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A PRACTICAL GUIDE TO “GOLD CLAUSES”
By Dr. Edwin Vieira, Jr., Ph.D., J.D.
November 22, 2009

Money Issue May Be The Establishment's Achilles' Heel In Its War On "Islamic Fundamentalism"
PART 1 of 7

Dr. Edwin Vieira, Jr., Ph.D., J.D.
January 11, 2006
NewsWithViews.com

No careful student of history can fail to be impressed by the interconnectedness of ideas and events in every civilization's rise and fall--especially that bad ideas inevitably engender worse consequences. That may soon become painfully apparent once again. Foremost among the bad ideas that should come to the mind of every patriot are the unconstitutional and dishonest monetary and banking systems that today beset the United States, as well as the entire Western world, in the form of the Federal Reserve System and other central banks that emit legal-tender fiat currency and “monetize” public and private debt. The worse consequences that few people foresee are the destruction of these systems--and the ensuing economic, political, and social chaos that will engulf America and all other Western countries--if any one of a number of quite predictable events occurs.

This Commentary addresses the possibility that Muslims throughout the world will turn from fiat currency and electronic bank credit to gold dinar and silver dirham coins as their media of exchange, thereby employing the full force of economics in a decisive counterattack in the global war that the West's Establishment has so imprudently launched against "Islamic fundamentalism". And leading to fulfillment of the prophecy in the Musnad of Imam Ahmad ibn Hanbal that "[a] time is certainly coming over mankind when nothing will be of use except a dinar and a dirham."[1]

A. Consider first the bad ideas and their consequences in the United States.

1. By refusing to use silver and gold coin as this country's official media of exchange, although the Constitution requires it, and by creating a corrupt connection between the General Government and private fractional-reserve banks, although the Constitution prohibits it, the Establishment has rendered America hostage to:

economic mismanagement and political manipulation of her monetary and banking systems--in particular, the Federal Reserve System--and of the supposedly free markets for securities and commodities that the System's operations so strongly, and often perversely, influence;
banking, monetary, financial, and other economic crises--and the social and political disruption, destabilization, and destruction they bring in train;
the imposition of an intrusive, abusive, and oppressive financial police state, subversive of Americans' fundamental constitutional liberties; and now even
world war, waged through both military and nonmilitary means in every corner of the globe in which prices of goods and services are measured in money.

2. This last concern is no exaggeration. But realizing why requires returning to basic principles.

Constitutional money and banking require:

the silver dollar of 371.25 grains (Troy) as the monetary standard, no less invariant than any other standard of weights and measures;[2]
gold coinage regulated in value in units of (silver) dollars, according to the rate of exchange the free market sets between silver and gold;
free coinage of silver and gold by the Treasury for all holders of specie;
unimpeded circulation of silver and gold coins as Americans' normal media of exchange in truly free markets;
the General Government's and the States' use of only silver and gold coins (or private electronic gold or silver currencies absolutely convertible into such coins) as their official media of exchange;[3]
no emissions of paper currency (or its account-book or electronic surrogates), whether designated "legal tender" or not, by the General Government, the States, or private banks acting as alter egos, agents, or accessories thereof; and
statutory controls on all fractional-reserve practices of private banks and other financial institutions, including: (i) prohibition of all fraudulent fractional-reserve practices, (ii) mandatory complete disclosure (i.e., beyond what would be necessary simply to obviate charges of common-law fraud and misrepresentation) to the banks' customers of the existence, operations, and risks involved in all permissible fractional-reserve practices, (iii) proscription of any form of what used to be called "suspension of specie payments" (whereby banks refuse to perform their contracts to depositors and noteholders, but otherwise remain in business collecting from their debtors), so that any bank that fails to redeem its notes or pay its depositors will be put immediately into receivership; and (iv) the imposition of personal liability for compensatory and punitive damages on all partners, directors, officers, trustees, and shareholders of any fractional-reserve bank that violates the law to its depositors' or other creditors' loss.

These changes cannot be expected to come through the courts. First, the judicial process is too slow to effect meaningful reforms before serious economic crises break out. Second, the judicial process is not given to broad, prospective legal restructuring, only to sequential, retrospective tinkering, one case at a time--in fact, the courts of the General Government (the so-called "federal courts") lack jurisdiction to give "advisory opinions" about sets of circumstances not actually before them. Whereas, legislatures can draft comprehensive statutes, taking into consideration a myriad of possible future situations and scenarios that cover the entire field. Third, the courts have no body of precedents on which to rely for the necessary reforms, because fractional-reserve banking has long been treated as an exception to the traditional common law of contracts and torts applicable to every other business. So, even if the most that were desired would be to compel fractional-reserve banks simply to abide by the traditional principles of common law in those areas, statutes would still be necessary to instruct the courts to enforce that requirement, and in how to do it. Fourth, fractional-reserve banking is already regulated all too favorably by numerous complex statutes that would have to be repealed or carefully amended, each in relation to the others, for a comprehensive reform to work. The courts, of course, have no authority to make such changes in statutory law.

3. America needs constitutional money and banking for two primary reasons:

First, because a specific rule of law requires it: the monetary powers and disabilities of Congress and the States as delineated in the Constitution.[4]

Second, because the goals set out in the Preamble to the Constitution require it. In any era, "the general Welfare" requires it: Americans would be better off, politically and economically, with constitutional money and banking. Constitutional money and banking are honest money and banking, and therefore contribute significantly to "establish[ing] Justice". And particularly in this era of "the war on terrorism", "the war on drugs", and other occasions and excuses for creation of a pervasive police state in America, "provid[ing] for the common defense", "insur[ing] domestic Tranquility", and especially "securing the Blessings of Liberty to ourselves and our Posterity" require constitutional money and banking to protect Americans from the untoward economic and political consequences of unconstitutional money and banking.[5]

4. All this being so, the question nevertheless remains: Why does America not have constitutional money and banking here and now?

a. It is not because the Establishment cannot put the Constitution into practice.

The Establishment can mint proper specie coinage. Indeed, the Treasury of the United States is even now striking silver Liberty and gold American Eagle coins in amounts supposedly sufficient to meet public demand. These coins, however, do not contain the weights of precious metals, or carry the denominations of “Value,” that the Constitution requires. Yet those defects the Establishment could easily cure, either by Congressional statute or administrative action by the Secretary of the Treasury.
The Establishment can remove all legalistic impediments--particularly "sales" and "capital-gains" taxes--to the exchange of Federal Reserve Notes and base-metallic ("clad") coinage for silver and gold coin, and to the general circulation of silver and gold coinage as Americans' ordinary currency.
The Establishment can repeal existing statutory legal-tender privileges for fiat paper currency and base-metallic coinage, and make the legal-tender power of silver and gold coins contingent upon their compliance with constitutional standards. (E.g., a coin stamped “One Dollar” need not be accepted as such unless it actually contains 371.25 grains of fine silver; and a coin containing less by dint of honest wear and tear may be exchanged for a coin of full weight at the Treasury on demand.)
The Establishment can separate bank and state by disestablishing (that is, completely privatizing) the Federal Reserve System, and allowing it to sink or swim in the free market on its own. As part of this disentanglement, Federal Reserve banks would be prohibited from labelling their paper currency “dollars”, or even calling that currency "notes" payable in dollars, unless the currency were redeemable on demand out of 100% reserve funds maintained for that purpose (that is, in effect were warehouse receipts for coin). And,
The Establishment can prohibit all forms of fraudulent fractional-reserve banking, and require bankers who employ legitimate fractional-reserve operations to provide the public with full disclosure of their policies and practices, the pitfalls these contain, the protections against those dangers the banks provide, and the penalties imposed by law in favor of the public when bankers fail to make such protections available.

So, if the Establishment wanted constitutional money and banking, America could, and would, have them tomorrow.

Footnotes:

1, Ibn Hanbal founded the Hanbali school of law, and is one of four individuals whose interpretations of the Qu'ran and the hadith (the sayings of Muhammad and reports about his actions) the majority of Sunni Muslims follows.
2, To put this into the most obvious practical terms, even modern politicians do not propose steadily to "depreciate" the ounce, or the foot, or the minute as a matter of legislative policy for the purpose of redistributing wealth or "stimulating the economy". Why, then, should anyone tolerate a policy of systematically "depreciating" the dollar?
3, See my three-part Commentary, The State Electronic Gold Currency Plan. In effect, electronic gold currency units constitute physical, and thus fully secured, "checks" or "orders" payable in gold or silver coin. As long as electronic gold currency units must be convertible into their free-market value in gold and silver coin, as a condition of their use by the government in any transaction, the overall transaction can be deemed to occur in such coin, and thus to conform to the command of Article I, Section 10, Clause 1 that "[n]o State shall * * * make any Thing but gold and silver Coin a Tender in Payment of Debts". This would never be true for redeemable paper currency, however. For such currency always amounts to "Bills of Credit", which no State may emit under Article I, Section 10, Clause 1, and Congress has no power to emit under Article I, Section 8, Clause 2.
4, See generally, Edwin Vieira, Jr., Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution (2d rev. ed. 2002).
5, See my earlier Commentaries: (i) "Homeland Security"--for what and for whom?, (ii) Are monetary and banking crises inevitable in the foreseeable future?, (iii) Will a monetary and banking crisis be the cloud with a silver lining that will provide America with a golden opportunity for real reform?, (iv) Americans cannot depend on Washington, D.C., to protect them from monetary and banking crises, and (v) Is self-help the best way for Americans to solve this country's monetary and banking problems?
PART 2 of 7

Dr. Edwin Vieira, Jr., Ph.D., J.D.
January 11, 2006
NewsWithViews.com

PART ONE of this Commentary explained why America needs constitutional money and banking, and that she could have both of them if the Establishment so willed. But...

b. The Establishment does not want constitutional money and banking for the most self-interested and venal of reasons.

(1) The Establishment cannot admit that it has been wrong for over a century as to money and banking, and that its faulty policies have had, and will continue to have, increasingly disruptive and inevitably destructive economic, political, and social consequences. Such an admission would destroy the Establishment's cherished and cultivated myth of "progress": the illogical and often counterfactual notion that what happens today is inevitably better than what happened yesterday. And "progress" having been exposed as a myth where matters as important as money and banking are concerned, Americans will demand to know in what other areas the Establishment’s "progress" has actually amounted to retrogression, and how that retrogression has exposed this country to danger.

In addition, a general debunking of the myth of "progress" would demolish the pseudo-intellectual foundation for "the living Constitution:" the Establishment's claim that the Founding Fathers' philosophy of law, government, and economy is outmoded, and needs to be updated by constantly increasing the powers of a centralized bureaucratic state, extending their application, and intensifying their enforcement, at the expense of Americans' liberties and traditions in the political, economic, social, and even cultural spheres.

Admission of its errors with regard to money and banking would shatter the Establishment's aura of intellectual capacity and superiority--and certainly of infallibility and integrity. For, if the Establishment has been so very wrong for so very long where matters as vital as money and banking are concerned--and so intent on and successful in concealing its blunders from public scrutiny and justifiable criticism--where else has it been wrong, where else is it wrong now, and where else will it be wrong in the future? What dire consequences does this country face from all those as yet undiscovered pratfalls? How great will the costs be--and who will pay them? And why should an Establishment, finally proven to be more foolish than wise, concerned more with self-aggrandizement than with "the general Welfare" the Constitution sets as one of its goals, and above all thoroughly mendacious, be suffered any longer recklessly and lawlessly to gamble with Americans' freedom, security, and prosperity?

Thus, admission of its chronic failures in the area of money and banking would refute--indeed, would subject to deserved ridicule--the Establishment's claim to perpetual leadership of American society. If the present monetary and banking mess has festered while the self-professed best and brightest from the Council on Foreign Relations, the Trilateral Commission, the Bilderburgers, the Republican and Democratic Parties, the prestigious think tanks, and the boards of directors of behemoth globalist banks and corporations have rotated in and out of the highest public offices in the United States--all the while focusing only on short-term manipulations of money and banking in order to fatten their own purses, while turning blind eyes to the long-term dangers born of the unnatural coupling of politicians and bankers--perhaps these groups are not warehouses that stock public servants of unquestionable quality, but merely Mal-Marts that purvey shoddy merchandise at exorbitant prices.

(2) From the Establishment's perspective, these are revolutionary ideas. For rejection by a critical mass of Americans of the Establishment's claim to leadership would result in its loss of position, perquisites, profits, and power. After all, the present unconstitutional monetary and banking systems enable politicians to redistribute vast amounts of real wealth from society's to their control through monetization of public debt and the hidden tax of inflation, and then to parcel out that embezzled wealth through governmental spending to their clients in influential special-interest groups, which then arrange for the politicians' re-elections, in what they all anticipate will be a never-ending cycle of prevarication, predation, plunder, and political power. When the unconstitutional monetary and banking systems are set aside, this cycle must end.

The Establishment knows how much is at stake: The amount of governmental spending accurately measures governmental power over society. The amount of governmental redistribution of wealth accurately measures people's dependency on politically generated incomes and the politicians who provide them. The extent of people's dependency on politicians for economic payoffs and favors accurately predicts their support for continuation and, inevitably, expansion of a political apparatus that can and will provide such benefits. By constantly increasing total governmental spending, and intensifying people's dependency on politically generated incomes, politicians maintain themselves in office and multiply their own power, perpetuating and strengthening that political oxymoron: a popularly elected oligarchy. Thus advance hand in hand political redistributionism--the theory and practice of using government to transfer wealth from one portion of society to another, and political careerism--the theory and practice of turning government from a sacrificial public service by, into a profitable personal business for, officeholders.

Moreover, through carefully targeted redistribution of wealth, politicians increase the economic and political power of the private special-interest groups they serve. In their turn, these groups inundate the electoral process with campaign contributions and other political expenditures and in-kind services that generate torrents of propaganda, agitation, misinformation and disinformation, and "get-out-the-vote" hoopla carefully crafted to deceive the electorate into selecting candidates most favorable to the special interests. Overall, this process empowers and perpetuates a political and economic ruling class that oversees, not a republic, nor even a democracy, but a manipulocracy, in which the manipulators inveigle the manipulated into believing that the manipulated are in charge, because the manipulated vote for candidates and policies the manipulators manipulate the manipulated into choosing.

Observe, too, that politically protected fractional-reserve banking would generate a manipulocracy even if politicians and their special-interest clients did not particularly benefit from the Ponzified banking system’s continual expansion of currency and credit for the purpose of "monetizing" public debt. For fractional-reserve banking enables bankers to redistribute wealth from society to themselves and their economic clients through the even more extensive "monetization" of private debt, and the so-called "forced savings" that such monetary inflation and credit expansion cause. Those who say the Federal Reserve System imposes no net drain on the taxpayers, because the twelve Federal Reserve regional banks remit most of their profits to the Treasury, forget that the real looting of society takes place at the lower levels of the System, where private debt is monetized. The thousands of private "member banks" in the Federal Reserve System remit none of their after-tax profits to Treasury, or to the American people as a whole. The ability to tap the spigot of "forced savings" increases the economic, and derivatively the political, power of the bankers, their clients, and their various camp followers in big business and the financial sector--who then can use that artificially enhanced political muscle to insure that their fractional-reserve racket will never be adequately policed. The direct symbiosis between bankers and politicians when bankers "monetize" public debt, thereby enabling politicians to redistribute more wealth than they could through taxation alone, only exacerbates the problem.

Manipulocracy is not simply a matter of ideological brain-twisting, however. Successful political manipulation benefits, but does not derive solely, from the Establishment's domination of the big media, big publishing, the ubiquitous (as well as iniquitous) governmental schools, and the other spigots of mass brainwashing. True, the soapsuds of propaganda, managed news, disinformation, compulsory miseducation, and general intellectual corruption are necessary to float the Establishment's ideology that indoctrinates people to accept, advance, and even applaud their own exploitation. Yet no manipulative ideology can be politically effective for very long if the manipulated in some sufficient number do not believe that they are receiving material benefits in some sufficient amount from putting it into practice. If "politics is the art of the possible," the perdurance of any scheme of political looting depends upon its actually delivering some of the stolen goods it promises. Thus, the ideology of the modern redistributive "welfare state" would be impotent to delude voters without politicians' demonstrated ability to redistribute wealth, more wealth, and even more wealth, year after year, election after election. (That, one way or another, this flow of wealth is largely siphoned away from the great mass of people who believe they are benefitting from governmental transfer payments generally escapes notice.)

At the end of the day, the political cornucopia of stolen wealth can be filled from only two sources: taxation (political confiscation) and monetary manipulation (the financial juggling tricks of political currency and political banking). Taxation, however, is always limited by politicians' recognition of the necessity to maintain a working, producing economy that can be perennially looted. And taxation is never politically popular with its victims. If too much is taken, the grasping hand throttles the golden goose. If too many are taken from, the myth of "free" governmental services becomes unsustainable.

Redistribution of wealth through monetary manipulation, distinguishably, is essentially unlimited--except by the eventual destruction of the monetary and banking systems as a whole in hyperinflation, depression, or both. Which calamities, History teaches, politicians tend wrongly to assume will never occur while they hold office, and in any event invariably blame on someone other than themselves when the roof finally falls in. For example, when currencies in East Asia collapsed in the late 1990s, the identities of the real culprits remained obscure, while blame was very publicly laid at the doors of such abstractions as "crony capitalism." or of the ever-ready scapegoats the then Prime Minister of Malaysia singled out, the Jews. And, closer to home, when the Federal Reserve System collapsed in the 1930s, the real culprits all escaped indictments, while Franklin Roosevelt confiscated gold from innocent Americans, and prosecuted people who stood on their constitutional rights and refused to comply. Perhaps even more importantly, 99.999% of the population today has no idea how monetary redistribution operates, how it adversely affects average Americans, who benefits from it, or even that it is going on. Amazingly, most people even call Federal Reserve Notes "dollars"--when they are nothing more than bank scrip or tokens, irredeemable in real "dollars" and shrinking in real value every day. Dr. Lawrence Parks, of the Foundation for the Advancement of Monetary Education (www.fame.org), ridicules Federal Reserve Notes as "irredeemable paper tickets"--which is an especially apt description, because their use admits the ignorant sheep into the process of their own economic shearing.

All this puts a new twist on an old saying: Some people's ignorance is other people's bliss. For these reasons, politicians and bankers have shrewdly, if cynically and antisocially, amended the old, self-limiting, and unpopular procedure of political looting--"tax and tax, spend and spend, elect and elect"--into the new, boundless, and pleasantly intoxicating process of "tax and tax, inflate and inflate, spend and spend, elect and elect."
PART 3 of 7

Dr. Edwin Vieira, Jr., Ph.D., J.D.
January 11, 2006
NewsWithViews.com

PART TWO of this Commentary explained that America does not have constitutional money and banking because the Establishment wants the very opposite. In this regard...

(3) Emphasis on inflation--expansion of the supply of legal-tender fiat currency and credit--cannot be exaggerated. Because, being in principle a Ponzi scheme, the pyramid of fractional-reserve banking must continue to swell in base and height, or implode upon itself. The ballooning pyramid, however, stands precariously upside down, on the relatively tiny apex of the real economy, which is forced to support an ever-expanding load of insufficiently productive, or actually unproductive and eventually destructive, debt and speculation. (The swelling "derivatives markets" stand out as egregious examples of this "casino capitalism".) Thus, the socio-economic structure becomes increasingly top-heavy, unstable, and dysfunctional, subject to recurrent crises, and even self-cannibalistic: racing with accelerating celerity towards its own demise in hyperinflation, depression, or the one followed by the other. And with either result creating social chaos that will culminate more likely than not in a police state--and another politically orchestrated hunt for scapegoats, to turn common people's wrath away from the real culprits.

To these long-term effects, though, politicians and special-interest groups typically pay no heed. Together, the shortness of human sight and the brevity of human life are the bane of all social stability. Precisely because the acaparadores--the political looters--are mortal, but society is (relatively speaking) immortal, political looting is a paying proposition. If the fatal consequences of their misguided policies inevitably fell on the special-interest groups that promoted them, and on the politicians who enacted them, prudence (or plain fear) would effectively deter most dangerous legislation. Inasmuch, however, as one generation of public officials and their clients can often benefit immediately from some perverse policy, while leaving the next generation of taxpayers and manipulated voters to suffer its inevitable ill effects, then avarice, ambition, and the lust for power will always come to the fore. As long as the political present is a "free rider" on the economic future, politicians and special-interest groups today will always seek to feather their own nests at the expense of other people who live in a distant tomorrow. This is one reason why a firm belief in an immortal afterlife of sure and certain rewards and punishments is so important to society; and why aggressive atheism and agnosticism--especially when officially imposed or promoted--are so destructively antisocial, but so personally profitable to predatory politicians and special interests.

As to money and banking, modern politicians' only concern during their tenures is to maintain the Ponzi pyramid of fiat currency and credit in some semblance of precarious balance--notwithstanding that the illusion of temporary stability allows for continuing and even exacerbating the very real malfunctions of the system that, carried far enough, must result in its self-demolition, and with it society's economic and political disintegration. The longer the system continues to "work", the deeper the grave it digs for society. The Establishment's notion that it "controls" America's monetary and banking systems is, therefore, fundamentally delusive and fatally dangerous. At this point in the inevitably calamitous cycle of fractional-reserve central banking and fiat currency, the Establishment no more "controls" those systems than the lady from Niger who rides on the back of a tiger in the children's nursery rhyme dominates the beast. But, just as she, the Establishment cannot afford to ease its white-knuckled grip on the reins.

c. This sorry situation does not continue because the American people themselves can do nothing about it. No, indeed.

(1) Many champions of the free market say that Americans cannot have constitutional money and banking because of the present legal-tender statute: Title 31, United States Code, Section 5103. They contend that it is first necessary to repeal this statute if Americans are to make any headway against the Establishment's regime of phony rag currency, slug coinage, and Ponzified central banking. This idea is dead wrong.

Americans even now have the rights:

to make so-called "gold-clause contracts" under Title 31, United States Code, Section 5118(d)(2)--and thereby to avoid the legal-tender law altogether; and
specifically to enforce such contracts through private arbitration--and thereby largely to stay out of the General Government's and the States' kangaroo courts.

Thus, the legal-tender statute is no legal barrier to any individual who wants and knows how to circumvent it, and is willing to bear the rather high economic costs of doing so. And in a society of intelligent and patriotic people the legal-tender statute would prove to be no great economic barrier, either, because the economic burden of avoiding it would decrease in direct proportion to the number of people who took such action. So, believing that the legal-tender statute is always an insurmountable hurdle serves only to confirm people in an ill-advised resignation to the status quo.

(2) Other advocates of sound money excuse Americans' inaction on the grounds that any major reform must await an initiative from Congress, to which the Constitution delegates the power "[t]o coin Money, [and] regulate the Value thereof", in Article I, Section 8, Clause 5. This, also, is erroneous. In Article I, Section 10, Clause 1, the Constitution denies to every State the power to "make any Thing but gold and silver Coin a Tender in Payment of Debts"--thus, in that "but", plainly reserving to each State the power to make such coin "a Tender" within her jurisdiction. And surely with respect to the performance of their sovereign governmental functions of taxation, public spending, borrowing, taking of private property for true "public use" through eminent domain, and adjudications in their courts, all of the States can choose to employ gold and silver as their media of exchange to the exclusion of Federal Reserve Notes, bank deposits, or any other currency.[1] For this result, no Congressional action is necessary.

d. The plain fact is that America does not have constitutional money and banking because the majority of Americans apparently does not know enough to want them, or does not want them enough to demand them. Ignorance and disinterest, of course, must be the reasons in the representative Republic which, subject to pervasive manipulation or not, America still remains as a matter of law. But why is this so?

(1) A large number of Americans actively or passively sides with the Establishment. These Americans are disinterested in constitutional money and banking because they have (or think they have) personal pecuniary interests in unconstitutional money and banking. After all, redistribution of wealth requires not only redistributors, but also recipients of the wealth redistributed. (Ironically, though, many of these recipients are as much the victims of the system as they are its beneficiaries. For example, impoverished people already, or soon to become, utterly dependent on the collapsing Social Security and Medicare schemes.)

(2) Most Americans are woefully ignorant of their legal rights and economic options as to "gold-clause contracts". And most of those who have informed themselves about these matters shrink from employing such contracts because of the costs of using silver and gold as their media of exchange, including: (i) education costs of the parties to the contracts, their lawyers, their accountants, and so on; (ii) transaction costs of drafting the contracts, and of obtaining, transferring, and storing the gold and silver coins specified as media of payment; and (iii) such regulatory costs as determining how these transactions will be taxed, especially as to "capital gains and losses", when their values are stipulated in silver and gold, not paper currency. For these reasons, silver and gold coin will not effectively compete with irredeemable paper currency as media of exchange in the marketplace until either:

large numbers of Americans become willing to absorb the costs necessary to start such a parallel coinage system; or
a "large player"--such as a government or a major private producer or retailer--comes into the market to lower the costs for everyone; or
Americans become aware of how such technological advances as private electronic gold currency can greatly simplify the use of specie; or
governments significantly reduce the regulatory costs associated with the use of gold and silver as common media of exchange; or
the long-term costs of continuing to employ fiat currency become widely apparent and intolerable; or ·some combination of these alternatives supervenes.

(3) Finally, Americans' political leadership in the States is to a woefully large degree clueless, visionless, and feckless. Typically, if they consider the subject at all, State legislators supinely defer to Washington, D.C., on monetary policy, with no concern either that the General Government's decisions are endangering the economic security of their own States, or that their mindlessly robotic reliance on those decisions mocks this country's federal structure, destroys one of the major checks and balances in the constitutional system, and encourages hubris, irresponsibility, imprudence, and arbitrary exercises of power by the Federal Reserve System and the special interests it serves. So, although (as I have explained in earlier Commentaries) initial reform of the monetary system could begin in the States--and that is probably the only workable route to a peaceable solution--such reform will require very hard slogging.[2]

B. To be sure, another possibility for triggering reform could be a crisis which forces the issue. But what sort of crisis might that be?

1. It cannot be simply a domestic crisis. A purely domestic crisis would likely not be bring about an orderly and measured transition in the direction of constitutional money and banking--primarily because the Establishment, desperate to defend its own position, and with many of the high cards of power already in its hand, could and would thwart any change for the better.

In any domestic monetary and banking crisis, Americans could expect not only economic stringencies; uncertainty, confusion, and fear engendered by ignorance; mass hysteria whipped up by the big media; and strident political demagoguery--but also total centralization in Washington, D.C., of control over money, banking, finance, and the stock and commodities exchanges, through an industrial-strength Caesarism that would make Franklin Delano Roosevelt look like Thomas Jefferson. The result being that the Establishment would suppress the use of silver and gold as media of exchange (or even stores of value) in the open markets, and probably would be applauded by a populace that knew no better and cared less. (What would occur in the black markets, though, would likely be something else altogether.)

Even without inventing any novel "emergency powers", the Establishment, on the basis of existing statutes, regulations, and judicial precedents which could be twisted to rationalize new statutes or regulations, might easily:

require reporting of all transactions involving money or media of exchange other than legal-tender paper currency or bank deposits;
impose confiscatory taxes on all transactions involving silver and gold;
declare "gold-clause contracts" unenforceable in the courts, or illegal altogether;
confiscate gold and silver coin and bullion from private owners;
outlaw the mere possession of gold or silver in any form, without some "license" or other special governmental permission; and, overall,
establish a pervasive and thoroughgoing financial police state of surveillance, regimentation, confiscation, and prohibition aimed at "demonetizing" gold and silver.

That none of these measures would be constitutional would not deter the Establishment, just as the unconstitutionality of similar actions proved no barrier in the past. So, a domestic crisis would be unlikely to generate significant impetus for change in a constitutional direction, but would probably serve merely as the occasion and excuse for the Establishment to demolish what little remains of Americans' constitutional freedom in the area of money and banking.

Footnotes:

1, See, e.g., Lane County v. Oregon, 74 U.S. (7 Wall.) 71 (1869), and www.goldmoneybill.org.
2, See my earlier three-part Commentary, The State electronic gold currency plan.

PART 4 of 7

Dr. Edwin Vieira, Jr., Ph.D., J.D.
January 11, 2006
NewsWithViews.com

PART THREE of this Commentary explained why a domestic crisis would probably not provide an occasion for reform of America's monetary and banking systems. Continuing that analysis...

2. For constitutional change to occur, irresistible pressure for reintroduction of silver and gold coin (or their electronic surrogates) as media of exchange in American markets would have to build up before the Establishment could do much to reduce it. This could arise from a foreign crisis the Establishment could not control. Such an event might force the Establishment to return to the practical operations of constitutional money and banking in order to retain any hope of remaining in power at all. Or a foreign crisis might encourage and enable other centers of political and economic power in the federal system--such as the States--to introduce gold and silver as media of exchange in their own economies, in order to protect themselves and their citizens.

3. The eruption of a foreign monetary and banking crisis in the not-too-distant future is possible--even probable--in the Islamic world. Ironically enough, too, precisely because of what the Establishment is doing there.

a. Dar al-Islam (as Muslims denote the territory in which Islam predominates) already sees itself as targeted, besieged, invaded, and increasingly occupied by the West. For generations, the Islamic world has been the victim of a cold war: aggression that tip-toes in on the little cat's feet of economic exploitation, pseudo-intellectual ridicule and bullying, political assaults, and cultural subversion aimed at control of Muslims' primary resource (oil), and transmogrification of Islamic society along both:

socio-economic and cultural lines--the insinuation of modernism in all its pernicious forms, including population control, radical feminism, the sexual revolution, hedonistic consumerism, and rampant materialism; and, ultimately,
political lines--the imposition of what cheerleaders for Western intervention call "democracy," so as to turn Dar al-Islam into a thoroughly demoralized, degenerate, manipulated, and subservient satellite of the West.

b. Most importantly, the economic, political, social, and cultural attacks all coalesce in a religious conflict: the Western Establishment's assault on so-called "Islamic fundamentalism." Here, one must speak plainly: To the Establishment, the pejorative buzz-word "fundamentalism" means any religion that teaches belief in a personal God, in transcendent justice (that is, eternal rewards and punishments for man's conduct in this world), in absolute morality, in natural law, and ultimately and especially in objective truth. For--in the fields of money and banking, no less than in others--the Establishment cannot deal with objective truth, and therefore must deny that it exists.

Absent objective truth, the Establishment does not have to explain and defend what it is doing, because objective explanations and defenses are not possible, and therefore cannot be demanded. And if objective explanations and defenses are not necessary, the Establishment can never be held accountable for what it does. This is why the Establishment embraces the Supreme Court's idiotic dictum that "[a]t the heart of liberty is the right to define one's own concept of existence, of meaning, of the universe, and of the mystery of human life."[1] That is, "I have a right to my truth, which is not necessarily your truth"--or, there exists no real "truth" at all, only supple excuses for some people's vicious appetites, and slick rationalizations for their aggression against others.

If both the Establishment and its opponents have an equal right to define their own economic conceptions of "sound" money and "honest" banking, and their own legal conceptions of "constitutional" money and banking--and if they can define ALL "existence, * * * meaning, [and] * * * the universe," they certainly can define these lesser-included matters--then the issue reduces to the stark question of naked power: Whose "truth" is to prevail? In other words, to Humpty Dumpty's observation to Alice in Wonderland, that who is to be master is the pith of the problem. On this score, even were the Supreme Court correct that "[a]t the heart of liberty is the right to define one’s own concept of existence, of meaning, of the universe, and of the mystery of human life", nonetheless the Constitution foresees that individuals may be deprived of their liberty--and property and even lives, too--with "due process of law."[2] So, inasmuch as the Establishment controls the apparatus that claims the prerogative to tell Americans what constitutes "due process of law" (in particular, the courts and the law schools), its "right to define * * * existence, * * * meaning, * * * the universe, and * * * the mystery of human life" becomes paramount. Not a very comforting thought for any individual whose "liberty" and "property," let alone "human life," may be subject to the Establishment’s self-interested "defin[itions]."[3] When secular humanism degenerates--as it inevitably must--into secular elitism, the hoi polloi had better fear for their lives.

c. Beyond this Kulturkampf, though, the Islamic world is also assaulted by hot war: the forces of occupation that march in wearing combat boots, their deployment rationalized by a bastard progeny of the Brezhnev Doctrine, that politicians and bureaucrats puporting to speak for "the United States" may invade Dar al-Islam any time, any place, to strike at "terrorists;" occupying the land, overturning governments, killing or maiming those who resist (and many others who do not, but simply wander into the line of fire), and setting up new "democratic" puppet regimes. Not surprisingly, the whole Muslim world is desperate to fight back. (After all, how would you feel if United Nations "blue helmets" marched into America on the same theory?) But how can Muslims possibly defend themselves against the greatest military power in world history?

4. One alternative for an Islamic counterattack stands out among the rest.

a. Plainly, it would be futile for Muslims (or apparently Americans themselves, for that matter) to expostulate on the illegality of the Establishment's military adventurism. For example, that in none of these incursions to date has Congress actually "declare[d] War", or has anyone actually proven that "the common defence" and "the general Welfare" of the United States (as opposed to neo-imperialistic expansion aimed at promoting the goals of various selfish special-interest groups) are at stake, as the Constitution requires. Or that, inasmuch as the sole constitutional authority of the United States in the premises is to "guarantee to every State in this Union a Republican Form of Government,"[4] not a "democracy", the General Government can claim no power to impose "democracy" on foreign nations. Or that, because the freedom Americans enjoy consists of "the Blessings of Liberty" their Constitution secures in the Preamble, the General Government cannot bring "freedom" to anyone by violating the Constitution. Or that, because Congress's only relevant power is "[t]o define and punish * * * Offenses against the Law of Nations",[5] it cannot authorize, enable, or even tolerate the President and the Armed Forces to violate "the Law of Nations" by preemptively marching into other countries to effect "regime change" on the basis of falsified evidence of an impending attack. Or that, because the Constitution is superior to any treaty, none of the foregoing can be undertaken under color of some directive or purported authorization from the United Nations or other multi-national or supra-national entity. Bootless, indeed, would be such remonstrances. For an Establishment that refuses to obey its own Constitution will not shrink from defying "the Law of Nations" or even "the Laws of Nature and of Nature's God" to which the Declaration of Independence appealed and on which all governmental authority in America rests and to which it must conform.

b. Then, too, Muslims cannot resist these incursions in the short run by massing conventional armies, navies, and air forces. Their scientific, technological, and industrial bases are too limited for that. And they cannot win in the long run by employing the low-intensity, irregular warfare the Establishment self-righteously condemns as "terrorism", either. For the Establishment will cite such "terrorism" as an excuse for perpetuating and intensifying its offensives against Dar al-Islam, at least as long as sufficient American blood and treasure remain to be expended in campaigns of "pacification."

c. But the Islamic world could strike a sudden, debilitating, and potentially fatal blow at the Establishment's Achilles' Heel--its Ponzified monetary and banking systems--through adoption by some significant portion of the world's over 1.1 billion Muslims of gold and silver coin as their common media of exchange: specifically, the Islamic gold dinar and silver dirham. This is not idle speculation, but an imminent fact. Already the Internet is burgeoning with information that anyone who searches for web sites dealing with "the gold dinar" can discover for himself. So, what appears here is by no means news to Muslim monetary and economic theorists and activists--only to most Americans. No Muslim firebrand needs these Commentaries to understand the potential for exploiting the Islamic gold dinar and silver dirham as levers to overturn the Western Establishment's monetary and banking systems. They already know it, and are encouraging their fellow Muslims to act upon that knowledge. But every American needs to become aware of this situation, in order to take appropriate countermeasures against what almost surely is coming.

d. Perhaps most interesting is that Muslim proponents of reintroducing specie as media of exchange focus, not simply on gold (which is the almost exclusive preoccupation of the few Western advocates of sound money), but also on silver. In this, they display great insight. In the West, even the most ardent advocates of gold often deny that silver is any longer a monetary metal. These friends of sound money forget, however, that silver's monetary character, no less than gold's, is contingent on the economic and legal context in which they are used as media of exchange.

Recall that silver lost its place as a monetary metal co-equal with gold not as the result of silver's economic inferiority, but as the consequence of an international political conspiracy to "demonetize" it.[6] Which conspiracy then turned the same tactics on gold, in favor of fiat central-bank paper currency.[7] And succeeded in both instances.

Today, the partisans of legal-tender fiat currency contend that gold, as well as silver, is no longer a monetary metal. This argument is not without empirical evidence, inasmuch as neither silver nor gold circulates as a medium of exchange to any significant degree in any country's markets, let alone throughout the world, as both gold and silver once did. On the other side, though, one can ask whether contemporary fiat paper currency, being merely an evidence and instrumentality of perpetual debt, is properly "money" at all, even though it does circulate to the practical exclusion of gold and silver. These disputes prove that what markets use as media of exchange can be controlled by law, by economics driven by law, by public ignorance and apathy, by the criminal politics of conspiracies among officeholders and special-interest groups, and especially by all of these operating in tandem. So, the answer to the assertion that silver is not a monetary metal is that it has been made so, just as gold has, and that, when once again offered to knowledgeable people as a medium of exchange in a usable form and under favorable legal and economic circumstances, silver will be accepted as such, just as gold will be.

Footnotes:

1, Planned Parenthood v. Casey, 505 U.S. 833, 851 (1992), reaffirmed in Lawrence v. Texas, 539 U.S. 558, 574 (2003).
2, See Amendments V and XIV, Section 1.
3, See, e.g., Roe v. Wade, 410 U.S. 113 (1973), and Victor Sperandeo & Alvaro Almedia, Crashmaker: A Federal Affaire (2000), ch. 117.
4, Article IV, Section 4.
5, Article I, Section 8, Clause 10.
6, See, e.g., M.W. Walbert, The Coming Battle: A Complete History of the National Banking Money Power in the United States (1899).
7, See J. Livingston, Origins of the Federal Reserve System: Money, Class, and Corporate Capitalism, 1890-1913 (1986).

PART 5 of 7

Dr. Edwin Vieira, Jr., Ph.D., J.D.
January 11, 2006
NewsWithViews.com

PART FOUR of this commentary warned that the Islamic world could precipitate a monetary and banking crisis in the West by reintroducing gold and silver coin as the media of exchange among Muslims. Continuing that analysis...

e. Even were circumstances propitious for the use of both silver and gold as media of exchange, would not Muslims, no less than Americans, suffer from the same disincentives against employment of specie coins in everyday transactions? No. Indeed, quite the opposite--because at least two "large players" exist for catalyzing the transition throughout Dar al-Islam from fiat currency to silver and gold coin (or electronic variants thereof).

(1) The first "large player" could be the Islamic oil reserve, on access to which the continued economic functioning, let alone prosperity, of the West depends. If major Islamic oil-producing nations began to demand payment for their oil in gold and silver (specie), rather than some fiat currency such as Federal Reserve Notes (FRNs), Western countries would have no choice (short of invasion of those nations and expropriation of their oil) but to pay in specie. To obtain that specie, they would have two choices: (i) to exchange their own products for specie, to that extent returning directly to a "specie standard" and demonetizing FRNs in their own economies; or (ii) to remain strictly on the FRN standard and exchange FRNs for specie as needed. If they exchanged FRNs for specie, however, the value of specie as against FRNs would rise, because (all other things remaining equal) if the supply of specie remains constant, but the demand for it increases, the "price" of specie in the medium of exchange used to purchase it must go up. Eventually--and most probably quite soon--parties that found themselves constantly exchanging the FRNs they received in other economic transactions for the specie necessary to purchase oil would start demanding to be paid in specie in those other transactions, so as to eliminate the cost of exchanging FRNs for specie. This would depreciate the value of FRNs even more. Gradually, this process could drive the entire economic systems in those countries dependent upon Islamic oil in the direction of a new "specie standard."

This scenario depends, however, upon operation "from the top down:" that is, the leaders of various Islamic oil-producing nations must decide to demand specie for their oil. These leaders form very small parts of Islamic society. Some of them are the Western Establishment’s clients, collaborators, or quislings. Others are susceptible to bribery, blackmail, or the ever-present threat of being Saddamized with "regime change." Few would be likely to risk the loss of their own power, prestige, and perquisites for the speculative general welfare of common Muslims.

(2) The second "large player" could be Islam--the religion--itself. This scenario is more likely, because its operation comes "from the bottom up:" that is, through the great mass of Muslims themselves--who, to a very significant degree, have nothing to lose and everything to gain.

The generally acknowledged "five pillars" of Islam include:

bearing witness that there is no God but Allah, and that Muhammad is His Prophet;
daily prayers (salaat);
fasting in Ramadan;
the hajj, or pilgrimage to Mecca; and
paying zakat (variously, zakaat or zakah), what non-Muslims might call a tithe.

The tithe is mentioned along with daily prayers over seventy times in the Qur'an. A commonplace analogy is that, just as prayer is an act of worship Muslims perform with bodily actions, the tithe is an act of worship Muslims perform through economic transactions. It is religiously obligatory charity, amounting to 2-1/2% of a Muslim's wealth above a certain exemption, that the faithful must pay year around, in money or in goods, directly to the poor or to some charitable agency. Those who fulfill this duty are promised rewards in the world to come; those who evade it are threatened with eternal punishment. Most importantly in the context of this Commentary, Islamic law holds that: (i) mere debt cannot function as money; and therefore (ii) the tithe, if paid in money, must be paid in silver or gold. So typical Western fiat currencies, which are all nothing but debts politically privileged to circulate as currency, cannot be used to pay the tithe.

Little insight is necessary to realize why a religious-cum-political movement that restored the Islamic tithe in the full strictness of Islamic law could be the motivation and the catalyst for reintroduction of gold and silver coin (the dinar and dirham) as common media of exchange throughout the Muslim world:

The tithe is religiously required of all Muslims.
If paid in money, it must be paid in silver or gold.
It must be paid regularly (at least yearly) as proceeds are earned.
Because the tithe must be paid in silver and gold, and regularly, Muslims would soon require that silver and gold coin also be received in the underlying transactions on which the tithe is assessed. For Muslims would not want to incur the added expense of resorting to specie brokers to make the necessary exchange from fiat paper currency to precious metals. Moreover, the tithe not only would be paid in by the productive, but also would be paid out to the needy, who would then themselves immediately spend it back into the Islamic economy, completing the cycle of circulation. So the Muslim world would increasingly, and perhaps soon exclusively, operate with silver and gold coin as its common media of exchange in day-to-day transactions (that is, on the basis of what Americans know as "gold-clause contracts").

Use of specie throughout Islam would

stimulate productive economic activity;
promote the elimination of usury (which is inherent in modern fractional-reserve banking and fiat currencies);
reduce, and perhaps eliminate, the circulation of Western fiat paper currencies in Dar al-Islam, thereby curtailing the economic power and influence of the Western central banks that emit them;
create economic, and thus engender political, unity among Muslims; and overall
strike a blow at Western economic imperialism--which operates through and in conjunction with politically privileged fractional-reserve banks--and therefore at Western political and cultural imperialism, too.

In this process, the religious aspect would be the central, compulsive, driving, and rewarding force. Muslims would turn to gold and silver coin, not simply in spite of any attendant economic costs, but even because those costs would become part and proof of their sacrifice and service to Allah. Thus, "Islamic fundamentalism" would overcome economic transaction costs. Faith would prevail over the materialistic scramble for profit. Spiritual man would prove superior to economic man. And the increasing benefits from the expansion of the use of silver and gold coin as media of exchange would provide religious, as well as economic, confirmation of the wisdom of this course: Allah blesses those who obey Him. Not only in Dar al-Islam proper, either, but also in non-Islamic countries where Muslims constitute sizeable segments of the populations.

f. Into this process would doubtlessly intrude, sooner rather than later, what most scholars recognize as, if not the sixth pillar of Islam, at least tangential to all five: jihad.

(1) In Arabic, jihad means simply to strive or to struggle. Specifically in Islam, jihad imports dedication of a believer's total resources and application of his utmost efforts to the promotion of Islam and against its enemies. This effort ranges from the believer's inward, personal, perhaps invisible jihad to perfect his own faith, to his outward, overt, and collective participation in various worldly jihads to defend, advance, and even expand Islam across a hostile globe.

Today, "the inner jihad" increasingly merges with "the outer jihad," because Muslims quite rightly understand Western political, economic, cultural, and especially military incursions into the Islamic world as designed to defame, subvert, corrupt, and ultimately destroy "Islamic fundamentalism"--that is, true Islam--and to replace it with pseudo-religious modernism, then indifferentism, and then the apostasy and even atheism that rampant materialism and hedonistic consumerism depend upon and foster. So, whatever Muslims can, in justice, do in self-defense to deter, resist, and defeat such subversives, aggressors, and oppressors, and preserve their freedom to live in their own lands according to the tenets of Islam, they can hardly be faulted for wanting, and trying, to do.

(2) Besides, to Muslims the use of silver and gold as means of self-defense in a jihad against Western imperialism and neo-colonialism would satisfy the fundamental criteria of a just war. First, in Muslims' eyes the struggle is both unavoidable and purely defensive. They see the West as having launched political, economic, cultural, and military aggression against Dar al-Islam, and as promising more of the same, if not worse, in the misnamed but perpetual "war on terror." (In principle, this war will never end while a single Western soldier sets his foot on Muslim ground.)

Second, Muslims can expect to win the monetary battle--because, in any fair competition, silver and gold will inevitably triumph over fiat paper currencies and bank credit.

Third, an Islamic victory would not entail Muslims' conquest, oppression, or exploitation of the West, but instead the economic and then political and cultural liberation of Western peoples from their own domestic deceivers, exploiters, and oppressors. The economic freedom that silver and gold provide would encourage, enable, and empower Western peoples themselves to overthrow the corrupt and corrupting regimes that propagandize, plunder, and persecute them. So, rather than dividing Muslim from Western peoples, this jihad would forge a new solidarity amongst them all.

Fourth, Muslims would wage this jihad not merely for their own personal gain, but also on behalf of universal principles of truth and justice, for the benefit of all humanity. Their truth would prove to be everyone's truth, because the laws of economics apply universally.

Thus, on any theory, Muslims could, and probably will, embrace the use of silver and gold as fully justifiable means of "outer jihad." At base, too, such use does not depend even upon Muslims' invoking the right of self-defense against alien aggressors, because it is required in any event by the Islamic pillar of zakat: that is, it is already part and parcel of every believer's "inner jihad."

(3) True, Muslims' adoption of silver and gold as their exclusive media of exchange would have profound economic, and then political, effects on the West--all of them negative from the Establishment's point of view. But if the West's monetary and banking systems did suffer crises, or even collapsed, it would be the Establishment's own fault for foisting such inherently flawed and dishonest schemes on the people, and the people's own fault for allowing themselves to be so misled and misused--and, if the truth be told, set up for the fall.

Crises in and the collapse of the West's monetary and banking systems might ultimately be all to the good of everyone concerned, however, not only because they would impede the Western Establishment's incursions into Dar al-Islam (and thereby reduce the threat of endless world war), but also because they might inspire Western peoples to take back control of their own countries.

PART 6 of 7

Dr. Edwin Vieira, Jr., Ph.D., J.D.
January 11, 2006
NewsWithViews.com

PART FIVE of this Commentary explained how Muslims' adoption of gold and silver coin as their media of exchange could happen, and what effects it could have. Continuing that analysis...

5. It may seem paradoxical that the Western Establishment's monetary and banking systems could collapse, simply as the result of Muslims' reestablishment among themselves of honest monetary weights and measures. But that reintroduction of specie as media of exchange in the Islamic world would have immediate and profound economic, political, and social effects in the West cannot be doubted.

a. The exchange values of silver and gold would increase dramatically as against fiat currencies, and the values of fiat currencies would correspondingly decrease, especially with Western currency traders and other speculators in the forefront of selling those currencies short. Imagine simply what the effect in the gold and currency markets would be if, say, 500,000,000 Muslims exchanged Western paper currencies for but 1 ounce of gold apiece over the next two weeks.

b. Through the inexorable operations of the free market, pressure would build for:

employment of "gold-clause contracts" in the West;
American businessmen to start pricing ordinary goods and services in silver and gold;
American banks to make available silver and gold checking and savings accounts--and, if they refuse, for new financial institutions to emerge that will assist people in employing silver and gold as stores of value and media of exchange; and
governments to integrate the precious metals into their own monetary transactions, especially to maintain the real values of their tax revenues, and to pay lenders and other economically savvy creditors who will accept nothing else.

c. All this would eviscerate the Western Establishment's credibility internationally and encourage challenges to its leadership domestically. In particular, Muslims throughout the world would realize that the economic, political, and military power the Establishment now exercises over Dar al-Islam can be thwarted, and even rolled back, if they rigorously perform their religious duties. Thus, the workings of the free market would actually encourage, strengthen, and prove right "Islamic fundamentalism." In the monetary field, economic science would validate faith. "The invisible hand" would be proven the product of "intelligent design."

C. How the Establishment would respond to these challenges is easy to envision. The fundamental predictive principle is that the Establishment cares about only the maintenance of its own power, to be achieved at any cost, unless and until faced down by countervailing power.

1. The Western banking banditti and their political fantoccini would probably try to protect themselves through police-state attacks against the market's spontaneous reintroduction of silver and gold as media of exchange. Employing such measures domestically, though, would have little effect internationally, except to encourage Muslims to go even further and faster, by evidencing to them how effectively their use of the dinar and dirham is deranging what they denounce as "the Great Satan" in his own lair. And to encourage other people everywhere else throughout the world to consider dumping fiat currencies in favor of gold and silver.

2. To be sure, the Establishment might attempt to apply financial police-state tactics against Dar al-Islam itself, such as:

embargoes on credit to those parts of the Islamic world that employ silver and gold as media of exchange;
refusals to deal with any Islamic nation that will not accept Western fiat currencies and bank credits on at least equal terms with specie;
resurrection of Franklin D. Roosevelt's "Trading with the Enemy Act" ploy to rationalize world-wide quarantines, sterilizations, sequestrations, and even seizures of silver and gold from Muslims (and perhaps everyone else);
denunciation of silver and gold as "monetary weapons of mass destruction," or some other gobbledygook calculated to stir up hysterical fear of and hatred against use of the precious metals as money, and against those who advocate such a course; and perhaps even
demands that Islamic nations either suppress their own citizens' use of silver and gold or be subjected to B-52 carpet-bombing, invasion, occupation, and "regime change."

If the Establishment lashed out with such frantic tactics, however, even the most somnolent Muslims would likely be steeled in their commitment to reintroduce a monetary system in conformity with the Qu’ran.

Whether the Establishment could effectively employ the relatively small military forces of the United States and its allies against 1.1 or so billion Muslims (almost 20% of the world's population) to suppress their use of gold and silver remains to be seen. In light of its resurrection, appropriation, and worldwide application of the Brezhnev Doctrine, however, the Establishment can be expected to try.

3. All of which portends a possible rapid descent into the hellish conditions of an undeclared, unending world war, both abroad and at home. Of necessity, the war would be undeclared, because the true antagonists would be the Western Establishment's bankers and their political cronies, on the one side, and the common people of the entire world (Americans included), on the other--and this fact could not be allowed to be exposed in Congress or the media. In this war, victory for one side would necessarily entail the utter destruction of the other side: Either Islam, or the Establishment, would have to go under. The bankers and their puppet politicians would understand this, even if most Americans would not.

D. What should common Americans do to protect themselves and their country--as opposed to the Establishment--from these dangers? They still have time, albeit probably not much. Although Muslim theorists and activists have already become vocal on this issue, average Muslims in large numbers are only just awakening to the silver lining in the clouds of Western warplanes and cruise missiles threatening them, and to their golden opportunity to play a leading role on the world's economic, and even political, stage. It may be years (although, perhaps, not many of them) until charismatic Islamic religious leaders emerge to preach a return to honesty according to the precepts of the Qu’ran, and hundreds of millions of common Muslims then follow them. But when such a leader--some Mahdi--finally appears, watch out!

1. Americans must recognize that, in justice, morality, law, and common sense, the Establishment has no valid claim to stop Muslims (or anyone else) from using gold and silver as their media of exchange. Such is all Muslims' legal right and, of more consequence yet, their religious duty. Moreover, the use of gold and silver is every American's constitutional right, too, and the Establishment's political duty, as summarized in the absolute mandate that "[n]o State shall * * * make any Thing but gold and silver Coin a Tender in Payment of Debts,"[1] Congress's power "[t]o coin Money, [and] regulate the Value thereof, and of foreign Coin,"[2] and the principle that "whatever functions [the government] are, by the Constitution, authorized to perform, they are, when the public good requires it, bound to perform."[3] So, on no valid reasoning can the Establishment deny to Muslims (let alone to Americans) what the Constitution proclaims as a fundamental individual right, limitation on governmental power, and even governmental duty.

2. Americans face an inevitable meltdown of their present monetary and banking systems no matter what the Islamic world does or does not do. If Muslims turned to silver and gold, however, they would provide everyone else with an example throughout Dar al-Islam of what needs to be accomplished globally, and assistance in bringing about positive monetary change everywhere. Obviously, if America's monetary and banking systems are headed for collapse anyway, rebuilding them on an economically and morally sound basis will be far easier if a large segment of the world is already employing silver and gold as its media of exchange. So, instead of blaming Muslims for causing a monetary and banking crisis that the Establishment set in motion decades ago, Western and other peoples should thank them for taking the initiative, and see them as the source of necessary succor after the monetary and banking roof falls in.

3. Rather than allowing the Establishment to react in its usual ham-fisted manner to a global monetary and banking crisis the Establishment itself has caused, Americans should take control of their own monetary destiny, and minimize their country's vulnerability, by themselves restoring constitutional money and banking as soon as possible--if not by a single comprehensive Congressional reform, then incrementally State by State, or as a last resort even individual by individual.

a. Initial legislative reforms must come State by State, because a national political movement for sound monetary reform simply does not exist in this country, and cannot be created in the foreseeable future. Too few people understand the problem, and apparently even fewer care enough to do anything about it. In some small States, however, leaders with insight and foresight may emerge, the electorate may be educated, progress may prove possible, and a paradigm for constructive change may be created. Moreover, State-by-State reform from the bottom up is more desirable than Congressional reform from the top down, because it will allow for careful experimentation with and refinement of the methods for introduction of silver and gold into each State’s financial operations and economy. A workable basic program already exists, as my earlier three-part Commentary, The State Electronic Gold Currency Plan, explains. There being a way, all that is needed is the will.

b. Congress could play a subsidiary, albeit nonetheless important, role in reform, however, by enacting legislation to remove all the financial-cum-legal disabilities that now hinder the use of silver and gold as media of exchange. For example, all exchanges of silver and gold useful as currency (whether in the form of coins, bars, electronic units, or otherwise) for Federal Reserve Notes and United States base-metallic ("clad") coins should be exempted entirely from National and State "capital-gains taxes," "sales taxes," and so on--so that these exchanges are treated, for all tax purposes, as no different from exchanges of Federal Reserve Notes for United States base-metallic coins and vice versa. That is, all such money-for-money exchanges should be declared to be nontaxable events.

Inasmuch as Congress requires the Treasury to mint gold American Eagle and silver Liberty coins to the extent necessary to meet public demand, and inasmuch as Congress has declared these coins to be "legal tender" equally with Federal Reserve Notes and base-metallic coins, thereby facilitating the use of the Eagle and the Liberty as currency, it is incongruous in the extreme that the exchange of (say) "$450" in Federal Reserve Notes for a "$50" gold American Eagle coin should be subject to a "sales tax," or that an exchange of a "$50" gold American Eagle coin for "$450" in Federal Reserve Notes should be subject to a "capital-gains tax" simply because the coin was originally obtained for "$420" in Federal Reserve Notes. As such taxes hardly draw substantial revenues into the National and State treasuries, they could be foregone with no appreciable burden, while simultaneously encouraging the use of silver and gold as media of exchange, and thereby providing at least a form of monetary insurance that would prove absolutely necessary for the country should events such as those described in this Commentary come to pass.

PART 7 of 7

Dr. Edwin Vieira, Jr., Ph.D., J.D.
January 11, 2006
NewsWithViews.com

PART SIX of this Commentary explained what the Establishment and common Americans might do in the face of adoption by the Islamic world of gold and silver as media of exchange. Completing that analysis...

E. Finally, in all of this, average Americans should not assume self-righteous airs. They deserve to be in danger. And it is their responsibility to take appropriate action. For, according to the theory of "self-government" on which the United States supposedly operates, they have brought all of these perils upon themselves.

1. A people's accountability for the actions of their government is proportionate to that government's representative nature. If public officials are chosen through fair elections, and their powers defined and limited by a constitution which the people themselves retain the right and power to interpret, amend, and enforce, then the people are ultimately responsible for every illegal act that those officeholders perpetrate in their name and that the people refuse or fail to punish. The principals must answer for the damages caused by the acts of their agents that the principals empowered and tolerated those agents to commit.

If, knowing or with reckless disregard of the facts, the people actively aid and abet, accede to, applaud, approve, accept, or even acquiesce in the dishonest and criminal acts of public officials and the special interests that suborn them, they are just as responsible as the perpetrators. Perhaps even more so, because it is the people's legal and moral duty, as well as their own self-interest, to arrest such behavior and arraign the malefactors before the bar of justice, inasmuch as the people put the malefactors into positions of power in the first place.

The Constitution makes pellucid in its Preamble that We the People are the authors of, and thus necessarily both legally and morally accountable for, the laws of the United States and their applications and misapplications by the public officials We the People select to enact and administer them. So, if We the People stand idly by, while malevolent officeholders commit criminal acts in their name and under the color of their laws, their silence betokens consent, their consent imputes guilt, and their guilt renders them fit subjects for retaliation by the victims of the officeholders' crimes.

A blind, unthinking patriotism cannot excuse inaction. A patriot loves his country and stands behind its legitimate authority. The essence of America is her Declaration of Independence and Constitution. A citizen who does not check every act of every public official against those documents is no patriot, only a chauvinist. No one may hide behind the plea that he has a duty to support the government "right or wrong." For if public officials are wrong (in the sense of violating the Constitution), then to that extent they do not constitute "the government" at all; their acts are not "governmental" acts but mere private wrongdoing; and every patriot's constitutional duty is to oppose them and rectify the situation. Indeed, that people demand what is right in the face of official wrong is the essence and the test of true patriotism.

On the other side, neither can it be a valid reason for inaction that the present political system is thoroughly corrupt. If it is, who let it degenerate to that level, if not the American people themselves? Who allows it to remain corrupt, if not they? And who will ever correct the situation, if they do nothing?

That certain individuals in temporary control of the apparatus of the General Government have launched a global attack against the Islamic world (and, truth be told, against Islam itself) is no excuse for common Americans' complicity or inaction. As the first, most important, and defining principle of constitutionalism teaches, not all acts that persons in public office may perform are legitimate acts of government. No electoral mandate, party platform, political policy, or majority vote in Congress or the Supreme Court can justify a war of imperial aggrandizement. As the Preamble to the Constitution emphasizes, We the People delegated powers to the General Government "to provide for the common defence", not to attack other nations. Indeed, aggression against other nations violates "the Law of Nations", "Offenses" against which the Constitution empowers Congress "[t]o define and punish,"[1] not to approve and facilitate. So, their perpetrating a policy of international aggression is a sufficient and compelling reason for removing from office--and, one would hope, prosecuting to the utmost--not only those who actually put such a policy into operation but also those who advise, devise, and promote it, as well as those who have the power and duty to intervene, but stand silently by, watching everything but doing nothing. That, surely, is the fundamental and fully justifiable lesson of the war-crimes trials of Nuremberg and Tokyo, which are now part and parcel of the precedents that make up "the Law of Nations".

Therefore, if domestic public officials in this country oppress foreigners--and, on the basis of the predictable consequences of that oppression, then attempt to subject Americans to the further oppression of a domestic police state--We the People have a duty (and, indeed, a desperate self-interest), not to obey them, but to change the personnel in, or if necessary even to pull down the structure of, the erstwhile "government"--or be held at least morally accountable before the entire world. As the Declaration of Independence emphasizes, "when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security." "[I]t is their duty". Yet what course of action are far too many Americans following? Resistance at the polls? Remonstrances to political leaders? Even self-preparedness for an ultimate day of reckoning with the monetary, banking, and other crises the Establishment has made inevitable? Or a self-imposed reluctance to face reality, coupled with retreat into the fantasylands of "sports", "entertainment", and general hedonism--while continually re-electing the evildoers or their political clones?

2. A collapse of the Establishment's Ponzified monetary and banking systems might strip Americans of their black glasses of willful blindness. The key qualification, of course, is "might". That vanishingly few Americans have awakened to their victimization, and identified the villains responsible for it, suggests that far too many Americans may never arouse themselves from their self-imposed slumber. Admittedly, that the Establishment's monetary and banking policies rest on lies, larceny, and thoroughgoing lawlessness may not be as obvious as that Pearl Harbor suffered no "sneak attack" or that the cross fire in Dealey Plaza was the work of no "lone gunman". Nonetheless, the evidence is accessible to and understandable by every American of average intelligence who bothers to search the open literature. Indeed, common sense teaches that the monetary and banking systems cannot be less corrupt than the total political-cum-economic regime of which they constitute important parts--and in the nature of things must be expected to be even more septic, the love of money being the root of all evil.

From even superficial research, every American can discover the absence of any truly patriotic "public interest" in this country's monetary and banking systems. And, just as easily, Americans can uncover the presence of parasitic special interests, composed of a small number of identifiable individuals self-consciously organized in families, groups, corporations, and so on, who originally put central banking across in 1913, who systematically expanded its powers thereafter, and who now ruthlessly run it for their and their clients' personal advantages (and, as a necessary consequence, the personal disadvantages of everyone else).[2] Yet, with all this information readily at hand, most Americans have failed to educate themselves. And the few exceptional individuals have proven unable, so far, to translate their knowledge into a movement for monetary and banking reform--proving, once again, that no man is likely to be taken for a prophet in his own country.

In historical context, this is hardly surprising. In the last mammoth crisis of fractional-reserve central banking in the United States--the banking collapse of 1931-1932 and the Great Depression that the Roosevelt regime perpetuated until World War II--Americans by the tens of millions allowed themselves to be deluded, manipulated, and even stampeded by the Establishment into sinking the vampiric fangs of political banking and political currency into America's throat even more deeply than ever before. Proving not only that Experience keeps a dear school, but also (and more depressingly) that her students rarely learn the lessons she teaches most emphatically.

So, if new monetary and banking crises were to occur in the near future, in the course of Muslims' adoption of silver and gold as their media of exchange, whom would many Americans be likely to blame? Or, more realistically put, whom would the Establishment deceive many Americans into blaming?

On any moral, political, or economic calculus, no blame should properly attach to Muslims. All peoples, everywhere in the world, have a natural, inalienable right to choose whatever honest media of exchange they desire. And of all contemporary media of exchange, the only ones that can be deemed as honest as human endeavors allow are silver and gold. Moreover, Americans' own Constitution requires that their governments--National, State, and Local--employ silver and gold as their official media of exchange, to the exclusion of any other. So, Americans cannot possibly fault Muslims (or anyone else) for using the very media of exchange We the People themselves have mandated for the United States.

Rather, Americans should condemn their own erstwhile public officials, and the special interests that pull those Pinocchios' strings, for leading this country into such a morass by launching a perpetual global assault on Islam while America remains vulnerable to the most effective--indeed, devastating--counterattack Muslims could employ in defense of themselves, their countries, and their religion.

The Constitution provides that "[t]he United States shall guarantee to every State in this Union a Republican Form of Government."[3] This presumes that what the Preamble calls the "more perfect Union" of "[t]he United States" will collectively remain "a Republican Form of Government," too, because the Union consists of individual States that are each "guarantee[d]" to be of such "Form." No republic, though, can survive if its ultimate guardians, its people, remain mere dumb spectators while their own erstwhile "representatives" engage in coldly calculated, systematic deracination, depravation, depredation, and demolition of their country.[4] In this, too, perhaps Americans can learn a lesson, or heed a warning, from the Islamic world: As the Sunan Al-Nasa'i[5] recites,

A man asked the Messenger of Allah: "What kind of jihad is better?" He replied, "A word of truth in front of an oppressive ruler!"

Footnotes:

1, Article I, Section 8, Clause 10.
2, See M. Rothbard, Wall Street, Banks, and American Foreign Policy (1995), at; [Read] J. Livingston, Origins of the Federal Reserve System: Money, Class, and Corporate Capitalism, 1890-1913 (1986); G. Kolko, The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916 (1963); W. Greider, The Secrets of the Temple: How the Federal Reserve Runs the Country (1987).
3, Article IV, Section 4.
4, Just so that no one intent on misconstruing my words can attribute the promotion of "racism" to me, the reader should understand that I use the word "deracination" to mean a "detachment from the customs and traditions of one's country". See Webster's Third New International Dictionary (1971), at 607. This preemptive explanation would not be necessary were the political world not filled with people who are as unscrupulous as they are illiterate.
5, One of six leading collections of hadith, recognized by Sunni Muslims.

Edwin Vieira, Jr., holds four degrees from Harvard: A.B. (Harvard College), A.M. and Ph.D. (Harvard Graduate School of Arts and Sciences), and J.D. (Harvard Law School).

For more than thirty years he has practiced law, with emphasis on constitutional issues. In the Supreme Court of the United States he successfully argued or briefed the cases leading to the landmark decisions Abood v. Detroit Board of Education, Chicago Teachers Union v. Hudson, and Communications Workers of America v. Beck, which established constitutional and statutory limitations on the uses to which labor unions, in both the private and the public sectors, may apply fees extracted from nonunion workers as a condition of their employment.

He has written numerous monographs and articles in scholarly journals, and lectured throughout the county. His most recent work on money and banking is the two-volume Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution (2002), the most comprehensive study in existence of American monetary law and history viewed from a constitutional perspective. www.piecesofeight.us

He is also the co-author (under a nom de plume) of the political novel CRA$HMAKER: A Federal Affaire (2000), a not-so-fictional story of an engineered crash of the Federal Reserve System, and the political upheaval it causes. www.crashmaker.com

His latest book is: "How To Dethrone the Imperial Judiciary"

He can be reached at:
13877 Napa Drive
Manassas, Virginia 20112.

Sound Money Bill Imperative for the States of the Union

There is no "one size fits all" bill, each bill must be written to satisfy a state's statutes, below are examples:

Opening Statement by
Rep. Bob Wagner

Montana Sound Money Bill HB 639 - Hearing on March 12, 2009, Montana: Opening Statement by Rep. Bob Wagner; and expert testimony of Dr. Edwin Vieira
Dr. Michael Parks - this is a video presentation that should be watched by all Americans regardless of party affilation.
With permission, five pages from Dr. Edwin Vieira's book, Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution (Two volumes, 1670 pages, 6,598 footnotes):

1 - Model Congressional Act for the Protection of Person Who Receive, Pay, and Exchange Various Forms of United States Coin and Currency. (2 pages)
2 - Model State Act for the Moneitization of Silver and Gold Coin with Respect to Essential Sovereign Functions. (3 pages)
Rep. Bobby Franklin

Rep. Bobby Franklin has introduced this bill in the current session; Georgia State Legislature - HB 877 force federal taxes to be paid to the State
For more on the relationship between the states and the federal income tax, please watch this video where Constitutional attorney, Lowell Becraft, Jr., explains in succinct detail beginning 4:16 into the video.
Sovereign State Depository
Borrowing Currency into Circulation - Loaning currency into circulation is an instrument of silent warfare as is also expansion and contraction of the currency supply.

Review of Pieces of Eight:

''Paper money has had the effect in your State that it ever will have, to ruin commerce -- oppress the honest, and open a door to every species of fraud and injustice.''

"What Vieira subsequently shows is that the Constitution’s monetary strictures, like its strictures in so many other areas, have been evaded and destroyed by politicians and that the Supreme Court has chosen to turn a blind eye to the monetary shenanigans of Congress. The surprising conclusion of Pieces of Eight is that there is no legal authority for our present system of irredeemable fiat currency. “To introduce the FRN (federal reserve note) as a new paper currency in 1913, the government had to tie it by a right of redemption to the circulating money of that day, gold coin. And then, to transmogrify the FRN into a currency fit for limitless inflation, the government had to cut that tie to gold (and silver as well)… If the FRNs were not ‘dollars’ when they explicitly promised to pay in gold, they did not magically become ’dollars’ when they stopped promising to pay in anything at all, and statutorily can be redeemed in nothing better than base-metallic coin,” Vieira says.

"Inflation. There’s the key. The Constitution gave the United States a monetary system under which money could be coined by the government, but not created out of thin air. Once they had been freed from the Constitution’s restraints, politicians were able to spend money without the unpopular need to levy taxes. Absent the monetary mismanagement of our central bank, the Federal Reserve, our economy would have been spared the boom and bust cycles that we have endured at its clumsy hands. In the court of history, those who planned and acquiesced in the destruction of the Constitution’s monetary framework have much to answer for."

BIOS

Dr. Edwin Vieira

Edwin Vieira, Jr., holds four degrees from Harvard: A.B. (Harvard College), A.M. and Ph.D. (Harvard Graduate School of Arts and Sciences), and J.D. (Harvard Law School).

For more than thirty years he has practiced law, with emphasis on constitutional issues. In the Supreme Court of the United States he successfully argued or briefed the cases leading to the landmark decisions Abood v. Detroit Board of Education, Chicago Teachers Union v. Hudson, and Communications Workers of America v. Beck, which established constitutional and statutory limitations on the uses to which labor unions, in both the private and the public sectors, may apply fees extracted from nonunion workers as a condition of their employment.

He has written numerous monographs and articles in scholarly journals, and lectured throughout the county. His most recent work on money and banking is the two-volume Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution (2002), the most comprehensive study in existence of American monetary law and history viewed from a constitutional perspective. www.piecesofeight.us

He is also the co-author (under a nom de plume) of the political novel CRA$HMAKER: A Federal Affaire (2000), a not-so-fictional story of an engineered crash of the Federal Reserve System, and the political upheaval it causes. www.crashmaker.com His latest book is: "How To Dethrone the Imperial Judiciary" ... and Constitutional "Homeland Security," Volume One

Dr. Lawrence Parks

Dr. Lawrence Parks is the Executive Director of the Foundation for the Advancement of Monetary Education (FAME). He has broad experience in academia, in business, and in finance.

He holds a Ph.D. in Operations Research from the Polytechnic University. Dr. Parks has studied the money issue for more than thirty years. His writings have appeared in Pensions & Investments, The Economist, The Washington Times, The Freeman, The Free Market, American Outlook, The United States Congressional Record, National Review, and others.

He is an active member of many civic and social organizations, a member of The United Association for Labor Education, The National Writer’s Union, UAW 1981, AFL-CIO, and he is a frequent speaker on the Fight for Honest Monetary Weights and Measures.

His focus is on how our present fiat monetary system operates to destroy savings, pensions and jobs and what to do about it.

Economic / Job Security

A PRACTICAL GUIDE TO “GOLD CLAUSES” By Dr. Edwin Vieira, Jr., Ph.D., J.D.November 22, 2009

A PRACTICAL GUIDE TO “GOLD CLAUSES”
By Dr. Edwin Vieira, Jr., Ph.D., J.D.
November 22, 2009