Economy

Truth told to Congress about Competing Currencies

“I warn you, honest money legislation is a wolf in sheep’s clothing.”

Published on

August 4, 2012

Rob Gray of The American Open Currency Standard testifies before the House Financial Services Subcommittee on Domestic Monetary Policy regarding the theory of competing currencies.

“No fair challenge can made between honest men and thieves. And let me be clear when I say thieves. I refer directly to the current private central bank and the men in government who allow it to exist.”

“I warn you, honest money legislation is a wolf in sheep’s clothing.”

In the US, legal tender laws ONLY apply to debt obligations. To clarify, if you are in debt, as in you just ate your meal, in the US you must be able to satisfy that debt in federal reserve notes. Period. Legal tender laws protect you from a merchant getting creative on you and making it difficult or impossible to pay your bill. Good idea, right?

Well, it doesn’t stop there. Legal tender laws are so un-important that most/all states have plenty of exceptions to the rule. For example, a gas station can refuse any bills larger than $20. A soda machine can only accept coins. A bus driver can only accept tokens. A business owner, who has an unlimited right to private contract, can negotiate a deal in gold, silver, copper, direct barter, or any other way they like. And if that’s not enough, states will recognize this contract even in the event of a default. For example, you negotiate a contract in ounces of silver, default on the deal and lose in court: the court will still enforce the original agreement!

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Not only do they not care, but they’re almost completely clueless – the committee members asked questions about consumer protection, consumer confidence and how the poor people would deal with community currencies. I’ll address these issues one by one here:

Consumer protection – this comes down to one thing: personal responsibility. “Alternatives” are not for everyone. Some people will never buck the system, or even try anything outside the box. The ones that will must be educated on the risks associated with operating outside the jurisdiction of government. That’s the way it goes with voluntary systems. Congressman Luetkemeyer brought up the FDIC, and how it guarantees deposits. Sure, the FDIC guarantees the deposit, but it can’t guarantee the deposit’s purchasing power. Take this example: the FDIC was crafted in 1933, when gold was about $20 per ounce. If you put that $20 in the bank, today it would be worth $20, even if the bank went belly-up tomorrow. Wanna guess how much gold you can get today for $20? Not a lot. Is that consumer protection?

Consumer confidence – people are pulling money out of the banks at an alarming rate. People don’t have confidence in the system because they are beginning to realize the currency is built on a foundation of debt, and that it all must be repaid. Gold & Silver, on the other hand, are debt-free, never need to be repaid, can’t be fractionally loaned, and buys more today (in most cases) than it did through history. Which system inspires more confidence? An honest one, or one that’s run behind closed doors?

The poor people – Do you know where the poorest area of the country is right now? It’s not Detroit, Cleveland, Kansas City or some other dried-up industrial center. It’s the Pine Ridge Indian Reservation, which boasts a whopping 95% unemployment rate, 22% male suicide rate, 42-year average male lifespan, and a 75% illiteracy rate. And they decided to start their own community currency because they flat broke, not because they’re flooded with capital. It’s predominantly poor people that launch community currencies because they believe taking control of the issuance of their money will help them create economic opportunities, like producing, trading, and exporting goods and services in exchange for more capital.

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