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9.15.2010

Money Talk

The U.S. Constitution’s provisions on money are clearly written, well-defined, consistent, and well-thought out. The result has no little beauty and simplicity. The Framers asked WE THE PEOPLE to commit (or not) to a specific set of monetary principles and not to others. Certain powers and disabilities are spelled out. The constitutional monetary system is a hard money or metallic money system as opposed to a system of government-issued paper. It is a free market system in which the government does not control the money supply, but opens the mint to private coinage.

In this system, the federal government has several specific roles. One is to mint coins of a known weight of metal. Another is to regulate the value of other coins, including foreign coins, so as to be of proportionate worth based on their metal content as compared to the standard constitutional dollar, which is a silver standard coin as the money-unit or unit of account. The system envisages gold and silver coins as media of exchange and such coins, properly regulated, being the sole legal tender.

The Constitution outlaws the emission of bills of credit (paper money) by both state governments and the federal government. Only gold and silver coin may be made legal tender. Congress may not levy forced loans.

The Ninth and Tenth Amendments to the Constitution make clear that the monetary powers and disabilities that constrain government do not foreclose lawful or traditional rights of the People. The governmental money system is that which the government must use as it goes about its business, if it is to behave constitutionally. Hence when people interact with government as in the payment of taxes, they are obligated to use the money that the Constitution requires the government to use. For their private transactions, they may choose whatever media of exchange they want to and contract with them as they see fit. They are masters of their own forms of legal tender in private transactions if they spell them out in contracts.

The money and money system of today’s government are entirely divorced from gold and silver in any form. The system uses a combination of paper money and electronic credits created by the Federal Reserve system.
This system is evidently unconstitutional.