Busting the
Myths of Money
UPMA Sept. 2014
We don’t have a minimum wage
problem. We have a money problem!
Three Myths of United States Money
1.
The Dollar is anything Congress declares it to be.
2.
The value of Money is anything the I.R.S. says it is.
3.
Centralized Banking is necessary for a stable
economy.
Myth 1: The Dollar is anything
Congress declares it to be!
•
Can Congress (or the courts for that matter) change
the definition of words used in the Constitution
without a constitutional amendment?
•
Eisner v. Macomber, 252 U.S. 189, 206 (1920)
• Congress cannot by legislation alter the
Constitution, from which alone it derives its power
to legislate, and within whose limitations alone that
power can be lawfully exercised.
Examining Myth 1
Constitutional Units of Measure:
Definition when the Constitution was
Ratified
Unit of
Measure
Times Stated
Year
33
One revolution of the earth around the sun’s axis
Day
21
One revolution of the earth around it’s own axis
Hour
1
15 degree rotation of the earth around it’s own axis
Mile
1
A unit of linear measure equal to 5,280 feet
Dollar
2
A coin containing 371.25 grains of silver
Eisner v. Macomber, 252 U.S. 189, 206 (1920)
Congress cannot by legislation alter the Constitution, from
which alone it derives its power to legislate, and within whose
limitations alone that power can be lawfully exercised.
Money of the Constitution
Article I Section 8, Clause 5
[The Congress shall have Power] To coin
Money, regulate the Value thereof, and of
foreign Coin, and fix the Standard of Weights
and Measures;
Article I Section 9, Clause 1
… a Tax or duty may be imposed on such
Importation, not exceeding ten dollars for
each Person.
Article I Section 10, Clause 1
No State shall … make any Thing but gold
and silver coin a Tender in Payments of
Debts.
Amendment VII
In Suits at common law, where the value in
controversy shall exceed twenty dollars, the
right of trial by jury shall be preserved, and no
fact tried by a jury, shall be otherwise reexamined in any Court of the United States,
than according to the rules of the common law.
What is One Dollar?
One Dollar is a standard unit of measurement
Money:
371 ¼ grains of Silver minted
= $1.00
Analogous
Time:
24 Hours = 1 Day * 7 = 1 Week
Weight:
16 Ounces = 1 Pound * 2000 = 1 Ton
Length:
1 Inch * 12 = 1 Foot * 3 = 1 Yard
Does the Constitutional Dollar
standard exist today?
•
Yes! How do we know?
•
The number $1.292929292.
It is derived from the
constitutional dollar unit.
Title 31 U.S.C. §5116(b)(2):
The Secretary shall sell silver under
conditions the Secretary considers
appropriate for at least $1.292929292 a
fine troy ounce.
Congress’ Responsibility to
Regulate the Value of Coin
Key:
1 troy oz = 480 grains
1 troy oz = 31.1034 grams
1 troy oz = 1.09714 oz
X 100 =
(4,630 grains
of Copper)
1 Cent
1 Dollar
(46.3 grains
of Copper)
(371.25 grains Silver)
X 10 =
(3,712.5 grains
of Silver)
1 Dollar
1 Eagle (10 Dollar)
(371.25 grains Silver)
(247.5 grains Gold)
Congress has the responsibility to regulate the value of all
minted coins to the fixed pure metal Dollar standard
Supreme Court - Coin Money is a
Constitutional Requirement
United States v. Marigold, 50 U.S. (9 How.) 560, 567568 (1850):
“ [Congress has] the duty of creating a pure metallic
Marigold
was
International
Bancorp
standard
of cited
value in:
throughout
the Union.
The power of
money
and of De
regulating
was
delegated
Llc v.coining
Societe
Des Bains
Mer et its
Duvalue
Cercle
Des,
329 F.
to Congress by the Constitution for … preserving the
3d 359,
May 19, 2003
uniformity and purity of such standard of value * * *
"If the medium could immediately be expelled, and
substituted by one it had neither created, estimated,
nor authorized one possessing no intrinsic value
then the power conferred by the Constitution would
be useless wholly fruitless of every end it was
designed to accomplish.
•
1792 Penny
Myth 2: The value of Money is
anything the I.R.S. says it is!
The IRS claims the following
argument Frivolous:
•
U.S. Monetary Law changed in 1985.
2. Constitutional money was
reintroduced in 1986.
3. FOIA documents show that the only
substance to the IRS’ position is the
assertion itself.
1.
In a transaction using gold
and silver coins, the value of
the coins is the face value of
the coins and not their fair
market value for purposes of Thompson v. Butler,
determining taxable income. 95 U.S. 694, 696 (1878)
(Source 2007-14 I.R.B, pg. 885 April 2, 2007)
Thompson v. Butler was recently cited
in: Crummey v. Klein Independent
School District (Unpublished Opinion,
U.S. Ct. App. for the 5th Circuit, No.
08-20133, 2 October 2008).
A coin dollar is worth no more for the
purposes of tender in payment of an
ordinary debt than a note dollar. The law
has not made the note a standard of
value any more than coin. It is true that in
the market, as an article of merchandise,
one is of greater value than the other; but as
money, that is to say, as a medium of
exchange, the law knows no difference
between them.
Examining Myth 2
A Dollar is a Dollar!
•
31 U.S.C. §5119(a)
“the Secretary shall … maintain the
equal purchasing power of each
kind of United States currency”
•
31 USC 5112(e)
(e) Notwithstanding any other provision
of law, the Secretary shall mint and
issue, in quantities sufficient to meet
public demand, coins which (1) are 40.6 millimeters in diameter and
weigh 31.103 grams;
(2) contain .999 fine silver;
(3) have a design (A) symbolic of Liberty on the obverse
side; and
(B) of an eagle on the reverse side;
(4) have inscriptions of the year of
minting or issuance, and the words
"Liberty", "In God We Trust", "United
States of America", "1 Oz. Fine Silver",
"E Pluribus Unum", and "One Dollar";
and
(5) have reeded edges.
The constitutional Dollar – a
minted Coin containing 371 ¼
grains of silver – guarantees
value:
“It is significant that this power of
coining money is mentioned in
the same sentence in the
Constitution as the power to "fix
the standards of weights and
measures,“ for the framers
regarded money as a weight of
metal and a measure of value.
Roger Sherman, a delegate to the
Constitutional Convention, wrote
that “If what is used as a
medium of exchange is
fluctuating in its value, it is no
better than unjust weights and
measures…which are
condemned by the Laws of God
and man …”. Gold Commission Report.
Public Law 96-389
Myth 3: Centralized Banking is
necessary for a stable economy.
Thomas Jefferson put it this way
“I sincerely believe, with you, that banking
establishments are more dangerous than
standing armies; and that the principle of
spending money to be paid by posterity, under
the name of funding, is but swindling futurity on
a large scale.” “Bank-paper must be suppressed,
and the circulating medium must be restored to
the nation to whom it belongs.”
Source: http://www.monticello.org/site/jefferson/private-banks-quotation
What are the effects of using
fiat-currency?
1.
An unrealized loss of capital and property;
2.
A loss of real economic value;
3.
The loss of the full economic impact of
automation;
Unrealized losses of capital and property
Property
=
# Egg Cartons = # Lawful Money $
(Brown Eggs)
1957
=
=
# Legal Tender $
=
U.S. Silver Certificate
1,600 Sq. Ft. Home
~37,700
($)13,500
No Lawful
Money Available
=
1982
$13,500
Fed. Res. Bank Note
1,600 Sq. Ft. Home
2007
~37,700
=
“$85,400”
=
=
Fed. Res. Bank Note
1,600 Sq. Ft. Home
~37,700
($)13,500
“$175,000”
Quiet Theft!
Property
=
# Egg Cartons = # Lawful Money $
# Legal Tender $
(Brown Eggs)
Buy
1957
=
=
=
U.S. Silver Certificate
1,600 Sq. Ft. Home
Sell
2007
~37,700
=
($)13,500
$13,500
=
=
Fed. Res. Bank Note
1,600 Sq. Ft. Home
~37,700
($)13,500
$175,000
No Cartons of Eggs Gain
No Lawful Money Gain
Federal Reserve Note
“Gain” of $161,500
No Gain No Tax Due
No Gain No Tax Due
After FRN Tax results in a
Physical Egg Carton Loss of
11,922 Cartons of Eggs
After FRN Tax results in a
Lawful Money Property
Loss of ($)4,269
Alleged Tax Due
~FRN$55,000
The purported Federal Reserve Note “Gain” is actually a “quiet theft” in that
it results in a physical property loss with the perception of an actual gain.
What is the effect of using unconstitutional legal tender?
Stock
= # Egg Cartons = # Lawful Money $ # Legal Tender $
(Brown Eggs)
1962
=
=
=
U.S. Silver Certificate
1982
~5,424
300 Shares IBM Stock
after splits
No Lawful
Money Available
=
Fed. Res. Bank Note
75 Shares IBM Stock after
splits
2007
$1,942.00
$1,942.00
4 Shares IBM Stock
~4,266
=
“$4,884”
=
=
~6,571
$2,338.56
Fed. Res. Bank Note
“$30,501.00”
IBM Stock Splits: 1964-05-18 [5:4], 1966-05-18 [3:2], 1968-04-23 [2:1], May 29, 1973 [5:4], Jun 1, 1979 [4:1], May 28, 1997 [2:1], May 27, 1999 [2:1]
Quiet Theft!
Stock
= # Egg Cartons
= # Lawful Money $
# Legal Tender $
(Brown Eggs)
Buy
1962
=
=
=
U.S. Silver Certificate
IBM Stock
Sell
2007
~5,424
=
$1,942.00
$1,942.00
=
=
Fed. Res. Bank Note
IBM Stock
~6,571
$2,338.56
17% Gain in Eggs Cartons
17% Lawful Money Gain
Federal Reserve Note
“94% Gain” of $28,559
Tax Due $59.48
Alleged Tax Due (15%)
~FRN$4283.85
Tax Due ~172 Egg Cartons
After FRN Tax results in a
Physical Egg Carton Loss of
923 Cartons of Eggs
“$30,501.00”
FRN Inflation results in a
83% tax rate or $328.45 of the
$396.56 of the purported gain
The purported Federal Reserve Note “Gain” is actually a “quiet theft” in that
it results in an 83% tax rate with the perception of 15% tax rate.
The loss of the full economic impact
of automation.
12
Automation lowers the
cost of production.
Inflation however ensures
the appearance of
increased revenue while
providing bankers
unearned profits (red)
10
8
■ Inflated Sale price
Inflation
adj 3.2%
■ Sale
price
6
cost/unit
4
2
0
1 3 5 7
However, lower cost of
production often results
in lower revenue. Thus, to
increase revenue a
manufacture either has to
increase sales or add
more features to maintain
9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 revenue.
Example – Ford Mustang
1965
$2,557
Features
•
Convertible
•
170 CID /101 HP
6 cylinder engine
•
Drum brakes
•
Bucket Seats with lap
belt restraint
•
No air conditioner
•
AM Radio
Example – Ford Mustang
2007
$31,700
Features
•
Convertible
•
4.0 L /210 HP
6 cylinder engine SOHC
•
Ventilated disc brakes
•
Bucket Seats with lap
belt restraint
•
Air conditioner
•
120W Stereo / iPod
input
The Lawful Money Cost of a Ford
Mustang has Remained Constant
1965
=
=
U.S. Silver Certificate
($) 2,557
2007
=
($) 2,557
=
Fed. Res. Bank Note
($)2,557
$31,700