Silver Certificates still part of the national debt

[mtnstyne]

I found this interesting while looking at the national debt:

 

$172 million of the national debt is the government still accounting for outstanding silver certificates.

 

treasury 2010 report on debt

 

It is footnote number 15

[BillJones]

I have never thought of outstanding currency as part of the national debt. I think more of bonds, T-bills, savings bonds and other similar instruments. At any rate the government stopped redeeming silver certificates with silver back in 1969.

[RWB]

What you are seeing is very rare: A nation that has not repudiated its outstanding obligations.

 

Absent specific authority from Congress, all past obligations of the U. S. remain valid and payable to the holder. That is why your silver certificates are still good for their face value. The high value zero coupon bonds issued in 1989 continue to accrue until maturity.

 

[truthteller]

What you are seeing is very rare: A nation that has not repudiated its outstanding obligations.

 

 

Give it five years; this will change.

 

 

 

TRUTH

[$ilverHawk]

Footnotes 13, 14 and 15 are exclusions from the Statutory Debt Limit. Note all three footnotes reference "destroyed or lost". Not obligations to pay. They are all "officially" missing. Redemption of Silver certificates was halted on June 24 1968. There is no further obligation for the United States to redeem Silver Certificates on demand.

 

However, since the certificates are unaccounted for, they must be listed for a full accounting. When circulating paper dollars near the end of their life cycle they are destroyed by the United States Treasury and a record of the destruction is made, and new Notes are printed. Apparently there are no records of "official" destruction of these Silver Certificates.

 

I didn't examine the document completely, but there should also be notations of the loss of more modern currency.

 

I'm sure we will all agree that there must some circulating currency, paper and coin, that is inadvertently lost or destroyed.

 

I don't believe that our government has that tight a handle on every single cent or dollar. So I do find footnote 15 to be amusing, particularly when the line item states $172 Million and the footnote states $200 Million.

 

Carl

 

 

 

 

 

 

 

 

[Crohnos01]

172 vs 200 million?....Chump change for Uncle... Besides, what's a few million between friends?

[BillJones]

What you are seeing is very rare: A nation that has not repudiated its outstanding obligations.

 

 

Give it five years; this will change.

 

 

 

TRUTH

 

You might be right, but given the huge, ever increasing national debt and the policy of using the Federal Reserve System to fund it with increases in the money supply, inflation could put us in the same position without an official decree from the Federal Government. We might be looking at de facto repudiation of our currency.

[jtryka]

The $200 million is excluded, the $172 million is a net number, so gross it would be $372 million, but $200 million is determined to be permanently lost (don't ask me how they determined that). Not sure how much sense it makes to include or exclude silver certificates, legal tenders or national bank notes, since technically they are still redeemable at face, though the likelihood of collectors deciding to turn in all those notes is pretty remote.

[BillJones]

... though the likelihood of collectors deciding to turn in all those notes is pretty remote.

 

You mean you won't trade your national bank notes for a few modern lucky bucks, a magnetic mark on a computer tape or hand full a base metal clad coinage?

 

I'm shocked.

[RWB]

People still turn in gold certs and large size currency. Some just don;t know what they have, and others think they "pulled one over" on the bank by getting currency for old worthless stuff.

 

[Conder101]

True. Remember from 1933 until around 1960 the gold certificates were illegal to own, and a lot of people though the gold coins were illegal as well. So if they could pass a gold certificate off in trade or slip a half eagle into a roll of nickels they thought they were getting away with something and getting a potentially illegal item out of their hands.

 

Not sure how much sense it makes to include or exclude silver certificates, legal tenders or national bank notes, since technically they are still redeemable at face,

But all paper money is a form of debt. It is a claim against the government for redemption and is in effect a zero interest bond redeemable for its face value.

[jtryka]

True. Remember from 1933 until around 1960 the gold certificates were illegal to own, and a lot of people though the gold coins were illegal as well. So if they could pass a gold certificate off in trade or slip a half eagle into a roll of nickels they thought they were getting away with something and getting a potentially illegal item out of their hands.

 

Not sure how much sense it makes to include or exclude silver certificates, legal tenders or national bank notes, since technically they are still redeemable at face,

But all paper money is a form of debt. It is a claim against the government for redemption and is in effect a zero interest bond redeemable for its face value.

 

While you are absolutely correct, when dealing with an irredeemable currency, what exactly is the obligation of the government? If they simply trade more irredeemable paper for that which you've redeemed, then the debt is never really extinguished. If I were to borrow something of value from you, like a hammer and pay you with a piece of paper that says I owe you a hammer, but then tell you that I will pay you back anytime you want, but only in other IOUs in different denominations or printed on different colored paper, you'd rightfully see that as a sucker's game, and that in reality I just stole your hammer. But in the present day, the government does it 24/7/365 and no one besides Ron Paul utters a peep in protest.

[RWB]

Currency is worth the face value of the note, just as when issued. The missing piece is that if it was originally backed or exchangeable for silver or gold, that can no longer be done at the statutory value of the metal - only at the commercial value.

[Oldtrader3]

I remember that the first US gold coins which I bought were purchased only at the Royal Bank of Canada, on St James St. in Montreal during the early to mid 1960's. This was primarily Sovereigns, Saints and Foreign, Central Bank gold sold at weight and rate. This bank and coin shops (Eaton's) were the only local place there to purchase US gold coins of other denominations in Canada and were sold at Eaton's as collectables and priced accordingly.

 

In the US, I bought all of my Saints and foreign Ducats etc. from jewelry stores. You could not legally buy gold bullion in the US then. Saints were sold at spot ($42/ounce). It was not until the start of demonetization of metals during the Lyndon Johnson Presidency, that I can remember seeing any selection of and buying gold bulllion at dealer's shops in the US (Texas) until about 1967.