I’m not referring to Ancient Rome or a banana republic. Unfortunately, my title describes our country, the U.S.A.
On July 23, 1965, President Johnson signed the Coinage Act of 1965. Like bills today, the title is the opposite of what the bill did (that’s just a smidgen of satire). When the Founders gave Congress the authority to “coin money,” that was a reference to a precious metals money system. When LBJ signed the Coinage Act, it destroyed coins. The act removed silver from dimes and quarters and debased silver half dollars. The act also banned silver dollars until at least 1970 (another temporary measure which became permanent).
Today (January 18, 2017), we trade a quarter for 25 cents. But, its meltdown value is only 4 cents. A dime has a meltdown value of 1 cent. A half dollar is worth only 7 cents, if melted. The first time I saw the new Presidential Dollar, it looked like the video game tokens I used in the 1980s. The meltdown value of our dollar coin is 4 cents. 
By contrast, a pre-1965 dime, quarter, half dollar and dollar have these meltdown values, today: $1.24, $3.10, $6.21 and $13.27. 
Why did the U.S. eliminate silver from our coins and use base metals, which have little real value? Most history books say it was because of a silver shortage. It is more correct to say the rising price of silver made it impractical. In 1950, a gallon of gas was 18 cents, the average new car was $1,510 and a new house cost $8,450.  In 1965, a gallon of gas was 25 cents, the average new car was $2,600 and a new house cost $12,700. 
Why do prices increase? This isn’t a hard question. “The word ‘inflation’ originally applied solely to the quantity of money. It meant that the volume of money was inflated, blown up, overextended. It is not mere pedantry to insist that the word should be used only in its original meaning. To use it to mean ‘a rise in prices’ is to deflect attention away from the real cause of inflation and the real cure for it,” wrote Henry Hazitt in his 1965 book, What You Should Know About Inflation. [Page 2]
As the chart shows, our money supply increased 48% from 1950 to the 1965 Coinage Act. By increasing the quantity of our money, we reduced its purchasing power. Goods and services cost more. Through this rise in prices, the Treasury manipulated the price of silver so it would not exceed the cost of our coins. The Treasury’s stockpile of silver was being depleted. The easy out was to stop using silver for coins. Like Ancient Rome, we debased our coins.
LBJ is remembered for “guns and butter.” In addition to the Vietnam War, President Johnson gave us his “Great Society” and “War on Poverty.” From the Coinage Act to August of 1971, our money supply increased another 44%. Our second graph shows we didn’t learn the lesson. In this second graph, we’re watching the growth of our money supply (controlled by the Federal Reserve), the red line, and our national debt, blue line. It’s been the history of the Federal Reserve—they print the money to fund Congress’ spending addiction. 
By August of 1971, President Nixon had a decision to make. He could cut government spending and strengthen the value of the dollar, or he could stop the foreign redemption of U.S. dollars for gold. Our gold reserves were beginning drained. From a high of 20,000 tons in the 1950’s, our gold reserves were in a free-fall and hit about 8,600 tons.  Nixon chose the easy solution; he stopped the foreign redemption of dollars for gold. Prior to the close of the gold window on August 15, 1971, foreign governments made a mad dash to trade dollars for gold.
Most economists call this a “Bretton Woods default.” It creates an unemotional image. In reality, for a foreign government holding dollars, it was a shocking dollar default. The United States broke their promise. “We’ve been duped,” they thought. Charles de Gaulle, the former President of France, had been right [click here].
In the 1944 Bretton Woods agreement, it was decided all international trade would cease to use gold and dollars would be used, instead. The agreement was: foreign countries could redeem, at any time, U.S. dollars for gold. This made the dollar the global world’s reserve currency.
Nixon “temporarily” broke that promise. He defaulted. After August 15th, the dollar was simply a piece of paper. It had no intrinsic value. Foreign governments were stuck with pieces of green paper. They weren’t happy.
If you’re a regular reader of my articles, you know the U.S. had four currency failures before 1900. Then, like Rome and most other world empires, we debased our coins and devalued our currency. This led to a dollar default, revoking the ability to redeem the dollar for gold. Next we had a debt default.
Who determines when a debt defaults: the debtor or the creditor? In the summer of 2011, our largest foreign creditor, China, declared “Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies—eroding the wealth of creditors including China.”  What’s been happening since then? We’ve been in a waiting period, waiting for the next global monetary system. It’s coming.   Are you ready?
“Dollar” Bill is a real guy, with real knowledge on our nation’s financial calamity, and real solutions for what must be done to dig ourselves out of the hole we are in. Due to his career, Bill must remain “disguised” to protect his position. “Bill” loves America, sees the impending cliff we are all headed towards, and hopes that by sharing his inside knowledge of the failed monetary policy in our nation, that a fiscal “nuclear” event can be minimized.