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The dollar’s decline from the gold standard

April 21, 2014 in Currency, Education, Gold, Gold Coins, Investing, Money, Numismatica, Numismatics, Precious Metals, Silver, Silver Coins, US Federal Reserve, US Mint

April 20, 2014. By: David John Marotta and Megan Russell. (http://www.dailyprogress.com)

The U.S. dollar was first regulated by the Coinage Act of 1792 and prescribed as 371.25 grains of pure silver. The eagle, worth $10, was 247.5 grains of gold. One cent, worth a hundredth of a dollar, was 24 grains of copper.

The value of the metal contained in the currency kept prices relatively constant before the founding of the Federal Reserve. During those 120 years, prices rose only 3 percent. In contrast, during the 100 years since the Federal Reserve, prices have risen 2,280 percent.

The Constitution gives Congress the power to “to coin money” and “regulate the value thereof.” This dictum was understood to be setting the currency’s weight and metallic content and was necessary to allow the currency to keep up with a growing economy.

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