Sunday, June 11, 2006

The solution to the evils of the Federal Reserve

There are many things I would do to change America in order to live in a free society. I would end many wars: the war on Iraq, the war on terror, the war on drugs, the war on immigrants, the war on ignoring the Constitution, the war on the police state, the war on guns, the war on tax nauseam. The 2nd Amendment (guns) and the Tax Honesty Movement (taxes) are the two of the three most important reasons I fight the battle for liberty. But, both are not number one. My strongest reason for being an advocate for a free society--bar none--is to repeal the Federal Reserve and return the people to sound and honest currency.

Now, I wrote a long article before about the perils of the Federal Reserve, so I will skip what's in my last post. But, a recap is in order. Between the start of the Constitution to legally function in 1789 and the creation of the Federal Reserve Act in 1913, America had the soundest money supply in the world. Art. I, Section 10, Clause 1 in the Constitution reads, in part: "No State shall...coin Money...[and] make any Thing but gold and silver Coin a Tender in Payment of Debts". The Constitution did two things with that statement: it required only the federal government to make money, and the states will only accept money as "legal tender" in the form of gold and silver. No fiat paper, no I.O.U.'s; only real gold and silver.

What happen in the mean time was America grew to become the most prosperous economy in history. Like I said in the earlier post, real wages doubled between 1800 and 1850, and doubled again between 1850 and 1900, while the value of the dollar remain the same (of course; the money back then was backed by gold and silver).

The country, land-wise, grew too. Between 1789 to 1913, America grew from 13 states from the Atlantic, to 48 states, the whole continental United States.

That was it means to be an American in the 19th century. That was it means to be truly free. And to be truly free is to have real and honest money that government can't inflate.

All that changed two days before Christmas in 1913. What happen is down right criminal. The fact is Congress delegated its money to a private bank. "Now wait!", you say, "Congress can't delegate anything," and you are right. Congress can't delegate what they don't own. We the People ordain and establish this Constitution, and this Constitution vested certain privileges to certain government officials. The government cannot delegate privileges owned by the people to someone else.

For example, I own a car. That car is mine. Let's say I want to loan my car to you. Can I do it? Of course. I own it, so I can do anything I want with it. Let's say you borrowed it for tonight. Your friend asked you to borrow the car to do errands. Can you do it? Absolutely not. It's not your car. I own the car, and I loaned it to you, period. I didn't loan it for you to loan it to someone else.

Congress did not own the money. We the People own everything, including the money. Through the Constitution, we delegated the money to Congress, with some stipulations (i.e., the money must be gold and silver). We did not let Congress delegate the money to a private bank, with no strings attached.

But it did. Although at first, money was still backed by gold and silver, but FDR made it illegal to own gold, and Nixon separated the dollar/gold relationship entirely. What we have now is fiat-paper money; the dollar backed by...nothing. A worthless piece of paper, that's it. It is not what the Constitution demanded. That makes it criminal. Then, since the US dollar isn't backed with anything, the printing presses make money out of thin air. When there is an increase of money supply, prices will rise, and money is worth less (i.e., inflation occurs). In 1913, a dollar is worth a dollar. But over time, the dollar loses value. In 2001, that dollar is worth 4 cents. In 2006, the dollar is worth two cents. And there is nothing you and I can do about it. That makes it evil. The only thing to do is to abolish the Federal Reserve.

I am not alone. Aaron Russo videoed a 35-minute interview in which he said the number one reason he made this movie, America: Freedom To Fascism [watch the FULL movie here], is to "shut down" the Federal Reserve. But, Russo didn't have an answer on what other currency to replace Federal Reserve Notes with. I have the answer. You replace the notes with Liberty Dollars.

Like Harry Browne's Permanent Portfolio, NORFED Monetary Architect Bernard von NotHaus is a genus for tranferring Federal Reserve Notes (FRN-worthless fiat paper) to Liberty Dollars (LD-REAL money). NORFED stands for the National Organization for the Repeal of the FEDeral reserve (Russo's #1 goal). We all know what the dollar is. There are $1, $5, $10, $20, etc. On the front side of the LD, you see the exactly the same thing: $1, $5, $10, $20, and $500. All but $500 are silver certificates ($500 is for gold). You will trade dollar for dollar, 1 : 1 (e.g., $20 FDN for $20 LD).

But unlike the FRN counterparts, you can trade Silver Certificates for pure silver (Silver Liberties). You can trade FRN for...another FRN, another worthless fiat paper. Silver and gold are REAL money. I know, the assumed value is higher than the spot price, whether it is Silver or Gold Liberties or Silver or Gold Certificates. The spot price of a Troy-ounce of silver (worth $20 LD) today is $11-12. That's okay. The LD is for spending, not saving. The REAL worth of a $20 FRN is...squat. $11 sure beats squat!

And best of all, LD are inflation-proof. As silver and gold rise in value, LD rises too. That is what the back side is for. When the spot price of silver breaks the threshold, the front side will double. You trade a $10 silver currency (liberty or certificate) to get back $20 silver currency. I know; I was there, and it's all true. However, the back side (the weight of silver/gold) will stay the same (1 Toz = 1 Toz, etc.). Now, the spot price of gold is over $600. I am in the process of trading $500 [1 Toz] gold currency for $1000 [1 Toz] gold currency. Not a bad trade, huh? If I can get Russo to meet von NotHaus (they both know G. Edward Griffin and Michael Badnarik quite well), the Federal Reserve will be history, and the people will have an honest, sound, and constitutional currency...again.


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