When Paper Money Becomes Trash

Tyler Durden's picture

Submitted by Nick Giambruno via InternationalMan.com,

This definitive sign of a currency collapse is easy to see…

When paper money literally becomes trash.

Maybe you’ve seen images depicting hyperinflation in Germany after World War I. The German government had printed so much money that it became worthless. Technically, German merchants still accepted the currency, but it was impractical to use. It would have required wheelbarrows full of paper money just to buy a loaf of bread.

At the time, no one would bother to pick up money off the ground. It wasn’t worth any more than the other crumpled pieces of paper on the street.

Today, there’s a similar situation in the U.S. When was the last time you saw someone make the effort to pick up a penny off the street? A nickel? A dime?

Walking around New York City recently, I saw pennies, nickels, and dimes just sitting there on busy sidewalks. This happened at least five times in one day. Even homeless people wouldn’t bother to bend over and pick up anything less than a quarter.

The U.S. dollar has become so debased that these coins are essentially pieces of rubbish. They have little to no practical value.

Refusing to Acknowledge the Truth

It costs 1.7 cents to make a penny and 8 cents to make a nickel, according to the U.S. Government Accountability Office. The U.S. government loses tens of millions of dollars every year putting these coins into circulation.

Why is it wasting money and time making coins almost no one uses? Because phasing out the penny and nickel would mean acknowledging currency debasement. And governments never like to do that. It would reveal their incompetence and theft from savers.

This isn’t new or unique to the U.S. For decades, governments around the world have refused to phase out worthless currency denominations. This helps them deny the problem even exists. They refuse to issue currency in higher denominations for the same reason.

Take Argentina, for example. The country has some of the highest inflation in the world. In the last 12 months, the peso has lost over half its value.

I was just in Argentina, and the largest bill there is the 100-peso note, which is worth around $7. It’s not uncommon for Argentinians to pay with large wads of cash at restaurants and stores. The sight would unnerve many Americans, who’ve been trained by the government through the War on Cash to view it as suspicious and dangerous.

For many years, the Argentine government refused to issue larger notes. Fortunately, that’s changing under the recently elected pro-market president Mauricio Macri. His government has promised to introduce 200-, 500-, and 1,000-peso notes in the near future.

This is the opposite of what’s happening in the U.S., where the $100 bill is the largest bill in circulation. That wasn’t always the case. At one point, the U.S. had $500, $1,000, $5,000, and even $10,000 bills. The government eliminated these large bills in 1969 under the pretext of fighting the War on Some Drugs.

The $100 bill has been the largest ever since. But it has far less purchasing power than it did in 1969. Decades of rampant money printing have debased the dollar. Today, a $100 note buys less than a $20 note did in 1969.

Even though the Federal Reserve has devalued the dollar over 80% since 1969, it still refuses to issue notes larger than $100.

Pennies and Nickels Under Sound Money

For perspective, consider what a penny and a nickel would be worth under a sound money system backed by gold. From 1792 to 1934, the price of gold was around $20 per ounce. Under this system, it took around 2,000 pennies to make an ounce of gold. At today’s gold price, a “sound money penny” would be worth about 55 modern pennies. A “sound money nickel” would be worth about $3.

I don’t pick up pennies off the sidewalk. But I would if pennies were backed by gold. If that were to happen, I doubt there would be many pennies sitting on busy New York sidewalks.

Ron Paul said it best when he discussed this issue…

“There is an old German saying that goes, ‘Whoever does not respect the penny is not worthy of the dollar.’ It expresses the sense that those who neglect or ignore the small things cannot be trusted with larger things, and fittingly describes the problems facing both the dollar and our nation today.

Unless Congress puts an end to the Fed’s loose monetary policy and returns to a sound and stable dollar, the issue of U.S. coin composition will be revisited every few years until inflation finally forces coins out of circulation altogether and we are left with only worthless paper.”

There’s an important lesson here.

Politicians and bureaucrats are the biggest threats to your financial security. For years, they’ve been quietly debasing the country’s currency… and inviting a currency catastrophe.

Most people have no idea how bad things can get when a currency collapses… let alone how to prepare.

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Durrmockracy's picture

 

 

Gold - Money of Kings

Silver - Money of Gentlemen

Copper - Money of Beggars

Paper - Money of Conmen

Debt - Money of Slavemasters

Bitcoin - Money of Hackers

Soul Glow's picture

No gold posts today, eh Tyler?

It's ok.  We'll do the heavy lifting for ya!

EVeryone see that gold caught another bid today?  In the face of NIRP it looks like some big money is getting the picture.  Is that money also central banks, knowing full well that the cash at their mercy may be in an outflow now that they've instituted NIRP?

Likely.

wee-weed up's picture

 

 

We'll end up doing with the dollar...

What fukin' Obozo does with the US Constitution...

Wiping our arses with it!

SILVERGEDDON's picture

See a penny,

pick it up,

get run right over,

by pick up truck.

Mareka's picture

My niece has started working.

Fresh out of college with $30K in student loan debt.

Realtor tells her a 40 year old dump is worth $170K and she’s better act fast.

Banker lends her $170K to buy the house at 5.75% for 30 years.

Fed created the $170K by entering a number in a computer.

The bank may be paying .04% to have the digits to lend.

My niece will get up each morning and slog off to work for decades to provide wealth to people she will never meet.

Modern slavery.

"We're doing it for the children."

 

Motasaurus's picture

I often state, to anyone willing to listen, that there is no house in Australia worth more than $100K. The biggest mansion on Sydney Harbour is worth $100K. That these properties are selling for $500Million is testamount to the artificial inflation of the market. 

Ever since I learned how banks create currency when you take out a loan I determined to never get a loan for a house. If I can't save for it, I simply won't have it. It's why for years now I've taken all my pay out of my account the day it enters and have bought physical assets with it.

Sure my silver stack is hurting right now, but I don't need it yet. What little gold I own is doing very well though. 

Antifaschistische's picture

I started saving pennies as a child...when 1982 came, I only saved the old copper pennies...which I have to this day.

Today, out of protest, I throw all pennies into a busy intersection along Main Street in downtown Houston where they will get destroyed...perhaps picked up by a homeless guy, who will take the mutilated zinc coin and eventually the treasury will have to replace it with another.

I never, ever give my pennies to make change because everything less than one dollar today is completely meaningless and nothing but a vestige of the days when they had real value.  Today, a meaningless token to continue to fool the masses.

TAALR Swift's picture

Sex - Money of...   (hore-moan/hormone people?)

Drugs - Money of ... (Ruthless Outsiders ?)

Alcohol - Money of DIY people

SILVERGEDDON's picture

dUMMOCRASSy

Fonestar - God of trolls. Probably Satoshi in disguise.

Coinhead - offspring of trailer trash and the banjo boy from Deliverance.

Phoenician Star Sucker - Klingon from Uranus on meth.

Dummo Crass - matchbook trade school diploma trailer basement dweller.

Darwin's inspiration for The Evolution Of The Species.

Durrmockracy's picture

You are nothing compared to fonestar (devotee of Satoshi) SILVERGEDDON.

Tyrone Shoelaces's picture

I was in the Philippines in 1982 laughing at how the filipino's threw away their little square aluminum centavo coins.

Americans now do that to the penny.  I am not laughing now.

Caught_Fish's picture

Here in Australia we got rid of one and two cent coins a while back. The five cent coin will be gone in a few more years. Notice inflation, you betcha mate.

When we go to Indonesia on holiday we take one and a half million from the atm as one days spending money.

Relativities a bitch.

Motasaurus's picture

The move to ditch the 5 cent piece has less to do with inflation and more to do with forcing us out of cash. 

Once the 5 cent is gone you're going to lose 5cents in every transaction on every item priced in 5 cent lots. And you bet your ass everything that is currently priced xx.98 is going to be "reduced" to xx.95. Anyone paying is cash pays to the nearest ten cents. 

Play the plastic game, or get penalised for your disobedience.  

White Mountains's picture

Meh, I am sure you don't even know what Bitcoin is.  Just saying.

LordBuckFast's picture

The psycho's are getting desperate and are now in a mad rush to implement their full agenda......

http://beforeitsnews.com/global-unrest/2016/02/ww3-2016-obama-putin-isis...


Normalcy Bias's picture

We should be going toward PM coins as sound money, but...

Liquor, cigarettes, medicines, ammo, chocolate, etc., are the likely monies of the future.

rwe2late's picture

 no more oil-backed dollar?

Mr. Universe's picture

Coffee, green beans. 2nd most traded commodity in the world behind oil...and the #1 drug in the world today.

logicalman's picture

If I were to decide to grow my own, I doubt coffee would be at the top of my list.

I do however enjoy 2 large mugs of seriously high octane coffee every morning - fresh ground beans and a French Press.

There are some things I'd miss more than coffee, though.

 

TeamDepends's picture

Bring back the man purse! The Scots had it right, wearing it directly in front of the scro' where you are most alert to attack.

Rubbish's picture

Pennies and Gold

 

Heaven

 

Gold Bitchez.....I pick up pennies

Chupacabra-322's picture

FYI, for years the wife & I have a cookie jar atop the refrigerator where we've been Chucking in pre 1982 pennies. Pre 1982 pennies = 97% Copper 3% Alloy. Post 1982, 97% Alloy, 3% Copper. I would dare say there isn't even 3% Copper in them nowadays.

Rubbish's picture

As a reloader, I weigh my 1982's and keep the beauties !

 

Gold Bitchez....I pick up pennies

bigkahuna's picture

I see it as almost a duty to pick up any money in the street or parking lot or other place - if I feel like it or not. Sometimes it is difficult, but it is necessary.

dot.dot's picture

You probably grew-up like me having to work for every nickle.  

I would hussle as a kid finding ways to earn money.  Today's youth can't be bothered to role up coins and take to the bank.  I see them just pitch change -they consider it a nuisance.  Kind of sad really.

Everybody -even what is commonlhy considered poor have money to piss away these days.  We live in insane times.

hxc's picture

 

For fucking real.

The9thDoctor's picture

Even though there has been so much debasement, I still have the habit of picking up coins off of the ground.

bigkahuna's picture

I hear you. When we were kids, we used to collect aluminum cans and turn them in so we could get money to go to the swimming pool.

NoWayJose's picture

Five dollars worth of pennies fit nicely into a pint sized Mason Jar (and the Mason Jar might come in handy one day too). I've got over 50 jars stashed with pre-1982 pennies, stashed over many years - and I am not selling or dumping them. I even bought a bunch of rolls of pennies recently and tried to fill another jar - surprisingly I still hit low teens in some rolls.

Duc888's picture

 

 

"Five dollars worth of pennies fit nicely into a pint sized Mason Jar (and the Mason Jar might come in handy one day too). I've got over 50 jars stashed with pre-1982 pennies, stashed over many years - and I am not selling or dumping them. I even bought a bunch of rolls of pennies recently and tried to fill another jar - surprisingly I still hit low teens in some rolls.""

 

Sometimes it's just easier for you and one of your buds to go in on a sunday and hog out a local telecoms copper.  Ya need a stout winch.... but in 1/2 hour you could score 10,000 mason jars worth of copper.

 

just sayin'

 

it's ppppproooobablllyyyyyyyyyyyyyyyyyyyy illegal, but so is gathering rain water that falls on your property.

 

NoWayJose's picture

Yeah, but it's nice to think that I got a copper penny from a bank, made by the government, and it only cost me a penny. And at some point, that copper could go up to 4 or 5 times in value! But stickin it to the man - is priceless!

pFXTim's picture

haven't you heard? you can pick up a million euros on ebay for ~100.00 USD:

http://www.ebay.com/itm/1-MILLION-EURO-IN-SHREDDED-CURRENCY-from-the-GER...

savagegoose's picture

i bet money velocity on exchange of nickels   make up for their cost. 8c to make and taxes for ever! sounds like a winner.

Duc888's picture

 

 

savagegoose : "i bet money velocity..."

 

 

Hmmmm, got me thinkin' how mant feet per minute to puncture someones chest cavity?

detached.amusement's picture

and of course the question is completely unqualified without discussing the projectile

Kreditanstalt's picture

"The U.S. dollar has become so debased that these coins are essentially pieces of rubbish. They have little to no practical value."

 

Nonsense.  Pick up enough of them and you make dollars, then tens of dollars...that's what me and my metal detector do.

Duc888's picture

 

 

""The U.S. dollar has become so debased that these coins are essentially pieces of rubbish. They have little to no practical value."

 

meh, reload them into shot gun shells an that shit will seriously fuck up someones world. 

https://www.youtube.com/watch?v=VPbGvjslY6A

Ouch, that's gonna leave a mark on the banksterz.


Aussiekiwi's picture

nickels and dimes, only terrorists and criminals use cash, have to go along with no cash and the total loss of your privacy to fight terrorism and crime.....its for your own good.

odatruf's picture

Too many powerful politicians from IL to dump the Lincoln penny.

Hope Copy's picture

WHAT  about   the $5 bill..  OK  .. turn that into a coin and make the quarter a tewnty cent piece..

Eng7's picture

Canada did it.

Australia did it.

Americans are just retarded.

Like not being able to change to the Metric System

Like thinking more gun ownership means less deaths

Like thinking NASCAR is racing ... but now I'm just being mean....

 

logicalman's picture

That's an 'eat shit, 20 billion flies can't be wrong' argument.

Canada did it. - Australia did it.

Debasement of its currency brought down the Roman Empire.

Debasement of its currency is what is in the process of bringing down the US hegemony.

History, Rhyming and all that.

I'd have to agree on the NASCAR thing, though, and the Metric System.

The gun thing is a more difficult balancing act and is worth careful thought.

 

True Blue's picture

I have to disagree about the metric system.

It works well for some systems, science for example; where a decimal system makes sense. And that is where Americans use it. For every day life, it isn't so practical to use an arbitrary and artifical system of measurements. The mile for example, a wierd relic at 5280 feet? Maybe, but it is also exactly 1,000 paces (that is where the name came from) which puts it at human scale; as opposed to the arbitrary 'meter' that some French twats magically arrived at in 1791 by dividing the distance from the North Pole to the Equator into 10,000,000 bits.

Eng7's picture

And thu you display the prime problem with America. Stagnant thinking leading to a constipated society. The point of the metric system is ease use by shifting a decimal point. 1Litre of water = 1 KiloGram of weight = 1Decimeter of volume. Now is is easy to say 1ml = 1mg, of 1 cubic metre is 1000kg. It is a beautiful system unlike the turd of the imperial system.

Bolts are now M2,M3,M4,M5 etc not 3/16, 5/8 etc etc.

I could go on and on

AngrySparky's picture

Yes Canada did do it, and I screamed out loud to my contacts on Facebook what it really represented... no one listened, no one cared.

As for your other comments? Humans are retarded... don't pick on American's only as they have a large population of dip-shits and geniuses.

Did you know that all international trade is conducted in USD and in the Imperial system because of the rule of the petrol dollar? No shit... metric countries (which is pretty much the whole world) have to convert loads to Imperial just for the USA... fucked eh?

Guns... hmmm... if everyone had one? There would probably be less gun death... If I had one? There would be more.

Eng7's picture

Hey Angry Sparky, assuming you are an electrician.

Another odd thing I noticed when visiting the USA, was a lot of commercial buildings had multiple single core PVC wires in metal conduits (Florida), rather than the more usual TPS style cable used elsewhere. It looked liked a total PITA to install and wondered the why it was done that way?