments-telling-us-what-fear
 Privateer: http://www.the-privateer.com/front.html
 What 40 Years Of Gold Confiscation By The US Government Looks Like: http://www.prisonplanet.com/what-40-years-of-gold-confiscation-by-the-us-government-looks-like.html
 The Confiscation Con: http://www.prisonplanet.com/the-confiscation-con.html
 Why Are The Banksters Telling Us To Sell Our Gold When They Are Hoarding Gold Like Crazy?: http://www.prisonplanet.com/why-are-the-banksters-telling-us-to-sell-our-gold-when-they-are-hoarding-gold-like-crazy.html
 Why Governments Hate Gold: http://www.prisonplanet.com/why-governments-hate-gold.html
 Gold: How High Is Up? US$5,000? Confiscation?: http://www.prisonplanet.com/gold-how-high-is-up-us5000-confiscation.html
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