Ever since 1913, the Federal Reserve has had a strong influence over the stock market. Without having gold and silver backed currency, the Federal Reserve Note is virtually money that was created out of thin air. By loaning this money to the United States and charging interest, this newly created currency expands the money supply, which constitutes inflation. Inflation is a tactic turned to by governments in debt, a hidden way of forcing the people to pay for programs they would not allow if direct taxation were demanded of them.
So how is the Fed doing in terms of managing our money supply? Since the establishment of the Federal Reserve, the U.S. dollar has lost over 95% of its purchasing power while the Fed maintains a monopoly over the issuance of bank notes or cash. The temptation to issue more paper money than can be redeemed by the issuing agency has proven irresistible. This inflationary policy produces predictable results: people are defrauded, commerce slows, confidence in the credit of the U.S. suffers, and bankers, merchants, and their allies in politics become wealthy.
Powerful banking interests like to blame their failures on deregulation or “free banking,” even though competition among banks would lead to a healthier marketplace. Honest banks would remain in business; fraudulent banks would fail; and bank customers would have learned a great deal about honest banking, honest bankers, and honest money. The nation would be spared future agony because of the awareness of the people and free banking. Recently, some states have been making progress to reduce the Federal Reserve's monopoly over the money supply. An Arizona Senate Committee
recently voted 4-3 to treat gold and silver as money to encourage its use as currency. The Arizona House had already voted 35-24 in support of the same bill. This bill, HB2014, provides a way for Arizona citizens to buy and sell gold and silver without having to pay capital gains taxes. This month, the Idaho House
passed legislation to eliminate state capital gains taxes on gold and silver as well. And Maine has been making strides in its Senate to eradicate the sales tax on precious metals. Find out more at The Tenth Amendment Center website.
Isn’t it about time the other 47 states followed suit and stood up to this fraudulent monetary system? Because the U.S. Constitution states in Article I, Section 10, “No State shall…make anything but gold and silver Coin a Tender in Payments of Debts,” states are deliberatively ignoring it. The Constitution grants no power for Congress to print paper money, so it has no authority to delegate it to a central bank, including the Federal Reserve. Making sense of how we got so far off track, President Emeritus John McManus, in his Dollars and Sense speech
, explains how inflation is thievery. He describes it as a reverse “Robin Hood.” Instead of stealing from the rich and giving to the poor, the elites are stealing from the poor and giving to the rich.
Former Congressman Ron Paul also shares the view that the Federal Reserve is unconstitutional and that we must restore sound money. He stated before the Arizona State Senate Finance Committee, “We ought to not tax money, and that’s a good idea. It makes no sense to tax money. Paper is not money; it’s a substitute for money and it's fraud.” Knowing that the only constitutional money is gold and silver coin, we must start phasing out the Federal Reserve through the states. Gradually adopting gold and silver coin as legal tender would introduce competition in the monetary system and create value to exchanges again. The economy can also be helped by reducing government spending, eliminating debt, and unfettering the market from big government regulation.