Dollar's Decline Catches Up With U.S. Mint

The real issue is the declining purchasing power of the currency. And that goes back to the year 1913 when the Federal Reserve System was successfully foisted upon the American public as a result of the banking establishment's antipathy towards the gold standard, which prevented them from creating fiat (unbacked) money out of thin air. Perhaps no one understood that antipathy better than Alan Greenspan. In 1966, prior to becoming chairman of the Fed, Greenspan championed gold, writing in The Objectivist:

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense ... that gold and economic freedoms are inseparable.

He then went on to explain that the real reason for the push behind the scenes for the Federal Reserve was to finance the welfare state:

Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation.

But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.