Tuesday, April 21, 2009

Monetary Policy

The US Congress must begin to repeal the un-constitutional Federal Reserve Act, and the Coinage Act of 1965, and reclaim from the Federal Reserve— which is a private bank —the Congress’ Power of creating Money and Credit.

Article I § 8 of the US Constitution extends to the Congress the power and benefit to coin and borrow money and to regulate the value of the money so coined and the coin of foreign sovereigns. In addition, the Congress may “provide for the punishment of counterfeiting the Securities and Coin of the United States.” Thus, Money is Coin, Credit is the Promise to re-pay borrowed Money, and a Security is an instrument that embodies that promise in writing. Facially, this language establishes that Money, Credit and Securities are three separate and distinct entities and that the Congress allowing the Federal Reserve control over monetary policy is unconstitutional since the powers it delegated belong to the Congress.

At one time, a United States Note (security) was redeemable for gold or silver Money. This made the United States Note only a Security and not the Money to which the Constitution refers. Incrementally though, it did seem plausible to accept United States Notes as gold and silver since they were redeemable as such. However, since the gold standard was abolished by a combination of the Federal Reserve Act (delegated the creation of money and credit and the value thereof to the Federal Reserve Bank), the Coinage Act of 1965 (made Federal Reserve Notes, not US Notes legal Tender for all debts, public and private), and President Nixon’s Executive Order closing the Note- for-Bullion exchange at the Federal Reserve, the United States Note has been replaced with the Federal Reserve Note. Since this new Note is not backed by gold or silver there can be no reasonable presumption any longer that the States are using gold or silver as tender in payment of debt.

This loss of control over the creation of Money and Credit has had a profound effect upon the States making every transaction they engage in unconstitutional because Article I § 10 requires the States to accept and use only gold and silver in the payment and discharge of Debts. Thus, every time a state executes a transaction with Federal Reserve Notes…it is breaking the law!

The Congress must begin work to repeal the Federal Reserve Act and the Coinage Act of 1965 and return to gold and silver as our legal tender. There are hosts of investment reasons for us to return to the gold/silver standard and value backed currency, not the least of which is the fact that simply by saving their money, Americans could have been earning 18% per year on that savings since the Great Depression. Of course, the greatest reason is simply that United States Gold and Silver Eagle Bullion Coins are the only legal Tender that the Constitution allows making them the only legal currency in circulation.

Many detractors like to argue that returning to the gold/silver standard, after all this time using fiat currency, would be monumentally difficult and is therefore ridicules. They also like to point out that as the gold and silver prices move, so would have to move the prices of all goods and services. These arguments, not withstanding their illegality, would have held some validity at one time. However, in this modern age transactions in gold and silver are easier than ever! Nearly all transactions conducted by business today are done so through some kind of electronic medium. Software could be written that would allow point-of-sale registers to calculate the current prices for gold and silver in real time with the markets. Bank debit cards would turn into “gold access” cards that would allow the division of gold and silver, held in reserve, down to the smallest denominations electronically. Large denominations of gold and silver bullion would never even have to move. Should citizens want access to tradable units for non electronic face-to-face purchases they could purchase them from a local exchange simply by presenting their access card and having the digital money exchanged for physical money. In closing, there is no reason why we accept the current illegal monetary policy foisted upon us except that we simply have grown accustomed to the private “banksters” stealing our wealth with the support and approval of the Congress.


RJ Harris
Norman, OK
Oklahoma Fourth District
Constitutional Conservative Republican

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