Decertifying Federal Reserve Notes?Submitted by MaxK on Tue, 03/22/2011 - 00:54
Since Federal Reserve Notes are not constitutional tender, the States could begin to take them out of circulation by law, returning them to the Federal Reserve as sovereigns and demanding repayment in legal tender, or possibly even enacting a law causing bills that pass through the State tax system to be marked "not legal tender", and put out of circulation.
This seems to be a proper response to money that claims to be something that it constitutional can't be - which is either fraudulent or counterfeiting. A State has to obey the constitution as the highest law in the land, and they aren't legal tender. - So enforce it by a law decertifying any notes that claim to be legal tender that are not.
The only other alternative might be a volunteer system, where a person who has "taken the pledge" writes on the bill "not legal tender". Anyone who has taken the pledge has committed to never accept a bill with the mark on it (but may pass it). This in effect creates two classes of money - fresh bills and bills removed from circulation, most people would have both types available. As more people take the pledge, the greater the effect on bills marked and people not accepting such bills. Which seems like a working boycott - A million people doing this would have a huge effect. The problem with this idea is it might be illegal, although some say the law reads that it is only illegal only if it defaces or makes bills unrecognizable.
So the first option with a State government supporting decertification, would be the approach to take. I don't see how Benanke or anyone at the Federal Reserve could object. The States have to decertify, or they are making something a legal tender that they are forbidden to make so.