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Is the Gold standard Unconstitutional?

Is the Gold standard Unconstitutional?
By Whigswin

http://forum.kucinich.us/index.php?topic=894.0

I agree with a lot of what Ron Paul has to say about the constitution, and politics. I have nothing against the man personally or his foreign policy at all, but I've come to understand that his Economic policy would be detrimental to this country not just because it would not create any kind of monetary reform, but because his economic policy is unconstitutional.

Ron Paul is an Austrian Economist, and The Austrian Economist believes that the market should regulate the market. You'll notice that whenever something goes wrong Ron Paul will blame the government for America's problems. When the FED spends 24 Trillion dollars, Ron Paul blames the Government. When the private sector creates 1.5 Quadrillion dollars in worthless debt based securtized assets, Ron Paul blames the Government. When the President imposes outright fascist policy, he again points his finger at the Government and calls it socialism. The government definitely deserves some blame, but to blame the government exclusively for corruption is ignorant of what is really going on. Most of the laws passed in washington today are lobbied for by corporations and banks. Nobody denies that, but Ron Paul will rarely if ever mentions that corporations are involved. If he did he wouldn't be able to call it socialism, and he never mention that most of Americas debt comes from derivitives cause by deregulation on the market. If he did talk about Derivatives people would understand that the market is not perfect and that you can't let it Regulate itself.

Quote:“The free market doesn't mean Wall Street should be free to steal from the American taxpayer. It's a free market, not a spree market.”

-Dennis Kuchinich

Ron Paul is also a supporter of the Gold Standard, which I would be for if not for two things. One There is not enough gold in the world to create gold standard for 300 million Americans. You can find out more about that here:
http://money.howstuffworks.com/question213.htm

http://www.youtube.com/watch?v=9E0UPBtmTb0

And two because it's unconstitutional! Now why is the Gold standard unconstitutional? Well lets look at the constitution. Section 8 of the constitution, which says what the powers of congress are gives congress the power

Section 8 constitutio Wrote:“To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

What part of that makes the gold standard unconstitutional? Lets ask Ron Paul...

http://www.rense.com/general75/aabol.htm

Quote:“Under the gold standard, the supply of money regulated itself. The government kept within limits. Banks were more cautious. Savings were high because credit was tight and saving was rewarded. This approach to economics is the foundation of a sustainable prosperity.”

Ron Paul- Abolish the Federal Reserve

You notice when reading this article that just before this paragraph Ron Paul quotes the constitution and says that the constitution gives congress the power coin money and to regulate the value of the currency, but with gold standard congress cannot control it's value because the value of gold is already set in stone, so to speak. In that system congress can never do the job the constitution gave them which is to regulate the value of the currency In the interest of the American people.

Now your going to love what I've found out about What ending the fed would do to the economy. Here's a little history lesson on Andrew Jackson.

Quote:In the Panic of 1837, the stage had been set for depression by outgoing President Andrew Jackson's and Secretary of the Treasury Roger Taney's abolition of the Second Bank of the United States, by their cultivation of the state "pet" banks, by their imbecilic Specie Circular of 1836, which demanded gold payment to the federal government for the purchase of public lands, and by their improvident distribution of the Treasury surplus to the states. London's ultimate weapon turned out to be the Bank of England bank rate. With all the American defenses sabotaged, the Bank of England sharply raised its discount rates, sucking gold specie and hot money liquidity back across the Atlantic, while British merchants and trading houses cut off their lines of credit to their American customers. In the resulting chaos, not just private banks and businesses went bankrupt, but also the states of Mississippi, Louisiana, Maryland, Pennsylvania, Indiana, and Michigan, which repudiated their debts, permanently impairing US credit in the world. Internal improvements came to a halt, and the drift towards secession and civil war became more pronounced. - Webster Tarpley - AGAINST OLIGARCHY

The fact is that that the Federal reserve is currently the engine of the world economy. Nations around the world hold dollars in reserves. If the Fed was suddenly abolished the engine that drives the dollar would implode and any banks that have dollars in reserves would be forced to sell dollars for other currencies. At that point what is there to buy gold for a gold standard with? Will you just get the gold for free? Or will you buy gold from other countries at interest and become a debt system again? Not to mention what will the IMF and world bank do if the Federal reserve was suddenly gone? Will we go to the SDR (The world currency)?

http://www.imf.org/external/np/fin/data/rms_five.aspx

This is a very serious issue and it's why I'm for nationalizing the fed with The American Monetary Act rather than abolishing it. This is the only way to return the control of money to the American People.

I'll follow this up with a history lesson on usury and the gold standard soon



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not very thought out. Also

not very thought out. Also the argument that there isn't enough gold i think is a red herring. if there argument is true that there isn't enough gold and silver in the world for all the frn's out there then why wouldn't you use other precious metals like titanium, platinum or other precious metal

Ahh yet another doltish post...

Sounds like the public school brigade is on the march again. Possibly we will once again see a time when schools teach the concept of fractions and gradations.

Oh...and Kucin-itch is a tool.

"...there is no doubt that it (socialism) could not possibly have affected us so widely and so deeply as it has, had it not been heavily financed". - B. Carroll Reece

"...there is no doubt that it (socialism) could not possibly have affected us so widely and so deeply as it has, had it not been heavily financed". - B. Carroll Reece

The government per the

The government per the Constitution has the power to regulate the value of coined gold and silver. It also has the authority to establish weights and measures.
Regulating the value of coined gold and silver obviously does not mean it's purchasing value. It doesn't mean that a silver coin has the value of a gallon of milk. That would put us on a milk, silver and gold standard. The reason for regulating the value of coined gold and silver had to do with the bimetal system.
When the bimetal system of money began the value of a dollar was one ounce of silver which could be traded for 15 ounces of gold. Later this was changed to one a one ounce silver dollar to equal 20 ounces of gold. In 1873 silver was demonetized and no longer excepted as payment for debt. If I had silver, I could not bring it into the government, for it to turn into coins and pay my taxes.
With this action the government theoretically abandoned the need to regulate the value of gold and silver coins. However there was a period when gold was melted down and silver dollars in circulation were worth only 1/35 the value of gold.
http://en.wikipedia.org/wiki/Free_Silver
When the government stopped accepting silver as payment for debt. It took the creation of money out of the hands of the people and then only the government controlled money. If congress felt the need to put money coins in circulation it would order it. This is a closed end system.
What Ron Paul wants is an open ended system of coined money. He suggest competing commodities. One way perhaps would be to establish a dollar to be equal to 1/20 part of an ounce of silver. And let the market decide the corresponding value of gold. Or the government could establish a dollar to be equal to 1 ounce of silver and let the market decide the corresponding value of FRN dollars. Competing currencies.
grant

currency of ANY type is

Currency of ANY type is ALWAYS backed by some commodity or asset ..
The backing may be in tangible form ,or value form, such as LABOR.
Money or currency is only part of an exchange process...Presently the only exchange I can determine for paper currency is Physical labor...
Nothing in human life gets done or accomplished without LABOR..
Physical labor is valuable, in exchange, for a Dollar currency, so that Dollar can be exchanged for other types of assets..Assets may be tangeble or intangible, services or otherwise, what a person may want or need , or value,or another form of currency.
Currency means ; ACCEPTED standard of exchange .. So it only makes sence that a stable type of gov't would have the most stable currency, the most dependable , the most acceptability ,for obvious reasons..
That brings you to the FED RESERVE..Stability
It would behove America to audit the FED to determine it's STABILITY ..As our whole system is based on this RESERVE.
Good people ,do Good deeds
and are no respecter of person

Speechless...W.T.F.

Why are you even on this site? Shouldn't you be praising Barry on an Obomba forum somewhere?

Do you even know what competetive currencies are?
Do you really UNDERSTAND what neo-con gov't. is?
Do you ever wonder why there are so many commercials that offer to TAKE your gold off your hands (including necklaces & tooth fillings) for a desperate, minimal price?

Oh & Dr. Paul has mentioned MANY sources of blame - not only the GOVERNMENT,
but the FEDERAL RESERVE - (OH! What's that you say?? It's a PRIVATE reserve)???
& the Military Industrial Complex (Halliburton-CarlyleGroup-DynaCorp.Blackwater)
& the Pharmaceutical Industrial Complex-(Take Your Pick).
Rumsfeld LIVES OFF THE INCOME of his pharmaceutical work/investments/401K background. Every time someone gets a vaccination, Rummy profits.

---this does not even come close to the WELFARE state that, (well - I won't OFFEND anyone) - ahem....feeds off them.

Obama = O.ne B.ig A.ss M.istake A.merica

Obama = O.ne B.ig A.ss M.istake A.merica

Holy hesus cristos,

these ignoramuses at the American Monetary Inst. are at it again. Stephen Zarlenga, my god, dude, teach your kids how to READ! Instead of peddling your me, me, me right, but no one else product. http://www.monetary.org/lostscienceofmoney.html

The difference between Mises.org vs. Monetary.org? REAL intellectual DEBATES, though most are Austrian economists, there aren't some "Tenet of religion" that says, they cannot debate on variances. Zarlenga, is only about Zarlenga. There aren't a body of scholars, like Mises, AMI, is Zarlenga, and followers. Typical of Statist control freaks.

Er... which part of The Constitution of the United States of America's Article 1 Section 10, Clause 1, which states:

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

do these morons, NOT get?

Like HR3200, the BigPharma authored oBUSHmaScare bill, they don't read, yet, they're all experts. Funny how he doesn't mention that about 70-80% of all gold that were ever mined as trackable in modern history, are STILL around. And they STILL retain their value. Gee, imagine that.

Really, how much bullsh*t rationalizing can one do, before really coming to terms with the reality of the matter? For the sake of putting himself on a path to intellectual honesty, and redemption, the Kucinich forum poser should reconsider calling himself a "Tory," instead of "WhigsWin," for starters. Plus, he didn't even have the minor courtesy to spell Kucinich's own name right; when it's in the name of the forum, he spells him Kuchinich?"

Humans, I get them, I get why they do those weird non-sensical things, but I still just don't get them.

And, oh, bringing up Tarpley? That's just too cute. Webster, give us your brains on geopolitics, but give it a rest with the worshiping upon the altars of the THE father the Military Industrial Complex, National Security State, FDR, whom merely took the empire away from the UK's NWO faction so we can be used as the cannon fodders for the globalists, instead. All that just "happened" to coincide with WWII and our overwhelming urge to rightfully kick some Nazi ass.

We all LOVE and respect Webster's mind, intense historical perspective and a uncanny knack for getting geopolitical developments correctly, which seem to flow as naturally as he speaks his 5 different languages. But, really Tarp, we love you, but no one in their right mind who LOVES liberty and freedom would support immense statist policies, even IF it is "good," as tyranny of good intentions can get. "Infrastructure Statist" is the most favorable term I can refer to our dear ex-LaRoucheite, the "Brain" of the 9/11Truth movement, Mr. Webster Griffin Tarpley, at least when it comes to talking economics. The day he writes a book entitled "Against Collectivist-Statism," is the day we and LaRouche-ites, finally agree on almost everything. But I'll break bread and drink, and be merry with any and all who want to debate real issues.

Nice try troll.

True, correct but not complete and completely misleading. Oh well, I've been cashing my paychecks for gold and silver dollars for over twelve years now and spend them for goods and services all over the country. I've had nothing but 100% success from my experiences therefore your conjecture is amusing at best.

Ron Paul is not a supporter of the Gold Standard

He supports private competing currencies. What he doesn't support is legal tender laws passed by Congress as they are not a legitimate power of Congress. The power to declare what shall be a legal tender is reserved to the States by virtue of the fact that it was not granted to Congress AND by virtue of the 10th amendment just incase no one got the message the first time.

Article 1 section 10 limits the States as to what can be declared legal tender.

The limit leaves us with a bi-metallic standard of Gold AND Silver. It was the manipulations of the Silver market by Gold bugs, and the abandonment of par value silver coinage as a result in 1873 that began the series of banking crises that culminated in the Federal Reserve, the income tax, and the direct election of senators.

Huh?

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 10, Clause 1: No State shall…coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt.

"An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself."

"Endless money forms the sinews of war." - Cicero, www.freedomshift.blogspot.com

And

Rothbard: The Case for a 100 percent gold dollar. http://mises.org/story/1829

and an excellent post by one of our own: (The Question of Gold Money: Is There Enough? (by Republicae))
http://www.dailypaul.com/node/96496

Rothbard: The mystery of banking
http://mises.org/Books/mysteryofbanking.pdf

From the book:
"I propose, then, the following:
1. That the dollar be defined as 1/1696 gold ounce.
2. That the Fed take the gold out of Fort Knox and the
other Treasury depositories, and that the gold then be
used (a) to redeem outright all Federal Reserve Notes,
and (b) to be given to the commercial banks, liquidating
in return all their deposit accounts at the Fed.
3. The Fed then be liquidated, and go out of existence.
4. Each bank will now have gold equal to 100 percent of
its demand deposits. Each bank’s capital will be written
up by the same amount; its capital will now match its
loans and investments. At last, each commercial bank’s
loan operations will be separate from its demand
deposits.
5. That each bank be legally required, on the basis of the
general law against fraud, to keep 100 percent of gold
to its demand liabilities. These demand liabilities will
now include bank notes as well as demand deposits.
Once again, banks would be free, as they were before
the Civil War, to issue bank notes, and much of the gold
in the hands of the public after liquidation of Federal
Reserve Notes would probably find its way back to the
banks in exchange for bank notes backed 100 percent
by gold, thus satisfying the public’s demand for a paper
currency.
6. That the FDIC be abolished, so that no government
guarantee can stand behind bank inflation, or prevent
the healthy gale of bank runs assuring that banks remain
sound and noninflationary.
7. That the U.S. Mint be abolished, and that the job of
minting or melting down gold coins be turned over to
privately competitive firms. There is no reason why the
minting business cannot be free and competitive, and
denationalizing the mint will insure against the debasement
by official mints that have plagued the history of
money.
In this way, at virtually one stroke, and with no deflation
of the money supply, the Fed would be abolished,
the nation’s gold stock would be denationalized, and
free banking be established, with each bank based on
the sound bottom of 100 percent reserve in gold. Not
only gold and the Mint would be denationalized, but
the dollar too would be denationalized, and would take
its place as a privately minted and noninflationary creation
of private firms."

"An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself."

"Endless money forms the sinews of war." - Cicero, www.freedomshift.blogspot.com

tsk tsk Mr. Kucinich...

"Ron Paul is also a supporter of the Gold Standard, which I would be for if not for two things. One There is not enough gold in the world to create gold standard for 300 million Americans. You can find out more about that here:"

Readers of Thomas Woods will recognize the following from his section on anti-gold fallacies (paraphrased here):

David Ricardo answered it well nearly 200 years ago: "If the quantity of gold or silver in the world employed as money were exceedingly small, or abundantly great...the variation in the quantity would have produced no other effect than to make the commodities for which they were exchanged comparatively dear or cheap. The smaller quantity of money would perform the function of a circulating medium as well as the larger." In other words - goods exchange against other goods, and that exchange is simply denominated into money. Pretty much any (of course there are limitations) amount of commodity-money could accommodate for pretty much any amount of commerce, it would just be denominated differently. Also, it's important to note that most 'gold standards' are typically 'silver standards', with silver being used for most everyday transactions and gold for larger transactions.

But this really demonstrates a fundamental lack of understanding on Dennis' behalf. If a gold standard were created then how much each dollar was backed would be determined by the US government's gold ownership - 'the value thereof'. I don't see how this is inconsistent with his gripe about unconstitutionality.

"If the Fed was suddenly abolished the engine that drives the dollar would implode and any banks that have dollars in reserves would be forced to sell dollars for other currencies."

- Who's talking about 'sudden abolishment', exactly? I don't think I've ever heard Dr. Paul talk about NOT formulating a plan of dismantlement and just wiping it from existence overnight...have you guys?

The article was only...

....The article was only posted on the Kucinich forum and it doesn't necessarily represent Dennis himself

When the Constitution was

When the Constitution was written I am fairly sure that the term "Money" was in reference to gold and silver.

Also, since you're quoting the Constitution you should also consider the fact that while Congress had the authority to coin Money and to regulate its value, the federal government did not have the authority to determine what could be used as tender in the payment of debts. Remember, the Constitution is a list of what the federal government can do with all else being denied to it. Anything that is not an authority of the federal government then becomes a State authority, or that of the people, by default - unless forbidden by the Constitution.

States were forbidden from making anything other than gold or silver coin a tender in payment of debts (Article 1 Section 10.1 of the Constitution). This means that the federal government was to make the gold & silver coins and to regulate their value while the States ensured that ONLY gold and silver could be used as Money.

And about there not being enough gold... the problem is not about too little gold but is that the world has too much fiat money in existence. In order to back money with gold all that needs to be done is to redetermine the value of the gold in terms of the currency.$1k per ounce might not do it, but $15k per ounce might. So then all that means is we will be purchasing items with grams of gold or maybe even grains of gold, instead of ounces.

...

Benjamin franklin and paper money

Benjamin franklin and paper money

http://en.wikipedia.org/wiki/Benjamin_Franklin#Public_life
Public life

In 1736, Franklin created the Union Fire Company, one of the first volunteer firefighting companies in America. In the same year, he printed a new currency for New Jersey based on innovative anti-counterfeiting techniques which he had devised. Throughout his career, Franklin was an advocate for paper money, publishing A Modest Enquiry into the Nature and Necessity of a Paper Currency in 1729, and his printer printed money. He was influential in the more restrained and thus successful monetary experiments in the Middle Colonies, which stopped deflation without causing excessive inflation. In 1766 he made a case for paper money to the British House of Commons.[40]

A-Modest-Enquiry-into-the-Nature-and-Necessity-of-a-Paper-Currency, an essay by Benjamin Franlkin

http://www.britannica.com/EBchecked/topic/387317/A-Modest-En...

also see...
http://books.google.com/books?id=ndb_Ea9ktiIC&pg=PA63&lpg=PA...

Was he for gold-backed paper

Was he for gold-backed paper money or fiat paper money? I believe paper first started being used because it was more convenient to transport as compared to many metal coins.

...

Does money have to be backed by anything?

Ive read many things that have convinced me that the gold standard is, indeed, unconstitutional. I am very rooted in that belief now too.I think its so important for people to realize that Ron Paul and Aaron Russo are just steering people into a different KIND of monetary control, thats all. Lets be real clear about one thing, If we were to go back on a gold standard...we should consider WHO IS IN POSSESION OF ALL THE GOLD RIGHT NOW! The people with all the gold would be in position to control everything, just as they are now. If you have watched "The Money Masters" then you know that the gold in Fort Knox has been stolen and probably most of the gold that the US owned(past tense) has been offshored to Europe.

The fact is, Money does NOT have to be backed by ANYTHING! As long as it is legalized for use as legal tender by the US treasury, like Lincolns greenbacks, then it would be just fine...EXCEPT, or UNLESS we dont, first, separate the US Treasury from the World Bank and World Monetary Fund, and RECLAIM ITs SOVEREIGNTY AND GIVE IT BACK TO THE US CONTROL which absolutely must be done, as it has been, and always was, UNCONSTITUTIONAL!

I hear your argument, and understand where you are coming...

thus, perhaps if you want to discuss what are the fundamental basis of agreed upon medium of exchange, which we call "money," what are the necessary characteristics? How do certain modes of exchange become accepted, and over time trusted? How would you determine its value?

I think you have a point about your the dynamics of gold ownership as you understand it. However, your Constitutional arguments do not hold, as the literal text of the document negates your position. It is true, gold and silver is to be used in payment of debts. Thus, anything outside of that explicitly limited enumerated powers of the State's role when it comes to coinage, is left to the 9th & 10th Amnd purview. But how is that equal to gold and silver being unConstitutional at any level?

Frankly if you got rid of all the money in the world, and banking, all you'd have is a bunch of pissed off people who won't have their promised obligations in debt met, international trade, shipment, and fuel screeched to a halt without the existence of a universally accepted medium of exchange, on the paper shuffler side. But on the actual economy, we still have the same pool of talents, raw materials underneath. The only thing missing is an agreed upon item which has the illusion of being the only thing that gives the individual a productive incentive, and a mode of medium of exchange.

Thus, the above scenario, if posited offers an ample opportunity to examine why gold has become "natural money" based on its relationship with capacity for productivity, rate of devaluation, and savings.

Then you have to get to the root of what is "natural money?"

For us to have this conversation, we would need to understand, what your understanding and views of about the concept and notion of "Natural Money," if as you believe, that money doesn't have to be backed by anything.

So we gently tossed the ball to you.

When money is backed by a

When money is backed by a real asset it prevents the government from being able to create more of it whenever they want to. It also prevents them from stealing via the inflation tax.

...