Sinking of the SS Central America: Lost Gold and Panic
The SS Central America, also referred to as the Ship of Gold, was a 280-ft sidewheel steam-powered ship that transported goods from Central America to the USA East Coast. The ship sank in a Category 2 hurricane in September 1857 off the coasts of the Carolinas with 477 passengers and 101 crew. It was out of Colón, Panama and headed to New York carrying 10 short tons or 9.1 tons of gold mined from the California Gold Rush.
The value of this gold at the time was around $8 million. In 2021 at the spot price on 6/20/2021 of $1,764.31 the value would be $422.7 million, ignoring any impurities or weight lost in refining and minting the gold that may have been needed. Knowing that the prices of gold and silver are heavily manipulated by a corrupt and self-serving financial system, utilizing the price the U.S. Debt Clock for gold based on the amount of fiat currency created on the same date of $27,151, the value of this gold would be around $6.5 billion dollars, again not factoring in impurities or weight lost during processing and minting. This is a material amount that could harm the U.S. economy if it was anticipated to enter the money supply, much as the ship sinking contributed to the Panic of 1857.
Leading up to the Panic of 1857, the amount of gold entering the economy from the California gold rush had started to decline restraining the money supply growth, Eastern banks has started to refuse to accept paper currencies issued by Western banks, and the railroad stock bubbles saw a dose of reality as their shares along with the greater stock market saw a decline. The sinking of the SS Central America meant a large shipment of gold anticipated by New York banks would not have the gold they needed to back their loans, resulting in further economic decline. The banks would not fully recover until after the Civil War. Due to the previously prosperous times, many banks, merchants, and farmers have taken on additional risks expecting good times ahead only to discover the exact opposite and finding themselves in precarious financial situations.
The SS Central America was discovered in 1988 by Columbus-America Discovery Group of Ohio, led by Tommy Gregory Thompson and $100-$150 million in gold was recovered, including an 80 pound gold ingot that sold for $8 million. It was later estimated that only 5% of the ship was initially excavated. Thompson was sued by 39 insurance companies who had paid claims on the SS Central America going down who claimed they had a right to all gold recovered, Thompson claimed they abandoned it. Thompson won the case and was able to keep 92% of the gold recovered but was later pursued by investors for not properly allocating the recovered gold to them based on the agreement made between the parties.
Analysis: First, the importance of gold as money to humanity less than two centuries ago is demonstrated both in that humans would ship it the long distance from California to New York into the money center of the country to be backed for loans to be issued and in that the loss of large amounts of it would cause an economic panic or greatly contribute to it. Sadly, events such as this would go on to be used as ammo by the central bank cabal to justify their demand for fiat currency, untethered from any restraints that a gold standard of bimetallism presents them with. The loss of the gold causing a lack of faith in the banks also displays the extent to which the populace realized during this time period how important precious metals are to the legitimacy of the private currency and note system, something that has been almost completely forgotten by the masses in our era.
Part of the path towards fixing the financial system and making it more fair for the People is educating the public about why precious metals backing a currency is necessary to prevent monetary corruption.
Please follow Bullion TP or join our channel!
www.bulliontp.com
