I disagree with the claim that STATE violence causes bad money (paper) to rule over good money (gold) and that abolishing the notion of legal tender or reverting to bartering will change everything.

The reason why we do not use gold as money today is because we are not used to. There has always been a problem of safe transportation and convenient storage. So around middle ages people in Europe people began to deposit their gold and silver coins at goldsmiths and in return got a certified paper receipt that basically said “John of Smith has deposited 17 ducats into the Merchants Guild. Signed and sealed, goldsmith Hans of Lübeck”. It was not long before people began conducting trade with those receipts, not gold. This is a natural result and it will reoccur even if the concept of legal tender disappears.

The fiat money came into existence when goldsmiths realized that they can issue more receipts (lend money for interest) than they had actual gold to back it up in their vaults. This was possible because people rarely took out their assets all at the same time.

When people got a whiff of this scheme, they demanded that goldsmiths (future bankers) split the “profit” with them. That is why You earn interest on Your savings account. Of course, in reality there is no profit because in order to pay interest, more money has to “created” in forms of fake credit. If the lender failes to pay the interest, the banker gets whatever was for loan collateral. This system is called fractional reserve banking. Today politicians refer to this process as “inflation”. Basically it means that somebody can lend money on the expense of everybody else and You will pay the bill.

Banks do not lend out money they already own. Instead they create “credit” and when this happens, value of every single monetary unit already in existence decreases. In the UNITED STATES, it is the legislative branch of the Government (the Congress) that is supposed to have the privilege to ‘coin money and regulate the value thereof’. Today the people have given up that privilege to private banks. The last President of UNITED STATES who tried to reclaim that privilege, got shot in a theatre.

Less ethical Governments, after learning what bankers were doing, fell in love with the concept. It meant that Governments could lend as much money from the bankers as they wanted and in effect “tax the people without taxing them explicitly”. That is why You as a citizen of a Government have the obligation to report Your income — to pay interest on the money Your Government has lended in Your name. The STATE does not actually demand that You pay for goods and services in FRN-s. Legal tender means that one may not refuse if legal tenders are offered as means of debt discharge. So it is a matter of negotiation between the buyer and seller although the seller is at disadvantage. What the STATE does demand, is that You file an income report since the CONTRACT of citizenship — and You are a citizen, according to Your passport — might compel such performance. The IRS dictates the law and it has every right to do so if You will not challenge it in a court of record. Such is the ancient custom.

Somewhere in the beginning of 20th century, bankers decided that they must ged rid of gold once and for all and force everyone to use their private currency (FRNs). So in UNITED STATES, they outlawed the private ownership of gold and mocked people who used gold as payment. I do not know if it is still the case but it was enough to wipe out the tradition. As a result of that campaign, most if not all citizens of UNITED STATES conduct their business using Federal Reserve Notes and in effect become owners of Government debt.

So You see, this is all a CONTRACT most people are unaware of. That is how the STATE usurps the power of the people — through ignorance. People have unwittingly entered into a CONTRACT with the STATE and most of us do not have the slightest understanding how to operate in this ancient system of Commercial Law that overrides any Government or Common Law tradition.

Gresham’s Law works mainly because people are ignorant. Not because the STATE prohibits the use of good currency. Until people understand that all law is CONTRACT (law can only be created through a CONTRACT) and everything else (including STATE power) is anarchy, there is no hope of improvement.

There is a very specific reason why I use all caps. It has to do with legal fiction and a concept called the straw man. Look it up.

The reason why we do not use gold as money today is because we are not used to. There has always been a problem of safe transportation and convenient storage. So around middle ages people in Europe people began to deposit their valuables at goldsmiths and in return got a certified paper receipt that basically said “John of Smith has deposited 17 ducats into the Merchants Guild. Signed and sealed, goldsmith Hans of Lübeck”. It was not long before people began conducting trade with those receipts, not gold. This is a natural result and it will reoccur even if the concept of legal tender disappears.

The fiat money appeared when goldsmiths realized that they can issue more receipts (lend money for interest) than they have gold in their vaults since people rarely took out their assets all at the same time.

When people got a whiff of this scheme, they demanded that goldsmiths (future bankers) split the “profit”. That is why You earn interest on Your savings account. Of course, in reality there is no profit because in order to pay interest, more money has to “created” in forms of fake credit. If the lender failes to pay the interest, the banker gets whatever was for loan collateral. This system is called fractional reserve banking. Today politicians refer to this process as “inflation”. Basically it means that somebody can lend money on the expense of everybody else and You will have to pay the bill.

Banks do not lend out money they already own. Banks create “credit” because they have the privilege to do so on the expense of everyone else. Unfortunately through creation of credit the value of every single monetary unit already in existence decreases. In the United States, the legislative branch of the Government has the right to ‘create money and regulate the value of thereof’. Today the People have gave up that privilege to private banks. The last President of United States that tried to take back that privilege, got shot in a theatre.

Less ethical Governments, after learning what bankers had created, fell in love with the idea. It meant that Governments could lend as much money from the bankers as they wanted and “tax the people without taxing them explicitly”. That is why You as a citizen of a Government have the obligation to report Your income — to pay interest on the money Your Government has lended in Your name. The State does not demand that You pay for goods and services in FRN-s. Legal tender means that one may not refuse legal tenders as means of debt discharge. The State does however demand that You file an income report since the contract of citizenship (You are a citizen, according to Your passport) might compel such performance. The IRS dictates the law and it can do so if You will not challenge it a court of record. Such is the ancient custom.

Somewhere in the beginning of 20th century, bankers decided that they must ged rid of gold once and for all and force everyone to use their private currency (FRNs). So in United States, they outlawed the private ownership of gold and mocked people who used gold as payment. I do not know if it is still the case but it was enough to wipe out the tradition.

So You see, this is all a Contract most people are unaware of. That is how the State usurps the power of the People — through ignorance. People have unwittingly entered into a Contract with the State and most of us do not have the slightest understanding how to operate in this ancient system of Commercial Law that overrides any Government or Common Law tradition.

Gresham’s Law works mainly because people are ignorant. Not because the State prohibits the use of good currency. Until people understand that all law is contract (law can only be created through a contract) and everything else (including State power) is anarchy, there is no hope of improvement.

Mark
DGCmagazine.com

Gilligan says:

I do have an idea though that might work…I have to think about it a bit first…