By Franklin Sanders
We live in a tapeworm economy. The monetary system enables those who control the government-sanctioned money creation franchise to feed on all the rest of us — not an accident, but the nature of the system.
The Federal Reserve Act (1912) gives to the Federal Reserve system power to do what is otherwise illegal: print its own private money (“Federal Reserve notes”) and force the rest of us to receive it as money. In the interest of a banking cartel the government has replaced public money (gold and silver coin) with private money (bank credit) to benefit no one but the banks.
Clearly, this means that eventually all the property and all the power in the country will wind up in hands of the money-printers. The power to print money is the beating heart of tyranny, the source of all its power. Abolishing the Federal Reserve and fiat money is the strategic key, the only strategic key, to restoring liberty, prosperity, government by law, and justice. Restoring hard money restores everything.
Our strategy must reverse and overthrow the Fed’s strategy. They have employed Gresham’s Law, using bad money to drive out good money.
But most people don’t understand that Gresham’s Law works both ways. It only works to drive good money out of circulation when driven by force, by legal tender laws. If good money is available and not forbidden by law, Gresham’s Law reverses: good money drives bad money out of circulation.
We must enlist that on our side.
Restore gold and silver to circulation
The U.S. Constitution, Article I, Section 10 says: “No state shall make any Thing but Gold and Silver Coin a tender in payment of debt.” This reserves to states the power to “declare a tender” but restricts that power to “gold and silver coin.” The federal government has already made gold and silver coin a tender (Coinage Acts of 1792, 1832, 1873, 1985, 1986, etc. etc.), but they don’t circulate. Fiat Federal Reserve money (notes and bank credit) is accepted by public and government to the exclusion of gold and silver. Therefore we must remove all those barriers.
1. Remove government barriers to circulation.
➤ Remove/forbid/exempt gold and silver from sales tax, both coin and bullion. Charging sales tax on exchanges of gold and silver coin not only obstructs their circulation, it is also illegal. Did you ever pay sales tax when a bank teller gave you two $10 bills for a $20 bill?
Of course not. Under the common law, the constitution, statutory law, and precedent, gold and silver coin is “money” while the green paper is a “note,” a “bank note,” a promise to pay money and not itself money. But if we can’t make that leap all at once, then we need to follow the Texas and California examples, where any non-jewellery gold and silver purchase over $1,000 is automatically exempted from sales tax.
➤ No capital gains tax on gold/silver transactions. Every exchange of gold/silver for fiat must be defined as a “like kind transaction at full equivalency on date of exchange.”
➤ Eventually, Tennessee government must re-denominate all fines, taxes, and dues in gold and silver, to the exclusion of fiat money.
2. Remove commercial barriers to circulation.
➤ It is hard to use silver and gold. People don’t use gold and silver because they are too inconvenient. They won’t accept them because they don’t know what they’re worth. That’s cured privately and easily by Internet conversion applications like silverandgoldaremoney.com. That’s cured publicly by state government publishing exchange rates daily.
➤ It’s easy to use paper. Every merchant accepts checks, credit cards, debit cards.Electronic payment systems for silver and gold are rare or unknown, but already available and successful, e.g., goldmoney.com.
➤ But Article I, Section 10 specifies the only tender as gold and silver “coin.”The law must integrate that with electronic systems as an alternative. 100% reserve gold and silver banks must be “legalized” by statute or court judgment. In fact, they already are, but not treated that way by courts.
3. No monometallism, no fixed exchange rates or fixed ratios.
➤ Whatever standard is enacted, it must include both metals, but without any fixed exchange rate between the two. Against those who object to that, answer that we already have floating exchange rates among all the fiat currencies of the world. Deal with it: the world economy already does. Any monetary system with only gold or only silver is only fiat money in disguise. Honesty and integrity can only be maintained when the value of each metal is defined in terms of the other, not in terms of some fiat currency unit like “dollars.”
4. Create the legal environment, then circulate.
Once we have created the legal environment removing the strictures against gold and silver (passed laws), then the greater hurdle appears: get people to use them daily. Once they begin using them, silver and gold will drive out fiat within two years. How can I be so sure?
➤ History shows that. Cf. 1792 when silver and gold coin replaced paper money.
➤ Silver and gold do not constantly lose value.
➤ Silver and gold actually gain value, so saving makes sense. Savers build capital for economic expansion by equity financing, so debt is not necessary.
➤ For holders of silver and gold, everything you buy constantly becoming cheaper. Day by day your money buys more.
5. Once that local cash circulation begins, local businesses will spring up to serve it.
Cobbler, tailor, hardware store and others will push out corporate franchises that drain cash away. Local production produces local demand that produces local jobs: we don’t have to bring in jobs and money from outside.
6. Gresham’s Law will keep that silver and gold money in the community.
All this happens without any laws, subsidies, government payments, or fractional reserve banks. No government interference, and heaven help us! No government “favours.” It will happen spontaneously, by human desire for prosperity, if we can only create the necessary conditions.
The bottom line
We must reclaim and restore not only one but three freedoms government has stolen: Economic Freedom, Food Freedom, and Monetary Freedom.
➤ Restore Monetary Freedom. Place silver and gold money on an equal footing with fiat money and offer the people “freedom of choice in money”, and
➤ Restore Economic Freedom by removing regulations that stifle economic freedom and initiative, and
➤ Restoring Food Freedom.Restoring one without restoring all will not only fail, but also leave us worse off that we are now.Someone will tell me this is impossible. Things have gone too far. We have to wait until it all collapses of its own weight before we can do anything. We can’t change anything. It’s hopeless.
I answer these croakers with the words of Jonathan, son of Saul. When the Philistines oppressed all Israel as we are oppressed this day, Jonathan went by himself to the Philistine army, up on the hill. He went by himself, only Jonathan and his armour bearer, a man and a mere boy against the Philistine’s whole host.
Jonathan came to the foot of the hill, and said to his armour bearer, “Come, and let us go over unto the garrison of these uncircumcised: it may be that the Lord will work for us: for the Lord is not restrained to save by many or by few.”
So they climbed up, and they fought, and they won. They killed 20 Philistines within a half acre, and the whole army panicked and fled and Israel chased them out of the country.
That one man’s resolve to fight or die but to live free marked the beginning of his whole country’s liberation.
Is it impossible to restore our freedom, to drive out the Philistines who rule over us? I don’t know. I have looked down their gun barrels, been ridiculed in their courts, and been thrown in their jails, so I of all people offer no guarantees and make no promises.
But I remember also that for all their power, all their money, all their agents, by the Grace of God I still survive and thrive, and so does the truth and the law. I only know that God is not restrained to save by many or by few, and I know it is time, our time to go up, and see
if God will work for us.
We have no other hope.
Franklin Sanders is publisher of The Moneychanger, a privately circulated monthly newsletter that focus on gold and silver and the application of Christianity to economics, culture and family life. We have subscribed to this newsletter for more than 20 years, and consider it a must read. F$99 a year. Franklin is an active trader in gold and silver (he’ll swap your green Federal Reserve rectangles and give you real money in return). He trades with savers and investors outside Tennessee. Subscribe to his daily price report and market commentary on the website.