Phase Out the Fed With State Sound Money Laws

08/07/2012
       
Phase Out the Fed With State Sound Money Laws Image from Shutterstock.com

States are considering applying Article I, Section 10 not to "make anything but gold and silver coin a tender in payment of debts."

Although it is very encouraging that the House voted 327 to 98 to audit the Fed last month, it is virtually certain that the Senate will not concur this year. Moreover, it is virtually certain that Congress will not act to end or phase out the Fed any time soon.

So, what's to be done about the impending destruction of our currency by the Federal Reserve's ongoing expansion of the money supply. Click here (and scroll down) to see for yourself the huge increase in the money supply under the Federal Reserve vs. the dramatic decline in buying power of the dollar from 1959 to 2010 (Graphic by Michael Hodges, Grandfather Economic Reports). Since 2010 there has been a continuation of this rapid expansion of the money supply.

The preeminent expert on Constitutional money, Edwin Vieira, has a strategy for phasing out the use of Federal Reserve Notes through new state laws providing alternative currencies, which he has been promoting via interviews and videos for the past several years.

Basically, Vieira advocates that states start taking advantage of their sovereignty as guaranteed by the Tenth Amendment and their constitutional mandate under Article I, Section 10 not to "make anything but gold and silver coin a tender in payment of debts," by passing laws providing alternative currencies in their states based on gold and silver.

A good way to understand Vieira's strategy is to view the video, "What Is Constitutional Money?", shown below, which consists of a lecture he gave last November in Washington, DC, sponsored by Congressman Ron Paul. Be sure to view all the way to the end of the question-and-answer period to get the whole story.

Since 2005 at least fourteen states have introduced bills to provide for the establishment of alternative currencies based on gold and silver: Colorado, Georgia, Idaho, Indiana, Iowa, Minnesota, Missouri, Montana, New Hampshire, South Carolina, Tennessee, Utah, Virginia, and Washington.

The only state to pass its alternative currency bill
and get the governor's signature was Utah in 2011. Utah's bill, HB317, provides a model bill for other states to consider introducing. Although Georgia didn't pass its alternative currency bill, HB3, in the 2011-12 session, its bill also provides another good model bill for other states to consider. While the Utah bill is stronger in its attention to the tax treatment of silver and gold money, the Georgia bill is stronger in its attention to the valuation of silver and gold money and in its requirement that state debts be paid in gold and silver.

Vieira emphasizes in the video below that his recommendation for creating state-based alternative currencies is not a "solution" to the destruction of our currency by the Fed, but that he believes these alternative currencies are the only "practical direction" for mitigating the bad effects of this destruction, and that they would provide a "floor" under the damage. Furthermore, these state-based alternative currencies would provide a model for the restoration of constitutional money at the national level.

If you agree with the above alternative currencies strategy, please contact your state representative(s) and senator and ask them to introduce or cosponsor an alternative currency bill similar to Utah's or Georgia's or a blend of the two in the 2013 legislative session.

(Image of Federal Reserve Note and gold coins via Shutterstock.com.)

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