Exactly

Thanks...Yes,I wrote it, along with another 300 pages on subjects ranging from monetary systems, Constitutional theory and history, to Fabian Socialism. Money is indeed a convenient exchange media, but it evolved as much more than that because it was a market necessity. There is a natural assumption that government is the base for the creation and expansion of money however, even in Paleolithic times, markets and trade preceded the formation of anything remotely resembling government. It was markets, first on a naturally evolving system of barter that set the stage for the evolutionary creation of money, it is and always has been a market phenomenon. The transformation of money from items of perceived value to a higher, more competent unit of value can traced back to at least thousands of years, it even appears that gold was used as a barter unit as much as 40,000 years ago.

In earnest however, gold and silver began to be recognized as a unit of value when the first coins were struck into circulation in the kingdom of Lydia. Gold, in particular, gravitated to prominence due to its natural metallurgical characteristics along with the fact that it was rare and difficult to obtain. Once in circulation, it became a titled property of the holder, there were no other claims of title unless through contract. Governments, or at least the politicians that run it, except for the Founders, have never liked a money they could not control. Gold and silver was just such a monetary unit, once in circulation it was almost impossible to control because it was the property of the person holding it without claim from government or banks. Money, in the form of gold and silver, was the titled property of the people possessing it through exchange.

Of course, gold and silver eventually gave way to Certificate Notes, which were nothing more than a notice of ownership of a prescribed weight of either gold or silver. These Certificates were the forerunner of Fiat currency but had nothing in common with Fiat currency except the paper it was printed on, Certificates represented the property of the owner, held in trust by a banking institution or other fiduciary institution. Fiat currency represents an obligation of the government and only the government holds title. Proof of that fact can be seen in the FDIC guidelines.

The government does, in fact, have the ability to an unlimited supply of Fiat currency for the simple reason that it has the power to issue Treasury Notes via fiat (although it's a bit more complicated than this) that are then bought and sold by the Feds Open Market System thereby allowing the U.S. Treasury to mint Federal Reserve Notes or by the more common method of multiplying money through commercial banking and Fractional Reserve.

The purpose of the Federal Reserve, a creation of this government, in conjunction with a powerful banking cartel in the late 1800s and early 1900s, was to eventually release the government from the restraints and limitations that sound money placed upon it and eventually freeing government from the possibility of a tax revolt. It was a joint-venture between government and banking. The government is not a slave to the Federal Reserve, but a cooperative partner in crime. The goal of politicians at the turn of the 19th Century was to eliminate limitations that the Constitution placed upon it, that is why we see three very distinct strategies implemented in 1913: The 16th Amendment that ushered in a Federal income tax, the 17th Amendment that nationalized the U.S. Senate resulting in the destruction of pure federalism (of course Lincoln played his part in the consolidation and centralization of the system into a non-federalist entity) and then the Federal Reserve Act which would eventually allow for the government to cut its ties to taxation as the sole means of revenue enhancement, in order to do that both good and silver had to be eliminated as the primary means of both exchange and taxation.

@Republicae Wonderful! There is much even in your first paragraph that I'd like to discuss, but time constraints.."...The transformation of from items of perceived value to a higher, more competent unit of value can traced back to at least thousands of years, it even appears that gold was used as a barter unit as much as 40,000 years ago." Love the phrase: "more competent unit of value". I can see that you and others are lovers of gold as a favorite material to use to trade honestly and fairly, and I'd like to examine that thought further, eventually, as we proceed, if you are so inclined. I am not as studied as you are concerning history, but it would be interesting to see evidence from 40,000 years ago. I've never even heard of the kingdom of Lydia, which shows my ignorance. Please bare with me. I am seeking understanding, with a desire to establish a just and fair system. In my view, justice for everybody harms nobody.

While we are in your second paragraph, not sure I understand this sentence: "...Gold and silver was just such a monetary unit, once in circulation it was almost impossible to control because it was the property of the person holding it wit and claim from government or banks." 'Wit and claim from government or banks'?

It does appear that you don't trust "government", and suspect their motivations, etc. Understandable, but we both know human nature, sometimes, is highly suspect in itself. Any system developed may be suspect to cynicism or skepticism, but, and maybe I'm just an idealist, but would like to find out what a just system would look like because we do not have that now, anywhere that I am aware of.

Not sure I understand your use of the loaded term "titled property". Who, besides some form of government would issue a title, for example?

In the case of "our" government, unconstitutionally relinquishing their responsibility to a private banking cartel, or cabal, or whatever you want to call the scheme that they fell for, we shall soon see who is a slave and who is a partner in this crime. More later???

@dmatic

Sorry I was half asleep at 3 this morning when I was responding to you comment I've edited that typo, it should have read "without claim" of government.

The term "title" is referring to the Ancient concept of Allodial Title, meaning that the individual in possession of the property holds sole ownership of that property, recognition of that title is without government claim. Money, like all property, should be Allodial once you take possession, either through monetary exchange, inheritance, or complete gift. At one time a person held Allodial Title to his home once he fully purchased it, that is no longer true eh the advent of property taxes which are little more than a Feudalistic system of perpetual rents, you only hold title as long as you pay you perpetual rents to a government entity, if you don't they confiscate your home or property. Thus you never hold full title.

@Republicae Thank you. No problem by the way with typos, etc. I make plenty of them, but I do want to understand what you write! I hold many of the same thoughts you express with frustration about the crooked money system we are enslaved with. as well as the favorite government funding tool, property taxes! Presently involved in a people's initiative to create a constitutional amendment to address high property taxes in the state wherein I "reside". All injustice is frustrating isn't it? And there is a lot of it out there!

Still not sure if it was you that wrote this, Republicae, so not sure how to respond. A lot of what the writer writes is interesting and shows an attempt to understand the ruse that is our "financial system". And a ruse it is! But, it also shows an incomplete understanding of the problems, though, it definitely shows more understanding than most!

Wonder how you will react if I told you the underlying problem....

@dmatiic

Please, tell me what you see. I'm always open to exploring new ideas.

@Republicae I will, but may I ask some questions first? I appreciate your attitude, by the way. And you have written a lot to digest in these two entries. You wrote:"history has shown that such single-tier systems are usually repudiated as the system deteriorates through rapid inflationary depreciation." Do you know the cause of "rapid inflationary depreciation"? After defining what that even is? How does history show this? Again, I hope to get to an understanding of what, fundamentally, would be a fair and just system wherein inflation or deflation happens only with regard to the things that "" in it's rightful purpose represents. I.e. the value of the wealth, which would be ascertained by the natural law of supply and demand.

If is simply a trade convenience, which represents the values of things traded, rather than being in itself, "valuable", it would be the measuring stick to measure the natural fluctuations in values of things traded for. I have to leave for a while....sorry.

@Republicae If I may continue, I think that "" used as a measuring stick to measure wealth should not inflate or deflate itself, so how to prevent that? Just as an inch will measure various lengths, what changes is not the inch, it is standard and remains the same. It is the thing measured that changes. An "inch" is of no value at all, so to speak, but it does measure 'things' which gives a context of value, in inches, of what a thing measures. So, too, does not have to have "inherent" value in itself, to accomplish its purpose of measuring value of wealth. Wealth, by the way, is defined as anything and everything made valuable by human effort. Now, certainly, gold has value and is measured, based on supply and demand, and it's value may go up and down, depending on the natural law. Thus, gold itself is deflated or inflated as to its inherent value. What someone is willing to pay for it, or willing to sell it for. But, how does one measure that value? would do the job.

Now, can be, and is, a government's stamp of approval on it, that it will be honored and can be trusted to represent value of things, or wealth. Wealth itself, being subject to moths and rust, as the saying goes, may deflate in value with age, or it may even inflate because demand even for "old" stuff, may put upward pressure on the price of obtaining it.

So, what is "" backed with? Why would anyone have "faith" in it, if it wasn't in itself, valuable? It should be backed by the wealth that it represents. There should be in circulation, as much as there is wealth in an economy. Economics is the study of the production, distribution and consumption of wealth. When there is not enough in circulation, business is curtailed because of want, which puts an upward demand pressure on "", and we then get into the crux of the matter. Charging interest for the use of , otherwise known as "Usury". When there is not enough in an economy, wealth production is limited, which is a bad thing for everybody, save the owners of the ! Here is the scheme that is used to enslave everyone.

@HollyLouise Sure, Holly. I'm relatively new to this, but at some other sites, someone may post something another wrote, and then, when challenged about it, they may not have an answer so it kinda was a waste of time to invest in trying to have a conversation. I'm really impressed with Republicae's writings, but just wanted to make sure it was his, because I don't want to waste time discussing something if I'm not talking with the author. Does that make sense?

It's hard enough to distill thoughts and questions into comprehend-able sentences and paragraphs, especially with a topic like this that is so difficult to get a handle on. I very much appreciate Republicae's interest and diligent investigation of it and am very much looking forward to learning his perspectives and conclusions. Yours, too, by the way! I've read some of your thoughts on other threads! Impressive!

All of us have learned from others, so I'm not too concerned with "plagerism", as long as the author is writing the thoughts and organizing them according to his/her understanding.

@HollyLouise, @Republicae By the way, again, the reason I said: "Wonder how you will react if I told you the underlying problem...." is because I do wonder. MANY throughout the years seem to balk at the mention of the injustice of interest collecting. It's kinda like the education problem, Holly, where people have come to just assume that it is given. I am very encouraged by your simple response, Republicae! I, too, am trying to learn....

@dmatic

I know exactly what causes inflationary depreciation, it is usually the act of a King or government or Central Bank. Let's look at history, Kings would have come minted in gold and silver, but at times when the king need to spend more than he had in his coffers he would start debasing the royal coin by adding base metals to the gold and silver, eventually as this debasement continued, the gold and silver coin would have almost no gold or silver contained in them. The money supply would increase but the number of coins required to purchase a product would rise because the coin has lost its purchase value. Similarly today, the The Magical Printing Press or the Digital Press has done the same thing. When I was a child a bottle of soft drink, for instance, was 10 cents, a candy bar 5 cents.

Prior to 1913 and the Advent of the Federal Reserve System, each “Dollar” had the purchase value of 100 Cents, today because of inflationary depreciation the “Dollar” has the purchase value of about 3 to 4 Cents. As an example of this today it takes $25,657.00 Federal Reserve Notes to purchase what $1,000.00 purchased in 1913 with U.S. Dollars. Now to show the importance of Sound Money, i.e. gold and silver, today the melt value of 4 pre-1964 90% silver quarters is approximately $11.18, more than the Federal minimum wage. in terms of Fiat Dollars. As you can see, Fiat Currency is an economic harm, it stifles prosperity and opportunity among the people while rewarding those that are politically connected.

In terms of the minimum wage, which was created by the Progressives in the early part of the 20th Century to keep what they tend as undesirables out of the workplace, this will show you just how damaging the Fiat Currency System is:

The minimum wage is currently $7.25 per hour, but when you put that amount in terms of a Dollar with 100 Cents purchase values we arrive at this:
$7.25 in today's Dollar is equal to $0.29 Cents in 1913 Dollars, at 40 hours per week $7.25 equates to $290.00, in terms of real 1913 Dollar purchasing power it is $11.41 per week.

This, as you can see, Sound Money is much more than just stressed convenience, good and silver as a currency of exchange is a unit of value, one that has been shown through 1000s of years to hold value not merely be just a unit is convenient exchange.

@dmatic

Capital wealth is a very interesting concept, today if the Fiat Monetary System follows every other example of Fiat failure in history then a person's Capital wealth could completely be wiped out win a matter of days under a hyperinflationary event. What happens during such events is that when rapid inflation is first recognized by the general public they start to exchange their Fiat dollars for as much of the necessary goods they can, as the hyperinflationary event gets worse they start to buy anything that they feel they can barter because they see fewer and fewer merchants accepting the Fiat currency. Eventually, the Fiat currency has no exchange value, at that point people usually use the currency as fuel, or insulation or even toilet paper.

If you take a $100 Dollar Bill and lay it beside a $1 Dollar Bill, each of those pieces of paper have exactly the same value, they hold no intrinsic value. The value is only in the image printed upon them, the cost of printing is about 4 Cents each, the greatest ruse of all. However, a given weight of gold and silver, although the value is indeed perceived to an extent, unlike Fiat paper currency good and silver will never relinquish complete value as paper money. Gold and silver don't need a government stamp of approval, nor are legal tender laws required to enforce its use as money. Legal tender laws are only used for Fiat or unsound currencies. Technically, even taxation is not necessary for government revenues under a Fiat Monetary System, the purpose of taxation is, like the legal tender laws, just another coercive measure to induce the use of the government Fiat money. Gold and silver are not subject to the common forces of inflation and deflation. Under a gold and silver Monetary System, deflation is common response in such a system, as such it helps people because, unlike Fiat Monetary System, things become more affordable, opportunity spreads and so too does prosperity.

I read an article about a decade ago, if I recall, from the Canadian Financial Times, it expressed the fact that if the United States ever returned to a Sound Monetary System (gold and silver) that Canada would be forced to also return to Sound Money because it would not be able to economically compete with the U.S., so people understand what it would mean, it would create an economic powerhouse of widespread prosperity and opportunity.

Economics is the study of human action as Individuals seek they own best interests, thereby benefiting others in their individual quest for prosperity and well-being. Now this is an extremely complex concept to grasp, but under a Sound Monetary System, it is not the number of units that give economic growth and expansion, but the value of those units as a fungible medium or exchange. The modern concept of an elastic currency is a excuse for the implementation of Fiat Monetary Systems,of coffee the problem is that it is exactly the elastic character of Fiat currency that is ultimately it's primary problem.

Interest on money, especially on Sound Money, is simply the Time Value of money, meaning that if I lend you money I no longer have access to the use of that money, thus there must be a value on the time you have use of the money I lend you, under normal circumstances, that is fine through contract. It is however, different under the fractional reserve Fiat Monetary System, for instance, when you purchase a home, it is your signature on that mortgage that creates the money for that mortgage, digitally printed and transferred to the seller.

@Republicae So, if I may be brief, you see no problem with interest collecting? You think it is defensible? You don't see how it contributes to and is the cause of inflationary problems of which you rightly abhor, by the way?

@Republicae I may appear to be adversarial with you if I attempt to understand what you are saying, but I hope that this discussion doesn't devolve into talking past each other, using words and ideas that we have not settled on definitions for, and assume the other has knowledge about. I can see that you have studied this issue with passion and think that you understand it, and using the agenda you bring to the table, desire to make the world a better place. I applaud your desire. I'm not trying to 'teach' you, and maybe you are teachable, but for me to enter into this is basically for me, to practice in somehow conveying the truth of an idea, with a skeptic, to better formulate the method I may use in the future when discussing this, most relevant topic! Thanks for participating!

@Republicae For example, I'm not sure of your use of the phrase capital wealth? Would you please define wealth, and capital wealth? Thanks

I think one of our problems is in understanding the definition of money, too. And, why it was "invented". I believe, as I've said previously, that money does not need to have inherent value, if it's work is to be a trade convenience. Presumably, before "money" was invented, people traded things that they had for things they wanted or needed. To make this trade more convenient, the concept of a standard of measuring value was needed so that when I needed a pair of shoes and only had a bushel of corn, I didn't need to carry around my bushel of corn until I found someone who made shoes that was interested in my bushel of corn! Obviously, I could trade my bushel of corn for some thing that I could use to buy the pair of shoes. Money fits the bill. Now, the maker of my shoes could use the money I used from selling my corn to the sheep herder, to buy the slab of meat from the butcher....and on and on. I suppose that is what you mean by the high sounding words "first tier fiat money system"?

I understand, and everyone else does too, that uses fiat money, that there is a difference in the amount of stuff one will trade for a dollar bill and a hundred dollar bill....even though those bills each cost the same to make. (4 cents)? Seems expensive, but what do I know? Could be the results of inflation? But, again, money, to do its job does not have to have value. It is being used as a trade convenience. I need to go now to get some hay....Sorry

@dmatic

Oh no don't view your comments the least confrontational. I'm happy to try to explain anything you ask. Capital Wealth is easy, it is the combination of your fungible money and your hard assets.

There is a great deal of difference between market or what might be called natural interest and day the interest rates that are artificially manipulated by the Federal Reserve. So I'll address natural interest, yes, not only is it defensible but in terms of economic health it is vital. Interest, like profit, are market signals they give both people and businesses important signals that help in the formulation of financial and business decisions. Interest rates also allows for deciding on the proper allocation of resources, including labor.

Interest is not inflationary, since it's not a creation of new money but a fungible exchange of existing funds of the borrower. Now that being said, the rate manipulation of the Federal Reserve does distort makers, the Federal Reserve is the source of the boom and bust business cycles we have seen since its creation. The Great Depression is a prime example of the actions of the Fed.

Money was not necessarily invented, gold and silver became money because they were found to be the most saleable commodity. It was rare and durable, it could be easily divided, and portable. Gold and silver, as it turned out, just became recognized as the best of all other commodities to serve as a means of exchange. Indeed, barter was used prior to the advent of money proper, but as you have said it was very cumbersome and inconvenient.

@Republicae My "New" Merriam Webster dictionary doesn't even have the word fungible in it! Hard assets as opposed to soft assets? I may be hopelessly out of your league, R.

"Interest" is "vital" to "economic" health? I think you lost me. What, to you is economic health? Again, Economics is the study of the production, the distribution and the consumption of wealth. Do you agree or disagree with that definition?

Wealth is defined as anything and everything made valuable by human effort. Even your gold, though it is a natural resource, for example, is not wealth until someone puts in the effort to go dig it up or pan for it or otherwise find it. Same thing for a tree in the forest. Until someone puts in the effort to go get it and milling it or sawing it or gathering it for firewood, it is not wealth...yet. At various stages, however, that tree can be utilized to create wealth.

So, first up, how is wealth produced? How is it created? Big business can create it, but so can small business. Even one individual can create it. Tomatoes in the grocery store can be wealth, because someone, normally, planted and tended the plants and weeded and watered and put effort into producing the wealth, and of course, getting it to the market. A tomato on the vine, fifty miles from my house doesn't do me too much good, so we need to investigate the distribution of it, too. Then, when I buy it, I can consume it and it is gone! But, I can use that consumed wealth, to create more wealth....

I know this is basic stuff, but it's important to understand, because many have bought into the finance scheme of debt money....

@dmatic

LOL, that surprises me that fungible is not listed in a new dictionary, perhaps that because I use the Webster's 1828 dictionary to get the same words and definitions used by our Founding Fathers. Fungible-is the property if a good or a commodity whose individual units are capable of mutual substitution, in other words a pure ounce of gold can be exchanged for something equal to the value of that unit, meaning that in the market the use of money is not static, it is always being exchanged therefore, the market will determine the value of the medium of exchange as the law of supply and demand gives market signals, more gold and silver will increase the price of goods, the less gold and silver in circulation the more market value the lower the price of goods.

Most people don't understand that interest is the discount of future goods as against present goods, it is an originary category of human valuation on the loss of present utility or availability to the owner by leading to another. In other words, a bushel of peas in ownership today has a different value than a bushel of peas the years from now, since the borrower is removing the current value available they're others it's a price on it for the unknown value in the future.

While that is the most common definition of economics, in realty economics is about human life, is about ideas that that motivate humans to act in their own behalf, it is based on the fact that we are always exchanging something we have for something we desire or need. We exchange our time, our energy, our money for something we want. We find something we want and value more than say our money, the person selling what we want, wants our money more than the product he is selling, thus a voluntary exchange takes place that is mutually beneficial. Economic health is really nothing more than billions of people entering into mutually beneficial exchange, prospering in the process and also creating opportunities that might not be available shit such exchange. People will only change their ideas and habits when they become totally convinced that such change will benefit and better serve their own interest. Government intervention into the market economy tends to distort the entire process, impeding fair competition, giving privileges and favorable regulations to the politically connected.

Wealth is the accumulation of valued goods, they can be utilitarian or esthetic, generally wealth can be considered as immediately liquid such as cash, jewels, and other sellable resources and less immediate goods such as real estate, timber, land mineral rights,artwork, etc. Wealth is produced by several methods, by the Enterprise of human action, entrepreneurship, investing, saving.

@Republicae OK, I think we might have a chance get somewhere. It is evident that you and I have had different 'teachers', however. I would like focus in on your first paragraph above. When you speak of "medium of exchange", I presume you're talking about "", is that correct? In your view, the medium of exchange seems go up or down based on how much gold or silver is available?

I am speaking about as a trade convenience, wherein the merely represents the value of wealth, and is not value in itself, in other words fiat , which has a bad name, because most do not understand and are confused about 's job as a trade convenience. In the system whereof I speak, it is the prices of "commodities" or things being traded that goes up or down, based on the law of supply and demand. The law of supply and demand determines prices of stuff in a marketplace. You seem think that the supply and demand of itself determines how much the is worth. This is important because it starts shed light on why your purchasing power of the dollar is eroding.

Most "economists" have been fed the "bill of goods" (semi-lies) that inflation is caused by "too much chasing too few goods", so they then justify taking out of circulation counteract inflationary tendencies in an economy. What this actually does is puts pressure on itself and increases interest rates, so that people who need do stuff will more for the use of it. It also puts downward pressure on the availability of wealth being produced. So less goods trade and less in the 'economy' buy them.

This is what led the depression, the "great one", even though the Federal Reserve was SUPPOSEDLY created prevent this from happening. It was a big lie. The Fed actually caused the depression. On purpose of course. Do you understand that the Federal Reserve is not a "Federal" program? It is not owned by the government. The Federal Reserve took out of circulation one third of the that was in circulation on purpose. So that people could not back their loans on houses, businesses etc.! But that depression will pale in comparison the coming one.

@dmatic

LOL, I've spent the last 20 years researching the events leading up to the creation of the Federal Reserve, even spending time on the famed Jekyll Island, standing in the very room where bankers and politicians sat to craft their plot.

Actually, the Federal Reserve is similar to later government sponsored enterprises such as Fannie Mae and Freddie Mac. The government has the power to appoint certain officers to head the organization, thus is a mixed corporate structure. The charter act creating the Federal Reserve explains the entire governmental corporate structure. After fees and overhead, along with a portion of profits dispersed to the various bank stockholders, the bulk of revenues are, by law, relinquished to the Treasury of the United States. The Federal Reserve acts at the mercy and behest of the Federal Government, at anytime the Federal Reserve Act could be repealed and the Federal Reserve Banks, their assets, including their buildings he liquidated. We just need to find politicians with the will to do it.

@Republicae Trump would probably do it. That's why they hate him so? So, you think the Federal Reserve is owned by the government?

@dmatic
The Federal Reserve is a government sponsored Enterprise, consisting of 12 regional banks, it has stockholders that are private banks which are required to invest 3% of their own capital stock in the Reserve Bank. The whole system derives all of its authority from the Federal government. This e, is ownership is not like we would normally understand in terms of private ownership, in other words an individual can't own stock in the Fed.

@Republicae So, Do you think the private banks that own the 'stock' in the "federal" reserve, are owned by the government?

@Republicae Are you OK with the Federal Reserve, instead of the Constitutionally mandated Congress coining money and regulating the value thereof?

@dmatic
No those banks are chartered by the government. The Federal Reserve is contrary to the Constitution, it is a violation that needs to be destroyed and Constitution order restored. I am a strict Constitutionalist therefore, almost all of our current government operates outside if the enumerated powers and athority of the Constitution.

@Republicae OK, we're on the same page! Let's get rid of the Federal Reserve, by either "nationalizing it", meaning truly put it's ownership in the hands of the people, or Just let Congress do its job. How would you suggest they regulate the value of "coined money"?

@dmatic

Prior to 1858, people could bring their gold and silver to the US Mint and have their raw ore minted into coin. It's also not very widely known that before 1858 all types of gold and silver coins from different countries were in circulation because each coin was valued by weight. It was a very easy and efficient system, all that Congress did was to determine the weight and measure of the US coinage but there was very little regulation because it was not needed.

As far as the Federal Reserve is concerned, it's good to know the history of it, in my opinion it's should be repealed and liquidated, or simply transformed into a clearing House for fund transaction.

It's important to know some of the history of the Fed and to understand just how detremental it has been too the period of this country. If one is to judge the efficacy of an institution by the policies it promotes, the decisions it makes and the results of its actions then the Federal Reserve Bank System has been one of the most dismal failures in history. Aside from the side-effects of an absolute fiat monetary system, such as the drastic depreciation of the purchasing power of the currency; the FED has not preformed well in the prevention of instability in the economy, just the opposite, it has created a long list of boom and bust cycles since the Federal Reserve Act was passed in 1913.

Just look at its record: 3 Depressions in the 20th Century; the first was in 1920-1921, the next was 1929-1933 and the next was 1937-1938. There were sharp Recessions: 1923-1924, 1948-1949, 1953-1954, 1957-1958, 1973-1975, and 1981-1982. 1987. Then there were 7 mild Recessions: 1926-1927, 1960-1961, 1969-1970, 1980, 1990-1991, 1999 and then 2001 brought on by the events of 9/11 and of course the latest FED fiasco that we are now witnessing. That is not the best record in the world for the Federal Reserve System and Keynesian Economics.

The long-term monetary policy promoted by the FED, this government and other countries, is ruinous. It is based on a game that relies solely upon the illusion of value, the deception of debt wealth. It is, simply a catastrophe that is literally unfolding before our very eyes. Any dependence by any society upon such an inconspicuous system of gradual monetary depreciation is, to say the very least, unwise, shortsighted and poses a very real danger to the future well being of the People.

Of course, such an inflationist fiat monetary system allows the government to expand everything politicians can dream up without resorting to a drastic increase of taxes on the People, this helps the government avoid such nasty and potentially dangerous acts of over-taxation; nevertheless, inflation is, perhaps the most insidious means of tax ever devised. It not only drains a great deal of productive wealth from the country, but it promotes government expansion, poor decision making and misguided polices.

The loss of productive wealth is probably the most damning result of fiat money; it impedes progressive commerce in ways that few understand. It is so damaging to the ability to judge the time value of our money that businesses, particularly those involved with long-term capital investments cannot accurately rely upon the future value of their money. Thus the true cost of capital always evades commerce, encouraging malinvestments and bad decisions; it is a sloppy system of money. Since there is never a clear signal upon which businesses can draw upon, especially when it comes to the manipulation of interest rates by the FED, it is an unreliable indicator of time preferences which, under a free-market system, coupled with sound money, would give such indicators and allow for far better decision making with both monetary and business movements.

Based upon the monetary and credit polices of the FED, commerce should have experienced a steady growth due to the injection of money and credit into circulation however, this does not appear to be the case. Now, based of FED figures, monetary growth and credit there has been an increase close to a factor of 90% between the periods of 1950 and 2008, yet we do not see a comparable rate of economic growth, the truth is that we see just the opposite, a declining growth rate and a drastic decrease in the purchase power of the dollar. In fact, judging other indicators, such as the amount of debt it now takes to generate even a dollar's worth of economic growth our country is on a precipice from which there can be no retreat, at least as long as this monetary system continues to drain away all viability from the economic system.

Without doubt, there are those apologists for the currency fiat monetary system and the economy that has been built upon it who sing the praises of its elasticity, its flexibility when just the opposite is true. What they actually heap their praise on is government intervention through the implementation of the Federal Reserve Bank. It is not, nor can it be a long-term solution, such systems always fails in the end. They shout that in order for the economy to keep going, for it to grow there must be a constant and consistent supply of money injected into circulation. While that is perfectly true for a fiat monetary system, it does not hold true for a sound monetary system. It is not the number of dollars floating around in the economy that matters, but the effective purchasing power of each dollar that assist in the productive creation of commerce and, in turn, wealth. With fiat money, central banking intervention and manipulation always depreciates the purchase value of money to the point that the only impetus for economic growth is the injection of even more money and credit into the system. This is, of course, a precarious road to travel upon.

Eventually, of course, this great inverted pyramid of debt that they have helped create can no longer be balanced. The debt and inflation become impossible to maintain to the point that the FED will be increasingly unable to create more debt to create more money to effect its balancing act. Thus far, the only thing keeping the entire system afloat is the fact that up until now they have been able to continue the process, but as you and I will soon see, that will no longer be possible. It is becoming evident that as the debt looms larger and larger, it will siphon all profitability from the economy because the economy can simply not service that galactic degree of debt.

There is currently an effort by the FED, the Treasury and this government of a great postponement; one that will barely slow the crisis, for it is systemic not only in its nature but the flaws within the system are inherent. There is a very real dual deterioration taking place at the moment, one involves a deflationary trend in banking, credit and business, the other is a massive inflationary trend taking place as the FED injects truly unbelievable amounts of credit liquidity and money into the system. There are other even more ominous threats to our economic survival on the horizon, of which there will be few options left the FED in its ability to divert disaster. Soon, there will be massive defaults, on such a scale that this country has yet to see in its history.

It has assisted in creating a vast black hole of debt one that has been steadily sucking the life from this country and its people. The only thing, and I mean the only thing that is keeping the entire system hobbling at the moment is the ability of the FED to keep the “printing-press” running at full speed. The problem of course is that the debt is multiplying faster than the FED can print itself out of the hole. The FED is constantly attempting to push that event horizon out in time, creating a lag-time between now and the “Reckoning”.

It is, of course, becoming more and more difficult for the FED to keep the spread from narrowing. As we know, the people of this country are woefully unaware of just what is taking place and because there is a delay between the actions of the FED and the reactions within the economy this allows problems to go unnoticed until they are upon us.

Eventually, the entire system becomes unmanageable, stress-cracks simply become too common and too deep to contain with the normal actions taken by the FED, as we are seeing. At this point, the decision-making process is much more akin to a stab in the dark than anything resembling sound monetary and economic policy.

We are seeing signals of a monetary system that is heading for the bone yard. The expansion of bank credit an money, thus more debt, all sponsored by a central bank which has proven itself incompetent since its inception in 1913, will begin to demand far more than the economy will be able to produce. As I have stated, time and again, this fiat monetary system and the economy it supports will end in a massive insolvency. Instead of taking appropriate actions to combat this, the FED is doing exactly the same thing that brought about every boom and bust cycle our country has seen since the 1920s. It is lowering interest rates, pumping mind-boggling amounts of fiat currency into the system and thus they are simply distorting an already inflated economic and monetary distortion by their actions. All of this leads to a very unsustainable level of debt and that debt will begin to demand even more service the larger it becomes. The central banks of the world now find themselves in the classic Catch 22, a circular equation with no solution.

We are at the point that the FED, the Treasury, the Government will no longer be able to mitigate the cascade of problems with any real effectiveness. The problems are now much larger than the institutions which seek to control them. In fact, the problems are now larger than the government which seeks to maintain its power and control, it will also be a victim of its own creation.

@dmatic

As I've said, Fiat money, was, in the beginning nothing more than a receipt for actual money, it was a token of an actual deposit of real, asset money, i.e. gold and silver. When gold and silver were placed on deposit a slip of paper, or a certificate was given showing title of ownership to the actual money. After a period of time, since the slip of paper repersented an actual amount of real, asset money, the slips of paper were traded with the confidence that they were “as good as gold”. Now, by 1933, thanks to this government and the FED, these slips of paper certificates, both gold and silver, were repudiated by this government. In other words, all that were given were paper receipts which held no actual value and no actual promise of payment of any kind. It was essentially nothing more than an official act of plunder.

By 1971, the government of Nixon repudiated all national debt payments and forced upon the world a system of paper slips that bore no promise of payment in assets only debt and faith in this government. Everything changed in 1971, the entire economic structure of the world was virtually remade overnight and a new type of debt organized into currency was established. Indeed, one can readily track the decline of our country to that period in particular, also to the rising level of debt and the decline of economic viability.

Since money has a very definite marginal utility there is an optimum amount of money needed at any one time in an economy, no matter the size of the economy.I strongly suggest you read The History of Money and Banking from the Colonial Period until the 1970s.

Back to money, when gold and silver are used as money the economy adjust itself to the supply and supply will always meet demand. Since money is not, as many suppose, linear in either nature or use, nor is it neutral, there is an economic equilibrium that is attained within a free market economy. As such, the supply of gold and silver are never an issue since each unit provides the maximum marginal utility within its economic potency.

David Hume stated, nearly 300 years ago, that if every man woke up with double the amount of gold money in his possession he would instantly feel twice as rich, as least for a while, but as that money was circulated into the economy the economy would adjust itself through pricing as demand for goods were outstripped by the supply of money in circulation. Soon, an equilibrium would be attained between the new supply of money and the prices of goods and no one would feel twice as wealthy as they did when they were surprised to find that they pockets were filled with twice the amount of money than they had the night before.

Thus when people say that the government can simply issue or print money, that is simplistic in the extreme. Now, take the amount of the economy, standing at $18.62 GDP, but that is the nominal value of the economy not the actual purchase value of it. So, when you consider that fact, there is more than enough gold and silver, not to mention the fact that under a market economy the economy naturally adjust to the supply of money in circulation, the less money in circulation the more each unit of money purchases, the more money in circulation the less each unit purchases.

That is a fixed principle of monetary mechanics. Thus when you say that the government should just print money what will give the money its value? It is simply not a matter of the government declaring that this or that slip of printed paper has this or that value? What is the difference between a $5.00 bill and a $100.00 Bill? As I've said both cost exactly the same to produce, both use the same ink in being printed, both are the same size, so what is the actual difference between the two in terms of value? There in is the great ruse, people have been so conditioned to think that the one printed with the numerals $100 is more valuable than the one printed with $5 and indeed because of this ruse people accept the $100 in exchange for more goods than they do for the $5, but the reality is that there is absolutely no difference in actual value between the two. There is absolutely no asset that makes one more valuable than the other, yet we have been conditioned to think there is and function as through it were true. Gold and silver are assets on both sides of the ledger, fiat currency however, is a liability on both sides of the ledger, that fact has complicated repercussions that would take a few volumes to explain.

Prior to the time when gold and silver were eliminated from our monetary system, a $100 Note was a receipt for a very definite weight, and thus value, of actual money, in fact every Note was a receipt for a real sum of real asset valued money. At that time money was a voluntary medium of exchange within the market, today it is an instrument of government coercion and corruption, as are all types of fiat currency or debased currency throughout history. The reasons that kings and governments loved to debased their currency are numerous, but one reason is the lack of restraint on them to operate without responsibility or accountability. That has always been the case.

Now, not only don’t we need bankers to create money, but get this, we don’t need government to create money either. All paper fiat money, whether issued by banks or governments, deprive individuals of their property rights. For at one time when you held actual gold and silver money it was titled by your ownership to you, today that is not the case, all issues of currency are the property, by de facto law, of the government. The Federal Reserve, as onerous as it is, is a creation of government and was created to serve the government. It is a sanctioned cartel, chartered by this government to allow for the inflationary deprecation and deficit spending of this government. Inflation is nothing more than a hidden taxation, one that allows the government to operate beyond the restraint of budgets, but in doing so the government risks the economic destruction of the currency’s potency through inflation.

What is wrong with people creating their own monetary system, nothing as long as it is an honest system of asset exchange instead of a falsified system of paper receipts that promise nothing by paper in return. A voluntary system of money where the people chose to use money because they actually can trust the money instead of trusting some central bank or even government is fine. You can never trust any type of fiat money substitutes because the purchase value is determined by the amount being issued by the official government or bank. Why would anyone want to use a piece of paper with a $1.00 printed on it when it might buy 50 cents worth of goods today, but depending on the rate of inflationary issue, could be worth 20 cents worth of goods tomorrow. Please, by all means, read When Money Dies by Feggurson, if you really want to see what happens when a government diredtly prints money without restraint.

The only thing that makes real money money is the fact that it can be exchanged. Gold and silver do not need faith, they do not need a government seal of official approval in order to function as money, nor is gold and silver weighted down with through the creation of debt and its organization into a currency as our current system is. History is filled with examples of governments directly issuing paper money, there have been a little over 700 paper systems throughout history and guess what? All of them failed, many through hyperinflation. Few lasted over 40 years, our current system is a little over 40 yerars old and is about to collapse.

@Republicae I will try to respond to the first of these two lengthy posts. I love your passion! Not sure I have as much time to keep up with my end of this discussion, but will try. First, in general, you seem to bought the notion that the Federal Reserve does what it does for the benefit of the people who are forced to partake in the unjust system they have created. That their motivation is altruistic, so tp speak, when the very opposite is the case, in my view. Their motivation is to increase their own control of wealth. They know exactly what the fate of their system will be. They are causing it! As you have fairly adequately surmised. It is a scheme, involving the collecting of interest.

Just to pick a sentence, you wrote: "It is becoming evident that as the debt looms larger and larger, it will siphon all profitability from the economy because the economy can simply not service that galactic degree of debt." This is true. It is purposeful. Obviously, for especially anyone with your degree of investigation and understanding, you understand this? It appears that they are destined to play this thing out until it explodes into collapse, as you have indicated, either intentionally, or because they can't stop it.

When you talk of "servicing the debt" you mean interest payments. Usury. The "price" or cost of borrowing money, through debt. It is called "finance". And, finance is the sponge that "siphons all profitability from the economy"!

This is the crux of the injustice. In the creation of wealth, both capital and labor are legitimate sharers of the "profitability". Without "profitability", there would be no incentive for investment, nor anything left over, so to speak, to pay for labor. Both of these cooperating sides, capital and labor, unite in purpose to create wealth and deserve, justly, to "profit", because they both have contributed in a real way to its creation.

The "thief" in this "economy" is finance. Interest collecting is unjust gain. Unjust in that the financier extracts part of the profit from the creation of wealth by capital and labor, even though doing absolutely nothing to deserve it! I know you will somehow try and defend the practice, but if you do, you will show that you have bought into their scheme. But, that's OK, for now. I will try to refute them so that you may come out of the fog and see what a righteous system that is fair and just for everyone actually looks like.

@dmatic

No, not in the least have I ever claimed that the Federal Reserve has any benefit to the people of this country, it has no redeeming qualities whatsoever. I'm not sure where you got that impression. The entire formation of the Fed was to benefit the government in its ability to spend beyond the revenues achieved through taxation, that fact is obvious by comparing tax revenues to with accumulated $22 Trillion in debt. In addition, the intentional inflationary depreciation of the currency acts as a hidden tax on the people of this country, siphoning of wealth and opportunity to the common man in this country. The act of inflationary depreciation also acts as a win-fall to those who are politically connected, when fiat money is first released into circulation it is to the benefit of bankers, -power businesses and investment houses like Goldman Sachs. The Federal Reserve is simply a means of authoritarian control.

Servicing the national debt is indeed interest, it is due to all creditors, such as Individuals, mutual funds, investment portfolios, holders of various Treasury notes of various maturity, and of course, foreign governments. As rate of interest increases global, due to various conditions in international uncertainties, and at some point it will consume more and more of the assets of the government. The unjust gain is not interest, but the type of system that has been created within the fiat economy. In a sound monetary system interest is not only justified by absolutely vital to a healthy economy, without it it the entire business signaling process would be totally chaotic, creating the misallocation of resources and labor. The economy would break down and create massive poverty. In our current economy interest, though manipulated, still, as distorted as it is, nevertheless it provides business signals that allow for economic growth.

@Republicae Ok, you're starting to lose me again...I agree that the Fed is authoritarian control, but disagree vehemently with you about the purpose of its formation. It was not to benefit "government". It was to benefit the authoritarian. Namely, the financier, himself, the money owner. After all, "government" is of, for and by the people, correct? I'm not saying that the Fed doesn't own our corrupt government, by the way. But, I am saying that the government does NOT own the Federal Reserve.

Sadly, I have many irons in fires, and cannot respond now, or ever apparently, as well as I would like, but may I ask you to define economic growth? You saying that the economy would break down and create massive poverty without interest collecting and/or debt financed "?" is to say the least highly suspect. Thanks

@dmatic

Have you read the Federal Reserve Act? You should, it will open your eyes to the purpose, even better is to read the first purposed drafts of the act, you will see that the purpose was, in fact, to benefit the government to circumvent the limitations on government. If it were an authoritarian entity then there would be no power to repeal the act.

@Republicae I would love to read the books you recommend, thanks. In your second post you wrote:"Since money has a very definite marginal utility there is an optimum amount of money needed at any one time in an economy, no matter the size of the economy."

I think we're still having a fundamental difference agreeing on the definition of money, and what its job is. I know how banks and script and notes came into existence, so it is what it is. In my view, money serves as a trade convenience, as I've said, and it needs to represent value. It does not need to be value in itself. In an economy, it is only necessary that the participants in the economy, if they want to use the convenience of trading with money as the means of exchange, or trade, basically agree that the different denominations of it represent the values of things they trade for. Otherwise, they could just trade whatever wares and/or services they have, in exchange for what they want, if they can find someone that wants to make the deal. Then they wouldn't need money.

In your sentence above, what would you say is the "optimum" amount of money in circulation in an economy, no matter the size of the economy?

In my view, since money represents value of wealth in an economy, the optimum amount of it in circulation, would definitely be reflected in the size of the economy. The money in a just economy would not inflate or deflate in value, just as an inch or a yard do not change when measuring linear things. The money would stay the same. The values of the things it measured however, would change due to supply and demand.

There needs to be enough money in circulation to be equal to the amount of business, or trade, being done in the economy. The total amount of money in circulation would be backed by the very wealth it represents, thus assuring everyone involved in the economy that they could have "faith" in the money being able to be exchanged for goods and services. As wealth is increased in an economy, more money would be issued to represent the newly created wealth, thus assuring the participants that the money they were using is backed by "wealth". (It doesn't need to be gold or silver).

@dmatic

Let's take a look at the idea that there must be enough money in circulation that is equal to the amount of business, etc. that idea completely contradicts the fact that as of this past January there was only $1.7 Trillion dollars in circulation, of that only $1.66 Trillion are Federal Reserve notes. The Gross Domestic Product last year was over $20 Trillion dollars, obviously the statement that you have to have money in circulation equal to the economic output of the country is no where near to being accurate and it points to a monetary truth: the more currency introduced into circulation the lower the purchasing power of each monetary unit.

There is, in a sound monetary system unimpeded by the intervention of government, a specific self-balanced amount of money required to circulate within an economy. The signal of a perfect amount of money is the full purchase value of each unit, with the Dollar that full purchase value is 100 Cents. In the Fiat System the purchase value or power today is approximately 4 Cents per Dollar, meaning that so much Fiat paper currency had been printed or digitally produced that each Dollar has lost 96% of its purchase value. The Federal Reserve is founded on the notion of elasticity, such systems always, without exception, create economic distortions that always lead to economic disparity in opportunity that stratifies the classes of wealth within a country.

Money is not simply just a means of exchange, it's more than utilitarian. The type of money makes all the difference in the world in terms of economic growth and opportunity. Fiat money allows for not only government mischief, but corruption, only sound money helps resist the inclination for such mischief and corruption because each unit of money must be accounted for in the budget. Remember when I said that gold and silver are assets on both side of the ledger and Fiat currency is a liability on both sides of the ledger? Under a Fiat system there is no real accountability, as seen with our $22 Trillion Dollar national debt, that would not be possible under a sound money system because politicians could not spend more that the actual revenues it brings in annually.

@Republicae thanks for your reply. I will try to make this understandable, and admit that I have not done a good, nor complete, job of explaining my position. I am trying to understand and explain the fundamentals of what a sound money policy would look like. We both know the current system is neither sound nor just. Correct?

In your attempt to refute the principle of having enough money in circulation that was equal to the amount of trade/business/transactions in an economy, you used figures from this unsound system. The figures you use can be shown to refute the system we have in place, but not the principle I was alluding to.

Using your figures, when 1.7 Trillion 'dollars' is expected to "carry" $20 Trillion in GDP, guess what? There is not enough money in circulation, and "money" itself becomes "valuable" and does not do it's job of representing value. This means that for much of the "economy" they are required to borrow it from someone and then pay interest on the loan which leads to higher inflation, of course. For others to participate in the economy, they, too, then, need to borrow and go into debt, too, paying interest on their loans, too.

I'm not saying that wealth isn't produced under this scheme, but wealth production is curtailed due to the lack of "money" in circulation. believe me, I know this is hard for you to understand. Maybe if I give a simplified example?

Why is there so much debt all over the world? Every country I am aware of, is in debt, except maybe, Switzerland? (That used to be the case). And There is so much debt in state governments, local municipal governments and not to mention private debt of the population of say, the U.S. either, and of course the unimaginable $22+Trillion federal debt. Ever wonder to whom all this debt is owed?

I'll try to come up with an example of why interest collecting is so unjust....later

@dmatic

Again, money is not static, it's fungible, it is constantly circulating through the economy performing it's exchange utility. The fact is that there is way too much money in circulation causes the purchase value to drop thereby, the problem is that because there is so much money it is losing its economic potency. Therefore, it takes more circulation of the Fiat currency today to buy less than what it bought 5 or 10 years ago. The more money they put into circulation, the purchase value decreases, prices then increase so people have had to accumulate debt because their money is approaching the Zero Value threshold. Interest has absolutely nothing to do what inflation, inflation is the increase of new money supply into circulation. Interest is paid through money that is already in circulation.

The more money that is placed in circulation the less purchase value each dollar retains, the evidence from history is clear, the Weimar Republic is a prime example of what happens when a government, in conjunction with a central bank, expands the money supply. Between 1921 and 1923, the money supply was expanded dramatically, the reason they expanded it was because of the economic condition of Germany after WWI. Because of the expansion of the money supply, it took a wheelbarrow full of Deutschmarks to buy a loaf of bread, it was cheaper to burn money than to buy firewood. Then we have some more recent examples are hyperinflationary monetary policy: Zimbabwe and now Venezuela.

The absolute worse policy is expanding the Fiat money supply. Again, the more Fiat is increased the less economic potency it retains, the more debt must be accumulated to make up for the reduction in purchasing power.

To the contrary, wealth is not curtailed by a lack of money is curtailed by an overabundance of money that no longer retains its purchasing power. You see is not the number of dollars you have that determines wealth it is the purchase value of each dollar that determines wealth. In Zimbabwe, you had some of the richest billionaires in the number of Zimbabwean Dollars that couldn't buy a dozen eggs with all their paper “wealth”

To illustrate: Today it would take $1,285,288.54 Fiat Dollars to buy what $50,000 dollars bought in 1913 when the dollar was backed by gold and silver. Less than 5 years ago it would take $1,192,448.90 Million Fiat Dollars to buy what $50,000 dollars bought in 1913. In the year I was born it would have taken $1,38,924.20 Fiat Dollars to buy whatever $50,000 dollars bought in 1913. Thus as you see the more money that is put into circulation the less it can purchase, it's a form of economic suicide to expand the money supply.

The reason Switzerland didn't carry much debt is simple, until the year 2000 the Swiss Franc was completely backed by gold, unfortunately in 2000 the government reduced the amount of gold reserves required would only be 40%.

The rain the most countries are in debt is directly tied to the horrible decision of Richard Nixon to close the gold window in 1971, you can see a direct correlation between that action and the exponential accumulation of debt. Fiat money is a debt based currency, it has no asset value, it operates on debt and thus it facilitates the expansion of debt.

Below are examples of what happens when you expand the money supply, the results are just the opposite of what you described.

@dmatic

Money is a good, at least real asset money, such as gold and silver, are actual goods, they are recognized as such and because of this characteristicum specificum, real money always falls under the set law of marginal utility, as such while money can be a stabilizing factor in economic exchange, the idea that a constant-valued good is a contradiction in the market and of the law of marginal utility.

Money arose as a commodity good, recognized as a valuable good with uses prior to becoming uses as money. Money substitutes however, which are nothing more than temporary paper claims, promises of payment depending on the supply, whether overly expanded or stabilized, there is however, rarely an instance in history where a fiat paper money substitute remained stable. As such, the problem arises that such substitutes extend economic inefficiencies, distorting the pricing structure, sending all types of mixed signals into the market.

It should be obvious, but obviously it is not...as von Mises stated: “Before an economic good begins to function as money it must already possess exchange-value based on some other cause than its monetary function. But money that already functions as such may remain valuable even when the original source of its exchange value has ceased to exist.

While there is, under a gold and silver money system, a degree of labor and the extension of resources to produce and then mint the coin, the same is not true for fiat money, it is simply printed or digitally produced without actual accountability for the quantity of supply. In this case, fiat currency does one thing that cannot be accomplished with gold and silver, there is a certain economic efficiency in the production of fiat paper money that cannot be matched by the production of gold and silver. That however, is not an advantage. Since fiat money does not lend itself to savings and thrift, there is an abandonment of all the mechanisms within the market that are associated with savings and thrift, such a efficient productive capital, natural market rates of interest that government everything from business decisions to the supply of money to the accessibility of credit.

Now, since fiat currency is not conducive to savings and thrift the entire economic nature of market production is skewed, distorted and cannot, no matter what the fiat monetary administrators attempt to do or create, they cannot replace or manipulate all the necessary market factors to make the system work as it would normally work with an asset-based money.

All fiat monies, must essentially be continuously re-deposited, reissued in order to maintain a degree of functionality as money, in other words, since there is no actual asset behind the fiat currency then there is no measure of economic requirements to determine the optimal supply, since that is not possible the only option is to continue to expand the supply thus constantly lowering the purchase value of the fiat currency and thus lowering the economic viability of each fiat unit. Thus, despite all the efforts to make fiat money substitutes act in a way that mimics real money, there is no way to accomplish that under such systems.

First, the goal of this government, beginning in the 1860s, which was an trial run for the real goal of displacing all gold and silver with a fiat regime that could be controlled by government and its banking-corporatist patrons. The next part of the goal was an expansion of the 1860 experiment and that was the formation of the Federal Reserve, by 1933 the next step in the demonetization of gold and silver took place with the confiscation of gold, the legal prohibition of private ownership and the use of fiat currency domestically. This was effectively used to take as much gold as possible out of the hands of the people and place it in the hands of those who wished to control this country and create what amounts to little more than a productive serfdom. This goal became more and more pervasive as the effort to demonetize gold and silver reached its peak with the total separation between the fiat regime and the commodity metals, thereby placing control over vast amounts of gold and silver into the hands of the official regime. It was not even necessary for the government and banks to own the gold, only to demonetize it, making it non-money essentially.

To replace the money property of the people, this government, and its banking patrons simply used deception substituting pieces of paper for real money and maintaining the ruse that it was valuable. Of course, that ruse is rapidly ending as the purchase value of the fiat regime is becoming worthless and a non-functioning substitute. They created a system whereby the people of this country would come to desire the paper without knowing that it actually had no value whatsoever. Hell, it was not long ago when there was a Congressman who was surprise to learn that the Federal Reserve Notes were not backed by gold. That, of course, was part of the system plan, to deceive the people to such an extent that they would rarely ask any questions. Dr.Paul has done more to reveal to this country the nature of this deception than any other man in the last century!

Essentially, it has been the greatest expropriation of wealth in the history of the world and this government, along with its banking patrons have been partners all along in the crime of the centuries.

Of course, regarding the scheme to deceive the people, the government had to create a gradual system that would allow acceptance of fiat paper tokens or tickets as money. This was accomplished by allowing those paper tickets to represent claims to gold and silver, that is the only reason they acquired purchasing power, without gold and silver there would have been no possible way for the fiat tickets to be accepted as an actual means of exchange with a purchase value. Since prior to the introduction of the fiat regime, a dollar was actually a fraction of an ounce of gold, the value was a known, but to create an effective substitute that same purchase value was assumed by the fiat currency. Of course, since that time, the idea and the reality of a fiat dollar is that it no longer retains the purchase value of 100 Cents, but of approximately 4 Cents. Nevertheless, it was the actual silver dollar that imparted the notion of value to the fiat paper money substitute, without the original value of the silver dollar behind it there would have been no possible way for such an impartation of value to the fiat paper. That’s how the whole fiat money scam was “sold” to the American People, it’s how it was forced on the People.

Under any normal competitive market it is impossible, but of course, that has never stopped governments and their banking patrons from attempting such feats. As with all fiat currency regimes, sooner or later, the actual price or purchasing power of the fiat money approaches the production cost of fiat money. In other words, as we have seen, the purchasing value of the “dollar” the Federal Reserve Notes are now very close to the cost of producing them, with each note costing just a few cents to produce matching the actual purchasing value of each. It is at this juncture, that the risk of hyperinflation becomes a real possibility.

As we have seen, particularly in the last few years, there has been a flight from Federal Reserve Notes into real values. With growing uncertainty, there will be a point where people will cease to want to accept the fiat notes, as that continues to occur, the idea that yet another fiat note will be accepted is increasingly doubtful. Of course what happens is that as the monetary system breaks down, there will be an evolution into another barter society, which, as always seen, a return to the known and recognized commodity monies, most likely that will be the most recognized monetary good: gold and silver.

As with all fiat currencies, in order for them to function one of the first things that must be established is a monetary monopoly, there must be a single fiat money producer, legally shielding from any and all competition. This is usually the government or a government sponsored cartel endowed with monopoly powers over the production and distribution of the fiat money. Without such monopoly protection a fiat monetary regime cannot exist. It is the most abhorrent systems that contradicts everything associated with the principles of the free-market and indeed with individual liberty and economic freedom. It is a system completely closed to options, this is an artificial legal construction that must be maintained and enforced through coercion.

@Republicae Well, I can't get by the first paragraph, from the first post above, without addressing it, lest I get more confused. Will try to read and digest the rest of your writings later today, Lord willing.

You wrote:"Again, money is not static, it's fungible, it is constantly circulating through the economy performing it's exchange utility. The fact is that there is way too much money in circulation causes the purchase value to drop thereby, the problem is that because there is so much money it is losing its economic potency. Therefore, it takes more circulation of the Fiat currency today to buy less than what it bought 5 or 10 years ago. The more money they put into circulation, the purchase value decreases, prices then increase so people have had to accumulate debt because their money is approaching the Zero Value threshold. Interest has absolutely nothing to do what inflation, inflation is the increase of new money supply into circulation. Interest is paid through money that is already in circulation. "

Let's try to address this first: "Interest has absolutely nothing to do what inflation, inflation is the increase of new money supply into circulation." I understand that that is how 'they' want you to think. Let's define "inflation" as increase in prices of goods? whereas deflation would be a decrease in the price of goods. You are thinking of inflation and deflation as it relates to the supply of money in circulation.

If money was functioning as a representation of value, as a trade convenience, how could it, as a measure, either inflate or deflate in it's "ability to measure value"? Can an inch inflate or deflate? Of course not. I think you trying to declare that money itself has to be value, instead of represent value, is a problem. What you are talking about is bartering. Trading something that has inherent value, for something that has inherent value.

In your scheme, using only gold and silver coin, and requiring everyone to use that if they wanted to enter the marketplace would incentivize it's hoarding, and pretty soon, wealth creation would be curtailed and the economy would suffer for lack of "money" to carry on the production, distribution and consumption of it.

So, let's look at the cause of inflation, the increase in price of a good. Let's say people need widgets to live, so two factories are built and people are hired to manufacture widgets. One factory is built without having to pay interest on a loan of money from a money owner. The other factory has to borrow money, due to it's owners lacking money to pay for the labor and materials to construct the building itself. I could run this example out very far, but maybe you can see from here, where I'm going? The company who can produce the widget without having to pay interest on every level of its production can afford to sell the widget much cheaper than the other company. If the other company wants to stay in business it will need to recoup and include its interest expense in the price of the thing produced, thus increasing its price to a consumer. Trouble is, with our debt based unsound money system, with not enough money in circulation, putting a premium of money itself, and having to pay more for the privilege of using it, in higher interest charges, every stage along the way of a product has interest payments incorporated into the price of everything! Those who own the money, have done nothing to increase the value of a product, and deserve not to share in any profit thereby, are nonetheless taking the first bite out of the profit made from producing a product.

By the way, I get that money is fungible and not static. It's losing its purchasing power precisely because of 'inflation' of prices due to interest payments along every step of the way of producing wealth!

@Republicae By the way, I get that the "dollar's" purchasing power should be equal to its productive power! We need to understand what it is that is cutting into its purchasing power!

@Republicae You wrote: "it's a form of economic suicide to expand the money supply." Economic suicide is allowing interest collecting to be the foundation of a crooked money system.

@Republicae Further, you wrote: "there is however, rarely an instance in history where a fiat paper money substitute remained stable." That's because there is not a sytsem in history that doesn't allow interest collecting, save for Muslim countries?

@dmatic

The definition of inflation is NOT the increase of prices, the increase in the prices is the effect of inflating the money supply beyond the optimal balance. Cause and Effect, the cause is inflation the effect of that inflation is higher prices. Too many dollars chasing fewer goods, the more dollars in circulation the less purchase power of those dollars, thus it cost more dollars to buy the same goods that cost less a year, five years, ten years ago.

Deflation, contrary to the idea that is intentionally promoted by the advocates of Fiat currency, is when each dollar increases in its purchase power, it becomes easier for people to buy the necessary goods and services at an affordable price. There is an optimal supply of money within an economy, if more is put into circulation, the result is that prices increase, making it more and more difficult for the people to live a comfortable life, to afford all the necessities, turning, in many cases those goods into luxuries because they are no longer affordable to the common man.

Fiat monetary inflation distorts more than merely prices, the entire economies of the world are distorted by the effects of the inflationary policies. Government, business and even individuals are negatively affected by these policies.

Fiat paper currency is nothing more than an official IOU, each dollar in your pocket has no inherent value, it is simply a promise of payment to the creditors of our national debt and to all other debts. Unlike gold and silver, which are their own value, in a Fiat monetary system, since there is no inherent value, since it is not rare, since it is not difficult or costly to produce, is not only subject to inflationary policies it can only continue to maintain an economic exchange value as long as its purchase power is not reduced to zero by placing more and more Fiat currency into circulation. At the point where the circulation reaches zero, it then, because of the continued issuance of currency into circulation, reaches negative purchasing power... at which point the government is forced to increase the face value of the money into, as we have seen, enormous denominations as a million, billion or as in Zimbabwe, trillion dollar bills.

Now in a sound monetary system, you can have both inflation or deflation dependent upon the supply of either gold or silver, but the effects are temporary because as real money the economic adjustments are quickly made. It's a strange concept to think that because we might use good and silver that prior would board it, that has never been the case with either gold or silver in the last 5000 years of their use as money. Gold and silver would simply be used as money, the fact that it's not been allowed to be used as money since 1933 in this country is the only incentive for hoarding it, once it is allowed to act as a monetary medium of exchange it instantly becomes commonly exchanged, granted savings would increase however, it is from savings that economic growth can take place because of the soundness of the money in investments. Because of the fact that gold and silver are asset money rather than debt money, debt on every level, from government to business to the individual would decrease dramatically. Asset money has a wonderful effect in an economy, it creates asset wealth; in contradistinction of debt money which naturally creates more debt which is leveraged in the economy allowing for the stratification of wealth and opportunity. Under a good and silver monetary system there is no such thing as a lack of money, remember it is not the number of money units that carries economic effectiveness but the purchasing power of each of those monetary units or dollars.

As an example think about it this way, as of today the market price of a $20 Dollar gold piece is $1300.00 Fiat Dollars. So it takes one thousand and three hundred Fiat Dollars to by $20 Dollars worth of gold that's because each of the Fiat Dollars have a purchase value of an amazing 0.01538462 Cents. I just checked that and it shocked me how bad things really are, get ready... You should start to exchange your Fiat Dollars into hard assets as soon as possible. So in a Fiat system you can have millions of Fiat Dollars but they will do you no good because they are constantly losing purchasing power. Again there is no such thing as a lack of money in the gold/silver monetary system for the simple fact that neither gold nor silver are subject to the forces of artificial inflation that devalue its purchasing power, it remains stable as long as government doesn't create artificial obstacles to its monetary and economic utility.

Again, interest is a neutral factor in terms of inflation, it does not affect prices, even if one company was in debt and the other wasn't, the market will determine pricing of the final product, pricing will be determined by what Peele win the market are willing to pay for a product. If a business owner has chosen to go into debt and that choice is not based on sound business practice then the business owner has simply made a bad business decision and could risk going out of business because of that decision.

That's why interest signals are important to any business owner, it he must borrow then he must include all the cost of opening a business in the consideration of his decisions, if after calculating the opportunity costs he determines that going into business is not a wise one then he will have to alter his plans, these decisions would have to include researching competitors whim his market, if he doesn't then he's just dumb.

Again, it is not the numbers of dollars that make an economy grow our wealth increase, it is solely the purchase value of each of those dollars that is important, the problem why the idea that there is a lack of money is that the more money pumped into circulation the less economic value it retains. The less economic value it retains the more distress it creates. Simply creating more money doesn't do anything positive in terms of economic exchange, wages, or borrowing, it only contributes to less purchasing power and nothing is accomplished. Inflation again is nothing more than putting more and more Dollars into circulation that creates higher prices because of less and less purchasing power of each dollar, nothing is accomplished except more of the same endless cycle.

Under a good/silver monetary system, rates of interest are formed by market forces, not bankers or government and are therefore, very stable, as such the economy becomes stabilized, business decisions can be estimated why confidence. Have you ever wondered why there have been so many booms and busts, what we call business cycles, they are created by the Federal Reserve’s artificial manipulation of interest rates, that would not nor could it be easily fine in a Gold/Silver monetary system because of its transparency, that is why gold and silver have been called Honest Money and that's exactly why government and bankers hate it as money. Money doesn't lose its purchasing power because of prices or interest payments, the only way that money loses its purchasing power is through inflating the supply into circulation, that's why it's called inflation because it means inflating the supply of money, nothing else causes inflation proper.

@dmatic

Again, inflation is not caused by interest, even though Muslims don't charge interest, that fact doesn't affect the levels of inflation the too have suffered from, because, as I have explained inflation is an increase of the supply of money put into circulation, nothing else causes inflation. For your premise to be correct then Muslim countries should not be suffering from inflation, unfortunately that's not the case at all. Turkey has a current 20.01% inflation rate, Indonesia is at 2.7%, Saudi Arabia is at 1.9% but it reached is highest inflation rate in 2008 when it reached 11.10%. Once again I'll emphasize, interest rates have absolutely not to do what either creating or effecting the rate of inflation.

@dmatic

Do you know what would happen to countries like Saudi Arabia if there was no oil revenues supporting their economy and there was no interest allowed? You would have a very poor, non-developed economy for the same reason i've tried to explain, interest is a time-signal for monetary value that allows for economic development not destruction. Interest is an ancillary to productivity and entrepreneurship, it allows for innovation and expansion of business where it would not be possible without the time-value of money.

Interest rates are an important price and as such, as with all other prices interest rates follow demand. Do you think there might be an occasion when a person or business was in demand of money that was not currently available? So, think about this since you believe that interest is a problem; you have deposited your money in a bank and the bank pays you 3.5% interest on your savings then the bank lends your deposited money to a business that is creditworthy at 4.5% because the bank has to pay its Bank tellers, security guards, the utilities, etc. Would you want to allow the bank to use your money free? You either heard for it, you saved it. What if the bank loaned your money to a business that later filed bankruptcy, but rather than you losing your money the bank held the loan at their risk, not yours?

Like any other good, money operates on a similar principle as supply and demand. The supply and demand for credit are determined by numerous factors in an actual free market economy, it also operates slightly different under a sound rather than Fiat system, but overall the principal is the same, it is the price of time for money. The distinction between interest in a sound monetary system versus a Fiat system are different because under a Fiat system interest is artificial and because the Fiat money is virtually created out of thin air with nothing to back it except us tax-slaves, the rate of inflation cannot reflect the normal underlying savings you would have under a gold/silver monetary system, therefore it distorts the consumption preferences of the public. Do you know why interest rates have been so low for the last decade? It's because the Federal Reserve and other Central banks have been injecting unbelievable amounts of inflationary credit into the various economics around the world, the effect of that is to keep rates low in an attempt to keep this artificial and completely unsound economic boom from exploding.

@dmatic

"By the way, I get that the "dollar's" purchasing power should be equal to its productive power! We need to understand what it is that is cutting into its purchasing power!"

It's cutting into the purchasing power because they are putting so much money into circulation, the more money in circulation the more each dollar losses in purchasing power. That's called INFLATION, the more money created the less it buys, as I've said we have so much money in circulation that each dollar has the purchasing power of a few Cents rather than 100 Cents, which is the value of a sound dollar, Fiat dollars are not nor can they be made sound by government monetary policy unless the government suddenly regains its Constitutional responsibility and restores Constitutional money which is Gold and Silver. That is the only money that is allowed by Consitutional mandate.

@Republicae Please forgive me, I'm way behind in reading and responding to your objections, but I will get to them as I can, if you want to continue. I would like to, as finally, I appreciate the level of passion you have for your position and seem willing to defend it! Anyway, you wrote: "It should be obvious, but obviously it is not...as von Mises stated: “Before an economic good begins to function as money it must already possess exchange-value based on some other cause than its monetary function. But money that already functions as such may remain valuable even when the original source of its exchange value has ceased to exist." Whomever von Mises is, is wrong. He/she presupposes his/her definition of money to be correct and it is not. i think they call that "begging the question"? Money is a trade convenience.

In a functioning economy, money represents value, and undoubtedly, I think, and I am asserting something here I have no idea of how to prove, that more wealth has been created since the introduction of fiat money? Now, I know with all the tom-foolery going on with definitions it's hard to calculate values, but you probably have the figures? I'll continue reading your earlier post. Thanks

@Republicae I'm still way behind: going to refer to an earlier post wherein you said: "All fiat monies, must essentially be continuously re-deposited, reissued in order to maintain a degree of functionality as money, in other words, since there is no actual asset behind the fiat currency then there is no measure of economic requirements to determine the optimal supply, since that is not possible the only option is to continue to expand the supply thus constantly lowering the purchase value of the fiat currency and thus lowering the economic viability of each fiat unit. Thus, despite all the efforts to make fiat money substitutes act in a way that mimics real money, there is no way to accomplish that under such systems."

The actual asset behind the fiat money should be the wealth that it represents. The optimal supply of money issued should be tied to the amount of business, or trade that is being done in an economy, say, for a year. That number should be able to be ascertained. There is, of course, a way to accomplish the optimal supply of money in circulation. Since, as your earlier paragraphs confessed, there is really no value in the printed paper that becomes "fiat currency" and is used as a tool within the system to accommodate trade, which is the engine that drives the production of wealth, "money" could be recalled every so often and exchanged with the new "money", that would be issued in its place. An amount that Congress and the Treasury would know. All "old money" in circulation would become obsolete after a certain point, and thrown away or used as firewood, or whatever. But before that it would be exchanged for the new money. Thusly, we would have an idea of how much money was in circulation.

I know that may sound strange to you, but that is because you see money as having value in itself. Or, that it needs to have value in itself to function as money. But it does not. I know, it is a whole new way of thinking....and, of course, is a great challenge to you. You have invested much time and study into the scheme that is masquerading as a sound system, and I respect that, but please don't dismiss it out of hand.

@Republicae I do so appreciate your efforts to understand and even of your mention of Ron Paul here: "Dr.Paul has done more to reveal to this country the nature of this deception than any other man in the last century!" I am studying, and have studied from a man that actually attempted to take these international financiers on. He uncovered their deceptive scheme in the early thirties.

@Republicae "As we have seen, particularly in the last few years, there has been a flight from Federal Reserve Notes into real values." This is true, because people, obviously are losing "faith" in these notes to act as money. Can't blame them, of course, when the whole system is about to come crashing down. The US government is bankrupt! Why would I take their notes?

You do have the option, however, of bartering, of course. Not convenient but it is an option. Yes, certainly advise getting out of paper money and trade it for something of value....

@Republicae We're both pretty stubborn, aren't we? I gotta smile. I know that nobody else is probably reading these, so it's just you and me....You have an agenda and I do too, I suppose. I think it's important here to make known our hearts. Why are you devoting so much time and effort to share what you have discovered with me? And, vice versa? Because we both see the deception that is out there and are trying to correct it and warn people, and then to "argue" for the better way. The just and fair way. Now, I don't know how you come to your conclusions about what you believe to be right, but I must tell you that, I believe that part of our problems as humans is when we are all doing what is right in our own eyes.

People don't seem to know what is right and wrong anymore. And then they argue with and hate each other when we all don't agree! United states....give me a break.

Having said that, I do want you to know again, that I appreciate you hanging in with me here. Many there are, who having discovered part of the deceptions that are out there deceiving everybody else, and have come to your conclusions about the worship of gold, instead of God. Not trying to be offensive but that's the way I see it. We can have a love for God and do things His way, or we can have a love for gold (money) which as you may know, is the root of all evil. Gold has been a problem for a very long time....way before the invention of fiat money.

You are right, of course to point out that "money" needs to be backed by something. In my view, money needs to be backed by the wealth that it represents.

I understand that if they, or we, issue more money into our economy than there is wealth to back it, we would have inflation...but that has never been the case. Maybe until now. How much money is actually circulating in our economy now? Does anybody really have any idea? How much is lying in vaults in China? How much is lying in vaults in the US? QE 1,2,3 ad infinitum is setting us up for a huge fall.

Let me ask you one question: When the Fed says that it wants to control inflation, what does it do? It raises interest rates to "cool" the economy, to hinder it from operating too "hotly". When the Consumer Price Index goes up, interest rates are raised? They don't take money out of circulation until they are ready to cause a depression. Which is what happened in the late 20's and early thirties. 1/3 of all the money in circulation was WITHDRAWN, out of circulation! But, I know what you're saying about debt!

@dmatic

Dr. Ron Paul was a friend and student of one of the greatest economic minds the world has ever produced Ludwig von Mises. I count him along with Murray Rothbard, also a friend of Dr. Paul, Friedrich Hayek, another friend of Dr. Paul. Also Carl Menger, Eugen Bohm von Bawerk, Henry Hazlitt are all along some of the most brilliant minds and they all spent decades investigating and researching not only the origins and narrow of money, but of human actions in economic terms. Because you don't understand something doesn't usually mean it is wrong, most of the time it means you should investigate before you make a conclusion to form your opinion. At least that is what over found to be true over the last 50 or 60 years of my life. I find it not only almost impossible to conceive some concepts in a matter of hours, there are concepts that require, at times, years or even decades to fully understand. Therefore, it takes caution and discernment to instance the difference between something you think is wrong and something you simply don't understand.

So let us dissect exactly what von Mises said and put that in a historical context:

“Before an economic good begins to function as money it must already possess exchange-value based on some other cause than its monetary function. But money that already functions as such may remain valuable even when the original source of its exchange value has ceased to exist."

Now, if you were familiar the incredible works of Carl Menger, you would understand what von Mises actually said, I should have asked you what you thought it means but I'll proceed based on many things you've already said that are indicative of your understanding. One of the most important books written by Carl Menger is On the Origins of Money.

The Forward of the book is right on target, so is the rest of the book, here is the forward:

“The public’s understanding of what money is and its origins has devolved to the point where the government monetary authorities can now inflate with impunity, with the ultimate result to be the destruction of the division of labor undoing all of mankind’s progress to date. The average Joe and Jane must trust the wise men and women working secretly in central banks around the world with what passes for money—paper and digits on a computer screen. These banks are the largest employers of academically-trained economists. But under the guidance of the Keynesian-schooled, the central banks engage in monetary operations that fulfill the funding needs demanded by politicians for political ends.
The hopes, dreams, and living standards of millions are affected daily by these faceless bureaucrats that supposedly know exactly which monetary buttons to push and levers to pull to insure our prosperity. however, history shows that central bankers have but one strategy to cure all things, especially their past mistakes: print more money, with their plans for stabilization resulting in just the opposite.”

So von Mises, based his research on the previous work of Carl Menger, Menger found that people evolved from a barter or direct-exchange economy, as you have noted it was inconvenient, to a substitute or indirect exchange economy, i.e. the use of money. The evolution of commodities into money was a long one, but eventually some commodities began to stand out as being more valuable than others as a means of exchange. So, from at least the 10,000 years commodities were exchanged for other goods, but as the thousands of years passed, some commodities evolved to the point that they were more useful as money therefore, more readily accepted in the exchange of goods. Eventually, just as von Mises explained, gold and silver which were already coveted for jewelry and decoration, became recognized as the most valued commodity and therefore, it became money, thus von Mises is absolutely correct and archeology/anthropology proves that fact.

What you think of as a Dollar as money, is merely a money substitute, just as J.P. Morgan, one of the founders of the Federal Reserve System, so aptly said “Gold is Money, all else is Credit”. Thus, what we have today is a money substitute based on credit/debt, it is not actually money, without government force of law, how much do you think it would be worth? Thus, in order to be real money there must be an underlying value to the commodity. Gold and silver require no government law to force people to exchange it as money, no government stamp, in fact they don't even need to be minted into coin to exchange them as money. For decades in this country you could go into a local merchant with a bag of gold or silver flake or nuggets and exchange those for the goods you needed, why? Because both of those commodities were and have been, recognized as money. You can exchange a written piece of paper for goods and services called an IOU, that doesn't make that IOU money does it, similarly the slips of paper you call Dollars are IOUs, but just like a handwritten IOU it is only backed by a liability promise to pay.

I'm not sure how old you are, but I remember when our Dollar bills were called Certificates, now Gold Certificates were before my time, but I remember Silver Certificates. So, before 1933 in regards what gold, when it was removed by FDR as domestic money, and before 1964 even Silver was removed as domestic money, all notes or bills were nothing more than a representation of real money. You could take a $5 Dollar note and it had the words printed on it: “Payable To The Bearer On Demand”. So, was the Gold or Silver Certificate money? Whiles is true each of those slips of paper were accepted as a medium of exchange however, they were a convenient substitute for the actual money, which was Gold and Silver. It was therefore, easy to simply introduce Fiat Paper Slips as Dollars or money, people had come to think of those money substitutes as money even though there were and are not money, but only a representative of the underlying commodity which is gold and silver.

If money were merely a trade convenience it would have never evolved in every society as a commodity money. As such, as money evolved prior to the Common use of gold and silver, some commodities were more sellable than others, for example, maybe a person could buy more eggs from someone who was offering them medical herbs than they were willing to sell eggs for finished beads. Eventually, the most sellable commodities that were acceptable was good and silver. Paper Fiat money would never have evolved head it not been for the underlying commodities of gold and silver, and Fiat money would have never been possible if Certificate money substitutes had not existed to allow the Fiat fraud to stealthy fostered upon the people without them ever really being aware of just what happened and just how it affected their lives and the future of this country.

@dmatic

Gold and Silver Certificate Bills, representative of the real underlying money, but merely used as a convenient means of exchange, each would have no actual value shit the underlying money to back them. Today nothing backs our Fiat currency. You do understand that there is a huge difference between money and currency?

@Republicae Well, if you bemoan the exit of gold and silver as "money", wait till you see what they do with digital stuff, and the elimination of "money" altogether! And the "mark" on foreheads and right hands! My, won't that be a trade convenience? Every transaction monitored. No buying or selling (trading) without that 'mark'!

I'll answer your posts after breakfast...Lord willing

@Republicae I do understand that you have great respect for the 'students of history who have spent decades researching' this complicated subject, though I do not understand this that you wrote: "...the origins and narrow of money,..."

One of the problems with respect, however, is that it may blind you to others who have also studied but have reached different conclusions. For example: You know the tendency of human nature to see the foibles of others but not recognize the same in themselves? Similarly, when Menger's book is forwarded with...."...The public’s understanding of what money is and its origins has devolved...." The author of the forward fails to consider that his/her own understanding may be tainted.

Certainly, the truth should correct any deceptions that are still out there, but, sadly, many don't really care about the truth. They'd rather "feel" like they are right by agreeing with so-called experts...

I am not disagreeing with the origins of money and its history. And, it is probably most certainly true that those people who began to use gold and silver to function as"money" thought they were a pretty advanced civilization, with great understanding of how to create a sound economy.

You continue to insist that whatever instrument is to be used to function as "money" must have inherent value. It is one of your 'bedrocks'. Your assumption that this is a fact because in early times...all "money" had value. They used to use other commodities as money. Until they discovered that gold and silver had all these wonderful qualities...etc. etc. etc. Then they started using it.

The truth is, the function of money is that it is a trade convenience. It is used to represent value. To measure value. It does not have to be value in and of itself to function as a trade convenience. But, in order to function as such, the people using it must have "faith" that it will be honored in other exchanges or trade of "stuff", whether that be goods or services.

People are rightly seeing the purchasing power of the 'dollar' decrease, so their faith is waning. And, those that see, such as you, are trying to figure out a better way to trade and "store" wealth. They are still free to trade commodities for other commodities if they can, as far as I know, though the IRS is trying to curtail that, too.

@Republicae So, you really want to quote Morgan as a purveyor of truth? "...What you think of as a Dollar as money, is merely a money substitute, just as J.P. Morgan, one of the founders of the Federal Reserve System, so aptly said “Gold is Money, all else is Credit”. Thus, what we have today is a money substitute based on credit/debt,...".

You may choose to follow this scheister's definitions if you want, but not me. Though you begin to hit on the problem with "based on credit/debt". You are right, this Federally Reserved system is based on debt....AND INTEREST COLLECTING!

If you want to know one basic fact and believe in one definition that is true it is this: God, Himself, declares Interest collecting to be unjust gain. It is UNJUST! That means that any system that is based on interest collecting and debt is unjust! Certainly it is gain for the money owners, namely the federal reserve, but it is UNJUST for everyone else that is required to use it!

@Republicae There is only a "huge" difference between the two, if one insists on money itself having inherent value, whereas currency and money are merely "mediums of exchange".

@dmatic

:"...the origins and narrow of money,..."
Sorry, that should have been nature of money.

Tainted by what? He was one of the first to delve into the deep history of the origins of money, to explore ancient money and the progression of money. As far as not being able to recognize or be blinded by the studies of others, you must recognize that the same might will be said of you. All research and thus, all science must be falsifiable to be considered true science, it must also be based upon a logical progression through history that supports it's conclusions. Truth, is the support of factual and thus, logical information, not assumptions. Carl Menger based the foundation for his work on the foundation of other great minds in economics reaching back to the early economists like Riccardo, Hume,and Say, incredible minds.

The reason that money requires an inherent value is because people quickly learned, as far back as the Song Dynasty, that paper money, without inherent value to back it becomes a powerful instrument of Tyrants and corrupt officials. As exactly as I have said, every single instance of Fiat currency throughout history has been a complete failure and in the process of failure it has done two things: 1. Created massive economic suffering. 2. It transferred massive amounts of asset wealth to the powerful.

The truth is that money, without the backing of a commodity to back it, eventually fails and fails miserably. The idea that it is just a trade convenience, defies several thousands of years of evidence to the contrary therefore, such an idea it's not logical because it doesn't follow the historic pattern.. If that is all it is, if it is only a trade convenience, then why would such currencies have such a dismal record of failure when not backed a commodity with an inherent value.

You hit upon an important point: faith. It is strange don't you think, that paper currencies without the backing of a sound valuable commodity requires faith, that faith must therefore be in the issuing power, i.e : government or a central bank. Good and silver backed currencies require no such faith, that is because they are money and paper slips without such backing are money substitutes. The faith in the ability to exchange such instruments as paper specie is gradually eroded by inflation of the supply of currency. The one eternal truth is faith is that it must remain both consistent and constant or it fails the person placing his faith in anything.

Take France, in its history you will find a long trail of its people putting faith in a currency that was merely a trade convenience, their faith was constantly crushed. The first introduction to those trade convenient currencies in France were introduced by John Law, as these convenient paper exchange slips were inflated into circulation by the time of the death of Louis VX, The country's economy was in ruin and the debt of the nation was an astronomical amount of 3 Billion Livres. Later, in the 18th Century they tried it again with Trade Convenient Fiat currency called Assignats, by 1795 the rate of inflation was a mind-numbing 13,000%, the only thing that stabilized the country was one of the few good things that Napoleon did, he introduced the Gold Franc. From the economic despair of the people who suffered from the effects of the slips you think are simply a Trade Convenience, once good was reintroduced the economy almost instantly stabilized and economic growth and opportunity increased dramatically. Why? Because gold and silver are money and don't require one iota of faith is required for then to be accepted as a medium of exchange.

I have formed my conclusion about what money is and what it is not on the verified historical evidence that prove both sound monetary and economic principles. The question is why would you object to a monetary system that has been proven time and time again throughout history for a currency system that has had such a dismal record through history of abject failure, is that indeed logical?

@dmatic
I quote J.P. Morgan for obvious reasons, he said that in testimony to Congress as they were debating the creation of the Federal Reserve, what was he saying to Congress with that statement? He was explaining the difference between two money and what those politicians are about to institute with creating the Federal Reserve.

It's not a question of definition, is a question of the context of the testimony and the context was the creation of the Federal Reserve, Morgan's comment was not a definition but a fact that was, at the time recognized by every politician in the House and the Senate. He was explaining that gold is money and everything else is credit and therefore, debt. He gave testimony to exactly what this country was going to face once Congress passed the Federal Reserve Act.

Perhaps you've never read the Bible in the original Hebrew, the word is Usury, based on the context it normally it's defined as an unusually high rate of interest. If you take it literally as do most Orthodox Jews that I know, then why do they charge interest on money they lend? There is a huge difference and there always has been between charging interests and charging Usury. Without interest, the economy would soon die, for who in their right mind would risk lending to anyone who might lose that money and be not be able to repay the lender, sorry but not only did your idea make no economic sense, it's not logical.

Would you work for a person that wouldn't compensate you for your labor? For me to lend you money is me lending you the fruit of my labor, my labor is my time and my time is my life. Demanding that a person lend you money without the compensation of interest is a form of stealing, just as unjust as if the man you worked 40 hours failed refused to pay you for you labor.

@Republicae "As far as not being able to recognize or be blinded by the studies of others, you must recognize that the same might will be said of you. " I do so recognize!

@Republicae You wrote: "The truth is that money, without the backing of a commodity to back it, eventually fails and fails miserably." Exactly! Money should be backed by the commodities it represents!

I don't know how to format a response to all of your points and objections, so I'll try this way?

@Republicae You asked: "if it is only a trade convenience, then why would such currencies have such a dismal record of failure when not backed a commodity with an inherent value."
Because of interest collecting. Money should be backed by the wealth it represents.

@Republicae Sometimes, it is hard for me to read your sentences, so if I misunderstand something you're saying, please forgive me. You wrote, regarding faith: "Good and silver backed currencies require no such faith, that is because they are money and paper slips without such backing are money substitutes. The faith in the ability to exchange such instruments as paper specie is gradually eroded by inflation of the supply of currency. The one eternal truth is faith is that it must remain both consistent and constant or it fails the person placing his faith in anything." I think I hear you, and the reason currencies have failed is because of "governments" and their misunderstanding of what sound money is. May I ask you if you think there is enough gold and silver in the world to represent all the wealth that therein is?

@Republicae About France, you wrote: "The country's economy was in ruin and the debt of the nation was an astronomical amount of 3 Billion Livres." Did France allow interest collecting? What was the rate, if so?

@Republicae Finally, you conclude your first post above with: "...The question is why would you object to a monetary system that has been proven time and time again throughout history for a currency system that has had such a dismal record through history of abject failure, is that indeed logical?" Pretty sure there has not been a system of gold and silver coinage without interest collecting. But, I'm not sure of your assertion that all systems that used gold and silver have been proven to be sound, just and fair. Are there any around today?

@Republicae OK, on to your second post above. : Usury is the charge for using something. Of course, there are those who TRY to suggest that usury is too high interest, but they are simply lying. Proof of this fact is in the book of Nehemiah, I think. From memory, though it could be Ezra, too. Anyway, once it was realized that the people were sinning against God for charging "interest" or "usury" of 1/2 of one percent, they were told to stop it!

You asked: "If you take it literally as do most Orthodox Jews that I know, then why do they charge interest on money they lend?" Well, if they are charging interest to their countrymen, they are sinning against God, and against the neighbor they are charging the interest to!

then you made this odd statement: "Without interest, the economy would soon die, .."

An answer to this will take longer than I have right now...but an answer will come, Lord willing! thanks for your patience.

@dmatic

Yet, in a good and silver monetary system, interest is charged and the only time throughout history that such systems fail is when government seeks to control them or manipulate them, so your interest theory, in order to be correct must be shown to have the same effect on all types of money, but it doesn't. Interest doesn't contribute to nor did it, in any way, destroy the monetary system. It is insulting the money supply to the point that the money losses it's purchase power. Interest doesn't, in any way, do that.

Evidence of that can be seen in Ancient China, from the Tang to the Song Dynasty, no interest was charged, so what destroyed the first currency? Inflating the paper money supply to the point that it was no longer viable as a medium of exchange. What killed the Assignant that first started to be printed in 1789,originally backed by land confiscated from the Aristocracy, but by 1796, it was inflated far beyond the underlying land commonly, and became absolutely worthless, again interest was not connected with it's creation and had nothing to do with it's collapse. In fact, I challenge you to find a fist currency through the history of the last 3000 years that has either directly or indirectly contributed to the collapse of any monetary system.

If you can present a theory, with the observable evidence seen throughout history then I'll consider it.

@dmatic

You wrote: "The truth is that money, without the backing of a commodity to back it, eventually fails and fails miserably." Exactly! Money should be backed by the commodities it represents!

There is a money that is backed by the commodities it represents, it's an easy and honest money that is backed by gold and silver.

@dmatic

You asked: "if it is only a trade convenience, then why would such currencies have such a dismal record of failure when not backed a commodity with an inherent value."
Because of interest collecting. Money should be backed by the wealth it represents.

Money doesn't represent wealth, it merely acts as a facilitator to gain wealth, although gold and silver do form a sound, the most sound foundation to create and accumulate workable wealth. Again, interest has not a thing to do when either wealth creation nor the failure is a currency.

@dmatic

Again a typo, I use a swipe keypad to maintain place with my mind, at times my iPad simply puts the wrong word, such as”good” when it should have been gold.

Once again, it is not the number or ounces of gold or silver that matter, is not the number of dollars that are out into circulation that matters, it is purely the purchase power of the money that matters therefore, yes there is absolutely enough gold, silver and other metals that can not only be used as money, but because such sound monetary systems can't easily be manipulated by government, because they simply can't print up more and more good and silver, reach dollar unit retains it's full purchase value. In a free market economy, money is constantly in an exchange flux performing its function as money.

Money, being a medium or exchange, evolving and developed over thousands of years, shit the help or control of government, though naturally the government recognized both the power and potential of money as a means of control over the people, co-opted, them monopolized their control over money, then debased money through fiat monetary inflation. Now money, as it was thought of for thousands of years is not even recognized nor does it even hold its original definition, as a have seen in our conversations.

It is impossible to understand money unless you understand that when gold and silver are used as money it is the private property of the person in possession of that money, complete title is held by that person unless he exchanges it for something he values or needs. That is why the government hates good and silver money, it is beyond government control. Today, the government claims title and full ownership of all money. That's why they are Federal Reserve Notes, printed and circulated by the United States Treasury through the U.S. Mint. Once you understand the principle that money, gold and silver, are private property, then you will start to see all the dots connect.

One proof that money today belongs to the government, it wouldn't matter if you had $1 Billion Dollars in your bank account, if the bank fails you will only get $250,000.00 back from the government, that's all they will guarantee. So where did all your other money go? Well, it was never all there, banks operate on what is called fractional reserve, they are allowed to only keep a very minor amount of money as a reserve to operate.

The reason that we want to own money is that we know others will accept it as means of exchange, and while it's true that paper money is indeed a trade convenience, it that is all it is, if that's is only function and all other aspects of that currency are void of the principle of private property then that money substitute will eventually fail because the actions of government will always debase the purchase power of the currency through inflationary depreciation because that pernicious characteristic is inherent in a government that has no limitations placed upon it by the budgetary restraints as with gold and silver money.

Now granted, what I'm about to say is difficult to grasp however, it is exactly what happens. Just as David Hume said over the hundred years ago. If, overnight everyone woke up to find that their bank accounts doubled the amount of money, it would make them all feel great and twice as rich as the night before, but as that new money starts to circulate because if doubling the money supply, prices would increase due to the supply being inflated. Thus, they would find themselves in the same place they were before their bank accounts doubled.
.Ludwig von Mises said, and rightly so: Money is a good that does not create a social benefit through an increase in its supply. Thus, the more money you put into circulation the less each unit of money buys.
In a private money economy where good and silver are money, for example, if I owned a gold mine, I either could sell the gold on the open market or transform the gold into money directly, just as Americans could do in the early years of this country until about 1858, when the government started to seek more control over money.

The supply means nothing if the money has little or eventually no purchase value.

@dmatic

As I addressed in another comment, there was no official government interest on the Assignats. It collapsed in the same way as all other fist currencies do, either with or without interest attached to the currency. Again, interest is non sequitur to the mechanics of Fiat currency failures.

@dmatic

Finally, you conclude your first post above with: "...The question is why would you object to a monetary system that has been proven time and time again throughout history for a currency system that has had such a dismal record through history of abject failure, is that indeed logical?"

Pretty sure there has not been a system of gold and silver coinage without interest collecting. But, I'm not sure of your assertion that all systems that used gold and silver have been proven to be sound, just and fair. Are there any around today?

There have been gold and silver monetary systems where interest is only charged by private contact, now even early in the years of the Federal Reserve, the government sold Treasury Bills, and as they still do, pay interest to the people our countries buying those notes, but what happened once our real money was done away with, is that since there is no real money the interest charge is as fist as the Federal Reserve Notes themselves. That's why we are in what I call a Dual Fiat Monetary System because each Federal Reserve Note is an IOU that is “backed” by another IOU note called Treasuries.

Have you ever read “The Creature from Jekyll Island”, if not you should it's goes in depth about the history and creation of the Federal Reserve, the are some things I disagree with Ed Griffin, but it is still a great book that's a slightly large with about 600 pages or so, if I recall. There are several others I could recommend also such as “What the Government has Done to Our Money” by Murray Rothbard. Also “End the Fed” by Dr. Ron Paul, Oh, and “The Gold Standard: Perspectives in the Austrian School”

You can find many free books at [mises.org] which is part of the excellent school of Austrian Economics located in Auburn, Alabama.

Another great free source of a wealth of information on the philosophy of liberty can be found at [oll.libertyfund.org]

@dmatic

This is long but worth the read, I doubt if it will all fit in this comment box:

What Is A "Dollar"?
An Historical Analysis Of The Fundamental Question In Monetary Policy
by
Edwin Vieira, Jr.

What Is A "Dollar"?

Introduction
The question "What is a 'dollar'?" may seem trivial. Everyone knows what a "dollar" is - or, at least almost everyone thinks he does. In fact, however, very few people could correctly define a "dollar.” And even fewer know why a correct definition is vital to their continued economic and political well-being.

Analysis

1. Why is a correct definition of the term "dollar" important?
   The United States has a highly advanced free-market economy. In a free- market economy, the prices of almost all goods and services are stated in units of money. Under present law - and, as will be described below, from the very beginnings of this country - "United States money is expressed in dollars .”1 Moreover, all "United States coins and currency (including Federal Reserve Notes ) are legal tender for all debts, public charges, taxes and dues.”2 Thus, all "coins and currency (including Federal Reserve notes * )" that are "expressed in dollars" are both money and legal tender. For this reason, accurately defining the noun "dollar" is mandatory, in order to know what is supposedly the official "Money" of the United States and what constitutes "legal tender for all debts, public charges. taxes and dues.”

2. Do the present monetary statutes intelligibly define the "dollar'"?
   Unfortunately, the present monetary statutes do not define the "dollar" in an intelligible fashion.

a. Federal Reserve Notes. Most people associate the noun "dollar" with the Federal Reserve Note ("FRN" ) "dollar bill,” engraved with the portrait of President George Washington. This association is mistaken.

No statute defines - or ever has defined - the "one dollar" FRN as the"dollar,” or even as a species of "dollar.” Moreover, the United States Code provides that FRNs "shall be redeemed in lawful money on demand at the Treasury Department of the United States * or at any Federal Reserve bank.”4 Thus, FRNs are not themselves "lawful money" - otherwise, they would not be "redeemable in lawful money.” And if FRNs are not even "lawful money,” it is inconceivable that they are somehow "dollars,” the very units in which all "United States money is expressed.”5

People are confused on this point because of the insidious manner in which FRNs "evolved" - actually, degenerated is a more appropriate verb - from the late 1920s until today. FRNs of Series 1928 through Series 1950E carried the obligation "The United States of America will pay to the bearer on demand [some number of] dollars.” Prior to 1934, the notes carried the inscription "Redeemable in gold on demand at the United States Treasury, or in gold or lawful money at any Federal Reserve Bank.” After 1934, the notes carried the inscription "this note * is redeemable in lawful money at the United States Treasury, or at any Federal Reserve Bank" (post-1934). Starting with Series 1963, the words "will pay to the bearer on demand" no longer appear; and each FRN simply states a particular denomination in "dollars.”

With and after Series 1963, the promise of redemption also vanished from the face of each note.6 Thus, on their faces FRNs became, in the apt description of banking expert John Exter, an "I.O.U. Nothing" currency. This change in the mere language printed on FRNs could not transform their legal character, however. If FRNs were not "dollars" when they explicitly promised to pay in gold or "lawful money,” they did not magically become "dollars" when they stopped explicitly promising to pay in anything at all.7
b. United States coins. The situation with coinage is more complex, but equally (if not more) confusing. The United States Code provides for three different types of coinage denominated in "dollars": namely, base- metallic coinage, gold coinage, and silver coinage.

(1) The base-metallic coinage consists of "a dollar coin,” weighing "8.1 grams,” "a half dollar coin,” weighing "11.34 grams"; "a quarter coin,” weighing "5.67 grams": and "a dime coin,” weighing "2.268 grams.”8 All of these coins are composed of copper and nickel.9 The weights of the dime, the quarter, and the half dollar are in the correct arithmetical proportions, the one to each of the others.10 But the "dollar" is disproportionately light (or the other coins disproportionately heavy). In this series of base metallic coins, then, the questions naturally arise: Is the "dollar" a cupro-nickel coin weighing "8.1 grams"? Or is it two cupro- nickel coins (or four or ten coins) collectively weighing 22.68 grams? Or is it both? Or is it neither, but something else altogether, to which the weights of these coins are irrelevant?

(2) Similarly, the gold coinage consists of "[a] fifty dollar gold coin" that "weighs 33.931 grams, and contains one troy ounce of fine gold"; "[a] twenty-five dollar gold coin" that "contains one-half ounce of fine gold"; "[a] ten dollar gold coin" that "contains one fourth ounce of fine gold"; and "[a] five dollar gold coin" that "contains one tenth ounce of fine gold.”11 The "fifty dollar,” "twenty-five dollar,” and "five dollar" coins are in the correct arithmetical proportions each to the others. But the "ten dollar" coin is not. Therefore, is a "dollar" one-fiftieth or one-fortieth of an ounce of gold? Or both? Or neither?
And what is the logical, economic, or other relationship between a "dollar" that contains "8.1 grams" of copper and nickel, and a "dollar" that consists of 0.679 grams of gold alloy?12

(3) Finally, the silver coinage consists of a coin that is inscribed "One Dollar,” weighs "31.103 grams,” and is supposed to contain one ounce of .”999 fine silver.”13
What is the rational relationship between this "dollar" of "31.103 grams" of ".999 fine silver,” a "dollar" containing 0.679 grams of gold alloy, and a "dollar" containing "8.1 grams" of base metals? Obviously, these are not the amounts of the metals that exchange against each other in the free market - that is, the different weights of different metals do not reflect equivalent purchasing powers. So, on what theory are each of these disparate weights, and purchasing powers, equally "dollars"?
c. Currency of "equal purchasing power" The United States Codeprovides no answer to this perplexing question. Indeed, it mandates that the question should not even be capable of being asked. For theCode commands that "the Secretary [of the Treasury] shall redeem gold certificates owned by the Federal reserve banks at times and in amounts the Secretary decides are necessary to maintain the equalpurchasing power of each kind of United States currency.14

One need be no expert in currency transactions to know that a "fifty-dollar" gold coin has significantly more purchasing power than a "fifty-dollar" FRN or than fifty cupro-nickel "dollars,” and that a "one-dollar" silver coin has significantly more purchasing power than a "one-dollar" FRN or one cupro-nickel "dollar.” Thus, one need be no expert in administrative law to realize that the Secretary of the Treasury has defaulted on his obligation to keep allforms of "United States currency" at parity with each other - that is, to maintain a "dollar" of the same purchasing-power, whether it be composed of gold, silver, or base metals.

The Secretary's default cannot be traced to a lack of power to perform his duty. For example,
"With the approval of the President, the Secretary of the Treasury may - (A) buy and sell gold in the way, in amounts, at rates, and on conditions the Secretary considers most advantageous to the public interest; and buy the gold with any direct obligations of the United States Government or United States coins and currency authorized by law *."15

"The Secretary may buy silver mined from natural deposits in the United States that is brought to a United States mint or assay office within one year after the month in which the ore from which it is derived was mined."16

"The Secretary may sell or use Government silver to mint coins * . The Secretary shall sell silver under conditions the Secretary considers appropriate for at least $1.292929292 a fine troy ounce."17

"Except to the extent authorized in regulations the Secretary of the Treasury prescribes with the approval of the President, the Secretary may not redeem United States currency (including Federal reserve notes ) in gold. When redemption in gold is authorized, the redemption may be made only in gold bullion bearing the stamp of a United States mint or assay office in an amount equal at the time of redemption to the currency presented for redemption."18

Thus, the United States Code simply presents another unanswered question: "Why has the Secretary of the Treasury failed 'to maintain the equal purchasing power of each kind of United States currency'?"

In sum, the present monetary statutes of the United States do not define the noun "dollar" in an unique way. Instead of monetary law - which, by hypothesis, requires clearly defined terms and rational relationships among those terms - the country's present monetary code smacks of political psychosis - in which completely different things have the same name, things unequal to each other are treated as equivalent, and things that should have the same characteristics (e.g., "equal purchasing power[s]" ) are quite different.

3. What do American history and the Constitution identify as the "dollar"?
   Reference to history clears away the confusion of present-day politics, by showing beyond cavil that the "dollar" is a specific coin, containing 371.25 grains (troy) of fine silver, and nothing else.

a. The "dollar" in the Constitution. Both Article 1, Section 9, Clause 1 of and the Seventh Amendment to the Constitution refer explicitly to the "dollar" - in the one case, permitting "a Tax or duty * not exceeding ten dollars for each Person" the States saw fit "to admit" prior to 1808; and, in the other, guaranteeing trial by jury "[i]n suits at common law, where the value in controversy shall exceed twenty dollars.” The Constitution does not define this "dollar.” But, in the late 1700s, no explicit definition was necessary: Everyone conversant with political and economic affairs knew that the word imported the silver Spanish milled dollar.

Indeed, had not such an understanding been catholic, powerful contending forces might never have agreed to support the Constitutionat all. For example, the traditional interpretation of Article 1, Section 9, Clause 1 is that it elliptically refers to the slave-trade, and represents a compromise between pro- and anti-slavery forces that was vital to ratification of the Constitution.19 Self-evidently, those in the pro-slavery faction would never have accepted the "Tax or duty" phrase unless they already knew that the "dollar" identified as the measure of the "Tax" had a fixed value, and what its value was. Otherwise, by monetary manipulation aimed at increasing the purchasing-power of the "dollar,” anti-slavery forces in Congress might have eliminated the slave-trade altogether.

Similarly, the proponents of the fundamental right to jury-trial in the Seventh Amendment would never have accepted the "dollar"-limitation on jury- trials unless they already knew that the "dollar" had a fixed value, and what its value was. Otherwise, monetary manipulation might have eliminated common-law juries altogether. Yet both these groups also were aware of the doctrine that, if Congress had discretion to change the value of the unit of money, there could be no legal limits to the changes it might make.20 Therefore, their support of these provisions inferentially establishes what a literal reading of them straightforwardly suggests: to wit, that the noun "dollar" refers, not to a mere name applicable to whatever Congress whimsically might decide thereafter to call a "dollar,” but instead to a particular coin so familiar in American experience as to be beyond political transmogrification.

An interpretation of the term "dollar" as signifying merely the label theConstitution gives to whatever Congress decides to make the unit of money, if consistently applied to other undefined terms in the document, would render the Constitution nonsensical. For example, the noun "Year" appears repetitively in Article I - particularly in Section 2, Clause 1 ("The House of Representatives shall be composed of Members chosen every second Year" ), and Section 3, Clause I ("The Senate of the United States shall be composed of two Senators from each State, chosen by the Legislature thereof, for six Years" ).

Self-evidently, the Framers used this term with the presumption that everyone would implicitly understand it to mean the time the earth actually requires for one complete revolution around the sun - rather than a mere empty shorthand for a unit of time within the discretion of Congress to adopt or change. Yet, if the word "dollar" need have no fixed, historically ascertainable meaning, neither need the word "Year.” The principle of constitutional interpretation is precisely the same in both cases. And if the noun "Year" need have no meaning more fixed than the noun "dollar" does in present-day monetary statutes (as discussed above), then Congress could enact laws "redefining" the "Year" so as to extend, for instance, the terms of the House and Senate to ten, twenty, one hundred, or any other number of earthly revolutions.

Of course, Congress may, with constitutional propriety, appoint astronomers, physicists, and other qualified experts to determine with scientific precision what the "Year" actually is. Congress lacks authority, however, to decide for itself what the "Year" ought to be, or to declare the "Year" to be whatever Congress may arbitrarily desire from time to time. Analogously, Congress may, with constitutional propriety, appoint economists, monetary historians, and other experts to determine with clinometric accuracy what the "dollar" actually was in the late 1700s. In fact, this is what Congress did do, under both the Articles of Confederation and the Constitution (as described below). Congress has no authority, however, to decide for itself what the "dollar" ought to be.

Besides constitutional history and logic, economic analysis and history support an interpretation of the noun "dollar" as referring to a specific thing the character of which was an ascertainable historical fact that Congress was obliged to determine, rather than as constituting merely a political label that Congress could assign to whatever it deemed expedient. The nominalistic view that would treat the term "dollar" as simply a convenient, historically vacuous term for whatever Congress chooses to declare to be "money,” and set up as the "unit of value,” is incapable of answering the question: "What is an abstract 'unit of value'?,” and passes over in silence the question: "Before ratification of the Constitution, was the 'dollar' something that it ceased to be thereafter?"

Economically, of course, "abstract" (or "objective" ) value does not exist, in monetary matters or elsewhere. In general, the notion that value is objective is "[a]n inveterate fallacy"; and the allied concept that value is measurable in terms of some definedly fixed unit is a "spurious idea.” Simply put, "[t]here is no method available to construct a unit of value.” More specifically, "money is not a standard for the measurement of prices; it is a medium whose exchange ratio varies in the same way * in which the mutual exchange ratios of the vendible commodities and services vary.” Furthermore, money can never arise ex nihilo. "The acceptance of anew kind of money presupposes that the thing in question already has, previous exchange value on account of the services it can render directly to consumption or production."21 In short, no governmental edict can make something with no previously existing purchasing power either a "unit of value,” or "money" in the economic sense.

Prior to ratification of the Constitution, no one conversant with economics and commercial practices conceived of monetary values as abstractions. Rather, "money" was generally synonymous with known weights of the precious metals, gold and silver, and (to a lesser degree) the base metals, such as copper. In particular, Anglo-American monetary history records that merchants traditionally tendered and accepted coins, the standard monetary instruments of the times, not by tale without consideration of those coins' qualities. but only as pieces of precious metal of specific weights and fineness.
Where commercial practice accepted payment of coins by tale, it was always with the definite belief that those coins' stamps assured them to be of the correct weights and usual fineness for their types. Absent grounds supporting this assumption, merchants regularly resorted to weighing and chemical analyses. Thus, commercial practice always insisted that the "value" of coins was not their face-values as abstract governmental tokens, but only their market-values as pieces of actual metal. And whenever circumstances indicated that a stamp no longer reflected a coin's physical content, merchants ceased relying on the official monetary "value,” and substituted their own system for measuring the coin's market-worth in precious metal.

From an early day, the law applicable to America conformed to this age- old commercial understanding. Queen Anne's Proclamation of 1704, for example, spoke not of abstract values, but of "the value of * coins which usually pass in payment in our said plantations [in America], according to their weight, and the assays made of them in our mint,” and specifically referred to the "Sevil, Pillar, or Mexicopieces of eight" (various forms of Spanish silver dollars) as having "the full weight of seventeen penny-weight and an half" - thereby recognizing that the value" of a coin lay in its "weight" and "assay" according to a fixed standard, or "full weight.”22

Thus, at the time of ratification of the Constitution, no person with any understanding of law and monetary affairs would have attributed to the noun "dollar" a meaning other than (for example): "a silver coin with a value of such-and-so grains of precious metal when at full weight.”23

b. Adoption of the "dollar" as the unit of money prior to ratification of the Constitution. The actions of the Continental Congress itself prove that the foregoing analysis is correct.

The Founding Fathers did not need explicitly to adopt the "dollar" as the national unit of money or to define that noun in the Constitution - because the Continental Congress had already performed that task.

I. Use of the dollar as a standard coin and monetary unit did not begin with the Continental Congress, however. Monetary historians generally first associate the dollar with one Count Schlick, who began striking such silver coins in 1519 in Joachim's Thai, Bavaria. Then called "Schlickten thalers" or "Joachimsthalers,” the coins became known simply as "thalers,” which transliterated into "dollars.” Interestingly, the American Colonies did not adopt the dollar from England, but from Spain. Under that country's monetary reforms of 1497, the silver real became the Spanish money-unit, or unit of account. A new coin consisting of eight reales also appeared.

Variously known as pesos, duros, piezas de a ocho ("pieces of eight" ), or Spanish dollars (because of their similarity in weight and fineness to the thaler), the coins quickly achieved predominance in financial markets of the New World because of Spain's then-important commercial and political position.24 Indeed, by 1704, the "pieces of eight" had in fact become a unit of account of the Colonies, as Queen Anne's Proclamation of 1704 recognized, when it decreed that all other current foreign silver coins "stand regulated, according to their weight and fineness, according and in proportion to the rate before limited and set for the pieces of eight of Sevil, Pillar, and Mexico.”25

By the War of Independence, the Spanish dollar was, for all practical purposes, rapidly becoming the monetary unit of the American people as a matter of economics. Not surprisingly, the Continental Congress first used, and then took formal steps to adopt, that dollar as the nation's standard of value. On 22 May 1776, a Congressional committee reported on "the value of the several species of gold and silver coins current in these colonies, and the proportions they ought to bear to Spanish milled dollars.” And on 2 September of that year, a further committee-report undertook to "declar[e] the precise weight and fineness of the Spanish milled dollar now becoming the Money-Unit or common measure of other coins in these states and to "explai[n] the principles and establish the rules by which the said common measure shall be applied to other coins in order to estimate their comparative values.”26

Meanwhile, Congress and its agents were carefully exploring the basis of, and possible structures for, a national monetary-system. In his letter to Congress of 15 January 1782, Robert Morris, Superintendent of the Office of Finance, commented that, "[a]lthough most nations have coined copper, yet that metal is so impure, that it has never been considered as constituting the money standard. This is affixed to the two precious metals [i.e., silver and gold], because they alone will admit of having their intrinsic value precisely ascertained.” "Arguments are unnecessary to shew that the scale by which every thing is to be measured ought to be as fixed as the nature of things will permit,” wrote Morris, concluding that"[t]here can be no doubt therefore that our money standard ought to be affixed to silver.” Although Morris personally favored creating an entirely new standard coin, he recognized that "[t]he various coins which have circulated in America, have undergone different changes in their value, so that there is hardly any which can be considered as a general standard, unless it be Spanish dollars.”27

In a plan first published on 24 July 1784, Thomas Jefferson strongly concurred that "[t]he Spanish dollar seems to fulfill all * conditions" applicable to "fixing the unit of money.” "Taking into our view all money transactions, great and small," he ventured, "I question if a common measure, of more convenient size than the dollar, could be proposed." "The unit, or dollar," he wrote equating the one with the other, "is a known coin, and the most familiar of all to the minds of people. It is already adopted from south to north: has identified our currency, and therefore happily offers itself as an unit already introduced. Our public debt, our requisitions and their apportionments, have given it actual and long possession of the place of unit."28

Yet Jefferson recognized the necessity of certain practical steps to adopt the dollar as the "Money-Unit": "If we determine that a dollar shall be our unit, we must then say with precision what a dollar is. This coin as struck at different times, of different weight and fineness, is of different values." This, though, Jefferson saw as a problem for economic science to solve through objective measurement, not as a matter for politics to dictate according to arbitrary policy. "If the dollars circulating among us be of every date equal, we should examine the quantity of pure metal in each, and from them form an average for our unit. This is a work proper to be committed to the mathematicians as well as merchants, and which should be decided on actual and accurate experiments." "The proportion between the value of gold and silver,” he added, "is a mercantile problem altogether.” Given "[t]he quantity of fine silver which shall constitute the unit,” and "the proportion of the value of gold to that of silver,” Jefferson went on, "a table should be formed classing the several foreign coins according to their fineness, declaring the worth in each class, and that they should be lawful tenders at those rates, if not clipped or otherwise diminished.”29

Concluding, he encouraged Congress:
To appoint proper persons to assay and examine, with the utmost accuracy practicable, the Spanish milled dollars of different dates in circulation with us.
To assay and examine in like manner the fineness of all the other coins which may be found in circulation within these states.
To appoint also proper persons to enquire what are the proportions between the values in fine gold and fine silver, at the markets of the several countries with which we are or probably may be connected in commerce; and what would be a proper proportion here, having regard to the average of their values at those markets .
To prepare an ordinance for establishing the unit of money within these states on the principle[:]
That the money-unit of these states shall be equal in value to Spanish milled dollar, containing so much fine silver as the assay shall shew to be contained on an average in dollars of the several dates in circulation with us.30

Jefferson's cogent and straightforward analysis of the problem of selecting and defining a unit of money should be compared - contrasted, really - with the present mishmash of monetary statutes that leave the definition of the "dollar" in a state of hopeless confusion today.

First, for Jefferson, the "unit" was to be "a known coin" that was "familiar" to the people because it was "already adopted" in the marketplace. None of the coins that Congress now authorizes - be it of silver, gold, or base metals - was (before its authorization) a "known coin" "familiar" to anyone in the United States, even in terms of its content of metal.

Second, having settled on the "dollar" as the "unit,” for Jefferson the problem of fixing the standard "unit" reduced to determining "what a dollar is" in terms of "the quantity of pure metal" [i.e., silver] contained in "an average" coin that actually circulated in the marketplace. Thus, for Jefferson it was not the prerogative of Congress to create the "dollar" ex nihilo, but the responsibility of Congress to determine what the "dollar" in common use among the people actually was. Today's Congress assumes that it may declare anything a "dollar,” and then impose thatersatz, political pseudo- "dollar" on the people whether they want it or not.

Third, for Jefferson, to settle the relative values of silver and gold coins was also a matter of studying actual economic relationships in the marketplace: to wit, "the proportion of the value of gold to that of silver" in the various coins in circulation. For today's Congress, economic relationships between silver and gold are irrelevant. And, of course, there is no rational economic relationship between the coins of base metals and the coins of precious metals, either. Moreover, even within the sets of gold and base-metallic coins themselves, rational economic relationships are irrelevant to Congress!

Obviously, Jefferson's free-market, scientific approach is a world apart from the arbitrary way in which Congress has set up the mutually incompatible and internally irrational sets of silver, gold, and base- metallic coins that exist today.

On 13 May 1785, a committee presented Congress with "Propositions Respecting the Coinage of Gold, Silver, and Copper,” which referred to the "Plan which proposes that the Money Unit be One Dollar.” "In favor of this Plan,” the committee reported, is "that a Dollar, the proposed Unit, has long been in general Use. Its Value is familiar. This accords with the national mode of keeping Accounts.” Later, the report referred to the "dollar" as the "Money of Account,” thereby equating that term with the term "Money-Unit.”31

On 6 July 1785, Congress unanimously "Resolved, That the money unit of the United States be one dollar.”32 Almost another year elapsed until, on 8 April 1786, the Board of Treasury reported to Congress on the establishment of a mint:
Congress by their Act of the 6th July last resolved, that the Money Unit of the United States should be a Dollar, but did not determine what number of grains of Fine Silver should constitute the Dollar.

We have concluded that Congress by their Act aforesaid, intended the common Dollars that are Current in the United States, and we have made our calculations accordingly.

The Money Unit or Dollar will contain three hundred and seventy five grains and sixty four hundredths of a Grain of fine Silver. A Dollar containing this number of Grains of fine Silver, will be worth as much as the New Spanish Dollars.33
Shortly thereafter, on 8 August 1787, Congress adopted this standard as "the money Unit of the United States.34

Again, stark and striking is the contrast between how the committee of the Continental Congress - composed of the Founding Fathers - approached the problem of fixing the unit of money, and how the modern Congress deals with the same matter. The committee determined that an American"dollar" should contain a known, unchangeable weight of silver, and would be "worth as much as the New Spanish Dollars" because it actually contained this weight of precious metal, not simply because Congress said it was a "dollar.” Today's Congress, however, assumes that the "dollar" need have no rational relationship to a weight of silver, of gold, or even of base metals. Thus, today's Congress assumes that the value of money has nothing to do with the substance that composes a coin, but is merely the product of a political decree. In today's Washington, D.C., might not only makes right, but also creates economic value!

Many of the same people who served in the Continental Congress participated in the Federal Convention that drafted the Constitution. And even those members of the Convention who had not served in the Continental Congress knew what that Congress had done. Therefore, when the Convention used the noun "dollar" in Article 1, Section 9. Clause I of the Constitution, it was with the tacit understanding of all the history surrounding that noun. Thus, the lesson here is clear: The constitutional "dollar,” the constitutional "Money-Unit" or "Money of Account" of the United States, is an historically determinate, fixed weight of fine silver in the form of a coin - in essence, a unit of measure - adopted, not created, first by the American market and then by the Continental Congress well before ratification of theConstitution.

c. Adoption of the "dollar" as the unit of money immediately after the ratification of the Constitution. Upon ratification of theConstitution. Congress and the Executive began work on a national monetary system.

(1) Alexander Hamilton's Report on the Mint. On 28 January 1791, Secretary of the Treasury Alexander Hamilton presented to Congress his Report on the Subject of a Mint. "A plan for an establishment of this nature,” he wrote, "involves a great variety of considerations intricate, nice, and important." Indeed, the erection of a mint was essential to the continued integrity of the nation's coinage:
The dollar originally contemplated in the money transactions of this country [i.e., the silver Spanish milled dollar], by successive diminutions of its weight and fineness [in the Spanish mints], has sustained a depreciation of five per cent, and yet the new dollar has a currency in all payments in place of the old, with scarcely any attention to the difference between them. The operation of this in depreciating the value of property depending upon past contracts, and * of all other property, is apparent. Nor can it require argument to prove that a nation ought not to suffer the value of the property of its citizens to fluctuate with the fluctuations of a foreign mint, or to change with the changes in the regulations of a foreign sovereign. This, nevertheless, is the condition of one which, having no coins of its own, adopts with implicit confidence those of other countries.

It was with great reason, therefore, that the attention of Congress, under the late Confederation, was repeatedly drawn to the establishment of a mint; and it is with equal reason that the subject has been resumed * .35

To form "a right judgment of what ought to be done,” Hamilton posed two questions, "lst. What ought to be the nature of the money unit of the United States?,” and "2d. What the proportion between gold and silver, if coins of both metals are to be established?"36
Recognizing that "[a] pre-requisite to determining with propriety what ought to be the money-unit of the United States" is "to form as accurate an idea as the nature of the case will admit, of what it actually is,” Hamilton referred to the resolutions of the Continental Congress on the subject, noted that they had resulted in "no formal regulation on the point,” and concluded that "usage and practice indicate the dollar as best entitled to that character.” As to "what kind of dollar ought to be understood; or, what precise quantity of fine silver,” he surveyed the various pieces in circulation over the years, and recommended that "[t]he actual dollar in common circulation has * a much better claim to be regarded as the actual money unit.”37

Hamilton recognized that "[t]he suggestions and proceedings hitherto have had for object the annexing of [the title of 'money unit'] emphatically to the silver dollar.” Yet, his personal view was that "a preference ought to be given to neither of the metals for the money unit" - at least "[i]f each of them be as valid as the other in payments to any amount.” He realized, of course, that adopting equivalent, interchangeable "money units" of both silver and gold would pose practical problems "from the fluctuations in the relative [market-]value of the metals"; but he suggested that this could be overcome "if care be taken to regulate the proportion between them with an eye to their average commercial value.”38

Turning to "the proportion which ought to subsist between [gold and silver] in the coins,” Hamilton proposed two "option[s]": namely, "[t]o approach as nearly as can be ascertained, the average proportion in the commercial world"; or "[t]o retain that which now exists in the United States.” The first alternative "requir[ing] better materials than are possessed, or than could be obtained without an inconvenient delay,” he recommended instead the domestic market-ratio of "about as 1 to 15.” "There can hardly be a better rule in any country for the legal than the market proportion,” he explained, "if this can be supposed to have been produced by the free and steady course of commercial principles. The presumption in such a case is that each metal finds its true level, according to its intrinsic utility, in the general system of money operation.”39

In the course of determining the method by which the government would defray the expenses of coining silver and gold brought to the mint byprivate parties (the system of "free coinage"40), Hamilton restated the traditional policy against monetary debasement in emphatic terms:
[R]aising the denomination of the coin [is] a measure which has been disapproved by the wisest men in the nations in which it has been practiced, and condemned by the rest of the world. To declare that a less weight of gold or silver shall pass for the same sum, which before represented a greater weight, or to ordain that the same weight shall pass for a greater sum, are things substantially of one nature. The consequence of either of them is to degrade the money unit; obliging creditors to receive less than their just dues, and depreciating property of every kind.

The quantity of gold and silver in the national coins, corresponding with a given sum, cannot be made less than heretofore without disturbing the balance of intrinsic value, and making every acre of land, as well as every bushel of wheat, of less actual worth than in time past. *

[A debasement would cause] a rise of prices proportioned to the diminution of the intrinsic value of the coins. This might be looked for in every enlightened commercial country; but, perhaps, in none with greater certainty than in this; because in none are men less liable to be the dupes of sounds; in none has authority so little resource for substituting names for things.

A general revolution in prices could not fail to distract the ideas of the community, and would be apt to breed discontents as well among those who live on the income of their money as among the poorer classes of the people, to whom the necessaries of life would become dearer.

Among the evils attendant on such an operation are these: creditors, both of the public and of individuals would lose a part of their property, public and private credits would receive a wound; the effective revenues of the Government would be diminished. There is scarcely any point, in the economy of national affairs, of greater moment than the uniform preservation of the intrinsic value of the money unit. On this the security and steady value of property essentially depend.41

In sum, Hamilton recommended two equivalent statutory money-units based on weight, a gold coin of 24.75 grains of fine gold, and a silver coin of 371.25 grains of fine silver. "[N]othing better,” he wrote, "can be done * than to pursue the track marked out by the resolution [of the Continental Congress] of the 8th of August, 1786."42

Hamilton's Report thus restated the traditional monetary principles of American law, as the Continental Congress applied them, and as the Federal Convention embodied them in the Constitution. Congress, Hamilton urged, should adopt silver and gold as the nation's monetary substances, at an exchange-ratio representing the average proportionate value between the metals in the domestic free market. Congress should continue on "the track marked out" under the Articles of Confederation and the Constitution by employing the "dollar" as the "money-unit,” or "money of account" - a silver "dollar" derived directly from the Spanish milled dollar, and a new gold coin containing a silver-"dollar's" worth of gold. The government should provide "free coinage" of both silver and gold for the public. And it should guarantee the preservation of the intrinsic value of the coinage.

Of enduring importance is Hamilton's admonition that "[t]here is scarcely any point, in the economy of national affairs, of greater moment than the uniform preservation of the intrinsic value of the money unit. On this the security and steady value of property essentially depend" Apparently, however, although Hamilton's statue stands before the Department of the Treasury, his words have been forgotten in contemporary Washington, D.C.

(2) The Coinage Act of 1792. Little more than a year after Hamilton'sReport, Congress enacted its principles into law. The Coinage Act of 179243 initiated a new statutory system embodying the constitutional principles that Hamilton had reaffirmed. First, Congress followed consistent American common-law tradition by continuing the use of silver, gold, and copper as "Money.”44 Second, it reiterated the judgment of the Continental Congress and the Constitution that "the money of account of the United States shall be expressed in dollars or units,”45 and defined the "DOLLARS OR UNITS" in terms of weight, as "of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure * silver.”46

Recognizing that to adopt Hamilton's suggestion of a "gold dollar" would cause confusion and require constant governmental supervision to "regulate Value[s],"47 Congress created no such coin, instead mandating the coinage of "EAGLES,” "each to be of the value of ten dollars or units,”48 that is, of the weight of fine gold equivalent in the marketplace to 3,712.50 grains of fine silver. Following Hamilton's recommendation, though, it fixed "the proportional value of gold to silver in all coins which shall by law be current as money within the United States" at "fifteen to one, according to quantity in weight, of pure gold or pure silver.”49 And it made "all the gold and silver coins issued from the mint a lawful tender in all payments whatsoever, those of full weight according to the respective values [established in the Act], and those of less than full weight at values proportional to their respective weights.”50

Thus, Congress did not establish a "gold dollar,” or enact a "gold standard,” as the popular misconception holds. For example, theEncyclopaedia Britannica erroneously reports that the "dollar * was defined in the Coinage Act of 1792 as either 24.75 gr. (troy) of fine gold or 371.25 gr. (troy) of fine silver.”51 The Act did no such thing. It explicitly defined the "dollar" as a fixed weight of silver, and "regulate[d] the Value" of gold coins according to this standard unit (or money of account) and the market exchange-ratio between the two metals. Nowhere did the Act refer to a "gold dollar,” only to various gold coins of other names that it valued in "dollars.”52

Congress also provided free coinage "for any person or persons,”53and affixed the penalty of death for the crime of debasing the coinage.54

Thus did the first Congress - which knew what the Constitution meant if any Congress ever did - rigorously apply the Constitution's mandate: It determined as a fact "the value of a Spanish milled dollar as the same is now current,” and thereby permanently fixed the constitutional standard of value, or "money of account,” as a unit of weight consisting of 371.25 grains of fine silver in the form of coin. It coined American "dollars" as "Money,” containing this intrinsic value of silver. It coined American "eagles" as "Money,” containing a fixed weight of pure gold - and regulate[d]" their "Value" at so-many "dollars" by comparing their intrinsic value in (weight of) fine gold to the market-equivalent of silver. It gave both the silver and gold coins legal-tender character for their intrinsic values in all payments. It opened the mint to free coinage of the precious metals. And it outlawed debasement of the nation's new "Money.”
The handiwork of the statesmen who drafted and approved these measures is more than a merely coincidental embodiment of the traditional principles of Anglo-American common law, the experiences of the Continental Congress, and the explicit provisions of the Constitution. Rather, taking into account the vicissitudes of the time, the Coinage Act of 1792 perfectly reflects what the common law and the law under the Articles of Confederation had been before ratification of the Constitution, and what the constitutional law was then and remains today.55 It is a definitive interpretation, elaboration, and application of the Constitution - with, in some of its sections at least, a clearly constitutional character of its own: in particular, Sections 9 (definition of the "dollar" ), 14-15 (free coinage of silver and gold), 16 (legal-tender character for silver and gold coins),56 and 20 ("dollar" identified as the "money of account" ).57

Most importantly, Congress' determination of the proper weight of the "dollar" is, for all practical purposes today, a statement of constitutional law unalterable except by amendment of theConstitution itself. For, at the remove of almost two centuries, to check the accuracy of the conclusion that 371.25 grains (troy) of fine silver best represents an average weight of the various Spanish milled "dollars" in circulation in the United States in 1792 is most probably impossible.
Conclusion

In the light of this history, the present monetary provisions of theUnited States Code demonstrate that official Washington, D.C., has no conception of what a "dollar" really is. The reason for this self-imposed ignorance is obvious. By reducing the "dollar" to a political abstraction, the national government has empowered itself to engage in limitless debasement (depreciation in purchasing power) of the currency. A "dollar" that contains - and must perforce of theConstitution contain - 371.25 grains of fine silver cannot be reduced in value below the market exchange value of silver for other commodities. A pseudo-"dollar" that contains no fixed amount of any particular substance per "dollar" can be reduced in value infinitely. As debasement of currency amounts to a hidden tax, Congress' silent refusal to recognize the constitutional "dollar" amounts to the usurpation of an unlimited power to tax through manipulation of the monetary system. Thus, modern "money" has become a means for the total confiscation of private property by the government.

More ominously, this scheme of surreptitious confiscation remains hidden from the vast majority of Americans, who seem blissfully unconcerned about the issue most important to the soundness of the country's monetary system: namely, the character of the monetary unit. One need not be overly pessimistic to predict that misuse by politicians of the fictional, constantly depreciating pseudo-"dollar" to expropriate unsuspecting citizens will continue until an economic crisis finally shocks an increasingly impoverished American people out of its slumber, and forces the people to ask the simple question: "What is a 'dollar'?" At that time, the answer will be no different from what it is today, and has been since 1704 - but the opportunity to use that knowledge to prevent a catastrophe may be long gone.

Therefore, those few who do know what a "dollar" is, and why that definition is important, need to inform as many of their fellow-citizens as possible. If time has not already run out for re-education of the American people in this area, it is racing towards the historic exit. Under these circumstances, silence by the friends of sound money and honest government is not "golden,” but potentially fatal.

Appendix
Excerpts from the Coinage Act of 1792
Act of 2 April 1792, 1 Statutes at Large 246
[246] CHAPTER XVI. - An Act establishing a Mint, and regulating the Coins of the United States.

SECTION 1. Be it enacted by the Senate and House ofRepresentatives of the United States of America in Congressassembled, and it is hereby enacted and declared, That a mint for the purpose of a national coinage be, and the same is established * .

[248] SEC. 9. And be it further enacted, That there shall be from time to time struck and coined at the said mint, coins of gold, silver, and copper, of the following denominations, values and descriptions, viz., EAGLES - each to be of the value of ten dollars or units, and to contain two hundred and forty-seven grains and four eights of a grain of pure, or two hundred and seventy grains of standard gold. HALF EAGLES - each to be of the value of five dollars, and to contain one hundred and twenty-three grains and six eights of a grain of pure, or one hundred and thirty five grains of standard gold.
QUARTER EAGLES - each of be of the value of two dollars and a half dollar, and to contain sixty-one grains and seven eights of a grain of pure, or sixtyseven grains and four eights of a grain of standard gold. DOLLARS or UNITS - each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver. HALF DOLLARS - each to be of half the value of the dollar or unit, and to contain one hundred and eighty-five grains and ten sixteenth parts of a grain of pure, or two hundred and eight grains of standard silver.
QUARTER DOLLAR - each to be of one fourth the value of the dollar or unit, and to contain ninety-two grains and thirteen sixteenth parts of a grain of pure, or one hundred and four grains of standard silver. DISMES - each to be of the value of one tenth of a dollar or unit, and to contain thirty-seven grains and two sixteenth parts of a grain of pure, or forty-one grains and two sixteenth parts of a grain of standard silver. HALF DISMES - each to be of the value of one twentieth of a dollar, and to contain eighteen grains and nine sixteenth parts of a grain of pure, or twenty grains and four fifth parts of a grain of standard silver. CENTS each to be of the value of the one hundredth part of a dollar, and to contain eleven penny-weights of copper. HALF CENTS - each to be of the value of half a cent, and to contain five penny-weights and a half penny-weight of copper.

SEC. 12. And be it further enacted, That the proportional value of gold to silver in all coins which shall by law be current as money within [249] the United States, shall be as fifteen to one, according to quantity in weight, of pure gold or pure silver; that is to say, every fifteen pounds weight of pure silver shall be of equal value in all payments, with one pound weight of pure gold, and so in proportion as to any greater or less quantities of the respective metals.

SEC. 12. And be it further enacted, That the standard for all gold coins of the United States shall be eleven parts fine to one part alloy; and accordingly that eleven parts in twelve of the entire weight of each of the said coins shall consist of pure gold, and the remaining one twelfth part of alloy; and the said alloy shall be composed of silver and copper, in such proportions not exceeding one half silver as shall be found convenient; to be regulated by the director of the mint, for the time being, with the approbation of the President of the United States, until further provision shall be made by law. *

SEC. 13. And be it further enacted, That the standard for all silver coins of the United States, shall be one thousand four hundred and eighty-five parts fine to one hundred and seventy-nine parts alloy; and accordingly that one thousand four hundred and eighty-five parts in one thousand six hundred and sixty-four parts of the entire weight of each of the said coins shall consist of pure silver, and the remaining one hundred and seventy- nine parts of alloy; which alloy shall be wholly of copper.

SEC. 14. And be it further enacted, That it shall be lawful for any person or persons to bring to the said mint gold and silver bullion, in order to their being coined; and that the bullion so brought shall be there assayed and coined as speedily as may be after the receipt thereof, and that free of expense to the person or persons by whom the same shall have been brought. And as soon as the said bullion shall have been coined, the person or persons by whom the same shall have been delivered, shall upon demand receive in lieu thereof coins of the same species of bullion which shall have been delivered, weight for weight, of the pure gold or pure silver therein contained: Providednevertheless, That it shall be at the mutual option of the party or parties bringing such bullion, and of the director of the said mint, to make an immediate exchange of coins for standard bullion, with a deduction of one half per cent, from the weight of the pure gold, or pure silver contained in the said bullion, as an indemnification to the mint for the time which will necessarily be required for coining the said bullion, and for the advance which shall have been so made in coins.

[250] SEC. 16. And be it further enacted, That all the gold and silver coins which shall have been struck at, and issued from the said mint, shall be a lawful tender in all payments whatsoever, those of full weight according to the respective values herein before described, and those of less than full weight at values proportional to their respective weights.

SEC. 17. And be it further enacted, That it shall be the duty of the respective officers of the said mint, carefully and faithfully to use their best endeavours that all the gold and silver coins which shall be struck at the said mint shall be, as nearly as may be, conformable to the several standards and weights aforesaid

SEC. 19. And be it further enacted, That if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of fine gold or fine silver therein contained, or shall be of less weight or value than the same ought to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, every such officer or person who shall be guilty of any of the said offenses, shall be deemed guilty of felony, and shall suffer death.

SEC. 20. And be it further enacted, That the money of account of the United States shall be expressed in dollars or units, dismes or tenths, cents or hundredths, and milles or thousandths, a disme being the tenth part of a dollar, a cent the hundredth part of a dollar, a mille the thousandth part of a dollar, and that all accounts in the public offices and all proceedings in the courts of the United States shall be kept and had in conformity to this regulation.

APPROVED, April 2, 1792.

©1994 - National Alliance for Constitutional Money, Inc.

@Republicae I've read most of "the Creature from Jekyll Island". I understand the fractional reserve banking system, too. Why do you think they allow that? So they can loan more "money" out to people and businesses and collect interest on each and every loan, even though the recipients of the loans didn't know they weren't borrowing real "money". It was just a figure in a bank account. If more than 2% of people who had money deposited in banks wanted to withdraw their money at the same time, the bank would freak, and have to get an emergency loan from a bigger bank so as to keep from having bank 'run' and people losing faith in their banks! Oh No! But, obviously, even though banks don't give the people that borrow from them, real actual, money, they are still collecting interest on each o0f those loans.....and, believe me, it is BIG BUSINESS! So they are charging interest on all these loans when they have given them really nothing but a figure in a bank book, similar to what the Feds do, and you think that doesn't have an effect on inflation? Are you serious?

So, in effect, the banks have increased the money supply when they loan out non-existent deposits, and "inflate" the money supply thereby proving your own definition of inflation.

They used to publish the money supply in the papers. They called it M1, M2 etc. Anyway, in the M1 figures they included all the physical 'cash' that was out there plus "checkable deposits"..

It's all a scam and you know it.

OH, I almost forgot. I watched the first part of 60 Minutes tonight, Guess who they interviewed? The supposed "head" of the Federal Reserve, Jerome Powell? Bernanke and Yellin also made an appearance! Cool cucumbers they are.... They want to keep "inflation" at 2%, and the way they say they try to do that is through interest rates!

@dmatic

Oh, from the beginning of our conversation, we both, in one was our another demonstrated it's a scam. They say they want to keep inflation at 2%, what they don't want people to know is that they have already created more that 3000% inflation since 1913.

My personal feeling is that 98% of the politicians, bankers and bureaucrats should be taken to the Washington Mall and publicly Garroted.

@Republicae Yes, but which 98%? And Yes, again to the scam....one wonders what 2% annual inflation, compounded would figure to since 1913?

Anyway, I just read the Viera piece you must have sent as I was typing my last. Didn't see it until this morning! Better have one's mind uncluttered when reading his stuff! I must admit, however, that I didn't yet read the appendix that you included. I need a rest. Appreciate what the founders were trying to do as they 'rassled' with this sometimes confusing topic....

From your post, as I was reading, I copied this..."More specifically, "money is not a standard for the measurement of prices; it is a medium whose exchange ratio varies in the same way * in which the mutual exchange ratios of the vendible commodities and services vary.” Furthermore, money can never arise ex nihilo. "The acceptance of anew kind of money presupposes that the thing in question already has, previous exchange value on account of the services it can render directly to consumption or production."21 In short, no governmental edict can make something with no previously existing purchasing power either a "unit of value,” or "money" in the economic sense."

This seems to be a crux in our discussion. May I ask how you "understand" this verbiage? I will try to parse it when my mind settles....

@dmatic

2470.5707% inflation rate from 1913 to 2019.

."More specifically, "money is not a standard for the measurement of prices; it is a medium whose exchange ratio varies in the same way * in which the mutual exchange ratios of the vendible commodities and services vary.” Furthermore, money can never arise ex nihilo. "The acceptance of anew kind of money presupposes that the thing in question already has, previous exchange value on account of the services it can render directly to consumption or production."21 In short, no governmental edict can make something with no previously existing purchasing power either a "unit of value,” or "money" in the economic sense."

In other words, money, in particular money proper (gold and silver) are economic goods or commodities, just like other commodities, their price in terms of ratios of supply and demand are fixed in terms of weight in the Constitutional sense but as commodities they are flexible in terms of the price is exchange. From the time that gold and silver are set as Constitutional money, the weight was fixed, but because of the nature of a sound money commodity system it too it's subject to both the supply and demand economic laws that govern market forces. Prior to 1913, or country and its people were blessed by the soundness of our money system, there were few hours of inflation all due to external forces such as war but not from the currency itself. Throughout the ages, but in particular in more recent times, no country or government could introduce a new fiat money without having that fiat money piggy back on an existing money that possessed a recognized value prior to the creation and introduction of the new fake fiat money.

@Republicae Thanks for the inflation figure. In your mind, then, has the fed only issued 2% extra currency into the marketplace, per year, to cause this decrease in purchasing power? I don't have the figures but it may show something.

I still have a problem with the idea that money has to be a commodity. Money should not be bought and sold itself, and it's "price" fluctuating accordingly, even if it's based on the law of supply and demand. When money itself is in demand, then that means business and trade are curtailed due to lack of its availability, and that is where the whole scam is exposed. Interest payments to use money! Money was "invented" to be a trade convenience and can be whatever the economy declares it to be. As long as people that are trading have faith that it will be accepted at the next place in the economy, to get what they wanted. Now, of course people can buy gold or silver or any other commodity to "store" their "wealth", and the price of that gold and silver and whatever other commodity, is determined by the law of supply and demand. It's stored value, going either up or down or staying constant. If a large supply of gold came on the market it's price to purchase it may go down unless the demand for it also increased.

@dmatic

No, first you must understand that the publicised inflation figures of the Fed are shadow statistics and are bogus, complete fabrications based on a few well chosen product sectors dealing solely with prices, that's their methodology. Price inflation Real inflation has to do what the amount of monetary inflation taking place, prices are merely a lagging indicator of monetary inflation. Based on actual price tracking fun year to year on all consumables goods, prices are and have been increasing by about 10% per year for years.

is as much a commodity as labor. People, companies all but your each and everyday when the sell you things, think of it this way, under the bartering system, two people each had a different commodity, each had what the other wanted so they sold the respective commodities each other in a direct exchange. evolved as an indirect method of two people selling commodities, one having the commodity the other having the goods commodity. It is nothing more than an evolved barter system, there is still a price for each commodity in the exchange.

I've stated, in a sound system there is an optimal supply of that meets the demand for it in the market with the equilibrium of supply by maintaining the full purchasing power of each unit, in our case that is the Dollar, when that equilibrium is lost the entire economic system becomes distorted.

Again, in a sound monetary system there is a certain amount of that needs be in circulation, no more and no less, the market demand signals the need for supply, when the purchasing power of the either increases or decrease that provides the signal that the supply of is not correct and then the Treasury would either increases or decrease the supply of in circulation, at least that's the way it use work, now they just inflate the Fiat supply constantly thereby destroying the purchasing power of the currency and making life hard, especially on the working men and women, especially on those on a fixed income. Those on fixed incomes are extremely susceptible Fiat inflation because they continue get the same nominal dollar figure in their monthly check but those fixed dollars bought more a year ago than they do today. Sure the government gives them their annual cost of living increases, but it's based on the Fed's inflation rate, such I've shown is drastically and purposefully underestimated.

Now, business do suffer from a lack of credit in a Fiat system because the that system is based on, just like J.P. Morgan said is credit, or country and indeed the entire world is awash with so much Fiat that is truly unfathomable, the problem in such as system is not the number of dollars or Euros or Yen floating around is the lack of purchasing power of each of those currencies. Another issue in this type of system is credit liquidity, remember the Crash of 2008, it was a liquidity crises, plenty of go around but the lack of liquidity in the credit markets shut the system down, almost completely.

Again you seen be missing the point behind actual and fist substitutes, the whole purpose for is act as the most efficient exchange mechanism possible, such a society can choose any they want, the question is one of actual efficient exchange, when the you choose is actually nothing more than a slip of paper that can be expanded the point that it losses the main purpose of a currency which is keep its original purchase value, then it that really and is it really a trade convenience when it no longer functions with enough economic potency? Just look at how many of those Fiat dollars it now take buy $20 dollars worth of gold, think of it this way, you can take a $20 Gold Eagle today and buy exactly as much as it would buy in 1913, that shows you just how worthless the Fiat dollars are, because it takes about $1300 dollars today what $20 dollars bought in 1913. Why would anyone choose a trade convenience like Fiat when in the end it's not a trade convenience at all.

@dmatic

The demand for gold and its price in Fiat dollars is a direct consequence of the decreasing purchase value of the U.S. FIAT DOLLAR. The Fed has not only created the boom and bust cycles for the last 90 years, is been attempting to re-inflate the bubble when it popped in 2008 and the disastrous economic policies of the Obama Administration which were totally flatlined by his Leftist ideas, the problem is that even under Trump, the Fed has been trying to get out of the mess it created by trying to raise interest rates by liquidating its own massive balance sheet, but it can't. The Fed can no longer manipulate the interest rates as it did before because after creating so much new Fiat money it has created something that it don't know how to handle and that is a dollar bubble. After injecting unknown Trillions of dollars, not only into our economy but also into the economies of several other countries, the Fed has effectively painted itself into a corner, when this bubble pops that will effectively end the U.S. fake dollar and the only workable solution to revive the economy, if at all possible, will be an official return to sound money and a free market.

There is a much larger concern however, in 2008 the global supply chain was very close to a complete collapse due to the lack of credit liquidity. It was and is the weakest link in the global Fiat economic system and it is just as vulnerable today as it was in 2008. Now what happens if the global supply chain collapses? Essentially everything stops moving. No oil, no food, no electricity, no running water, we essentially go back to living like we were in the 12th Century and it will take generations to restore the supply chain. You can't just have it collapse one day and then just magically restart it the next.

It's hard to see, but what we have been witnessing for the last two decades is the death of Fiat currency not only here but around the world. It is about to be accelerated, so get prepared. Learn good skills, if you don't know how to hunt, trap, grow food, forage, learn. If you live in a big city, prepare a plan of escape because people are going to go crazy. In the summer of 2006, I recognized patterns in the economy here and overseas, I blogged about what I saw happening with the Euro and the EU, with Fannie Mae and Freddie Mac along with several other indicators that are far too complicated to go into here. I warned my friends, particularly those in Real Estate, to be very careful, they didn't listen and the paid a heavy price. I had two friends that owned a large real estate firm with over 150 agents and a 10,000 SQ ft office, they lost everything because they thought the good times were never going to end.

I'm about to post a couple more of my writings I hope you will engage then as enthusiastically as you have this one.

@Republicae You asked, I think: "Why would anyone choose a trade convenience like Fiat when in the end it's not a trade convenience at all." You are free to use gold in your exchanges, if you desire. But, some people have a hard time finding it. They are free to buy an ounce of gold if they can find it for whatever....1200 or 700 or whatever the price in dollars of it is this week, and take that ounce of gold and exchange it for whatever it's worth in the commodity they want.

@Republicae you wrote: "Again, in a sound monetary system there is a certain amount of that needs be in circulation, no more and no less," How is that certain amount determined in your 'system'?

@dmatic

No, you can't use gold and silver as an exchange in the United States, unless you won't to go to prison, current U.S. legal tender laws for prevent the use of gold and silver as currency in any economic exchange, based on The Coinage Act of 1965, which states: Federal Reserve Notes are legal tender currency notes.

If you did go into a store to by $15 dollars worth of products with your $20 Gold Egale you would get a $5 bill for your $1300 dollar ounce of gold. So, not you can't use gold and silver.

@dmatic
It's simple: The quantity of money issued in circulation is determined by the purchase value of each unit, if there is inflation them the treasury, based on economic indicators, reduces the circulation of currency, if there is deflation then the Treasury increases circulation of the currency. Prior to the creation of the Federal Reserve that's the way the monetary system of this country worked and it kept the purchasing power of the currency stable and at full value.

@Republicae You wrote: "After injecting unknown Trillions of dollars, not only into our economy but also into the economies of several other countries, the Fed has effectively painted itself into a corner, when this bubble pops that will effectively end the U.S. fake dollar and the only workable solution to revive the economy, if at all possible, will be an official return to sound money and a free market."

agree 100% with your statement and conclusion!

@Republicae You wrote:"I'm about to post a couple more of my writings I hope you will engage then as enthusiastically as you have this one." I look forward to it, my friend! If I can find them. I'm not as smart as you are regarding this technology. Earlier you asked how old I was. I am 67and 7 months 'old'. In '94 God spoke to me, telling me there would be an economic collapse and chaos in the cities. He didn't tell me when. I got a little "scared" because we were living in a small city, but He enabled my wife and I to buy an acreage on land contract in '95 and have been watching and preparing ever since.

You are a wise man to warn your friends. I know all about it when they refuse to listen. The Bible says: A wise man sees the danger approaching and hides himself, the simple pass on and suffer...

I'll still rassle with you about money though and what constitutes sound money and a just system. Look forward to meeting you someday!

@Republicae OK, one more thing before we move on. You wrote: "It's simple: The quantity of money issued in circulation is determined by the purchase value of each unit, if there is inflation them the treasury, based on economic indicators, reduces the circulation of currency, if there is deflation then the Treasury increases circulation of the currency. Prior to the creation of the Federal Reserve that's the way the monetary system of this country worked and it kept the purchasing power of the currency stable and at full value."

You're going to need to define 'inflation" differently, then, than you did earlier. Are you talking about inflation as in price increases? Or deflation as price decreases? If so, you're kinda right.

@dmatic

Thanks man I appreciate it.

@dmatic

Inflation is increasing the money supply, deflation is decreasing the money supply, that's all it is, the symptoms of those actions is price, up when inflation, down with deflation. Prices are affected by either inflation or deflation, prices are not the cause of either inflation or deflation, prices are the effect of either one or the other.

It's like having a cold, a virus caused the cold you have, but the symptoms are a runny nose and fever. The money supply is the cold virus, the runny nose and fever are prices,

@Republicae "The base of human existence today is trade.

There was a time when man could make his home in a cave for which there was no rent to pay. He could go into the jungles and by artful maneuvers trap some other brute and eat it to sustain himself. He could also use the skin of his victim for clothing. His drink came from a nearby spring or stream of running water.

At that stage of his career man was more or less independent. He paid no rent, no taxes, no interests, no profits, no protection fees. He paid for nothing.

All he had to do was to go out and catch his food on the run, or pick it from the bushes, go to the spring or stream for drink, make his own clothing from the skins of his victims, and protect himself as best he could from other brutes, insects, bacteria and weather.

In those days he had to be a man or the length of his life was short. He either had to be strong enough to whip, single handed, every other animal he encountered, or else swift enough on his feet to keep out of their way. He had to keep his eyes open both while awake and asleep or he would suddenly disappear without leaving flesh or bones to prove that he had lived.

But possession of a thing is seldom appreciated and so man became dissatisfied with his independence and individualism when he had it. He craved social ability and the power to dominate the living as well as devour the dead. So he began to use his wits as well as his arms and legs. He learned to be social and crafty.

It was a long stretch from early individualism to the present complex social state. None of the old-timers remember anything about it.

But somewhere betwixt and between, humans began to trade their belongings. The hungry man, for instance, at the start, would trade his skins for some fresh meat. That was the direct method of trade in which the producer received something tangible from the purchaser.

Later, however, this method of payment was supplanted by a medium of exchange called money. Bits of metal were carved and marked to represent certain values and became generally recognized as the method by which trade should be conducted.

Owing to the brightness and scarcity of gold, as well as to its glittering appeal for childlike people, that metal was principally used as money in the beginning, and eventually became the standard of money value throughout the world.

But the visible supply of gold in the world could not keep pace with the ever increasing population who needed money for trading purposes, and credit then came into vogue which permitted trade to be carried on many times larger in amount than there was gold to pay for it.

And because there was not enough money for everybody to use there were men who made it their business to get control of it and make everybody pay for its use in the shape of interest.

No autocrat of any type ever held such power over human beings as is held by the present international financiers who control the supply of money. They are the real masters of office holders, manufacturers, merchants and workmen. And they are gradually screwing them all down to nothingness.

The branch of capitalism which allows interest to be charged on money, has not only paralyzed mankind, but it is the two-edged sword that will destroy Capitalism unless abolished at once."

@dmatic

I'm not sure exactly where you found that however, it is almost completely incorrect in terms of the how money actually evolved, especially the use of gold and silver, win the historical context. Gold and silver didn't become money be they were bright and shiny, it had been used as far back as the late Paleolithic periods as decorative items. The reason, as I've said in previous comments, that they became the most sellable commonty, possessing certain qualities that made them idea as a long-term exchange media. Gold and silver, unlike other metals and items, would not corrode, they were relatively easy to divide and easily portable compared to the necessary burdens of barter.

Money is a commodity, but what is a commodity? It's a material object that is either obtained or produced by labor. Money, just like any other bartered good, must be a commodity and while any commodity can be money, the fact that the last 5000 years have shown the use of gold and silver commodities as money, evolved in different civilizations, as the ideal form of money. It's hard to argue with history, that's why most people simply ignore it and the lessons it teaches.

“The branch of capitalism which allows interest to be charged on money, has not only paralyzed mankind, but it is the two-edged sword that will destroy Capitalism unless abolished at once."

This quote can also be instantly debunked by the study of history. If interest were so dangerous to commerce then we wouldn't be here talking about it on a website using iPads or computers. If indeed interest were so harmful to commerce in general, or for that matter Capitalism, the use of interest has had ample time to destroy capital commerce.

I fully realize that a great many people think, for some reason, that credit and interest on that credit are some modern invention, that's far from the truth as you can get. The fact of the matter is that credit and interest has existed long before man invented or used any official form of money.

In fact, much of that history is recorded in stone such as the Code of Hammurabi in 1800 B.C., 3819 years ago where he established the minimum and maximum rate of interest that could be charged in his kingdom, it's evident that even 3819 years ago that credit and interest were being used long before the times of Hammurabi. You think interest rates are high now think about rates during that time: each commodity borrowed were to be paid back in kind, so if you borrowed grain, you had to repay your loan with grain at 33.3% in interest payment per annum.

Hammurabi also addressed unfair practices, for instance, creditors were forbidden to call in loans to Farmers before their harvest, if a harvest failed, the creditor would be required to cancel all interest for a year to allow the farmer to replant and recoup his losses. Historically, it was a more of a matter of private contracts, written at the time in clay tables, there have been literally thousands of them found dealing with loans. Why, because if you borrow a sum of grain from a person loaning it then you are taking the use of that grain away from the lender of that grain. It was an honest principle of private property, it is still to this day the very same principle when it comes to modern credit and interest. In biblical terms, if the charging of interest was so bad them why were Jews allowed to charge interest on loans they made to gentiles, the only people they could not charge interest was on their fellow Jews, the same is true what Muslims.

If someone loans you something, money or grain or anything else requiring you to contact why that person, you as the borrower are taking use of that money or grain or anything else loaned out to you away from the use of the person who loaned it to you, the very idea of not paying that person smacks of the immoral use of another's property without recommended for the use. Such action is similar to a appropriation of government's power to legalized official plunder in the form of overt taxation.

I could not, in all good conscience, advocate such principles as being remotely honest or moral.

@Republicae Thanks for reading that and giving me your opinion. It appears that we are at an impasse and will continue to just go around in circles. Our main point of contention is on the definition of money and whether or not interest collecting is just. You define money as a commodity. I define a commodity as a commodity and money as a trade convenience. As for good conscience and morality, I believe that we don't define morality because we, as mankind, do not seem to have a moral standard that does not change. There is one Who does not change, and that is God. I believe He defines what is right and what is wrong. Any "law of man" that does not conform to His standard is, wrong and will not stand.

So, I have, very much enjoyed conversing with you and getting to try to understand your perspective. I do know of the Hammurabi Code by the way, but God is the Author of history and His Law, in my view, does not change. He has declared interest collecting to be unjust gain. He allowed the Israelites to charge interest to those who didn't live by His Law, as a protection for them. Israelites were commanded to love their neighbors, not unjustly gain from their hardship. I read the book of Nehemiah the last couple days about their efforts to rebuild the wall around Jerusalem after the captivity. If I remember, it was chapter 5:11 that discussed charging the hundreth part as usury that was wrong for them to do. I read it because of the discussion about Trump's wall that I'm having with people. I should read Ezra's account next.

Anyway, I wish for you continued health and prosperity. I will look for your other writings, too, on the iDW site. Thanks again, It's been fun.

@dmatic

The funny thing is that money is a trade convenience as long as it maintains the value of trade, when it no longer maintains such a value it can no longer be considered money. The problem with any type of Fiat currency is that it totally and absolutely subject to the abuses of government power and corruption, that is why throughout history, it has always been considered dishonest. It is and always has been, in a very real sense, an instrument of abuse of the property of the people and a tool of enslavement and oppression. It is so easily manipulated and that's why government have chosen it, time and again, over honest money like gold and silver, which are difficult to manipulate and will always be the property of the person that has it in his possession, it is hard to debase without detection, unlike any and all Fiat currencies or money substitutes.

It you consider money to be a trade convenience and only a trade convenience, then you can't never understand all the other vital characteristics that money, real money, provides not only a nation, but more importantly the people. Property money is first and foremost the first wall of defense against the attack on the Right of Private Property, from the Right of Property come all our other Rights. When the money of a country no longer hold the Title of Property then there is no ownership protection, as it's the case with all Fiat money substitutes which belong in Toto to the government that issues it and controls both is supply and value by artificial manipulation.

Let's take a look at the logic of your premise, if you have studied Immanuel Kant then you will find this familiar with the reasoning. Do you agree that the Barter System can reasonably associated with a low division of labor? Meaning that it didn't necessarily take several different workers to produce the items exchanged under the pre-money barter system. Also, would you agree that the participants in the barter exchange during those times expected to consume whatever it is that they receive in exchange? You agree that in the barter system each item exchanged were commodities?

But what happened as the barter system began to develop into an indirect system of exchange? Do you think that people would exchange their goods for something that was merely a trade convenience, no the reason and only reason they made the exchange for their goods with someone was that the person waving their goods had a commodity of equal value as the goods being exchanged, if not the the exchange would have never taken place.

Now we would agree, I think, that not all goods or commodities are equally marketable due to the fact that demand is not constant, that was the problem why the direct barter system. So as the direct barter system gave way to the indirect barter system what was absolutely necessary and vital for the indirect medium of exchange or money be in quality? First, it had to possess certain characteristics not found with other commodities, thus it had to be durable and yet easily divisible to meet the rigors multiple exchanges at multiple rates of exchange, but more importantly, it had to be in constant demand otherwise it would not work as money.

So, consequently, in terms of the direct barter system two people brought their goods to market, one brought pork and the other brought herbs, now there were several people there that had all types of goods to barter but none of them wanted or needed either pork or herbs and were therefore, not willing to make an exchange with the person that had the pork or the herbs for the goods the persons who the pork and herbs really needed. The reason for the lack of a successful exchange was that obviously neither pork nor herbs were in high demand. But what happened as the indirect barter of commodities developed into an indirect barter of commodities? First, the opportunity of a successful exchange drastically increased for one reason and one reason only, the commodity medium of exchange was in universal demand because of its value as a commodity. This is the exact way that those goods, those commodities (gold and silver) became the most marketable, universally and constantly in demand, and the common medium of exchange that sprang up in different countries independently of one another. Logically therefore, it could be assumed, with very high confidence, based on at least the last 4000 or more years that the markets would have never developed beyond the direct barter system had money simply been just a trade convenience and nothing more. The is no instance in the long history of money where Fiat money started as Fiat money, in every case, the only way that Fiat money was introduced was to piggy-back it on real commodity money using completely and absolutely fraudulent methods, usually such transitions are kept hidden from the people because their would be an uprising against such overt official embezzlement of the people's property.

Now how did credit arise, just like money it was not invented and it is nothing more than an exchange transaction, exchanging present goods for future goods. Now, real gold and silver money serve as a transmitter of value through time because the value loaned out today will hold its value in the future when the loan is repair, again speaking to the honest characteristics of gold and silver. But the same cannot be said of any type of Fiat money substitute, or trade convenience, for the creditor is at a disadvantage, for the money he loans out today, even at interest, will be repaid to him in money that has less purchase value in the future. The borrower, on the other hand, will use the money he borrowed at the time he took out the loan and enjoy a higher purchase value while repaying the loan with a money substitute that has lesser purchase value than when he took out the loan. And you talk about interest being immoral, it's nothing compared to the total dishonesty of a non-commodity money system. Not only is it dishonest, there is no mechanism that can make it honest.

There is a very good reason the Founders of our country sought to forbid Fiat money from being used in our country, they had seen first hand what a trade convenience money withdraw do, prior to our winning our freedom, during the Revolution, the Continental Congress issued paper money purely as a trade convenience, it didn't long for them to realize just what they had done. The term “Not Worth A Continental” was regularly heard throughout the future States, it caused great hardship and despair. Again, there are extremely valuable lessons to be learned from history and those who ignore that history are doomed to repeat the errors of the past.

The Founders knew exactly what they were doing, they were brilliant scholars of history, they know first-hand and through the study of government throughout history that to allow for money substitutes would destroy this country, and indeed it will and I'm afraid it will not be in the too distant future, once that occurs it will not be merely a trade convenience type of money that will bring us out of that decrepit state of ruin, there is one and only one type of money capable of economic restoration, that is an honest measure and weight of gold and silver money.

I don't know your age, but there's about an 85% chance it will happen in the last twenty years of my life, if you are younger than 35, the odds of it happening in your life time goes up to about 98%. I hope you know how to hunt, fish, live off the land you'll need those skills to survive.

@dmatic

If we, as a people, only understood the importance of Constitutional theory...