The Nature of Money and our Monetary System
Johnny Silver Bear
As
the editor of the Silver
Bear Cafe, I try to focus on the ramifications of world events.
I try to understand how what's going on now will affect your pocketbook
next week, next month, next year. It is my sole intent to help you
consider the possibilities which will, in turn, help you prepare
for your financial future.
One
of the most important aspects of your financial survival concerns
your understanding of the nature of money. If you believe that
precious metals do not constitute "money", you may have been misled.
If you have been misled, who misled you? Why? And "What's
wrong
with
this picture"?
What is money? The whole
point of money is suppose to be the provision of a convenient and
liquid medium
that
can be exchanged
for less
liquid value.
It is
a go between. One strives to accumulate money so it can be exchanged
it for something else.
In
our illustrious history, we humans have tried everything from salt
to
sardines as a
medium of exchange, but nothing has seemed
to work as well as gold and silver. A
person bringing a relatively illiquid item to market could swap
it for gold or silver, secure in the knowledge that the metal would
retain its value for as long as he chose to hold it and would be
accepted
as
payment for anything he wanted when he chose to spend it.
The
condition that your gold and silver will retain its value for as
long as
you chose to hold it is the most valuable characteristic of the "barbarous
relics",
and
provides the fodder for me to champion the cause of precious
metals ownership, and for my ensuing attack on the debasement of the
American dollar.
Man
has an innate desire to obtain and own gold and silver. That we seek
to possess precious metals seems as naturally
entrenched in our collective psychic as any other instinct. The possession
of
wealth, in the form of gold and silver, has always represented power
and
control. There is nothing wrong or unnatural to desire power and
control. The power to control one's destiny through the accumulation
of wealth is not only natural, it is healthy. This natural desire
is the basis of our capitalistic system. The gold standard, as prescribed
by our Constitution, is "the Law" that insures that the "power
and control" that is provided by wealth, cannot be abused. Those
who would seek to abuse the power of wealth would consequently have
to break
"the Law." "The Law" has been broken.
In 1792 the U.
S. Coinage Act was passed by Congress.
It invoked the death penalty for anyone debasing
money and provided
for a U.S. Mint where silver dollars were coined along with gold coins
beginning in 1794. The text of Coinage Act of 1792 states: “The
Dollar or Unit shall be of the value of a Spanish milled dollar as
the same is now current,” that is, running in the market, “to
wit, three hundred and seventy-one and one-quarter grains of silver.”
To
repeat, A“dollar” is a silver
coin containing three hundred and seventy-one and one-quarter grains
of
silver — and it cannot
be changed by constitutional amendment, definitionally, any more
than the term “year” can.
Even
at
the current suppressed value of silver, ($6.93/troy ounce), a "dollar
is worth $5.36. The fact that a currently circulated Federal Reserve
Note of a "One
Dollar"
denomination is not worth $5.36
is evidence that a radical debasing of money has occurred sometime
in the past
and begs the questions: Who was responsible for
the debasement, why did "we the people" allow the debasement
to occur, and why weren't
those responsible prosecuted?
Fiat
money, (money not backed by anything), was something so abhorrent
to our Founding Fathers that they didn't
even discuss it as an option. The Constitutional gold standard
provided that the Country's citizens could not be robbed by means of
inflation.
An
interesting
original draft by the Founders would of allowed for "bills
of credit",
or paper money but that was struck out. It seems that during the
Revolutionary War, when paper money had been issued, a promise
to back the notes for gold or silver was a "no confidence" disaster,
causing counterfeiting by the British and other forms of fraud.
The
end result were notes of no value, plummeting to less than a penny
per dollar. Sound familiar? This is why the Founding Fathers decided
to mint only gold and silver coins as "money." They provided
for a U.S. Mint where silver dollars were coined along with gold coins
beginning in 1794.
" The
people of the states empower the Congress to coin money and
regulate the value
thereof
and also of foreign coins." From
Article I.8.5
This provision in the U.S. Constitution gave Congress
the Right to produce a national coin, set the weight, fineness, and
value. Also, Congress could specify the value of a foreign coin in
terms of the national coin of the United States.
" No
state shall ...coin money; emit bills of credit; or make anything
but gold and silver
coin a tender in payment of debts." From
Article I.10.1
It is clear from this provision that the State's could
not create their own coin nor could they make anything but the gold
and silver coins issued by Congress as legal tender for the payments
of debt. This is a Constitutionally mandated gold standard.
No
further paper money was issued by the U. S. Government for over eighty
years. The Founders did allow, however, private
banks to act as depositories for the United States and to collect taxes.
People were issued redeemable bank notes which circulated as currency.
Alexander Hamilton was initially responsible for the "National Banking
System". Unfortunately, he realized his error in promoting this
type of banking too late, and by the end of the Civil War there were
thousands
of banks
issuing thousands of different kinds of bank notes.
In
1862, during the "War for Southern Independence",
Lincoln radically debased the currency by having millions of "greenbacks" printed
so he could pay for the "trappings of combat" needed for
his "sacking of the South". (see
death penalty above)
In
1872, Supreme Court Justice Stephen Field, aware of the rages of
inflation, attempted to block an
unconstitutional overextension of powers by the Bank of the United
States. He wrote:
“The
arguments in favor of the constitutionality of legal tender
paper currency tend
directly to break
down the barriers which separate a government of limited powers
from a government resting in the unrestrained will of Congress.
Those
limitations must be preserved, or our government will inevitably
drift from the
system established by our Fathers into a vast, centralized,
and consolidated government.”
Drift, it did, and is now moored on the
precipice of the economic abyss.
In
1878, in a rare state of clarity, Congress began to redeem "greenbacks" into
gold which put the United States back on the gold standard until 1933.
It was well known amongst intelligent politicians, (who
have, apparently, remained in the minority), that the gold standard
protected citizens
against the controlling tendencies of the government by offering
an absolute hedge
against the depreciation or devaluation of the currency.
Gold provided an agent of maintenance and liquidity within and beyond
national borders. Above all, it raised a mighty barrier against authoritarian
interferences through the manipulation of the economic markets. Within
the constraints imposed by the gold standard, America's economy remained
relatively
healthy
until 1913.
On
December 23, 1913, the U.S. Congress passed the Federal Reserve
Act, placing control of this nation's money into
the hands of a private corporation. This corporation was made up entirely
of bankers. Calling
itself the
Federal Reserve, so as to seem official, it replaced the national
bank system. Treasury notes were recalled and Federal Reserve notes
were
issued
with a
promise
to redeem them
in
gold on
demand.
The forces behind the Federal Reserve, (American and Western European
banking interests), remained tethered by the limits imposed by the
gold standard, but this would soon change.
In 1920, the 66th Congress passed
the Independent Treasury Act.
In 1921, the United States Congress abolished
the U.S. Treasury, and, as a result, all of our country's bullion
and all other instruments of value, ( i.e...moneys in trust funds
and other
special funds that had been kept in U.S. Treasury offices and vaults),
were systematically transferred to the coffers of a private corporation!
From
1913, until 1933, under the authority of the U.S. Congress, the
Federal
Reserve held
control of all of our country's gold. They then proceeded to loan
us back our gold, at interest. We paid interest for the use
of our
own gold! What's wrong with this picture? What could have incited our Senators
and Representatives to allow that to happen? In order to keep up
with the ever rising debt service, we borrowed more of our own gold.
We kept borrowing more and more
of
our
own
gold
to
pay
more and more interest,
until
all the gold was gone. At that point, the country went
bankrupt. Guess what happened next.
The
bankers foreclosed on America. I know what you're thinking. Me
too.
On March 9, 1933, the U.S. declared bankruptcy,
as expressed in President Franklin Delano Roosevelt's Executive Orders 6073,
6102, 6111, and 6260.
On
April 5th, 1933, one month after his inauguration, President
Roosevelt declared a National Emergency that made it unlawful for
any citizen of the United States to own gold, (see
death penalty above), and "unconstitutionally" ordered
all gold coins, gold bullion, and gold certificates to be turned
into the Federal Reserve banks by May 1st under the threat of imprisonment
and fines. This was technically, a national confiscation of gold
and silver. This
unlawful precedent set by Roosevelt would eventually lead us to
the catastrophic situation we find ourselves in today.
Our
bankrupt nation went into receivership
and was reorganized in favor of it's creditor and new owners, a private corporation
of international bankers. (Since 1933, what is called the "United States
Government" has been a privately owned corporation, and the property
of the Federal Reserve / International Monetary Fund.)
Without
a word of truth to the American people, all our good faith and credit was
pledged as the surety for the debt by the same slime ball Congressmen who
created the mechanism
that allowed it to occur.
Those
Congressmen, knew such "De
Facto Transitions" were unlawful and unauthorized, but were mysteriously
coerced into sanctioning, implementing, and enforcing the complete debauchment
of our monetary system, and the resulting changes in all aspects of government,
society, and industry in the United States of America.
From
the onset of the Federal Reserve, fractional reserve bankers
set out to win the war of misinformation. They did this, in part, by
attempting to advance the pseudo tenets of Keynesianism, monetarism,
and supply-side
economics.
John
Maynard Keynes, although a great friend of the bankers, was probably
the most heinous influence on freedom, liberty, and the free market in
the 20th century.
He was
a Fabian socialist and a Globalist, (is that redundant?), who provided
an intellectual cover for inflationism. He is
best known for authoring bogus economic theories, undermining Western
values and philosophy, and providing a floor plan whereby the banksters
could more easily deceive the
people. It was Keynes who coined the phrase, “barbarous relic” in
reference to gold. It was Keynes who desecrated
the U.S. Constitution with almost every breath.
During
the first half of the
20th century, each of four world leaders did the exact same thing within
ninety days
of their ascension to power. Each
made it illegal for the citizens of their respective countries
to own gold. Those leaders were: Mao, Stalin, Hitler, and Franklin D.
Roosevelt. All four were acutely aware of the restrictions that
a gold
standard imposed on their abilities to wage war.
The
bankers hate gold as money for the same reason. Gold as money
acts as a barrier to the expansion of credit money.
By pandering the
lure
of
unlimited
credit, the banksters went about recruiting politicians through
out the world. The opportunity to wage war on borrowed money
turned out to be irresistible to Empire. Wars have always been very important
to the banking cartels. They are
very expensive. Time and time again, through loans to governments,
the cartels
have provided
the
funding for great conflicts. Imagine, being able to go to war
with unlimited
funds.
Better yet, imagine the inability to go to war because of the
lack of unlimited funds. The temptation
extended to the power mongers was too great. The
credit was made available with a single catch. The gist of the pitch
went something like this:
"Sure
we'll loan you all the money you want, on the condition that you enact
laws making all the citizens of your individual countries responsible
for the interest payments, through taxation"
One
by one the
leaders
of every government on earth sold out, and agreed to
demonetize
gold,
thereby
allowing
the
continued power grab
of the banking cartels through the issuance debt based
currency. The result has been the methodical fleecing of the general
population through the debasing of the dollar
by 94%.
On
May 22nd, 1933, Congress enacted a law, against Constitutional mandate,
declaring all coin and currencies then in circulation to be
legal tender, dollar
for dollar, as if they were gold. The President was unconstitutionally
empowered to reduce the gold content to the dollar up to 50 percent. (see
death penalty above)
On June 5th, 1933, Congress stabbed the gold standard
out of existence by enacting a joint resolution (48 Stat. 112), that
all gold clauses in contracts were outlawed and no one could legally
demand gold in payment for any obligation due to him.
On January 30th, 1934, the Gold Reserve Act was passed,
giving the Federal Reserve title to all the gold which had been collected.
This act also changed the value/price of gold from $20.67 per ounce
to $35 per ounce, which meant that all of the silver certificates the
people had recently received for their gold now were worth 40 percent
less.
On
January 31st, 1934, after President Roosevelt fixed the dollar at 15
and 5/21 grains standard to gold. Russia and the central
banks of Europe were very excited and began buying up gold in huge
quantities. This planned redistribution of our country's wealth
was one of the most important objectives of the Globalist's agenda. Thus
a dual monetary system began which offered the gold standard for foreigners
and Federal
Reserve
notes
for
Americans. (see
death penalty above)
Between
1934 to 1963 all Federal Reserve notes issued had a promised
to pay, or to be redeemed in "lawful money." Over
a short period of time the wording on the Federal Reserve notes
began to change until there was no redemption in silver promised. This
was done slowly enough that the people didn't see it coming. (see
death penalty above)
On
November 2nd, 1963, new Federal Reserve notes with no promise
to pay in "lawful money" was released. No guarantees,
no value. (see death penalty above)
In 1965 silver in coins were reduced to 40 percent by
President Lyndon Johnson's authorization. (see
death penalty above)
President Lyndon Johnson issued a proclamation on June
24, 1968, that all Federal Reserve Silver Certificates were merely
fiat legal tender and could not be redeemed in silver. (see
death penalty above)
On
December 31, 1970, President Richard Nixon signed into law an
amendment to the Bank Holding Company Act, which, among other things,
authorized the treasury to totally debase coins to a worthless value
in non precious
metal. (see death penalty above)
"Single acts of
tyranny may be ascribed to the accidental opinion of a
day. But
a series of oppressions, begun at a distinguished period, and pursued unalterably
through every change of ministers, too plainly proves a deliberate systematic
plan of reducing us to slavery." - Thomas Jefferson
Since the seventies, the unfettered
issuance of debt money has continued to debase our currency more
rapidly than ever before. In the last three years, the debasement
has accelerated
exponentially.
"The abandonment of the gold standard made
it possible for the welfare statists (government bureaucrats) to
use
the banking system as an unlimited expansion of credit. In the
absence of the gold standard, there is no way to protect savings
from confiscation
through inflation... Deficit spending is simply a scheme for
the "hidden" confiscation
of wealth. Gold stands in the way of this insidious process." -
Alan Greenspan
The world governments continue to babble that tired Keynesian
rhetoric insisting that gold and silver have become obsolete, relics
of the past. Yet in the 4th Quarter of 2003 global gold and silver
demand was the highest on record, and, some of the world's largest
investors are presently taking major positions in precious metals.
The
cartel
wants economic growth, lots of borrowers, and lots of opportunities
to lend newly created funny money at interest.
You can't blame them for wanting that. If I could print up all
the funny money I wanted and could then lend it out at interest,
I'd
be happy too. That is, I would be happy to lend it if I didn't
have
a soul. The
ravages of inflation have heretofore been thoroughly exposed and
the results are blatantly apparent in our inability to successfully
engineer our
lives without debt. Fractional reserve banking has provided for
the theft of the life blood of our nation.
Compounding
the problem is
the
fact
that the world is no longer capable of sustaining economic expansion.
We are beginning to witness emerging nations, like China
and India sucking up natural resources at a rate that is way
past rechargeable. We are entering a period of civilization where
the
keyword is sustainability,
not growth.
The
debasement of our currency continues with abandon.The purchasing
power of the dollar is quickly eroding. It is down 30% in the last
three years. Conversely, the value of gold is up 30% in the last
three years. Because the dollar is the reserve currency of world,
every commodity, from rice to timber, from oil to precious metals,
will continue to rise, priced in dollars.
The
U.S.A. is currently breaking all records for the longest period
of time that a nation's economy has endured after abandoning the
gold standard. Our country has been foreclosed on in the past,
and its just about to be foreclosed on again. It's just a matter
of time. The "endgame" is near.
"
I believe that banking institutions are more dangerous to our liberties
than standing armies . . . If the American people ever allow private
banks to control the issue of their currency, first by inflation,
then by deflation, the banks and corporations that will grow up around
[the banks] . . . will deprive the people of all property until their
children wake-up homeless on the continent their fathers conquered
. . . The issuing power should be taken from the banks and restored
to the people, to whom it properly belongs." -- Thomas Jefferson
-- The Debate Over The Re Charter Of The Bank Bill, (1809)
The
last thing that the powers that are engineering the devaluation
of the dollar want to happen is for the world to wake up to the
fact that precious metals represent un-inflatable money. Both gold
and silver are rising in price. This rise is currently fueled mostly
by the dollar's demise. When the resulting "demand panic" kicks
in, and it will very soon, the value of precious metals will "go
ballistic." Oil is already being affected by "demand
panic." It's price is rising in all currencies, not just the
dollar.
It
is my view, (and one that is shared by a great many others),
that the failure of our current monetary system is eminent.
The purpose
of this examination has been
to
"wake you up", and make you
aware of
the facts that support my take on things. Hopefully
it has increased your respect for the intrinsic value of precious
metals. From an economic standpoint,
gold and silver will lend heartily to our salvation.
Gold and silver will soon regain their positions as the anchors
of an
honest monetary system. The market
will demand it, and the "powers that be" will
have no choice but to let the market have its way.
The
presence of gold and silver in your portfolio will insure
that you will emerge from the abyss with your capital intact. There
is still
time for
you to reallocate your a portion of your equity into the
commodity sector, including
gold and silver bullion, and gold and silver mining stocks.
This move could well provide you with
an unequaled measure of security. The gold standard is part
of our Constitutional legacy. The subjugation of the Constitution
is the root of all economic evils. If enough of us get together
on this, we might be able to "Right the Republic". Very
soon,
as early
as next year, a lot of people will be
glad they held gold and silver.
Its
not what you don't know that will screw you up, it's what you know
that is wrong. The spin you hear from the mainstream media is intended
to mislead you. Open your eyes and face the future. If you leave
your head in the sand and ignore it, you are only leaving your
butt exposed for the world to kick. This all may sound like gloom
and doom, but when you get a handle on what is going to happen,
you will have a future filled with opportunity. Fortune favors
the Informed.
Kenneth
Parsons, aka Johnny Silver Bear, is an IT professional in Garland,
Texas and the President of Silver Bear Communications, Inc. Mr.
Parsons has been involved in the advertising and promotion industry
for over twenty-five years. He is the editor of the Silver
Bear Cafe and, as such, is responsible for shaping
the content of "The Bear". Mr. Parsons has served
as CEO for Fiberscape Communications, Inc., a web site
development / hosting and streaming
multi-media company in Richardson, Texas since 1997. He
is a Jeffersonian and a passionate supporter of the U.S.
Constitution.
He is also an outspoken advocate of gold money and equal
tax rates. You can contact Mr. Parsons with questions or
comments
via email at johnny@silverbearcafe.com
Email this Article to a Friend 
Printer Friendly Version