by Doug Tjaden, Sound Money Center
NOTE: Doug Tjaden will be a featured speaker at Nullify Now! Jacksonville. Get tickets here – http://www.nullifynow.com/jacksonville/ – or by calling 888-71-TICKETS
Over the past several years, our debt-backed fiat Federal Reserve Notes have been on a steady march toward the same end every other fiat system has met â€“ the currency graveyard.Â Consequently, the argument to use gold and silver as constitutional tender has occasionally broken into the news cycle.Â Each time however, the mainstream media quickly shouted it down, using their favorite zombie phrases (a tip of the hat to Dr. Thomas Woods). â€œBarbarous relic!â€ â€œEconomic dinosaurs!â€ And my personal favorite, â€œBags of gold and silver coins!â€
Unfortunately, the public bought the rhetoric, and thus the idea that one can actually use constitutional tender in the 21 century was lost in the 24 hour news cycle.Â For those who understand where we are in the fiat death cycle, this has been frustrating to say the least.
However, today Europe is threatening to implode and the United States is hurling headlong into the second dip of the â€œgreat recession.â€Â This has brought the issue of sound money back into the marketplace of ideas.Â Will it get lost in the media noise of the already contentious 2012 Presidential race?Â I donâ€™t think so.Â In fact, I believe it will be a major subject in next summerâ€™s debates.
Attending and speaking at the Nullify Now! event in Kansas City last week, confirmed my suspicions that there are several variables present today that were missing during past sound money debates.
First of all, because of the political theater surrounding this summerâ€™s debt ceiling debate, the reality of our economic situation has been thrust into the faces of millions of Americans. That being, the world is entering a sovereign debt/currency crisis of immense magnitude, and the United States will not escape its effects unscathed. This event by the way, has long been anticipated by most proponents of sound money.
Second, in March of this year, Utah made gold and silver legal tender once again. This â€œdisturbance in the forceâ€ of monetary policy has captured the attention of two of the nationâ€™s largest newspapers.Â They cannot understand why a state would actually pass a law to make constitutional tender legal again.Â For example, Nathaniel Popper of the LA Times stated, â€œThe ultimate goal is to return the nation to a gold standard, in which every dollar would be backed by a fixed amount of precious metal.â€
The â€œgold standardâ€ he describes would mean the gold (and silver if we use Utahâ€™s law as a basis) is held by a central bank.Â Paper money (or electronic digits) would circulate and act as legal tender. The paper/electronic money would derive its value by the precious metals held by, and owned by, the central banks. There would not be an option for the people to demand specie (physical metals) in exchange for their paper/electronic money. This would leave us open to continued fractional reserve, fiat games.
In contrast, Utahâ€™s law made the physical gold and silver legal tender. Furthermore, the people own the metal, not merely paper ticket (or digital) tokens that derive value based on the central bankâ€™s ownership of gold and silver to back it. Please take a moment to consider the ramifications of that very important differentiation. â€œHe who owns the gold makes the rules.â€ Wellâ€¦ with the system put in place in Utah, the people are in a position to make the rules â€“ not the central bankers.
A third issue making the environment different this time is the fact there will soon be a practical means to implement Utahâ€™s system, making gold and silver legal tender alongside Federal Reserve Notes. The free market is combining 21st century technology with constitutional tender, and surprise, surprise â€“ the result is a solution that is as convenient as the existing system.
So what does the Federal Reserve think of all of this? You can bet your bottom â€œdollarâ€ that they do not like the idea of their monopoly on monetary policy being nullified by state sound money laws.Â However, unlike the trouble Liberty Dollar founder Bernard Von NotHaus found himself in, what if there is no legal recourse for the Fed? What if state law is on solid constitutional grounds? What if free market implementation has the backing of the state? What if those solutions operate legally within the confines of the existing financial system?
In the past, legal and constitutional support has not hindered those in control of the monetary system. At a minimum, roadblocks will be leveraged to their full advantage (including leaving the Federal capital gains and collectables tax on gold and silver in place as long as possible). Beyond that, one needs only look at history to see the money changerâ€™s playbook.Â Do some research on Presidents who tried to rout them out. It isnâ€™t pretty.
Ayn Rand said, â€œYou can ignore reality, but you canâ€™t ignore the consequence of reality.â€ Â Increasing numbers of state legislators understand the consequences of ignoring the precarious nature of our monetary system and are demanding protection for their citizens from the mismanagement of monetary policy by the Federal Reserve. They need your support and encouragement, as the 2012 legislative session is less than six months away.
In preparation for that session, the Utah Monetary Summit is slated for September 26th in Salt Lake City. The purpose of the summit is to craft a “declaration of principles” that states can agree upon which will help guide their sound money legislation and implementation.
Larry Hilton, the summitâ€™s organizer said, â€œThe declaration will form the foundation for model legislation. If the summit can produce two documents – a declaration and model legislation â€“ it will put state legislators in good shape going into 2012.”
Mark your calendars, and attend the event if at all possible. September 26th promises to be a watershed event to assist states in their quest for sound money. Solutions are available if we simply have the courage to work together and embrace them.
EDITOR’S NOTE: You can track the progress of state-based Constitutional Tender legislation at THIS LINK
Doug Tjaden is the Executive Director of the Sound Money Center, an organization dedicated to helping states reinstitute sound money, through education and networking. (www.soundmoneycenter.org) Doug is also an author, pastor and father of five and is a speaker on economics, politics and religion. He is passionate about helping people understand history, and how it can help us identify trends in place which will soon affect our lives.Â