Competing Currencies: Cut the Spending, Cut the Taxes, Cut the Crap

If you haven’t noticed, we are in desparate times. President Obama, Timothy Geithner, and Bernanke are all holding us and our futures hostage – raise our debt, or we will crash the economy. Obama is treating us like immature little kids and telling us to “Pull off the band aid. Eat our peas” (here). Geithner is even digging up an obscure clause in the Constitution saying that the debt cannot be questioned (here). And lastly Bernanke is calling the debt limit a “wrong tool” to use (here).

I hate to break it to these guys, but this isn’t just about changing some numbers to increase a limit that limits our drunken spending – it is a litmus test of how our government views itself. And with the hostage-like situation of “raise the limit or the world is going to shit” talks I can only think that our leaders don’t think we are smart enough to know that regardless of the debt number, we know we (and especially our children) are going to have to pay that back sometime. MAybe, finally, we are beginning to see the debt as something fundamentally wrong with America. We can’t continue to live in a indebted society if we want to be free.

Enter Ron Paul. First it was the Federal Reserve Transparency Act of 2009 (HR 1207) which allowed us to audit the very people who manipulate and indebt us – the Federal Reserve. Despite overwhelming support from the Congress (Democrats and the Republicans), Barney Frank still managed to stall it out in committee. years later we still have the money manipulators at hand and Ron Paul again comes out with another gem – The Free Competition in Currency Act of 2011 (HR 1098) which would allow the fiat currency issued by the Federal Reserve and backed by the US Government to be challenged and other stronger currencies take their place. But, I doubt that our government will see this through – especially Obama who believes that we are all little children who don’t understand the graveness of this situation.

Original article below seen here.

The end of June marked what is hopefully the end of the Federal Reserve’s policy of quantitative easing. For months the Fed has purchased hundreds of billions of dollars of Treasury debt, enabling the government to fund its profligate deficit spending, push the national debt to its limit, and further devalue the dollar. Confidence in the dollar is plummeting, confidence in the euro has been shattered by the European bond crisis, and beleaguered consumers and investors are slowly but surely awakening to the fact that government-issued currencies do not hold their value.

Currency is sound only when it is recognized and accepted as such by individuals, through the actions of the market, without coercion. Throughout history, gold and silver have been the two commodities that have most fully satisfied the requirements of sound money. This is why people around the world are flocking once again to gold and silver as a store of value to replace their rapidly depreciating paper currencies. Even central banks have come to their senses and have begun to stock up on gold once again.

But in our country today, attempting to use gold and silver as money is severely punished, regardless of the fact that it is the only constitutionally-allowed legal tender! In one recent instance, entrepreneurs who attempted to create their own gold and silver currency were convicted by the federal government of “counterfeiting”.   

 Also, consider another case of an individual who was convicted of tax evasion for paying his employees with silver and gold coins rather than fiat paper dollars. The federal government acknowledges that such coins are legal tender at their face value, as they were issued by the U.S. government. But when it comes to income taxes owed by the employees who received them, the IRS suddenly deems the coins to be worth their full market value as precious metals.

These cases highlight the fact that a government monopoly on the issuance of money is purely a method of central control over the economy. If you can be forced to accept the government’s increasingly devalued dollar, there is no limit to how far the government will go to debauch the currency. Anyone who attempts to create a market based currency– meaning a currency with real value as determined by markets– threatens to embarrass the federal government and expose the folly of our fiat monetary system.  So the government destroys competition through its usual tools of arrest, confiscation, and incarceration.

This is why I have taken steps to restore the constitutional monetary system envisioned and practiced by our Founding Fathers. I recently introduced HR 1098, the Free Competition in Currency Act. This bill eliminates three of the major obstacles to the circulation of sound money: federal legal tender laws that force acceptance of Federal Reserve Notes; “counterfeiting” laws that serve no purpose other than to ban the creation of private commodity currencies; and tax laws that penalize the use of gold and silver coins as money. During this Congress I hope to hold hearings on this bill in order to highlight the importance of returning to a sound monetary system.

Allowing market participants to choose a sound currency will ensure that individuals’ needs are met, rather than the needs of the government. Restoring sound money will restrict the ability of the government to reduce the citizenry’s purchasing power and burden future generations with debt. Unlike the current system which benefits the Fed and its banking cartel, all Americans are better off with a sound currency.