Of Gold, Silver, Coin, and Constitutions

It would seem that our constitution is largely just ignored.

Sorry, it just is.

There have been so many specifics that it is hard to pick a starting point. From The Louisiana Purchase, where the founders themselves chose to ignore the constitutional prohibition on buying large chunks of land, to the present government not understanding (or choosing to ignore) that ” shall not be infringed” means don’t mess with it (What part of “don’t touch” is unclear?…) we are awash in the arrogance of politicians just doing what they damn well please, legal or not.

So I was looking up something about The Federal Reserve Bank. Some link posted by Gail Combs sent me off looking at some history of it that I’d had to learn once (how it came into existence). Back then, I’d only cared to pass the exam at the end of the class. Now I got to wondering “What power enumerated in the Constitution lets congress create The Fed?”.
I didn’t remember one.

So I went looking.

It seems to me that the Constitution is pretty clear on what it says. Under ‘enumerated powers’ it lists (and remember, if it is not specifically listed, there is NO authority for the U.S. Government to do something):

Section 8 – Powers of Congress

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

To establish Post Offices and Post Roads;

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

To constitute Tribunals inferior to the supreme Court;

To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

Now I’m just not seeing “provide medical care to all” nor “long duration unemployment insurance” nor most any of the welfare state in that list of powers. Most such crap is crammed through the ‘general welfare’ clause, but that sure looks to me like it is intended as a ‘defend and protect’ against foreign interests, given the context.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

So we have taxation, various fees, pay debts, run an army and protect the place (i.e. keep the general welfare sound and peaceful). Frankly, I don’t even see where we can have the FBI acting as police. I don’t see ‘police function’ listed. I also ought to point out that the United States is a legal entity that is a government; it is not ‘all the citizens of the several States’. The welfare clause is not about individuals, it is about the Federal Government taking care of itself.

But all that aside. What I want to look at here are the terms about money.

I see nowhere that it says “grant a government monopoly on banking to a quasi Federal agent”. Frankly, it doesn’t even allow for printing paper money. It says “coin”. A coin is a metal disk of defined weight and value. Not a piece of pretty paper.

There is simply no constitutional power granted to make paper money, nor have that delegated to some Federal Reserve Bank creation of the government. They can make coins, and regulate their value. Period.

Further down, under things prohibited of the States (remember that all things NOT listed are reserved to the States and The People, so if it is NOT listed, the States can do it) we have money and coin showing up again:

Section 10 – Powers prohibited of States

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Usually you just hear about that second bit “make any Thing but gold and silver Coin a Tender” almost universally as a statement that States can mint money, but only gold and silver. Yet, look at that earlier bit: “prohibited”…”coin Money”. The States are specifically prohibited from coining money, but also prohibited from allowing anything other than gold and silver coin as tender in payment.

Looks pretty darned clear to me. Federal Government makes the coins ( of Gold and Silver) and regulates their value and the value of foreign coins too. That stuff is the only stuff that can be allowed as money in the States. Not paper. Not plastic. Not ‘bag-o-bits’ nor wampum beads.

Please realize I am not advocating that we rush back to bimetalism and coins as our currency. (It ‘had issues’…) Yes, it can work, but it simply would not allow our society to function today. (I would not be strongly against it, either, but would propose some ‘modifications’… basically, that there be physical metal on deposit and any e-commerce moves receipts for it).

What I’m pointing out is far more basic.

The constitution is just irrelevant to how our government and financial systems today operate. Day in. Day out. These folks KNOW they are just ignoring it (or are incredibly dim…) and do not care.

It is simply not credible to expect those same folks to care about any aspect of a document that on the face of it is non-operative. We’ve trained them to ignore the words at all times. How can we then expect them to not ignore it?

I suspect we are so far down this road, committed to The Big Lies, that it is un-recoverable. It would simply collapse the nation to try uprooting all the rot and returning to what the Constitution clearly says. At the same time, a Convention to re-write it so that it reflects the reality of today is from the “destroy it to save it” school.

In short: This is broken, and it’s sucky, and there isn’t much can be done about it.

From our perpetual standing army, to our fiat money system, to the welfare state, to pork barrel politics and Federal Highways and gas taxes and meat inspectors and light bulb bans. Not a whit of it is in conformance with the constitution.

So I guess we just drift. Whatever lie can be plausibly thought to make someone ‘feel good’ is promoting the general ‘welfare’ (or at least the welfare of that person and the congress critter they bribed donated too); well, that’s suitable grist for the mill… make it a law and move on…

That is just so wrong. There must be a better way.


About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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53 Responses to Of Gold, Silver, Coin, and Constitutions

  1. BobN says:

    What the founding fathers forgot is for a way of enforcing the rules. A budget must be passed every year. We all know the rule is being broken every year, but how do you enforce it. The only way is through the ballet, but half the country are idiots or on the government handouts.

    We need laws that do not any laws from being passed that doesn’t apply to the government, no special insurances, pensions and things like gun bans not applying to them. The ruling elite need to not be so elite.
    No budget – No pay!
    These type of safeguards need to get passed somehow, but the people that pass the laws will not do what they don’t want.

    Doesn’t the FED Charter need to be renewed this year? Sounds like an audit should be made before such an important decision is made – Yah right!

  2. Lynn Clark says:

    Remember Nancy Pelosi’s response when she was asked where the Constitution granted authority for Congress to mandate individual health care?

  3. Robert says:

    How about we stop being so rusty with Constitutional Amendments? How about the Conservatives in Congress propose a Constitutional Amendment to make something Constitutionally legal.,Something we are already doing that everybody agrees on,that is not Constitutional now.
    That will do three things. It will remind people of how things are supposed to work. And it will show that we have strayed from the Constitution.And it will reintroduce the process to Americans.
    It might be hard to find such a cause,but something like coinage and paper money is as good a place as any to start.

  4. Peter Offenhartz says:

    You need to read some American history. Hamilton and Jefferson settled this issue a couple of hundred years ago.

    [Reply: Snark does not suit you. I’ve read history. LOTS of history. We had circulating silver when I was a kid (I have a box of silver dollars from then, saved as a kid) and the paper money said it was a depository receipt for “Lawful Money” – meaning gold and silver. So asserting it was all done and over in the time of Hamilton and Jefferson is just stupid. Sorry, not polite, I know, but it is stupid. The founders wrote a good document. Then proceeded to ignore it themselves. They spent a couple of years haggling over how to amend the constitution to allow the Louisiana Purchase then, when pushed for ‘when’ by Napoleon chose expediency and just bought it illegally. IMHO that set the pattern. So I don’t hold the “founders” or “framers” as incredibly noble and untainted and all bad coming from recent folks not following their wisdom. I hold them just as flawed as the current crop. So Hamilton and Jefferson are just a couple of guys who cut a deal, and ignoring the constitution has a long heritage. That doesn’t make it “settled”, just ignored. -E.M.Smith.]

  5. Robert says:

    After we do a couple of those exercises. Then we pick something that not everyone likes. In hopes it will fail. Oh say something like the powers of agencies like the EPA and the like..

  6. Robert says:

    At that point the real conversation and the American reawakening will be sparked.

    Say Something :O)

  7. Robert says:

    Yes I do remember that Lynn. It was something along the lines of ….Are you kidding? is that a joke?
    A Joke! That is exactly what that woman thinks of our Constitution.

  8. Robert says:

    If waiting for moderation means that others cant see my comment within 15 minutes, .That not a good way to have an interactive conversation. I am moving on……….

    [Reply: Read the about box. There is but one of me (and right now I’m down with a cold). New posters go to moderation. If they ‘play nice’ they go to a fast straight through (at least until they start being rude or a pain). So yes, you got to sit a while as I was busy trying to decide if I could eat today without throwing up… I’m sure your needs were far more important… But as I’ve now ‘serviced the queue’, your next comments won’t wait. -E.M.Smith]

  9. p.g.sharrow says:

    Imagine 200 years ago, the founders carried on conversation through horse powered snail mail ! ! LoL
    @ EMSmith Sounds like you have had too much excitement and germ contact. Kick back and rest.
    The Republic has been going to hell since the first congress, I guess it can survive a while longer. pg

  10. John Robertson says:

    Sort of like the joke, you can’t be a little bit pregnant.
    Societies and values seem to be cyclic, a little rot in government is ignored in times of plenty, we let it slide as its not worth the effort to correct and so it goes, growing until we hit the extremes of today.
    Now we have no rule of law, corrupt practises are the norm and trust is gone.
    So now it disintegrates, another empire falls and we start over again, hard times give rise to hard rules, theft from the collective gets death, til times get softer.
    Benjamin Franklin was it?
    “We have given you a republic, if you can keep it”.
    But its too hard to correct the abuses of power when the powerful are united in their looting,the watchdogs are corrupted and no one remembers why theft is wrong.
    This was the value of morals and the media.
    Attempting to correct at this point looks like suicide for the critic,alternate methods become necessary, guard your tribe and stuff, let the rest burn.

    I think we see the signs, new standards of wealth, accumulating stuff you can use and protect,reducing participation in community efforts, reducing effort to match the share you are permitted to keep,
    new tribes arising?
    Its my suggestion that there is no hiding the decline, our political bureaucrats greed now exceeds the nations wealth, theft is their only business.
    And gun sales hit new highs with every promise made by government.
    May all your days be interesting.

    30 years ago I met people who described society as I just have, yet we are still here.
    Obviously we adapted to those conditions and we will to the over regulated era thats coming.
    Were they wrong about the effects? Or just the time necessary?

  11. E.M.Smith says:

    @Peter O.:

    Some Jefferson Quotes for you (so you can read some history):

    Thomas Jefferson: “Paper is Poverty. It is only the ghost of money, and not money itself”

    At a White House dinner honoring Nobel Prize winners, in 1962, John F. Kennedy said, “I think this is the most extraordinary collection of talent, of human knowledge, that has ever been gathered together at the White House, with the possible exception of when Thomas Jefferson dined alone.”

    Jefferson is remembered for many things — of which the Declaration of Independence, the founding of the University of Virginia, the Virginia Statute of Religious Freedom, his presidency of the United States, and the Louisiana Purchase are highlights. Jefferson also is well remembered for his passionate opposition to his colleague in the Washington cabinet Alexander Hamilton.

    Perhaps because it was not a subject of controversy, however, Jefferson’s stand for honest money — money defined as, and currency convertible into, precious metals — is not so well remembered. That said, it was an area where he and Hamilton obviously were in accord. Between the end of the American Revolution and the beginning of the Constitutional Convention, Jefferson wrote to E. Carrington, in 1788: “Paper is poverty. It is only the ghost of money, and not money itself.”

    His papers show that Jefferson’s opinion of paper money did improve with time. Representative samples:

    “Paper money is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted.” … “Paper is already at a term of abuse in these States, which has never been reached by any other nation, France excepted, whose dreadful catastrophe should be a warning against the instrument which produced it.” … “The unlimited emission of bank paper has banished all Great Britain’s specie, and is now, by a depreciation acknowledged by her own statesmen, carrying her rapidly to bankruptcy, as it did France, as it did us, and will do us again, and every country permitting paper money to be circulated, other than that by public authority, rigorously limited to the just measure for circulation.” … “When I speak comparatively of the paper emission of the old Congress and the present banks, let it not be imagined that I cover them under the same mantle. The object of the former was a holy one; for if ever there was a holy war it was that which saved our liberties and gave us independence. The object of the latter is to enrich swindlers at the expense of the honest and industrious part of the nation.” — To J.W. Eppes, 1813

    “The errors of that day cannot be recalled. The evils they have engendered are now upon us, and the question is how we are to get out of them? Shall we build an altar to the old money of the Revolution, which ruined individuals but saved the Republic, and burn on that all the bank charters, present and future, and their notes with them? For these are to ruin both Republic and individuals. This cannot be done. The mania is too strong. It has seized, by its delusions and corruptions, all the members of our governments, general, special, and individual.” To John Adams, 1814

    “M. Say will be surprised to find, that forty years after the development of sound financial principles by Adam Smith and the Economists, and a dozen years after he has given them to us in a corrected, terse, and lucid form, there should be so much ignorance of them in our country; that instead of funding issues of paper on the hypothecation of specific redeeming taxes (the only method of anticipating, in time of war, the resources of times of peace, tested by the experience of nations), we are trusting to the tricks of jugglers on the cards, to the illusions of banking schemes for the resources of the war, and for the cure of colic to inflations of more wind.” To M. Correa, 1814

    “Even with the flood of private paper by which we were deluged, would the treasury have ventured its credit in bills of circulating size, as of fives or ten dollars, &c., they would have been greedily received by the people in preference to bank paper. But unhappily the towns of America were considered as the nation of America, the dispositions of the inhabitants of the former as those of the latter, and the treasury, for want of confidence in the country, delivered itself bound hand and foot to bold and bankrupt adventurers and pretenders to be moneyholders, whom it could have crushed at any moment. Even the last half-bold, half-timid threat of the Treasury showed at once that these jugglers were at the feet of the government. For it never was, and is not, any confidence in their frothy bubbles, but the want of all other medium, which induced, or now induces, the country people to take their paper; and at this moment, when nothing else is to be had, no man will receive it but to pass it away instantly, none for distant purposes.” To Albert Gallatin, 1815

    “Not Quixotic enough to attempt to reason Bedlam to rights, my anxieties are turned to the most practicable means of withdrawing us from the ruin into which we have run. Two hundred millions of paper in the hands of the people (and less cannot be from the employment of a banking capital known to exceed one hundred millions), is a fearful tax to fall at haphazard on their heads. The debt which purchased our Independence was but of eighty millions, of which twenty years of taxation had, in 1889, paid but the one-half. And what have we purchased with this tax of two hundred millions which we are to pay, by wholesale, but usury, swindling, and new forms of demoralization?” To Charles Yancey, 1816

    “We are now taught to believe that legerdemain tricks upon paper can produce as solid wealth as hard labor in the earth. It is vain for common sense to urge that nothing can produce but nothing; that it is an idle dream to believe in a philosopher’s stone which is to turn everything to gold, and to redeem man from the original sentence of his Maker, “in the sweat of his brow shall he eat his bread.” To Charles Yancey, 1816

    “That paper money has some advantages, is admitted. But that its abuses also are inevitable, and, by breaking up the measure of value, makes a lottery of all private property, cannot be denied. Shall we ever be able to put a constitutional veto on it?” To Dr. Josephus B. Stuart, 1817

    Jefferson exonerated the use of paper money as a regrettable necessity of the American Revolution
    — a “holy war…which saved our liberties and gave us independence.” A comparable exoneration readily may be extended to the use of the greenback by President Lincoln to save the Union during the Civil War. Jefferson indicted the use of paper money by the bankers of his day as a device to enrich swindlers at the expense of the honest and industrious part of the nation.

    Hardly a ringing endorsement of fiat money…

    Oh, you do remember that my major was / is Economics and that money theory and history makes up a large part of the corpus?…. Shall I quote Samuelson at you? I still have it, along with my other Econ books (even my economic history books) on the shelf here…)

    Try this one maybe:


    During the Revolutionary War, two things almost led to the defeat of the struggle for American independence. One was the inadequate system of constitutional government, and the other was unsound money.

    Congress issued about $240 million in “Continentals”–referring to money of the Continental Congress. It was understood that the money would be redeemed in gold or silver by the states after the war.

    The states thought this was a great way to manufacture money so they issued vast quantities of their own paper currency.

    The British saw what was happening, so they printed up bales of counterfeit “Continentals” and used them to buy supplies from Americans.

    Before long, confidence in the Continentals had sunk so low that by 1780 they were not even worth one cent. No further paper money was issued by the United States for over eighty years.

    I think you will find that Hamilton and Jefferson did not run the government nor the money system 80 years AFTER the revolution…

    In 1785, two years before the Constitution was written, the Congress accepted the Spanish dollar as the official unit of value for the United States and determined that all foreign coin would be evaluated in terms of the Spanish dollar.

    In 1786, the year before the Constitution was adopted, the Board of Treasury fixed the silver weight of the adopted dollar at 375 and 64/100s grains of fine silver. The value of gold coins or any other coins was to be calculated in terms of the silver dollar of this weight and fineness.

    It will be noted that three things had been established before the Constitution was adopted:

    1 That the official money of the United States would be precious metals–silver and gold.
    2 That the basic unit of value would be called a “dollar” and consist of 375 and 64/100s grains of fine silver.
    3 All other coins, both foreign and domestic, would be evaluated in terms of this official silver dollar.

    All of this was already part of the law of the land when the Constitution was adopted. Therefore, the Founders wrote the following provisions in the Constitution concerning money based on the above statutes which had previously been adopted as the official monetary system.

    It then lists the constitutional points I quoted above.

    So it’s pretty clear that paper money and fiat currency was pretty well seen as a path to ruin “back then” and that we used gold and silver only for a good long time. (Later to have more war expediencies lead to more paper money and more depreciation of the currency).

    We then clung to a weak “Gold Standard” until Johnson wanted to spend more on war than he could afford or tax, so fired up the printing press. (Nixon then abolished the gold standard when the bill came due. I remember that day. It was a big deal in my home town. It is also part of why I have a silver coin collection. The family decided to save some silver…)

    But the major destruction of the lawful money system was done by FDR. (Again to finance Progressive Dreams and Wars). Making gold illegal to the average person. Just crazy.

    At any rate, we are now in the final stages of a fiat money collapse. It can be a long and slow process, and there is a theoretical possibility that the Fed will prevent it. (But there is zero evidence for that).

    Near as I can tell, the ‘game’ is to float as absolute gigantic a load of debt as possible, then repudiate it via currency collapse. That is what you see repeatedly in the economic history of sovereign debt and fiat currencies.

    Here is a list of just the hyperinflations. It does not include things like the USA slow death inflation that has consumed 90% of the value of a dollar in my lifetime. ( I started keeping a personal inflation index at about 1960. What then cost a nickle is now 50 cents and what was then a dime is now a $1 – though pushing on $1.50 )

    Click to access File:The_Hanke_Krus_Hyperinflation_Table.pdf

    So it’s pretty clear that fiat currency does what Pascal stated. It eventually returns to its true value, which is zero.

    Only question is ‘how fast’.

    That depends entirely on the strength of law and morality of politicians. Not exactly a strong anchor…

  12. John Robertson says:

    E.M have you tried chewable Zinc tablets, as a palliative for the common cold?

  13. E.M.Smith says:


    I am resting. Laying on the bed at the moment. (Thinking about maybe trying something for dinner). I do need some intellectual engagement, though, or I’ll go stir crazy …

    But yes, some folks have a strong need for ‘instant gratification’. This will only get worse with the next generation that has never had to be ‘out of touch’ for a weekend (never mind a month in the woods…)

    @John Robertson:

    Reagan bought us a reprieve. Anyone else remember 12% to 16% U.S.Bonds? I do… it was a rough time, but bought a few decades. This time it will take more like 20% Bond rates (once the Fed finishes blowing the Mother Of All Bubbles) and that’s likely not going to work. We also have a nation of folks who won’t ‘put up with’ that kind of pain.

    It took a while, post Reagan, for folks to be willing to risk that kind of pain again. Now they have forgotten it.

    FWIW I expect Texas, Utah, and some parts of the north plains to midwest to do OK. Self reliant. Lots of land and resources. Centered people. Not a lot of dependent urban core that survives on ‘looting’. Also, FWIW, things have been pretty lousy in the past and the nation survived. (Like the collapse of the Continental. The Greenback. Heck, the whole split to a Confederate and Union nations – I have a Confederate $20 in a box… the Great Depression, etc. etc.)

    IFF we are very lucky, we’ll have a simple stagflation and folks will, slowly, figure out that it just isn’t working…

    So there will be more self reliance and more ‘duck and cover’ and more folks choosing an ‘alternative economy’. There is a long global history of folks coping with far worse. Heck, I remember visiting Italy when they had their own currency. Nearly no coins around. So you tended to order things that didn’t need coins in change or accept an added cookie with your lunch as ‘change’…

    The basic “out” is that most anything can act as currency. From nails or light bulbs to bags of rice or cans of fish. So folks could, for example, buy cigarettes (used in prisons) or cans of tuna fish and use them as a ‘store of value’ and ‘medium of exchange’.

    Also, as my debt is about the same as my assets, any inflation is a net zero to me. My money becomes worth less, but still pays off my mortgage. Why do I care? Folks figure out how to do that pretty quickly…

    But that kind of thing can stretch out how long it takes to become a new Argentina or Greece. (Frankly, I’d have bet hard money that Greece would have collapsed already…)

    So don’t expect a collapse any time soon. Likely several years off, still. IF Obama and the Dims keep on racking up debt at $1.5 Trillion / year, though, well… treasury interest rates have started rising already…

  14. E.M.Smith says:

    @John Robertson:

    I’d rather not turn this into a ‘cure me’ thread. I don’t have ‘the common cold’ nor the typical immune system. I tend to ‘go down’ for about 2 days, and just destroy whatever the bug is. I’m already on the ‘better’ side (fever broken, thinking of food, feeling like moving around). It’s just those Neanderthal immune system gene going nuclear on anything that wakes them up…. Vit C demand rises, but zinc doesn’t do much (likely as I take a multi-vit w/ minerals daily so am not deficient).

    I’m pretty good at ‘home cures’ anyway, but most just benefit from spending 2 days ‘over heated’ under the covers and hydrated, not eating. It is typically the fastest path to cure. I avoid ‘palliatives’ as they typically slow the ‘cure’ ( those histamines and all are helping kill bugs, the ‘clog’ is preventing them moving deeper into the lungs, etc.). So mostly I just do heat (the immune system works better when warm, and bugs struggle), sleep, and Vit-C (that gets depleted when the immune system is in high gear).

    As to “what is it”: I don’t know. Not the flue (too mild) but not the common cold either ( some body involvement). Having spent 2 days surrounded by a few hundred thousand of “my closest friends” in Disneyland, while way too cold and being metabolically attacked by ‘room spray’, it isn’t a surprise that something ‘moved in’. As of now it’s also “moving out”… But tomorrow I expect to be doing more or less normal things. (Yes, that fast. I’ve developed this ‘burn it out’ process over the years to optimize what my body does… 3 days is unusually long for most things, so I’d be surprised if it goes past then…)

  15. crosspatch says:

    Now I’m just not seeing “provide medical care to all” nor “long duration unemployment insurance” nor most any of the welfare state in that list of powers.

    I have long said that I felt that things like federal unemployment was unconstitutional. It was to PROMOTE the welfare, not PROVIDE it. And I think Madison would agree with me.

    “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.” — James Madison

  16. Sera says:

    Do you think that adding very small amounts of gold/silver to other base metals would be sufficient for coining- to stay within the restrictions of the Constitution? Could we do that and still call it legal tender? Could we put small amounts of silver strips (molecular thin) inside fiat paper to make it legal?

  17. Sera says:

    @ Crosspatch:


  18. Petrossa says:

    This thread could have been written about the EU. It goes through the exact same monetary crisis, only the mechanisms differ. Money isn’t printed by one central organization but via multiple backdoors without any democratic control. The value of the Euro is de facto zero, since it exists mainly of national bonds of bankrupt nations bought by the european bank, or promises to pay vast sums by other nations to other nations in case of. It’s impossible now to determine what ratio of real value to paper money exists.That it’s not 1 on 1 is clear, what’s less clear if it’s 1/100 or 1/1000. Which is the reason the EU is so desperately clinging to the Euro to the point of paying bankrupt countries to reimburse the interest on their loans. Should those bankrupt nations default, the whole ponzi scheme falls apart and the whole of Europe is bankrupt.

  19. Jason Calley says:

    @ E.M. “The basic “out” is that most anything can act as currency. From nails or light bulbs to bags of rice or cans of fish. So folks could, for example, buy cigarettes (used in prisons) or cans of tuna fish and use them as a ‘store of value’ and ‘medium of exchange’. ”

    In fact, one very useful definition of money is this: “For any given society, money is whatever thing is the most liquid commodity.”

    Look at any society, at any nation — whatever is the most liquid commodity, that is what money is. In a prison, cigarettes become money since they can be most easily traded. In Richmond, Virginia in 1864, coffee was the most liquid commodity. Traditionally, gold or silver was the most liquid commodity in most nations. Today, in most nations, special pieces of paper are the most liquid commodity — but (unlike metals, coffee or cigarettes) not because of market forces or because of consumer choice. The special paper is the most liquid commodity only because men with guns will kidnap you if you refuse to use the paper. This threat of kidnap and punishment for non-use is what makes paper liquid and turns it into money.

    Of course, as you point out, only gold and silver are legally money. More precisely, IF we followed the old Constitution, only gold and silver would be money.

    PS Hope you get well soon!

  20. philjourdan says:

    Article I, Section 8, Clause 3: To regulate Commerce with foreign Nations, and among the several States,

    I draw your attention to the first 3 words, and the last 4. That is the way the feds have enslaved the nation. That is where they think (and actually did since it is an established fact) get the authority for the Fed, Obamacare, Welfare, and just about anything else.

    Note, I am not saying it is right. A more rational sane person would have shut them down long ago. Or even recently. But alas, politics is not composed of rational sane people, nor are the courts for the most part. We are now at he mercy (in other words, we lost our freedom) of the tyranny of the ruling class.

  21. adolfogiurfa says:

    Remember the Hugo Chavez´s formula for “managing” democracy? It involved changing the Venezuela´s constitution…

  22. philjourdan says:

    @Adolfo – Obama’s is simply ignoring it.

  23. Richard Ilfeld says:

    Yes, its a house of cards, or a monetary bubble, and it will fall, or burst, or whatever. There will be a default. ‘This Time is NOT different” ( “This Time is Different” is a good history of government defaults).
    So, the operative question becomes, what happens after bankruptcy. Lots of Companies and individuals face this, and survive.
    Bankruptcy provides, first, for the discharge of debts, to the detriment of the creditors. In liquidation, they would get a share of the proceeds, usually nothing after the lawyers take their cut.
    Governments don’t usually liquidate. After the bond haircut, or slashing, or whatever, and devaluation, life goes on.
    So once the Nueavo DInero replaces the Old Dollar, we take stock of
    the enterprise, and ask, how much useful stuff do we have, and what parts of the enterprise can now keep going profitably.
    We have lots of stuff. We still produce lots of value in our economy.
    If we froze spending at current levels in discretionary for half a decade, then limited growth, and means tested entitlements seriously we’d be fine. (assuming we could maintain something like our current productivity).
    This last is the kicker for a country like Greece – post bankruptcy there isn’t enough of a going concern to support the enterprise at any level.
    As a bonus, we may even have enough wealth left to extract from the ground to regain prosperity — growth compounds like interest which is why & how we got rich in the first place — from time to time the economy has grown faster that government spending.

  24. Richard Ilfeld says:

    EM — if we assert that fiat currency will return to its true value of zero, what we are actually saying is that we place no value, or a negative value, on government activities, since by definition ‘fiat money’ that failed is money designated for discharge of debts public and private, and the private side has failed. Of course, in countries with modern sanitation and some care for hygiene, there is a residual use for banknotes allowing them some value…..

  25. Gail Combs says:

    I just posted a comment over on WUWT that belongs here too:

    Reporters, Lawsuits and OBUMMER

    Reporter Chris Hedges sued President Obama in a federal class action, claiming the 2012 National Defense Authorization Act aka the “Homeland Battlefield Bill” threatens him and other journalists with life imprisonment without charge or trial for doing their job.

    President Obama signed the bill on New Year’s Eve. It authorizes the military to indefinitely detain anyone it accuses of planning or supporting terrorists or “associated forces,” anywhere in the world, without charge or trial.
    Co-sponsor Sen. Carl Levin, D-Mich., said during congressional hearings that Obama asked him to preserve language in the bill making Americans subject to indefinite detention.


    Well there went the Constitution straight down the toilet.

    Sixth Amendment – U.S. Constitution
    Sixth Amendment – Rights of Accused in Criminal Prosecutions
    In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.

    Seventh Amendment – U.S. Constitution
    Seventh Amendment – Civil Trials
    In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.

    Even the ACLU is up in arms about OBUMMER

    ACLU to Obama: You Can’t Just Vaporize Americans Without Judicial Process
    The American Civil Liberties Union is suing the Obama administration over the deaths of three American citizens who were killed by US drone strikes in Yemen last year….

    …. it’s about targeted killings more broadly, including those carried out by drone strikes and those performed by elite American military units. The lawsuit contends that the United States government violated the constitutional rights of the three men by killing them without court review outside of an active war zone.

    The Obama administration has contended that it has the authority to target suspected members of Al Qaeda outside the conflict in Afghanistan and Pakistan, particularly if a given individual poses what it calls an “imminent threat.” Although the US government had tagged Anwar al-Awlaki as a terrorist through controlled disclosures to the public and the media, Khan was merely suspected of being a propagandist, and the government has never alleged that Awlaki’s teenage son was involved in terrorism. Moreover, the ACLU argues, the US government has “defined the term ‘imminent’ so broadly as to negate its meaning.”

    …the ACLU’s lawyers believe their chances for getting a hearing are better this time, both because their clients, in losing their loved ones, suffered a concrete injury that can’t be denied, and because of the more frank public acknowledgements by administration officials of the targeted killing program’s existence. The latter, the ACLU argues, will make it more difficult for the government to contend the matter is a state secret.

    “What they would be saying is, that they have the authority not just to kill American citizens who are deemed to be enemies of the state, and not just that they have the authority to kill citizens without explaining why they’ve done it, but even that they have the authority to kill citizens without even acknowledging their role in it,” Jaffer said. “If the previous administration had proposed a policy of that kind, it’s inconceivable that we would have accepted it.” ….

    I never though I would side with the ACLU but I am really cheering them on this time. Seems like some of the US citizens in The Innocents’ Club are starting to wake up.

    The last link on The Innocents’ Club should be read by everyone. It is about the guy who invented the propaganda machine we are still fighting.

  26. adolfogiurfa says:

    @Richard Ilfeld Nuevo Dinero (Nooehvoh Deenehroh). You are right, I have lived that and I´m still alive.

  27. adolfogiurfa says:

    I got it! Outsource government!. In emerging economies, privatizing & outsourcing is working OK, of course competition should be kept. Wanna a new highway? Bid it for 30 or 50 years!, etc.,etc.

  28. John Robertson says:

    Greece? All I know about the greek economic melt down is what I have gleaned from the MSM.
    If greece continues to surprise people by not collapsing, does that suggest I am misinformed?
    What is the real economy of Greece? They have years more experience with micromanaging mismanagement by bureaucrats. The media are not trustworthy.
    Greeks are just as smart as us, we probably can pick up some valuable pointers if we knew who to talk to.
    Is Greece the future?

  29. Petrossa says:

    Greece is a closed economy, with the lowest tax returns and the highest institutionalized fraud possible. That worked fine when they had their own coin, they just devalued and reset the economy. But since they are in the Eurozone they can’t anymore, so they started loaning on a big scale, at low interest since they paid according to the strength of the Euro.
    At one point the interest was more than the greeks could generate themselves so they went broke. In a few days about the total greek national debt was transferred to foreign accounts and greece knocked at the door of the EU for money.

    SInce the EU was rather pissed off they put them on a starvation diet which crunched the already weak economy even further and caused them to even need more money. This cycle is still going strong. Basically the Greeks live on EU welfare.

  30. Richard Ilfeld says:

    Greece has ordinary, formerly middle class folks going hungry. They don’t make much that the rest of the world wants, at any price. The real price they can get for their agricultural exports can’t support a modern european state. The per-capita gdp absent Euro support pushes them back in to the middle range of developing countries — like some of the weaker former Soviet states. And for two states in the same financial status, the stresses in a declining one are much greater than the stresses in an advancing one. The common interest of the MSM and Euro folks in Greece not fully collapsing, and not really showing the details of daily life there, is fear of the bond vigilantes.

  31. Richard Ilfeld says:

    Our crash will probably involve haircutting, with a fancy name, debt held by the fed. $3T is on the books … to convince the market to really absorb this $3T would have required pretty high interest, and will when it turns over. Doubting the Fed will soon find a time to dribble it back to the market. This represents a lot of inflation – so the fiscal magicians will need to find a way to make it disappear. Good luck and enjoy the ride.

  32. omanuel says:

    You are right, constitutional limits on government are ignored. Government-sponsored dishonest science spells disaster for all society and ultimately for world leaders, themselves.

    There will be a Thorium Energy Conference in Chicago on Thursday and Friday, May 30-31, 2013: http://www.thoriumenergyalliance.com/ThoriumSite/TEAC5.html

    I encourage readers to attend, spread the word, and ask questions:

    If scientists follow basic scientific principles, mankind can continue to evolve and enjoy life with abundant energy (E) that is stored as mass (m) in cores of heavy elements [1].

    If our government is unwilling to be honest about nuclear energy [1] and to plan for disposal of nuclear waste, it is probably in the best interest of all concerned to avoid developing nuclear energy and continue along the present path to a pre-industrial form of life under a tyrannical government.

    Why? Tyrannical governments and nuclear energy have always been a dangerous mix:
    Hiroshima, Chernobyl, Fukushima and Accumulated Nuclear Waste:


    [1] “Neutron repulsion,” The Apeiron Journal (2012)

    Click to access V19N2MAN.pdf

    With kind regards,
    – Oliver K. Manuel
    Former NASA Principal
    Investigator for Apollo

  33. Peter Offenhartz says:

    My point is simply that if Jefferson and Hamilton didn’t know what was in the Constitution, who does or did? Does the ChiefIO know more than these two? History informs us as to the necessity of paper money, and nothing I read in the Constitution forbids paper money.

    Reply: Well, that’s a different statement from your former one. Please make up your mind. I’m of the opinion they knew quite well what was in the Constitution but also were men with failures like all others and let ‘events’ over ride wisdom. As evidence, the Louisianan Purchase where we have Jefferson & friends agonizing over how to change the Constitution to grant the power, then just doing it anyway when pushed. All recorded. And yes, I do know more than those two. The world has moved on and there is much more to know now. For example, I can build a radio from scratch and make antibiotics. Not sure how my having more knowledge is relevant to them being human, but you asked. You also clearly fail “Constitution 101”. It specifically says that all things NOT specifically stated are reserved to the States and The People. There is no need at all to even have the words ‘paper money’ listed. Simply leaving out the power to use paper money says it can’t be done. Though in this case it specifically says the Feds can coin hard money and that only gold and silver can be allowed as money by the States. BTW, as I stated in the article: I am not advocating for bi-metalism as it ‘has issues’. I’m mostly bitching that nobody bothered to put a ‘one-liner’ change in the controlling document and chose to ignore it instead. As I’ve said several times before, Russia was jerking around gold supplies and having your enemy control your money supply is a bad thing. What WOULD I use as money? Not sure. Most likely a basket of commodities with a ‘depository receipt’ system. Anything that can not be printed in unlimited amounts would do. -E.M.Smith]

  34. Peter Offenhartz says:

    I do not appreciate being called ‘stupid’ but it’s okay by me for as long as your readers have a chance to judge for themselves when you release my comments from moderaration. I think you substitute speed for intelligence. Your reply to my comment was lengthy and one-sided; you showed the Jeffersonian side of the argument and ignored the Hamiltonian. I am not (insofar as I can tell) ‘stupid’, but I am beginning to wonder.. Do you have a problem with criticism? Let’s keep this discussion rational and stop trading insults. The fact remains that Hamilton was involved in creating our Constitution and, at the time, he had no objection to the creation of paper money (see the Federalist Papers). Paper money is a necessity of modern life, as is ‘notional’ money (checking accounts, savings accounts, anything online). Your problem seems to be that paper money was not envisioned by the writers of the Constitution — Big deal, so were many aspects of modern life. I fail to understand your argument, and I don’t think it’s because I am ‘stupid’. I think an apology is in order.

    Reply: Simple. Read the About Box. Be Polite. Don’t Snark at me. You claim to be a regular reader, so ought to have read my “be a mirror” philosophy. When you snark, I snark (and may bite). When you are polite, I am polite. That is WHY I want folks to be polite. Because I don’t like biting. This is not an inherent part of who I am. It is a learned behaviour from dealing with a world full of bad people. What rude, mean, and bad people understand is ‘response in kind’. You have an argumentative and attack style. Your comments will go to moderation for as long as that is the case. You have complete control of that. So far you have been able to ‘be nice’ for about 2 in a row. Then you go back to attack, snark, whine, and complain. “Wonder” is the start of insight and wisdom. There may be hope. Now go back and look at how we had 80 years of hard money after the nation was formed. It was “settled” all right. Settled as gold and silver. Per me and ‘criticism’: Absolutely. It comes under “attack the messenger”. Instead of addressing the question, you criticize the speaker. That, then, (remember the mirror?) gets you called stupid. (read the about box, again). It’s a bad idea to keep kicking the same dog that bites you every time you kick it. ( Can’t think of a more clear image than that…) Again: That is not a “me” issue. I have loads of ‘issues’ and would love to share them with a kind ear over beer. I could fill books with my failures. Can’t spell worth a damn, for instance. Have lousy hair. Can’t stand opera. Does that make you feel better? It is all irrelevant because it is never about the messenger. So any, all, and every time you try to make it “about me”, you will find your ankle being bit. Got it? (Don’t need people sucking up either. “It is not about me” cuts both ways.) Frankly, what I find most offensive about it is just that it is a stupid waste of time. I don’t care at all what Archimedes manners were, what his bathroom habits were like, or if he beat his wife and kicked the dog. I just care if this theories prove out. Now, for example, you say “your problem”. Do you even SEE that “your” personalizes it? That “problem” makes it an attack? Do you really like spreading BBQ sauce on your ankles? BTW, paper money was invented by the Chinese long before, and had been in use in Europe long before. About 1100 AD Sung Dynasty IIRC. The Colonies had used paper money prior to the revolution. Those folk were well aware of paper money and it was NOT a new technology. They CHOSE to avoid it as it ‘has major issues’. Though these folks say it was 800 A.D. or so: http://www.pbs.org/wgbh/nova/ancient/history-money.html so your entire statement about them not ‘envisioning’ it is a bit, er, um, ‘uninformed’… Per the wiki Swedes were using it in 1661 and the Spanish to some extent: https://en.wikipedia.org/wiki/Currency#Paper_money It wasn’t “new”. It wasn’t something they just didn’t know about or forgot. They had just been burned by paper currency (“not worth a Continental” ring a bell?). It was a decision to have enforced hard money. But again, as stated at least twice now: My complaint is more about not doing a change to the constitution than about using a non-bi-metal money system. As per apologies: I don’t see the need, but if you feel one is in order, I won’t stop you from offering one. -E.M.Smith ]

  35. E.M.Smith says:


    You may also find this as useful ‘catch up’ on the history of American money:


    Breaking from the Mother Country (1775)
    Continental Currency
    When the colonists made their final break from England, war became the high price to pay for that freedom. The newly-formed nation needed money in order to finance its war effort, but because of England’s attempts to keep gold and silver out of the colonies, the colonists had no precious metals. Thus, the Revolutionary War would have to be financed with paper. In mid-1775, the Continental Congress authorized the issuance of paper currency. These war notes were redeemable in Spanish Milled Dollars – large silver coins of 8 Real denomination (the famous “pieces of eight”) struck at the Spanish colonial mints in Mexico and South America.

    Because the Continental Congress authorized their creation, these notes became known as Continental Currency. Unfortunately, it quickly depreciated to where the face value of the money was worth less than the paper on which it was printed. This depreciation in value created the popular expression of the day, “it’s not worth a Continental.” However, today the notes are in great demand by collectors!

    We started on paper currency, and it was a disaster. A key part of why the Constitution said Gold and Sliver, BTW.

    The Birth of America’s Currency System
    After their experience with Continental Currency, Americans were extremely reluctant to accept paper money issued by our government. Consequently, America did not find it necessary to produce paper money, as we know it, for nearly a century!

    Once the Constitution was ratified, the coinage system of the United States was established. America’s first coins were struck in 1793 at the Philadelphia Mint, and from then until 1861 (68 years later), the government saw no need for a national paper currency.

    But during this period, several important events took place. The War of 1812, the Mexican War of 1846, the Panic of 1857, and the uneasy period immediately before the outbreak of the Civil War all caused a severe drain on the U.S. Treasury. To overcome these deficits, the federal government issued so-called Treasury Notes from time to time. They were simply signed “promissory notes” which earned interest, and did not circulate as money except for a brief time in 1815.

    We again see the scourge of most monetary systems: Governments indulging in war, needing buckets of money to pay for it. But at least their paper notes were interest bearing.

    The Civil War

    The Civil War was to have the greatest impact on America’s paper money. Because of the duration of the conflict, financing the war became a major problem. Supplies, clothing and pay for the military had to come from somewhere. And it wasn’t long before the United States found itself in a desperate financial situation. Remedies included increasing the national debt, enacting the first income tax and issuing a national paper currency.

    Putting their faith in paper money

    Congress finally passed the Act of July 17, 1861 which permitted the Treasury Department to print and circulate money. “Specie” payments were suspended, which meant the new paper money could not be converted into either silver or gold coins.

    Once again, the desire for war becomes the destruction of the wealth of nations and the corruption of the currency. It’s a never ending pattern in money history.

    Frankly, if all it did was limit the scope of war, a strict hard money policy would be worth it, IMHO.

    The history of paper money is directly tied to government excess. For that reason alone, it is evil. ( Gold and Silver are a bit limited in supply for the world of today, they also don’t wear well, so many tons get lost as molecular dust from coins in pockets…) IFF we could have a guarantee of enough discipline that folks would not cheat the system, having paper receipts for deposited commodities might work reasonably well. A “basket of stuff” backing each bill. But the history of “gold backed dollars” and “silver certificates” is that the government eventually decides is wants to spend the backing too…. and inflate the paper.

    (If anyone is looking for me to advocate one kind of money over another, I’m not ‘going there’. They all have ‘issues’. Paper money just has more than most… Frankly, I’ve mused some times that Starbucks needs to print a “Starbuck” card, good for one Mocha. Now that would be a currency I could endorse ;-) Redeemable at any time for “specie” in a cup ;-) I think most transactions could relatively easily be done with such ‘commodity cards’ if folks really wanted to try it. There really isn’t anything special about government paper compared to anyone else with a ‘promise to deliver’. Other than that the other folks can’t inflate…)

  36. Peter Offenhartz says:

    Well, if the Chiefio would like an apology for my rudeness, I am happy to provide it: I am sorry I seem so rude. But I would like to see a corresponding apology for his calling me stupid, which I think (and hope) I am not. I admit to being rude: It is part of the way I exist. When someone says something stupid (or ignorant), I like to pounce. I don’t usually accuse anyone of stupidity (unless it is painfully obvious), but I do accuse the Chiefio of being long-winded and biased (especially when it comes to Hamilton’s views), about which (as it happens) I know a few things. I still maintain that if Hamilton and Jefferson didn’t understand the meaning and restrictions of our Constitution then no one does.

    Reply: Still not ‘getting it’ eh? ANY of the “about the messenger” stuff is unwelcome. I don’t need (nor want) an apology from you (or anyone else). We don’t do “apology tours” here. Things are what they are. Now you have decided to continue to do the “insult first address topic later, or never” with more “to the person” insults. I’m tired of the childishness. Bit Bucket Fodder is what you have here. (So don’t be surprised if more such just gets bit bucketed. You’ve also added at least a year to any ‘out of moderation’ hopes). Per Hamilton: Yes, he is the darling of “implied powers” folks. Madison didn’t like it. Jefferson didn’t like it. The Supreme Court has decided to go that way. So there is a food fight between two major schools of thought on the constitution (constructive / original intent vs implied / do what you want if remotely plausible). That is NOT “settled” which was your original pre-mutation position. But no, I’m not interested in some kind of debate over the virtues of Hamilton. He had few, and ended up shot for being petty and backstabbing. And, again, at no time have I said they did not understand the restrictions. I have repeatedly said they wished to ignore them. (Though a case can be made that Hamilton was simply trying to redefine them out of existence as he wanted a powerful central government, but having lost out in the writing stages, came back for an attempt at undermining, that has largely worked post-death.) That they have normal human failings says nothing about what they understand. His peers had many unpleasant things to say about Hamilton. It was mostly foreign ‘statists’ who liked him. He was a big government guy whose major accomplishments were building organs of power and force to grow central government, so not a surprise those kinds of folks liked him. -E.M.Smith]

  37. Jason Calley says:

    @ E.M. “I think most transactions could relatively easily be done with such ‘commodity cards’ if folks really wanted to try it. There really isn’t anything special about government paper compared to anyone else with a ‘promise to deliver’. Other than that the other folks can’t inflate…”

    I remember reading somewhere that a sort of de facto international currency had become popular across many African nations. The medium? Prepaid phone cards. makes a lot of sense. I wonder if here in the US we could use prepaid electricity cards that could be redeemed as payment on electric bills. Or maybe gift cards for gasoline — or maybe just prepaid Visa cards.

    I would disagree about there not being anything special about government paper compared to other promises to pay. I really do not want to sound like a broken record on this subject, but there IS a difference. Private promises to pay have to be based on persuading someone to use them, whereas government promises are forced at gunpoint via “legal tender” laws. Again, sorry if I keep pushing the concept, but when an individual or a business offers a gift card or a coupon you don’t HAVE to use it or accept it. You only choose to do so if it is to your advantage and you will walk away from the transaction better than you were before. Consequentially, private promises become self correcting of abuses. Bad promises force unfaithful actors from the market. Government promises and government paper is the opposite. Because they are forced on you, there is relatively little reason for the government to act in good faith. After all, what choice do you have? You use their paper or you go to jail. In fact, even private businesses, if too successful in offering an alternative to government paper, will be forced from the market by government punishment. http://en.wikipedia.org/wiki/Liberty_Dollar

  38. E.M.Smith says:


    No, you just keep on repeating it. I tend to the theoretical on money issues. It is theoretically no different using a pound of coffee or a Fed. Reserve Note. But it is just as true that in reality only one can be forced on me at the point of a gun.

    The “KiloWatt Card” has an interesting attraction to it… fundamental unit of work… or kW-hr work done over an hour. Now if only prices were not so variable all over the nation…

    But that is a fundamental of all commodity currencies. Commodity prices are volatile (even gold and silver). One of the bigger problems with precious metals based currencies…. Part of why I like the idea of shares in a currency basket. Dampen the swings.

    In reality, I like the idea of a ‘credit card / debit card’ where, in the account behind it, you can park your value in any national currency or any commodity ETFs (including metals) and change allocations in any ATM (or over the phone) at any time. Spending is just like now, but you and the seller select any units for the exchange, too. ( i.e. they can price in bbl of oil or gold or Yen or whatever). Nothing at all prevents that.

    The “Schwab One” account lets you spend with a card, and will auto-convert currencies if you cross borders (as do most cards) yet the contents of the account can be parked in any tradeable ticker. Just add having the cash be designated as to currency (instead of needing to buy a currency ETF) and having ‘per purchase’ designation of exchange medium and it’s a done deal. (Though frankly, as it’s electronic and near instant, the ‘medium of exchange’ becomes less important. Your, say, Swiss Francs get swapped to $, the exchange happens in seconds, and once in the other guys account, he slides it off to Euro or whatever…)

    So we are very close to having a ‘universal money holder’ account already…

    @Peter O:

    Oh, and something else you read wrongly:

    “So asserting it was all done and over in the time of Hamilton and Jefferson is just stupid. Sorry, not polite, I know, but it is stupid.”

    Notice that says the assertion that things were over and done and paper money was allowed in the time of Hamilton and Jefferson is stupid. It does not say “you, for saying a stupid thing, are generically stupid”. It is a sentence about a thing (an idea / assertion) and not about a person.

    You seem to have permanent blinders about directing speech at things and ideas and not at people. Always you personalize (and from the looks of it, both ways). Making a stupid statement is a stupid act, nothing more. When we have a clear monetary history of post constitution having nothing but gold and sliver money until both men were dead, it’s a bit hard to say they had “settled it” that paper money was OK. It is, in fact, a stupid assertion as it ignores clear facts of no paper currency at all post “Continental” and post Federation, until The Civil War for the Greenback creation. (The Treasury Notes of the 1815 era were actual loan notes, not paper currency, though briefly some folks treated them like currency due to a shortage of other stuff).

    So to say that assertion is stupid says little about you as a whole person. Just like earlier today when I stupidly put extra sugar in my tea. Stupid not to count spoons while talking to family. It’s talking about a stupid act of paying attention to family instead of what I was doing.

    Somehow you need to get off that focus on the person and personality.

    Oh you can keep beating your head on that wall until it feels better…

  39. Tim Clark says:

    “Part of why I like the idea of shares in a currency basket.”

    I’ve thought about this alot after your piece on Starbucks coffee. I wouldn’t give you a plug nickle for a starbucks card. But I agree that a currency basket may be the best solution. My reasoning is that people, not governments, would set the value, and currency traders are quite adept at determining “true value”.
    I conclude that because, in essence, my IRA investments (and yours probably) do just that, with allocations in companies in countries that produce something of inflatable value relative to the US dollar. But the crux of good investments obviously is determination of relative value and asset allocation. I still think Chile, Canada and to a lesser degree Australia have a high net value. I own some petrobas. I don’t understand the Yen, and China’s yuan doesn’t float. Singapore and Malaysia have some of my dough. I have a personal aversion to investment in Arab oil economies, regardless of their lower debt/GDP ratio. So I have few dollars fundamentally (excepting oil companies), but a basketful of foreign Starbucks cards.

  40. George says:

    Doesn’t matter if others (leaders) don’t follow the constitution, as long as you do.

  41. John Robertson says:

    My favourite unit of exchange was suggested on this site a while ago, nano grams of plutonium,
    when you become too wealthy you could donate to your favourite politician.
    While poison and impractical, the concept of a credit one does not risk accumulating too much of has some societal value.
    2nd thoughts thats what inflation does to our dollars,never mind.
    But I do like the gifting aspect.

  42. Jason Calley says:

    As the Constitution says. “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;”

    Most people never stop to wonder why the authority to coin and regulate money is included in the very same clause with the authority to fix standards of weights and measures. We are so used to think that a dollar is a piece of paper, that we forget that a “dollar” is actually a weight of silver or gold. Of course one could argue that perhaps it was so in the old days of the US, but we are far too civilized for that foolishness today. Today, we agree that a dollar can be a piece of paper or even a magnet digit stored on a hard drive. Gosh! A’int we the sophisticates! Anyway, back in the old days when dinosaurs walked the Earth and volcanoes belched hourly, a dollar was a weight of silver. (Actually, it was a mass of silver, but no quibbling.) Just like an “ounce” is a particular weight, a dollar is a particular weight, and hence included in the same Constitutional clause. “Coining” money is just the process of making certified, prestamped, units of weight — no different in theory than having official yard sticks or meter sticks. http://mises.org/daily/4149

    Confusing Federal Reserve Notes with “dollars” defined as a weight of silver — or of gold, or any other commodity — opens up a wonderful line of possible opportunities for those with banking and political connections. All of us regular citizens are now so conditioned to think of dollars as pieces of paper that we have forgotten about the whole “weight of precious metal” thing. Suppose (not too hypothetically) that a quasi-governmental corporation such as the International Monetary Fund is created by edict or treaty, and that included in its charter is a clause giving it “special drawing rights” on the US Treasury. Well, the last time that the weight of gold was officially set in relation to a dollar, it was about one dollar equals 1/42.5 ounces of gold. With special drawing rights one could go into the Treasury and withdraw not Federal Reserve Notes, but actual “dollars”, actual gold at a rate of $42.50 per ounce. Not a bad deal for the banks that control and own the IMF!

    Of course, don’t YOU try making a dollar be silver! You will go to jail. For example, a US Silver Eagle, a one ounce, one dollar face value coin, still officially legal tender, will cost you about $35 in Federal Reserve Notes. Suppose you have a business and pay your employees $700 per week. Suppose you decide to instead give them 20 Silver Eagles for pay. Then they will only owe taxes on twenty dollars a week pay. After all, the Eagle is a real legal tender coin, you paid them $20! Well, maybe it SHOULD be legal, but the IRS will put you in jail anyway.

  43. George says:

    Why are We a Christian nation? Because there is no king/monarch/tyrant ruling us; we reserve that power for a mild, forgiving God. The state is not God… it just likes to jealously usurp.

    1. Give unto the central bankers what is the central banker’s. Give unto God what is God’s.

    2. We are like little children living in a field that is not ours. When the owners of the field come, they will say, ‘Give us back our field.’ We take off their clothes in front of them in order to give it back to them, and they return their field to them.

  44. George says:

    [SNIP!] Reply: Your recent run to ethnic comments has caused this to be snipped. ALL ethnicities and races are welcome here and I’ll not have any of them insulted. -E.M.Smith]

  45. George says:

    I think everyone feels the same. The real matter is what we do about it collectively as The People? Most feel powerless, impotent, feminized, and mistrusting. How can The People come together? How can we fix this? What do we need to say to each other? How should we say it knowing we have been pushed to extremes and fed lines by tv? Do we wait until the sh*t hits the fan? Did it already hit the fan? Just like a mother needs to feel pain during childbirth, The People have to take a hit to fix this. A sacrifice is necessary.

  46. adolfogiurfa says:

    @George It will endure as long as food stamps, government checks,etc. have some value. Up to now everything is being artificially kept under control. It will be a dramatic and sudden wake up. It would have been better to say the truth and face it from the start. Now it is too late: graduality makes things worse in economy.

  47. George says:

    It’s never too late… and it is all up to us individually.

  48. George says:

    To err, human. Repent, devine. Persist, devilish – B. Franklin

  49. George says:

    Jesus said, “One can’t enter a strong person’s house and take it by force without tying his hands. Then one can loot his house.”

  50. George says:

    Where there’s no law, there’s no bread. – B. Franklin

  51. Mark Miller says:

    @Peter Offenhartz:

    I found your comments “light reading.” Jefferson and Hamilton didn’t know what was in the Constitution? Please. They helped write it! That’s like saying you didn’t understand the meaning of what you wrote here.

    I’ve seen others debate this point before, that the meaning of the Constitution was abundantly clear, as if it read like computer code, or it should have been. No, not quite. The Constitution was written in the plain language of the day so that the states and the people could enforce it (that’s my sense of it, anyway). Any law is open to some interpretation. The Founders knew fell well from history that there would be arguments about its meaning. The only question was how far afield people would go with it. This is the reason lawyers are able to routinely argue points of law in court. This is the reason the southern states could argue that they had the right to secede and their residents could say, “Yeah, that makes sense,” and the fed. gov. and the northern states could argue otherwise, with their own adherents.

    There were some principles in the Constitution that were assumed, or agreed upon at the time, but were unstated. It takes some background to understand what they were. Ultimately, law is a social compact, with some implied assumptions. Ideally it is construed as narrowly as possible, so as to prevent abuse, but that really depends on the character of the people who are ruled by it, and who implement it.

    The fact that the Founders were imperfect is not an excuse to just ignore what they created.

    I think the reason “original intent” is valuable as a pursuit–as a limiting factor in how we would choose to change the meaning of the Constitution–is that the Founders intended to give us a great gift unprecedented in history, the gift of liberty in a civilized society. The Constitution was their best attempt at creating a society where that was possible. We should assume they defined things the way they did for a good reason, and so deviating from that should not be taken lightly. Yes, they made some mistakes in creating it, and they anticipated that they had, which is the reason they allowed it to be changed, though they intended that to be difficult. Still, it was created with a lot of thought, with wisdom derived from history under their consideration. It seems to me they tried as much as possible to avoid letting the issues of the day drive their thinking when they created it. They focused much more on principles that they hoped would endure. The issues of the day intruded on their thinking once they tried to implement the Constitution in practice, and the arguments about its meaning–what it could be construed to allow, without breaking the social compact–commenced.


    I assume you know this already, but as I was reading what you said about the Louisiana Purchase, I remembered back to a lengthy article I read on Madison. One of the things it said was that he considered the question of the LP, and he thought the Constitution allowed it, through the gov’t’s treaty-making power. When I read that, I thought it a bit funny. Yes, technically a treaty is at its essence an international agreement. In this case, it would’ve been an international agreement that went quickly in and out of existence: Our gov’t pays France money in exchange for X area of land. Fini.

    The reality is the words we humans use are but pebbles skipping across the pond. Each word and sentence construction evokes meaning for us, which is the bulk of what’s going on with communication. The same goes for the law, and for the Constitution. The only way we can approach “original intent” is to read as much content that went into the creation of the law in the first place, and then translate that content into accurately represented principles that can be applied to circumstances. If they *can’t* be applied to circumstances–if the principles just don’t map at all, then ideally the courts should demure, and say, “We can’t deal with this issue,” which should prompt a political response to perhaps change the law to better suit the circumstances.

    The one caveat I hold is, as one judge put it, “The Constitution is not a suicide pact.” If cleaving to the original intent means a dire threat to the country, I say stretch it a bit, but only for a time, as Lincoln did.

    I’m in favor of the idea of changing the Constitution to the understanding of our contemporary gov’t’s role in society. One reason being that such a change would necessarily evoke debate about the question, “What *is* the gov’t’s role?” A question a lot of us haven’t asked in a long time. IMO this is the reason constitutional amendments have been avoided. The elite don’t want to have that argument. They find it much more convenient to let federal elections, particularly of a new president, settle it. The change is much more subtle that way.

    People smarter than me quake at this notion, because they feel quite rightly that the American public now is not educated in the ways of power, the principles of liberty, and in how a democratic republic needs to converse to consider these issues. The thing is the longer we go on like this, the more excuses the elite will have for just utterly ignore the Constitution. The people will see it as more and more irrelevant. To give you an idea of how serious this is, last year we had a congressman from IL (Jesse Jackson, Jr.), and the governor of NC (Bev Perdue) say explicitly that we should have “cancelled” last year’s election so that politicians wouldn’t be focused on fundraising and campaigning, so they could “focus on the economy.” Okay, I can see the points about fundraising and campaigning. A dirty business anyway, but I was alarmed at this notion that they thought the fed. gov. could just say, “Hey, uh…we’re not going to have an election this time. We’re just going to let everyone ride for a little bit longer…” Thankfully there was abundant pushback that trounced the idea. But just the fact that a couple prominent people in gov’t felt free to suggest that was deeply unsettling to me. I mean, this is yet another thing the Constitution clearly prescribes, and yet, a few, who swore to uphold the Constitution no less, thought, “Eh, ignore it.”

    (constituents confronting Phil Hare, Democratic congressman from IL)

    At least if we changed the Constitution to something that resembles our current understanding of gov’t’s role, people could point to it and say, “This is what we agreed to. This is what is expected of you, and what you’re allowed to do. We aren’t going to allow you to go outside that.” It was intended to be a constraining document, but it can only fulfill that function if it ultimately means something to the people. We can’t count on gov’t officials to hold to it by themselves. The temptation of power is too great.

    Something that’s occurred to me recently is that ultimately all law is political. Words mean what we think they mean, and in some cases what we choose for them to mean. This includes giving greater weight to some ideas over others.

    Addressing another point you made, re. the “general welfare,” I’m no expert on this, but what I’ve heard others, who’ve looked at this more than I have, say is that there was an argument between Hamilton and many of the other Framers about this. I assume you know about this as well. Hamilton won out posthumously, though he didn’t win the argument in his day. My understanding is the prevailing view at the time was that “general welfare” referred to the idea that the federal gov’t could not play favorites. It was an “equal protection” clause for the states. The gov’t was to apply its enumerated powers, as they related to the states, equally to all of the states–in other words, it was to exercise its power for “the general welfare,” since for the most part the original Constitution (before the Bill of Rights was added) only concerned itself with the fed. gov.’s duties, and its relationship to the states.

    I think one of the big defects of the Constitution is in how the courts relate to gov’t actions that are unconstitutional. My understanding is the courts will only respond if it can be ascertained that there is an injured party. On so many critical constitutional issues, the courts have either denied a hearing, because “there is no injured party,” or they’ve demurred, saying, “This is a political issue.”

    Though he didn’t say it explicitly, this is essentially what Justice Roberts said in his ruling on the ACA.

    Ultimately, the power to limit the gov’t rests with the people.

    Unfortunately, when it comes to the issue of money, with the exception of experienced investors, people are totally clueless. I’ve tried raising the issue in common political conversations, and the response I get varies from blank stares, to charges of “conspiracy theorist.” The idea of intrinsic value just plain doesn’t exist for most. In all likelihood, as people get poorer, as their money becomes worth less and less, they will blame “the corporations” for raising their prices, raising the price of living, and not hiring enough people to pay the bills. They’re not going to blame the gov’t or the Fed. That’s two steps beyond their ability to comprehend.

  52. Mark Miller says:

    Meant to add this, though my comment was getting looooonngg ( :) ). I think Madison anticipated our current circumstances to some extent, as did Ben Franklin, though Franklin seems to me to have been more pessimistic. Madison knew from history that we would have charlatans who would gain power, that the people would divide themselves into the politically connected, and the politically dispossessed, and that politicians and their constituents would try to do things that only benefitted themselves, but which damaged the livelihoods of the dispossessed. The one saving grace I think we have in the Constitution, that we still adhere to, is the scheme of divided power, so as to frustrate efforts to centralize it. We have staggered elections, so that all elected officials in the gov’t aren’t all elected at the same time. We have a structure that tries to create competition between different branches. We had diffusion of power, with the states handling some issues exclusively, and the fed. gov. having some exclusive powers. This is the one aspect that’s been most damaged by “reforms” over the last century. These measures have slowed down efforts to seize power, but have not stopped it. What troubles me is I don’t get a sense that we follow any of these conventions because the Constitution talks about them, but rather just because of tradition. On a few occasions our society has actually reversed the trend towards more centralized, corrupting power, if but briefly. That impulse fades quickly once things start “going well” for us.

    It seems like it takes a lot for people to notice that the gov’t is imposing itself too much. It has to really overreach, and cause some pain before people push it back. Arguments about what principally will happen if we don’t change course don’t carry a lot of weight, I think primarily because we don’t give much credence to history, to the consequences of power (only that it “benefits me” in the moment, or it doesn’t), nor the implications of economics. We think, “Things are different now.” Our technology fools us into thinking that we have changed, or that what hurt our ancestors won’t us anymore, just as what used to seemingly not hurt our ancestors hurts us now.

    Being a free people is a tough business. We are a softening society, as a preacher I used to listen to warned us. We have all sorts of comforts at our disposal that science, engineering, and economics have afforded us. They lull us into thinking that all that’s really necessary is an easy style, some coordination, with adherence to the occasional fad, and “have money will travel.” The rest is noise.

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