"it is their Right, it is their Duty, to throw off such Gove

First, we should all recognize that the monetary use of gold is not without its flaws, no system can possibly be considered perfect due to the interactions of human beings and the unforeseen consequences of their actions. However, the primary flaw with all fiat monetary systems is that they always fall into mismanagement and abuse by those who manage the system due to the nature of the system itself. Every attempt at stabilizing fiat money is usually short-lived, because by its very nature the entire system must rely upon a consistent expansion of the money supply to continue economic growth. This major flaw, combined with mismanagement, will always end in the destruction of the monetary system, there are no exceptions.

Now equally, a gold specie system, administered by a central bank or under the heavy control of the government is not much more successful than a fiat system because of the simple reason that it can easily be abandoned by a stroke of the pen. The most successful monetary system would be one in which individual banks of issue not only had the fiduciary responsibility of good business practices, but also they would not have the ability to renege on the promises and demands of that responsibility to their depositors. Not only would this provide a much longer stability of prices, but also, as witnessed in history, a much more stable economy.

It has empirically been shown that the tendency of inflation usually persist under all fiat monetary systems, but not under what could be considered a classical gold monetary system where, through private banking, the promises of redemption are enforced by the sheer demand of the public. In order for the public to have confidence in such a system, it would, as always, have to have a credible commitment from the banks to maintain gold redemption of any bills of issue, and that any breach of this contract would not simply be dismissed as it appears under our current fiat monetary system. Now, this does not preclude the fact that banks are businesses, and mismanaged businesses do fail and should always be allowed to fail. That being said, such businesses should always provide for independent audits and publication of the findings of such audits to the public, especially to the depositors.

While I personally defend the use of gold as a monetary necessity, I do not defend it on purely ideological [i.e. Constitutional] grounds, but also on rational grounds as well. It is a very rational monetary system; it requires absolute responsibility on all parties, especially the government. Unlike fiat money, gold is not, nor can it ever be an inherent liability; by its very nature it is an asset.

Today, we are accustom to and therefore inclined to think of gold in terms of fiat evaluation. We look at the fiat price of gold and therefore assume that it is the actual value of gold when it fact it is merely the fait price that reflects the inflated, therefore debased purchase value of our fiat currency. Likewise, our entire economy is calculated in fiat terms, logically because at this time that is all we have, however, it is important to realize that the entire economy is based upon a debased evaluation. In other words, the evaluation of our economy should be recognized in highly inflated terms, therefore the real economy minus this inflation is substantially less than it appears in the numbers. I realize that is difficult for some to wrap their minds around, but if you view the economy in terms of a 1913 100 cent Dollar you will get the real economic evaluation. The reason for this is that since our money has lost the majority of its economic purchase power over the last 95 years, the economic evaluation is based upon far less purchasing power per dollar of value.

Take, for instance, $1Million Dollars in today's fiat evaluation, under a 1913, 100 cent Dollar evaluation that $1Million Dollars would equate to only $45,007.36 [*using government CPI figures]. As you can see, that is a massive denigration of the purchase value of our money over the last 95 years. Real economic activity is distorted through the consistent long-term depreciation of the monetary system. It should also be apparent, that under this long-term depreciation of the monetary standard, all economic contracts are also suffer from distortion, even future business projections suffer under the weigh of this distortion, thereby skewing any real possibility of accurate business models, especially when it comes to inventories, capital improvements, as well as profits and losses.

Now apply that same principle to the fiat price of gold which, at the moment is trading around $823.00 per ounce, in a 1913 100 cent Dollar, the price is $41.77. Once again, if we abandon the rose colored fiat glasses we see the truth behind the fiat system of serfdom, we are laboring for pennies. The illusion of wealth is strong, especially in this country, but that is exactly what is provided by a fiat monetary system: an illusion.

As we have seen over the last several years, those who manage the fiat monetary system [i.e. The Federal Reserve] have succumbed to political pressures, even though the charter forbids such collusion. The Federal Reserve Act never really stopped the Fed from doing what they wanted anyway; by 1922 the Fed began to monetize debt by forming what we now know as the Open Market Committee to purchase U.S. Treasuries though it was expressly forbidden to do so by the 1913 Act. The political pressure to inflate, therefore to mismanage the system, has increased as politicians forget that there is no such thing as a free ride, even under the pennies from heaven system of fiat money. The "Piper" will be paid!
Of course, as we have readily seen over the years, the average person is bombarded, via the media and the politicians, with the ideal that the problems associated with inflation are due to natural price increases. It is far easier for them to place the blame on things outside of their immediate control then to confess that the real culprit is the monetary system imposed upon the People.

From the 1890's, there was a major push to substitute gold-bullion, and thus gold-exchange standards for the traditional gold coin standards which were far too restrictive on the government and the increasingly powerful bankers in this country. It was extremely beneficial to both government and the bankers to extend and stretch their available gold reserves by any means possible. The real push, of course, was to eliminate the restrictions that the old gold coin standards placed upon them, they wanted a free hand, and of course, as we know, they got exactly what they wanted at the expense of the People and the future welfare of this country.

As we know, by the late 1920s, the entire substrate that had been formed in the previous decades by the government and the inter-central banks, with their reckless issue of credit came crashing to the ground. While there have always been those who blamed gold for the problems, the real issue behind the crash was how the banks economized the gold system and issued, with little restraint, easy credit policies.
It should be relatively obvious that when you have a managed fiat monetary system, and therefore a managed economy, the political forces will always pull or push monetary policy toward the interests with the strongest political connections, thus distorting the system even more. These pressures, always politically motivated, will add a particular bias to all governmental monetary decisions made within the economy; in doing so, the ideals of a representative government are effectively circumvented by the power of monetary policy and the consequences of that policy.

I believe it was Irving Fisher who stated: "illusionary and tantamount to open approval of the government's power to manipulate purchasing power according to the appetites of powerful pressure groups", nothing could be more factual than that statement. There is absolutely no doubt in my mind that the creation of the fiat economic system was purely politically motivated to induce a social outcome through the transformation of economic life in this country. The system was created to solely benefit those who created it and control it, for it provides no real benefits to the People themselves. The system is, at its very heart, an attempt to defraud the People of this country of their Right to Private Property and their ability to gain wealth through honest means.

There was a time in our country when our money was our property. It was more than just a medium of exchange or an economic instrument; it was, in a very real sense, property. When a man labored he received compensation in value equal to his work, his produce or his creativity; the money he earned was his property, just as anything else he owned. He could be assured that his money was a store of real value, he could spend it as he pleased, he could store in a bank, stuff it in his mattress or bury it in a mason jar in his back yard and it was no ones business but his own. He could be confident in the value of his money, that he could dig that Mason jar from the ground years later and still have money that kept an equivalent value as when he buried it, it was real money, sound money and it was his private property. He could be assured that his government could not confiscate it, track it or regulate it once it was in his hands; it was real property, his property. He need not worry about whether he carried a suitcase full of it from city to city, state to state or country to country because it was, without any equivocation, his property to do with what he wanted.

That all changed in 1933, when FDR issued the Executive Order No. 6102 that proclaimed the hoarding of gold and silver by the People [he called them subjects of the United States] "posed a threat to the peace, equal justice, and well-being of the United States; and that appropriate measures must be taken immediately to protect the interests of our people. Therefore, pursuant to the above authority, I hereby proclaim that such old and silver holdings are prohibited, and that all such coin, bullion or other possessions of gold and silver be tendered within fourteen days to agents of the Government of the United States for compensation at the official price, in the legal tender of the Government. All safe deposit boxes in the banks or financial institutions have been sealed, pending action in the due course of the law. All sales or purchases or movements of such gold and silver within the borders of the United States and its territories, and all foreign exchange transactions or movements of such metals across the border are herby prohibited. Your possession of these proscribed metals and/or your maintenance of a safe-deposit box to store them is known to the Government from bank and insurance records. Therefore, be advised that your vault box must remain sealed, and may only be opened in the presence of an agent of The Internal Revenue Service.

By lawful Order given this day,
The President of the United States."
What an amazing decree, it totally and completely destroyed the Constitutional Rights of the People concerning private property, as well as protection against search and seizure. Of course, following that un-Constitutional and criminal act, the official currency was devalued by 40% and the official price of gold was then revalued upward. Thus the enslavement of the American People that was planned in 1913, had effective been implemented by 1933. The People had no choice in the matter, no redress whatsoever, they were required, by "law" to exchange their real money for a devalued sum of paper money whether they like it or not.

Now, it should not be surprising to anyone that if the government is powerful enough to take one penny from you they can take absolutely everything from you. Dr. Paul stated that: "If it gets bad enough, they'll declare a national economic emergency. They'll take over the banks, all business and industry. They may even try to confiscate our gold.

The power to confiscate gold is still on the books as the law of the land. I urged the full commission to recommend Congress repeal the power to confiscate gold in an economic emergency. We pushed it to a vote and I was the only one that voted to recommend to Congress that we never again contemplate taking the gold of the American People. The fifteen other members voted it down. The power is still there on the books, and they can do it anytime they wish."

In our Constitutional Republic, the Founders were well aware of the potential dangers involving the nation's currency and with that knowledge they gave us with some extremely strong admonitions concerning the value of money as property. They had experienced the results of unsound money and knew that monetary instability would not only threaten the nation's economic freedom, but all freedoms and liberties enjoyed by the people.

In the preliminary draft of our Constitution the following words were considered: "To borrow money and emit bills [fiat currency] on the credit of the United States." The wording however, was struck from the final document and for good reason. Due to the Founders knowledge of history and even their experience with the "Continentals", they knew the danger that emitting such bills posed to the nation and the value of the monetary property of the People. Indeed, it was more than just the monetary property Rights, but all Rights of the People that concerned the Founders; for they were aware that if the monetary system was ever corrupted that the entire system could be corrupted.

In fact, there were some in the Constitutional Convention that believed that it would be better to discard the entire Constitution instead of allowing "and emit bills" to remain. The passion concerning the ability of Congress to "emit bills" was so powerful because the Founders knew that such ability had the potential to undermine the Republic.

The cardinal rule of money as real property is essential for a Free People; absent that cardinal rule the government assumes powers that will always infringe upon the Rights of the People. As we have seen, when money is little more than an impotent instrument of exchange, monopolized and regulated by the government then the government is; apparently, free to treat it as such. The government can debase it, confiscate it, control it, track it and basically manipulate it to benefit any agenda it pleases.

Is it any wonder why the Founders were so concerned about taxation without representation? Such taxation allowed the King's government to tax the fruit of the people's labor indiscriminately. It totally ignored their property rights and amounted to open robbery of the people's private property. Today, we have the semblance of representation, but in reality those we elect rarely consider our consent when crafting legislation. Perhaps if we actually considered what has taken place over the last century we would once again raise our arms in revolution and cast out those who should be considered nothing more than common criminals acting for their own benefit instead of that of the people.

Through the years our financial privacy has been invaded through a system that has completely eliminated not only the property rights of our money, but also the value of our money and indeed the essence of our money itself has been detrimentally altered. Today, our money has been transformed, by certain factions in both the banking cartel and government, as an instrument of a government. A government that no longer places value upon the Rights of the People to keep their property and to use that property in ways that should be considered private and inviolate is a government operating outside the Consent of the People and the Law of the Land. Along with the Central Bankers, such a government seeks to use unsound money for purposes other than the real benefit of the People.

This government began to follow the path toward unsound money the moment it bowed down to the power of the bankers by passing the Federal Reserve Act in 1913. Since that time we have witnessed some of the most heinous acts against the People and their property in the history of this nation. Under the watch of the Federal Reserve, this country and its people suffered numerous depressions and recessions, including the Great Depression. These financial crises served the bankers and the government well, it provided opportunities to both bankers and the government unparallel in our nations history. The scope and power of the government was immensely expanded in the wake of the Great Depression and although the Federal Reserve was intended to avert such economic panics, it was the major contributor to that economic catastrophe and, indeed, as it turns out, a prime beneficiary of the economic disaster. During the Great Depression there was a tremendous amount of wealth that was transferred into the hands of not only the Central Bankers, but into the coffers of the government itself.
The Great Depression provided the government with an opportunity never before seen in this country's history; the Crash of 29 and the ensuing depression followed the natural progression of monetary debasement and control. It also proved to be the impetus for the destruction of the property rights associated with money. It gave the government "claim" over the people's money, making it nearly impossible for a man to control or maintain his money as private property. FDR's confiscation of gold and the government's decision to renege on its promise to redeem its Liberty Bonds and other government obligations marked the beginning of the end of private money property in this country; it also marked the end of the full faith of the United States government.

By 1971, the goal of destroying private money, and the rights associated with it, was completed when the government quietly achieved a total fiat currency coup d'etat and their banking partners, the Federal Reserve now had free-reign to control the monetary interests of this nation through a complete monopoly. This effectively ended all property rights the people retained in their money. Since that time, we have witnessed a drastic confiscation of the wealth of this nation by the government and its banking cartel. This confiscation is hidden from the masses of people and takes the form of inflation, draining away the purchasing power of the nation's money and the ability of the majority of the people to maintain a stable livelihood.

Alan Greenspan once said: "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation." He should know, for under his tenure at the Federal Reserve, the people of this country have been victimized and seen their wealth robbed through that insidious form of theft called inflation. We have seen our standard of living stolen from us and with the complicity of our own government we have witnessed the demise of our property rights, and indeed all our rights. The fruit of our labors are being siphoned off by those who are no longer worthy of being called our Representative Government, they have long ago abandoned good government for abusive powers and what amounts to little more than blatant highway robbery. They have replaced our Liberty and Rights with something that is totally contingent upon our compliance under the illusion of freedom. They have transformed this nation from one of producers, manufacturers and good labor into a debt-dependent serfdom created to increase their own real wealth and powers while reducing the actual standard of living for millions of hard-working Americans.

How many times did our Founders clearly warn us of the potential for deceit and corruption associated with the unsound money, but through trickery and overt deception this nation was lead down a path that will, ultimately, prove its undoing? The Father of the Constitution, James Madison stated that unsound fiat money would destroy the necessary confidence between man and man, in public councils, industry, the moral standing of the people and the complete character of the republican government.

The last century saw a progressive disregard for the Constitution and authority, in many cases it is simply ignored by government. Such disregard should not be considered anything less than criminal, a breach of contract between the government and those who have consented to be governed under that agreement.

The people must come to understand that one of their fundamental rights is that of money property and the only way to have money property is for money to be a sound store of value, untouchable by government, separated from the influences of a monopolistic Central Bank, free of the threat of confiscation or undue taxation without appropriate Constitutional Representation. It is a Right that must be restored to the People, without such restoration there is little hope of us maintaining the few vestiges of freedom left to this People.
We stand at a time when this nation will face a great turmoil; the next few years will determine the future of our nation.

The Right of Money Property is a revolutionary right; it stands as a bulwark against those who would assume authority over us and our future. The Right to produce, to labor in exchange of just and sound compensation without the interference of government or the overt monopolistic control of the Central Bankers is essential for a good and prosperous future. We must repudiate all extra and un-Constitutional usurpations and hold those within government accountable for such crimes.

The People must once again take an offensive stance against all those within and without the government who continue to seek to overthrow the remaining remnants of our Constitutional Republic. Our call to sacrifice is no less vital as that of our Founders, our call to defend this Constitutional Republic is no less essential for the survival of this nation.

I leave you with these words:
"When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security."

In Liberty and Eternal Vigilance,
Republicae-Seditionist

Thanks again!

Republicae I have a neighbor who is an investment consultant. We have had some light discussions of things going on. He still of course buys the media BS and even thought the US treasury still printed our money. Told me technically inflation is not that bad.

I have hinted that the inflation numbers are not correct. And about other things. I have not gotten to deep yet ith him because I want to ease him along because he thinks he is pretty knowledgeable in this area but he hasn't a clue. He is open to abolishing the income tax though.

My point is I am looking for something light to explain how the Federal Reserve works and is the root cause of all our problems. I had thought about sending him some of your very well written articles but I think it might blow him out of the water. Do you have anything that touches on the basics sort of a Republicae light if you will I can send him first before I hit him with both barrels? Or perhaps recommend something?

Its good to be here...I've enjoyed your support on the DailyPaul...there are few there that seem to get it.

I would suggest Murray Rothbard's The Case Against the Fed, The Mystery of Banking, and perhaps Wallstreet, Banks and American Foreign Policy.

I would also suggest Hayek's The Mythology of Capital, The Pure Theory of Capital.

The Bubble that Broke the World by Garet Garrett.

The Causes of the Economic Crisis, and Other Essays Before and After the Great Depression by Mises

The Theory of Money and Credit by Mises

A Critique of Interventionism by Mises

The Ultimate Foundation of Economic Science by Mises

Of course, if you have not read these I would highly recommend them to you also, some are a bit heavy, but all in all they are very good information on the subject. I would start with The Case Against the Fed.