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The Soon Coming Judgment Of God Upon America and How To Escape It 306
exchange for paper. They wanted gold. Their demand for gold forced the US to admit they didn't
have it and to reverse their redemption policy. A Beirut newspaper ran a quote of Libyan premier
Abdel Salam Julloud on September 4, 1973. Julloud stated:
Libya will no longer accept payment in U.S. dollars. The dollar has its
value and we want a currency that is convertible to gold.
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I do not blame Libya for wanting gold; I would rather have gold as well, wouldn’t you?
The above actions of President Nixon are what prompted the Shah of Iran in December of 1973
to state that Iran didn’t want to hold onto paper money that would be made worthless through
inflation. The Shah stated:
Why would we hoard non-gold based paper money in banks if inflation
makes them worthless.
1229
According to the Federal Reserve itself, it doesn’t even take inflation to make Federal
Reserve Notes worthless because they start out that way. The Federal Reserve Bank of Chicago
reveals the following in a booklet entitled Modern Money Mechanics:
In the United States neither paper currency or deposits have value as
commodities. Intrinsically, a dollar bill is just a piece of paper. Deposits are
merely book entries….
What, then makes these instruments—checks, paper money, and coins—
acceptable at face value in payment of all debts and for other monetary uses?
Mainly, it is confidence that people have that they will be able to exchange such
money for other financial assets and real goods and services whenever they
choose to do so.
1230
History proves that this confidence has never lasted, not here in the US or anywhere else
in the world. All fiat money systems have eventually collapsed. The nations of the Middle East
showed they did not have confidence. They did not hold on to their paper, they converted them
into gold and began buying up assets of the United States. The price of oil went from $2.33 a
barrel in 1971 to $10.73 per barrel on December 12, 1974 and then to $20.11 a barrel on April
24, 1992. During this period the price of oil increased 763%, but oil went down relative to the
price of gold. In 1971 you could buy 15 barrels of oil for an ounce of gold. But in 1974 as well as
in 1992 you could get more for that same ounce of gold.
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Today, January 2006, an ounce of
gold will only buy 8.2 barrels of oil because of the dramatic increase in demand for oil world
wide. But while the price of oil per ounce of gold has gone up 100 percent since 1971, in terms
of the dollar in has risen over 2,833 percent. Gold has maintained its value while the dollar was
eaten away by inflation.
John Exter, former vice president of the Federal Reserve Bank of New York and head of
gold and silver operations for the Federal Reserve, stated the following regarding paper money
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