Idaho's Weekly Journal of Local & National Commentary Week 2815


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by Free Market Duck

The difference between sound money and our current pulp fiction Dollar, or…why Idaho Legislators should vote “yes” on House Bills 622 and 633
(Mar 24, 2010)

Boise, ID – The U.S. Dollar is like the pink slip to your ’57 Chevy.  If you print up one million copies of the pink slip to your ’57 Chevy and sell each copy for a thousand dollars, you will have issued one billion dollars in ownership title to your single ’57 Chevy.  You will have cheated 999,999 people who are now holding fake pink slips to one ’57 Chevy.  This is called fractional reserve banking.  Some call it counterfeiting or robbery.

   In the case of the Federal Reserve doing the same thing with the U.S. Dollar, i.e., issuing the dollar as a presumed promissory note for gold or silver, the central bankers are betting that everybody will not simultaneously run down to the bank and demand gold or silver coins for the U.S. Dollar.  (That was before Aug 1971, before former President Nixon completely closed the international gold settlements window.  Now the dollar is not backed by anything.)

   In the case of one million counterfeited pink slips for one ’57 Chevy, you would be counting on everybody not rushing over to your garage to present their pink slip for the single ’57 Chevy.  Each copy of the new “counterfeited” pink slips will temporarily circulate in the market and act as a promissory note as long as more than two people don’t demand redemption of their Note, their new pink slip, for the car.

   But what happens when you take fractional reserve banking one step further and change the wording on all the one million pink slips from, “Ownership Title to one ’57 Chevy VIN # 123456789,” to simply, “The Car?”  As if the pink slip is now the car itself?

   This is an important concept because that’s exactly what the Federal Reserve did in the case of the U.S. Dollar.  They changed the wording on the paper Dollar from, “This is to certify that there is on deposit, one silver dollar [the coin, defined as 418 grains of silver at .999 fine], payable to the bearer on demand,” to simply, “One Federal Reserve Note.”  As if the Federal Reserve Note is now the silver coin itself.

   If you take a Federal Reserve Note down to any U.S. Treasury today, they will “redeem” it with another paper Federal Reserve Note.  In the case of the ’57 Chevy, all the holders of the pink slips are holding Non-Titles of Non-Ownership to Nothing except a piece of paper that strips out the legality of the previously-worded contractual agreement and substitutes it with a fake concept that the pink slip is now the car itself.  I repeat, the pink slip has now morphed into the car itself.

   And that’s exactly what has happened to our U.S. Dollar:  the promissory note for an ounce of silver, or gold, has been stripped of its “obligation of contracts” for which the Note was originally created, an ounce of gold or silver, and has morphed into a piece of paper that says that the Federal Reserve Note is the silver or gold coin itself.  I know it sounds absurd, but that’s exactly the type of money we have today.

   But we all know that, in the same way that a pink piece of paper is not the real car, our current Federal Reserve Notes are not physically gold or silver.  Our current U.S. Dollars are now nothing but non-promises to redeem non IOUs.  They are, as one of our Founding Fathers, James Madison, warned us about in The Federalist Papers, an “abrogation of the obligation of contracts.”  The U.S. Dollar is a big lie and the Federal Reserve system is the biggest Ponzi Scheme ever perpetrated against the people of the world.  And it is the major cause of our current Recession, as all currency inflations have been in many other countries throughout history.

   Why has the Fed Reserve morphed into a giant Ponzi Scheme?  The reason the Federal Reserve has reneged on the “obligation of contractually redeemable money,” gold and silver, is so that they can “legally” expand and contract America’s money supply like a rubber band, earning billions of dollars in interest during this complicated process, and exchanging their fake paper for the fruits of your labor, with not one person in a million being cognizant of what’s really going on in this transformational process.

   If the people of America truly understood how and why the Fed is manipulating their paper money and credit, they would riot in the streets tomorrow.

   Why does the U.S. Congress put up with the Fed’s giant Ponzi Scheme?  The U.S. Congress loves the Federal Reserve system because it provides the legislators with zero brakes on how much pulp fiction dollars they can create out of thin air to finance their deficit Welfare programs.  Abolish the central bank and return to a 100% gold standard with no fractional reserve banking and the Welfare State disappears overnight.  Gold money is an automatic regulator of all aspects of the free market, from hyper-inflation to fraudulent derivatives on Wall Street.  That’s why Congress and the Federal Reserve central bankers hate gold.  It forces them to be honest.

   I am writing to you today because, as Idaho legislators, it is incumbent upon you to understand the true nature of our current money since it is the medium of economic exchange by which you, as statesmen and women, collect taxes, spend revenue, and generally conduct your legislative financial business.  In short, we want to use real money and not the pulp fiction dollars that the Federal Reserve has been inflating and thus causing the current derivative-induced Recession (mainly through the housing market).  Continual deficit financing and hyper-inflation of our money supply has brought our nation to its financial knees and we MUST return to a sound monetary system.

   The current Monetary Bills H622 and H633 before you, authored by Rep. Lenore Barrett and Phil Hart respectively, that would authorize Idahoans to use gold or silver specie as legal tender for all debts public and private, is the right step in the right direction to help counter the inflationary results of the Federal Reserve’s incessant manipulation of our money.  Note that House Bills 622 and 633 not only create institutions to handle computerized contracts of gold and silver, they also prohibit that most evil of evil monetary concepts:  fractional reserve banking.

   I urge you to consider implementing Bills H622 and H633 as a giant step forward for not only Idahoans who want to protect themselves from the devaluation of their savings and inflation of prices in general, but also as a giant step toward U.S. Rep. Ron Paul’s (R-TX) U.S. House Bill to Audit The Fed.  Three Quarters of the U.S. House and half of the U.S. Senate, including our own U.S. Senators and Reps are on board to Audit The Fed.  After we Audit The Fed, we must then introduce gold and silver legal tender to float alongside the inflated Federal Reserve Note, and let the people chose their own medium of economic exchange, which will obviously be gold and silver, and thus drive out the Fed’s pulp fiction garbage so the U.S. can resolve its current Recession and employment problems.  Then we can abolish the central banking Ponzi Scheme and return to sound money.

   Thanks for all of your hard work in the Idaho Legislature. – FM Duck

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