Did you know that the Federal Reserve botched the world's biggest coin trick?

It's true! I'll tell you the story. 

Thomas Nelson Downs (1867-1938) was a vaudeville star. Known as the King of Coins, he was an expert conjurer, but like most successful magicians, what really made him stand out was his ability to showcase his talent in an entertaining way.

His most famous routine was known as "The Miser's Dream". It is a classic trick that was already popular when Downs began performing it.

During the trick, the magician holds a container, similar to a top hat or champagne bucket. With the other hand, he extends his hand into the air and appears to extract a silver coin from the ether, which he then tosses into the hat or bucket.

Downs was a master of this trick thanks to his flamboyant performance. After pulling a few coins out of the air, Downs would approach the crowd and begin snatching them from the audience. Silver would magically appear behind ears, mustaches and elbows; few were spared from his quest for silver coins. Dozens of coins appeared. 

It was dazzling!

The Miser's Dream is still a great piece of magic, but it no longer has the dramatic impact it had over a hundred years ago.

Why?

As with any other performing art form, magic fads come and go. That applies to any trick. But the Miser's Dream has a vulnerability that most tricks don't.

The miser's dream is about making money appear out of thin air, and that money is not what it used to be.

The first five dollars in silver coins Downs made appear worth about $150 today. That value resonates with the average public. After all, that's enough for a few steak dinners. But when I do the trick today, the first five dollars (no longer silver) is worth .... five dollars.

This is not enough to buy a Big Mac.

I imagine the adults of over a hundred years ago, absorbed by the illusion of a man who made hundreds of dollars appear in seconds. The public would react the same way today.

But five dollars?

It is not the same feeling.

Measured by the undervalued meat monetary system, in a hundred years we have gone from the Miser's Dream scale of tomahawk steaks to a couple of cheeseburgers.

And who is responsible for the diminishing value trick?

It wasn't Tommy Downs.

It was not the magicians - myself included - who performed this classic.

So who made the value of the dollar disappear?

You guessed it, sound money fanatics. The Fed pulled this terrible trick, and it's still doing it right now, even as you read this.

Tommy Downs made the silver appear.

The Fed, with its printing press, made the value disappear.

Before I finish, I will do a little mind reading. You, dear reader, may be asking yourself, "How is silver extracted from the air?".

I can't tell you the secret, but I can tell you the first step.

Ready? get some money!

Doctor Dixon, Money Metals