by: Shorty Dawkins, Associate Editor
I was reading an article at Global Research, today, “It’s the Interest, Stupid! Why Bankers Rule the World” by Ellen Brown. I’m not normally a big fan of Ellen Brown’s, but this article struck a chord with me. I urge you to read it.
I have known for quite a while that the power of the Central Banks, including the Federal Reserve, to create money out of thin air and to then charge interest on it has been the cause of our debt slavery. How to defeat the Central Banks, each a private entity, serving private interests, who have a blank check to create their own money and reap the interest on it? Her idea, which is not new, is to create a National Bank, (a US Government owned Bank), which would issue the money, at interest, to the Government as it needed, at interest, (of course), but because the Government owned the Bank, all profits would return to the Government. The question then comes to mind, why must the Federal Government pay interest on money its own Bank created in the first place? The Constitution provides that the Treasury shall coin the money, (not the Federal Reserve). If it coined the money, it would not involve any interest at all. It would merely be spent into existence, with no debt involved. No, the idea of a Federal Government owned National Bank doesn’t interest me in the least. I would much prefer the Treasury to retake its power to issue money, (debt free money), thereby eliminating the enormous debt load, along with the interest due to the Fed resulting from money being created as debt.
What interested me in her article was her discussion of North Dakota’s State Bank. She writes:
The only U.S. state to own its own depository bank today is North Dakota. North Dakota is also the only state to have escaped the 2008 banking crisis, sporting a sizable budget surplus every year since then. It has the lowest unemployment rate in the country, the lowest foreclosure rate, and the lowest default rate on credit card debt.
Hmm…. It looks like they have their act together and are prospering. Admittedly a good deal of their prosperity comes from the Bakken oil fields development, but the point is, that they have created a State Bank that is thriving. This puts them, at least partially, out from under the control of the Federal Reserve System. If every State in the Union were to create their own State Bank, the power of the Federal Reserve would be greatly reduced. And it would be accomplished with no Federal Government involvement! Each State would be relieved of interest payments now currently going to the Banks. North Dakota did it. Why can’t other States? I’m sure the big banking interests would fight it with everything they had, but if the people realize the benefits to be accrued, it could be done.
Now, let us assume, for the sake of argument, that the Treasury has taken back its Constitutional duty to coin money, and each State has created its own State Bank. Is there something else we should do to place ourselves under a Constitutionally sound financial system? Let’s take a look at the US Constitution to find the answer.
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.
I find two points of interest germane to our discussion.
No State shall coin Money
No State shall make any Thing but gold and silver coin a Tender in Payment of Debts
We’ll get to #1 after I discuss #2.
The second item tells us plainly that as far as the States are concerned, it is gold and silver which are the legal form of Tender in Payments of Debts. Back when the Paper Currency, the Federal Reserve Notes, were backed by gold and silver, their use by State governments could, by a little stretching of interpretation of the Constitution be considered abiding by the Constitution, but since the removal of all backing with gold and silver, it becomes obvious that the States are in direct violation of the Constitution when they accept, and make payments with, Fiat Currency.
It has been the History of the Federal Government, particularly among the Executive and Legislative branches, to ignore the Constitution when it was expedient to do so. So too, it would seem, has it been the case with the States, as we see with the ignoring of Section 10 of the Constitution. Expedience has been the bane of our Republic. It is expedience, rather than commitment to principal and Law, that has taken us down the slippery slope we find ourselves traversing. The Oaths of Office, swearing fidelity to the Constitution, taken by every politician at every level of government, are mere words in too many politicians mouths.
And what of we the People? Have we demanded our politicians keep their Oaths? Or have we, like them, bowed to the expediency of the moment? It is time for all the People to search their consciences regarding this matter.
Returning to the subject of State Banks and what may be done, I would suggest that in order to follow the Constitution, the answer becomes obvious. Each State should establish a State Bank, with these Banks offering the ability to make payments in gold or silver. State taxes would be paid in gold or silver, as would all expenses incurred by the State in its daily operations. The people of the State could be allowed to open gold and silver accounts in the State Bank, and all levels of Government within the State could also open accounts there for the purpose of accepting payment in gold and silver, or to make payments with them. With such a Bank handling gold and silver transactions in each State, they would all be in compliance with Section 10 of the Constitution.
States cannot coin money, according to Section 10, but they are required to use gold and silver as Tender in all Payment of Debts.
Some will say there is not enough gold and silver to satisfy the needs. At today’s prices of the two metals, this is quite possibly true. It is a sure sign that they are undervalued. Let’s look at a time when the dollar was fully backed by gold and silver. In 1900, the average yearly wage was $449.80 . The yearly average wage for 2011 was 42,979.61. In 1900, a silver dollar could be exchanged for one paper dollar. Therefore the average worker in 1900 could exchange his/her paper dollars for 450 silver dollars. At today’s silver prices, and today’s average wage, he/she could buy roughly 1870 silver dollars. This implies silver is undervalued by a factor of roughly four. 4 x 450 = 1800. This is also an indication of how much the Federal Reserve has devalued the Federal Reserve Notes, the paper, Fiat dollar. The silver dollar, the coin, didn’t change. It was the value of the Fiat currency that changed. If silver was at an equivalent value, adjusting for the devaluation of the Fiat dollar, its current price, in paper dollars, should be $90-$100 dollars. (This is also an indication of the price suppression being carried out by Central Banks and large financial interests.)
The point is, if silver and gold were the basis of the currency, there would be little to no inflation. A gold and silver currency makes for a stable economy. Sure, there will be some speculative “financial panics”. Throughout history there have been panics fueled by wild-eyed speculators. The Federal Reserve has done nothing to stop this. We have had a severe depression since the Federal Reserve came into being, plus numerous recessions and crisis. We have had a Tech bubble, a Housing bubble, and now we have a Bond bubble waiting to burst, along with a derivatives bubble. The Federal Government and the Federal Reserve are bleeding this country of its wealth. It is time for the States to step forward and say, enough. A State Bank, utilizing both the Paper Fiat Currency, (at least for now), and silver and gold, can break the power of the Federal Reserve and its Fiat Money System, and place each State on a sound monetary basis. It will also bring the States back into compliance with the Constitution.
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