Unless you understand the reasons for a gold or silver standard, the argument over the content of coins (what used to be actual money) makes no sense. When government dictates what is money, it should make that money out of the cheapest materials available. The dictate is the sole source of value. When people dictate what is money, the content of the coin determines its value. The government just guarantees that content by stamping its seal on the material.

When people re-assert their sovereignty and once again demand that one dollar be one ounce of silver, no matter what the government says, a lot of our problems will be resolved.

http://reason.com/blog/2010/05/03/why-cities-are-broke-they-spen

“The Securities and Exchange Commission knew since 1997 that R. Allen Stanford likely was operating a Ponzi scheme but waited 12 years to bring fraud charges against the billionaire, the agency inspector general said Friday.

An SEC enforcement official who helped quash investigations of Stanford’s business later legally represented him, according to a new report by the agency watchdog.

The SEC didn’t bring charges against Stanford until February 2009, when it alleged a $7 billion fraud. SEC Inspector General David Kotz said in the report that “institutional influence” in the enforcement division was a factor in the agency’s repeated decisions not to conduct a full investigation.” (end quoting)

 There is more where that came from:

http://globaleconomicanalysis.blogspot.com/2010/04/sec-staff-watched-porn-as-economy.html

Historically, the quarter, half, single and double eagles represented the highest values of US coinage (equivalent in nominal terms to $2.50, $5, $10, and $20). Debasing these coins, but not the lower denominations (the large cent, or penny, through the dollar coin), creates an arbitrage opportunity as the eagles would be exchanged for lower denominations. That is, the overall metallic value of eagles would be exchanged for the higher overall metallic value of lower-denominated coins.

Faced with such obstacles, the US Mint pursued a different tactic: in April 1933, Presidential Executive Order 6102 effectively eliminated the entire class of eagles. Rather than circumventing or solving the dilemma, the state simply abolished it. Subsequently, the US Mint was free to debase lower-value coinage en masse.

And so it began. Like all effective state intervention, the origins of debasement were at first mild and seemingly innocuous. Given the nickel’s relatively large mass but low value (in tale), initial debasement targeted this coin. In 1866, nickels were debased from 90% silver to a mix of 75% copper and 25% nickel. All other coins retained their relatively standard 90% silver component.

En masse debasement occurred with the Coinage Act of 1965, which eliminated silver from the circulating dimes and quarter dollars and diminished the silver content of the half dollar from 90% to 40%. From then on, all dimes and quarters consisted of 75% copper and 25% nickel.

Consider this example of how little the value of the new metallurgical content compared with the stated denomination of the coin: After 1965, both the nickel and the dime consisted of the same relative proportion of base metals. As the dime’s mass is exactly one half that of the nickel, despite having twice the stated value, the underlying value of its base metals cannot exceed 25% of a its stated value of 10 cents. Otherwise, an arbitrage opportunity would develop leading to the disappearance of nickels. Simply put, US coinage was debased by over 75%. Rulers from antiquity, laboring to achieve debasement by clipping coins, would be envious.

n.12: …In 2007, due to the rising price of copper and zinc, the United States banned the melting and mass exportation of pennies and nickels.

Source: Chris Casey, The State Grants No Quarter to Freedom, Ludwig von Mises Institute (Feb. 25, 2010), http://mises.org/daily/4109.

source: http://reason.com/blog/2010/01/25/hayek-vs-keynes-the-rap-throwd

Frank Chodorov, The Rise and Fall of Society, p. xvii (The Ludwig von Mises Inst. 2007) (orig. copyright 1959).

Not much has changed since then.

Section 19 of the Coinage Act of 1792.

Courtesty of James Grant, Requiem for the Dollar, Wall St J. December 6, 2009
http://online.wsj.com/article/SB10001424052748704342404574575761660481996.html#mod=todays_us_weekend_journal

via Doulgas French of the Mises Economics Blog http://blog.mises.org/archives/011165.asp

Coinage Act of 1792

Count on the Progressives to pass a repeal of the Bush tax cuts in 2010, covering all gains since January. Just as they did under Pres. Clinton in 1993. Smart investors might expect this and sell their gains this year to avoid the trap. Better to miss out on further gains to avoid the more likely risk of a confiscatory tax next year. Indeed, a paranoid sort might see the inexplicable current run up in the markets as a massive manipulation (unactionable, of course) to secure those gains. It is a dangerous game of last one on the boat is a goner. Watch out when everyone rushes for the lifeboats at the same time, only to find some of them have already gone.

Preventing this would require a sufficient number of Democrats to come to their senses and avoid this suicide mission. That has not been a winning proposition to date. If this happens, Democrats will get obliterated in the 2010 elections.

For information on David Galland and Casey Research, go to http://www.caseyresearch.com/casey-services/free-publications/caseys-daily-dispatch?ppref=DLW022ED1109A.

For information on retroactive taxes (it is not just a Democrat issue, Ford did it too), see http://www.heritage.org/Research/Taxes/HL613.cfm#pgfId=1004129.

If you think the Court or Constitution will help, you are wrong, as this quote should demonstrate:

“Taxation is neither a penalty imposed on the taxpayer nor a liability which he assumes by contract. It is but a way of apportioning the cost of government among those who in some measure are privileged to enjoy its benefits and must bear its burdens.” Welch v. Henry, 305 U.S. 134, 146 (1938).

For a catalog of the history of Supreme Court decisions recognizing the right of Congress to retroactive taxation (even beyond the year of enactment), see U.S. v. Darusmont, 449 U.S. 292 (1981).

Source: Alf Field, Kitco.com: http://www.kitco.com/ind/Field/nov112009.html

via Jeffrey Tucker at the Ludwig von Mises Inst.: http://blog.mises.org/archives/011033.asp

and remember this happened because France decided the USG was printing too many dollars and decided it wanted instead the gold the USG promised (until this announcement) to exchange for those dollars. Int’l speculators indeed! Nixon was a terrible US president, for reasons few understand.

Source: Porter Stansbery S&A Digest (10/9/09).