What is Money?

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.   --John Maynard Keynes, The Economic Consequences of the Peace, 1920

Click here for the debt of the United States
Click here for Fed Rates and Other Indices


A Brief History of Money

The noted economist John Maynard Keynes once stated that governments can confiscate, secretly and unobserved, the wealth of the governed by a process of inflation in a manner such that only one man in a million may diagnose.

What is money? Some may say, "a medium of exchange" and others may say "credit" and others may say "information". It really depends on who you ask.

"Money" is the term we use for objects perceived to be of value to everyone which can be exchanged for objects (or services) perceived to be of value to the purchaser. In the book "The Wealth of Nations", Adam Smith examines the history of money and the capitalist system of exchange. This is generally viewed as a conservative (as opposed to liberal, socialist, or communist) principle of individual responsibility and government monitoring of commerce.

From the beginning of time, human beings have attempted to exchange goods and services to obtain things they desired but were themselves incapable or unwilling to make or perform. Without a commonly accepted form of exchange, it is quite possible that someone may desire a good or service but have nothing considered to be of value to the potential supplier of the good or service. However, with a commonly accepted form of "monetary" unit, then the goods and services of one may be provided in exchange for receiving this commonly accepted "monetary" unit, and then that unit exchanged with another individual for a good or service they may provide.

In some historical societies, shells may have been the mode of exchange. In others, pelts, stone, precious metals, or cattle, sheep, etc. may have been the mode of exchange. However, throughout history, there has always been a particular mode of exchange which was preferred and generally accepted by most organized societies. Gold and silver coin have always enjoyed such a common acceptance due to the rarity of the metal and the relative ease with which it can be measured, divided, and aggregated.

From the beginning of recorded history, societies have determined units of measure and markings to validate the purity of the metal as well as a standard weight. As Adam Smith describes, sometimes governments and/or bankers have attempted to regulate the measurement and monitoring process so as to enrich themselves at the expense of society. An unfortunate truth of history is that oftentimes, rulers (as well as bankers) have actually confiscated the wealth of the citizenry, sometimes by edict with the knowledge of the citizenry, and at other times secretly and by devious means.

Therefore, money is a commodity, defined by government and accepted by citizens as a thing worthy of retention and useful in commonizing methods of commerce. That "thing" which was used in societies past, as well as present, was either gold or silver. Also, as defined by the United States Constitution (Article 1 Section 10) and the United States Code (Coinage Act of 1792, 31 USC 314 & 821, 12 USC 152), the money of the United States is either gold coin or silver coin. The unit of measure, as defined under the Constitution and the United States Code, is a metric weight known as "dollar".

Money is defined by three indicia which are (1) a quantity, (2) a weight, and (3) a substance. Thus the three indicia of the money of the United States is a quantity of a dollar weight of a substance which must be either gold or silver, as defined by law (noted above).

Bankers throughout history have attempted to include in the acceptable definition of money promissory notes (such as the present Federal Reserve Note, a credit note based on faith in the credit of the United States and not upon any thing held in deposit), however, when the people lose faith in the promise contained in the note, historically societies have reverted to the reliable gold and silver which has been the standard for millenia. While these type of credit notes are used today in the United States, they do not conform to the requirements of law (as noted above). And thus far no credible challenge to the present system has been mounted by a State of this union, and probably never will be.

A Brief History of Money
In summary:
  1. The things viewed almost universally as a medium of exchange are either gold or silver.
  2. Bankers throughout history have attempted to convince the populace to deposit their gold or silver in exchange for notes promising redemption at some future point in time and have generally defrauded the depositor thus expropriating the wealth of the people.
  3. The United States of America was founded upon conservative principles of integrity which are not subject to manipulation in a monetary system based on valid measures of gold and silver coin.
  4. At present, a system has developed replacing gold and silver and based entirely upon faith and not any thing held in deposit or reserve. This present system operates within these United States despite the Constitutional requirement that all money in the union be gold or silver coin.
  5. The people are generally ignorant of anything other than the historical truth that gold and silver was once used as money in the distant past but that now, as an enlightened society, we no longer rely on those relics of history--that heavy metal--but instead operate on the "more efficient" credit system in place around the world.

Of Weights and Measures

"But thou shalt have a perfect and just weight, a perfect and just measure shalt thou have: that thy days may be lengthened in the land which the LORD thy God giveth thee."
(Deuteronomy 25:15, KJV)

The principle of honest weights and measures has been of paramount importance since the beginning of recorded history. The Law, as handed down to Moses, demands perfect and honest weights. This concept is alien to us today in the United States of America, even though it was clearly understood by the founding fathers and incorporated into the Constitution of the United States of America in Article 1 Section 8.

As an interesting side note, after assigning the responsibility for weights and measures as well as coining money, the Constitution also authorizes Congress to punish "counterfeiters". What exactly is this? It can be two things: (1) Coins which are not actually made of gold or silver as required by the standard of weights and measures although struck in a mold consistent with government coinage practices, and (2) fake government securities (and perhaps independent bank notes) promising to pay gold or silver.

That series of clauses provides that Congress maintains the responsibility of converting gold and silver into monetary units based on a valid system of weights and measures.

Honest weights and measures have always been a problem. "White collar criminals" of centuries past very often included bankers who would distort the actual measure of pure material in coin by either minting coins of less than the purity of gold or silver indicated on the face of the coin or by shaving the coins such that they generally appeared to be consistent from one coin to the next, but were not perfectly consistent providing for a "skimming" of the valuable metal. Dishonesty also may take the form of providing promissory notes to be held by depositors, which, when aggregated, actually exceeded the actual gold or silver on deposit.

The weight chosen for the United States of America was a metric weight known as a "dollar". This is similar in designation to the "pound" which was in use as the unit of measure for the British. The conversion to standards of weights and measures is available at the weights and measures website . As for a general understanding of the weights and measures employed by the United States in comparison to the historic "Troy ounce" weight, here is a comparison:

  • Per the Coinage Act of 1792: a $1 weight of silver was 412.5 grains of 90% pure silver
  • Per 31 USC 314, 821: a $1 weight of gold was 1/42 Troy ounces of fine gold
  • Per the weights and measures website: 416 grains = U.S.$1 coin @ .9000 fine silver
  • Per the weights and measures website: 480 grains = 1 Troy ounce @ .9999 fine
  • Thus a typical U.S.$1 weight of silver approximately equals .78 Troy ounces of silver
Of Weights and Measures
In summary, the Constitution of the United States requires the dollar to be the unit of measure and gold or silver to be the substance of money for this nation. Congress is required to fix the standard and control coinage. Member States of the union are required to use ONLY gold or silver as tender in payment of debt as coined by the federal Congress per measurements therein adopted. (This summary alone is sufficient to see that we presently operate in a system which is unconstitutional.)

The Principles of "Banking" Money and Issuance of Notes
An important aspect to understanding money is gaining an understanding of the concept of "banking". This concept is not what is taught in school regarding the commerce referred to as banking, but rather the concept to understand is the real meaning of "banking". What does "banking" money actually mean?

To "bank" any thing (object or item) is to put an object in a safe place for later retrieval. If that item is placed in the custody of another person or business entity, it is said to have been "deposited" with that person or entity and some form of "certificate of deposit" is appropriate to ensure restoration to the original "despositer" or that individual's assigned representative bearing the "certificate". Such would be to "bank" one's money. The "certificate of deposit" would be a physical certificate, typically written on paper, constituting a legal document, which declares what items were "banked" and promises to restore those items, or their equivalent, to the bearer of the certificate upon demand.

So, rather than keep one's valuables in the home where thieves may steal it, many people may opt to deposit their gold and silver in a more secure facility such as a bank which has been chartered by a State and which must meet certain legal obligations and be subjected to legal reviews (audits) to ensure honesty in dealing with the property of citizens of the State. This was supposed to make "money" safe from thieves. The bank would issue "notes" which were basically bearer certificates of deposit. These certificates could be exchanged making travel much easier provided the bank was recognized as reputable and their certificates were accepted by other banks in various parts of the country.

Also, you may read a long ignored dissertation which was the basis for the U.S. Constitution's prohibition against "paper money" by clicking here. This dissertation is an in depth examination of the evils of "paper money" from 1792 written by Roger Sherman, one of the greatest minds influencing the founding of the United States of America.

The problem that often arose throughout history was that the bankers issued notes in excess of deposits retained. This meant that the family who deposited its hard earned gold and silver in the bank to protect it from theft, actually ended up being victimized by their banker. The banker may have issued far more certificates of gold and silver deposits than was actually retained in the vault at the bank. In doing so, the banker would have inflated the supply of promissory notes over the money which was held in reserve to redeem those notes. This is true inflation.

The Principles of "Banking" Money and Issuance of Notes
In summary, the masses have deposited their gold and silver with bankers in exchange for promissory notes (basically a reserve note or certificate of deposit) which were intended to provide a means of reclaiming one's assets at some point in the future. Historically, bankers have issued more notes than actual deposits retained thus inflating the supply of reserve notes.

The Problem of Inflation
As mentioned above, the noted economist John Maynard Keynes stated that governments can confiscate the wealth of the governed by a process of inflation in a manner such that only one man in a million may diagnose. What does this mean? If Mr. Keynes is correct, very few people understand inflation in its true sense.

Today, when one speaks of inflation, typically this is a reference to increases in the "cost of living" as defined by typical product pricing throughout a society. The factors which should influence pricing include production efficiency, technological improvements, product enhancements, and the like. All of these things should result in reduced costs, yet throughout the world, pricing rarely falls for consistent products. In fact, it is usually only a product which incorporates outdated technology that falls in price.

Enhanced products and innovation combined with manufacturing efficiency and cost containment should result in equal or reduced pricing over time. However, in the world today we frequently observe deteriorating quality combined with manufacturing efficiency for similar or increased pricing. Why is this? This results from additional factors including, but not limited to, real inflation.

What is real inflation? Manipulation of the supply of money, such that the supply grows over time. Let's look at a simple explanation. Remember the principle of banking money? Suppose your great-great-grandfather deposited a dollar weight of silver with a banking institution and that institution issued him a promissory note (a one dollar bill) in exchange. Further suppose the bank anticipated that few people would ever actually redeem their notes for the silver on deposit and decided to issue additional notes such that the total notes issued exceeded the actual silver on deposit. In such a circumstance, the banking institution has inflated the money supply by issuing more promissory notes than it can honestly satisfy by its reserve of silver. Anyone bothering to ask would be able to observe that the notes can be exchanged for real silver, but would not know to what extent that silver on deposit fractionally represented the actual notes outstanding. That is real inflation on a small scale.

Natural inflation would occur as additional gold or silver is mined and converted into monetary units. While natural inflation is expected and acceptable, real inflation is deceptive and represents a fraudulent activity committed by the banking institution. Extrapolate this small scale example to the State, National, or International level. In the United States, since 1913, the Federal Reserve System has controlled the banking institutions and in so doing gained control over some of the unscrupulous practices of smaller banking institutions. However, the effect was to nationalize the practice of fractional reserves. Over time, this institutional control has resulted in the elimination of any promise to redeem notes for real money. Over time, this institutional control has resulted in the confiscation of assets, secretly and unobserved. Over time, this nation has accepted the promises written on pieces of paper as a means of commerce, not really understanding the inflation of the number of promises issued and the deception employed regarding the "value" of these notes which are referred to as currency.

Real inflation is now combined with interest demands and taxation to further complicate the understanding. Formulae are generated to explain the monetary system (M1, M2, and the broader M3) and these formulae are so complex that even the most scholarly among the financial institutions cannot explain it to the common man. Combined with the interest demands and taxation, these formulae cause most people to stop trying to understand and simply accept the present system of credit instruments circulating as if they were actually money.

As a result, today, society is ignorant of real money and is simply content to exchange promises written on paper currency as if they were actually money. This willingness is perpetuated provided inflation (possibly defined as the cost of living) is not too rampant, taxes not too much of a burden, and "value" remains a commonly accepted perception among the players in the economy.

Classic example of the confusion caused by banks discussing "inflation"

ECB Leaves Rates Unchanged

By G. THOMAS SIMS 
Staff Reporter of THE WALL STREET JOURNAL
April 7, 2005 12:20 p.m.

FRANKFURT -- Despite sounding more downbeat on the euro-zone economy, the European Central Bank Thursday ruled out a cut in interest rates, and made clear that it still aims to raise rates at some point, in part to stave off the threat of inflation from high oil prices. [and the article continues]

What this means is that now, the bank, claiming to be trying to control "inflation"--a term yet to be understood by everyone--will consider another action which further increases costs to businesses and consumers (which weakens the economy). Think about this for a moment... the bank will increase the cost of capital to coincide with the increased fuel costs. How does this "help" control inflation? Remember, economists and the media have taught us to think of inflation as "increased pricing"--just like the sentence in the WSJ article above. If fuel costs will increase pricing, is it not logical to assume that the increased costs of borrowed capital will also increase pricing?

Here is where the "real" inflation is mixed with the typical understanding of inflation and (intentionally?) causes confusion. By increasing interest rates, the effect is to reduce the tendency to borrow to cover other costs by forcing the borrower to spend more on debt service. The theory is that if the cost of borrowed capital increases, then the borrowing itself will decrease (reduce the money supply) resulting in a reduction in "real" inflation--an decrease in the money supply. This confuses the layman because "everyone knows" that when interest rates go up, things cost more (typical understanding of inflation).

Therefore the normal person, being confused, throws up their hands and thinks, "Well, the bankers understand this and I don't, so I guess this information is correct and their decision must be correct." Then the consumer just hopes the actions taken do not "cost too much" of the consumer's hard-earned "money".

The example above shows only how "confusing" this entire subject has become. This is why people quit trying to understand the complex language of the bankers. Another fantastic example of this is the "Crisis" of Summer 2008 (click here).

The Problem of Inflation
In summary, real money (gold or silver coin) was deposited in exchange for promissory notes. These notes have been inflated (more issued than deposits received and retained). Complex formulae are continuously referenced to explain the extensive nature of the money supply which cannot be understood by the common man (and probably were intended to confuse most people). The general population has no understanding of the true nature of inflation and simply hopes that prices don't rise too drastically, interest rates don't seem excessive, and taxation does not seem too much of a burden.

The Truth About Bankers and Money
Jesus "cleansed" the temple of the money changers. Why? Because the truth was that they defrauded the people. They, as have bankers throughout history, cheat and steal the wealth of their customers. Various efforts to ensure reliability of "money" have been employed, including the ridged edges of coins (if smooth, then someone shaved off part of the gold or silver making it an unjust weight or measure).

Also, you may read a long ignored dissertation which was the basis for the U.S. Constitution's prohibition against "paper money" by clicking here. This dissertation is an in depth examination of the evils of "paper money" from 1792 written by Roger Sherman, one of the greatest minds influencing the founding of the United States of America.

The great economist and philosopher Adam Smith published his writing "Wealth of Nations" long ago, and in that book, he spoke briefly regarding the practices of banking institutions and governments as regards a standard of exchange. He said...

Money... (quote to be added here)

Throughout history, money has been regarded as something worth obtaining (and even hoarding). The unscrupulous have been willing to go to great lengths to "con" the masses into parting with their money. Bankers throughout the centuries have included individuals who are experts at the "con" game and who disguise their "con" with elaborate rules, regulations, and complex formulae. But in each case, from the beginning of recorded history, it always comes down to a singular mission: confiscate the wealth of another by acquiring the rights to their real money through both legitimate and illegitimate means while giving them promises to redeem that money and yet never intending to do so in whole.

Not all bankers are bad people. In fact, many bankers are very honest, particularly under the stringent controls operating in the United States today. Also, many bankers are actually only glorified laborers who truly have no concept of what money is, in spite of their lofty educational achievements. However, historically, bankers have very often been professional thieves. These who know what they are really doing are professional "con" men operating in a trade fully intended to confuse the masses.

Most people trust their banker and most banks have "Trust" departments, but in reality, even unwittingly, bankers are the least trustworthy of individuals on the face of the planet. They simply steal the wealth of the populace they serve... even though many of those bankers do not realize they participate in this elaborate, communistic fraud.

The Truth About Bankers and Money
In summary, bankers are thieves. The handful who know what is going on with the debauchery of the currency are the evil men who actually rule the world through their control and manipulation of the money supply. Those bankers who do not know these things are merely laborers who unwittingly participate in the expropriation of the wealth of their customers. Yet the fact remains that one's wealth is diminished immediately upon deposit and is further depreciated over the time that deposit exists.

The Fiascos of Central Banking
THIS SECTION IS STILL UNDER DEVELOPMENT, and will include an historical account of the devastation brought on through the frauds perpetrated by central banks. While rarely acknowledged as the cause of economic devastation and international conflict, when this comprehensive list is complete, the reader will realized that the "friends of paper money" do not want to be exposed for the evil they intentionally inflict on people and nations and these evildoers usually successfully deflect the responsibility for the ills of mankind to others, namely politicians and circumstances. With a compliant media and self-absorbed politicians, their efforts in historical revisionism are typically successful. This section is forthcoming...

The Fiascos of Central Banking
In summary, 
THIS SECTION IS STILL UNDER DEVELOPMENT, and will include an historical account of the devastation brought on through the frauds perpetrated by central banks. While rarely acknowledged as the cause of economic devastation and international conflict, when this comprehensive list is complete, the reader will realized that the "friends of paper money" do not want to be exposed for the evil they intentionally inflict on people and nations and these evildoers usually successfully deflect the responsibility for the ills of mankind to others, namely politicians and circumstances. With a compliant media and self-absorbed politicians, their efforts in historical revisionism are typically successful. This section is forthcoming...

The Federal Reserve Act of 1913, Wealth Confiscation, and Communist Principles
At the turn of the 20th Century, a revolution was sweeping the world. Country after country experienced waves of shock as the tenets of the religion of Karl Marx became the political correctness of this time period. America was not exempt. While other nations around the world adopted much, if not all, of the religion of Karl Marx, the United States of America also embraced portions of this a-theistic philosophy of governance and community.

Comments of the Chairman of the Banking
Committee of the US House of Representatives
10 June 1932

Louis T. McFadden, who was the Chairman of the House Banking Committee back in the 1930s described the FED, remarking in the Congressional Record, House pages 1295 and 1296 on June 10, 1932:

"Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal reserve banks. The Federal Reserve Board, a Government Board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the maladministration of that law by which the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it".

Interestingly, John F. Kennedy drafted an executive order (#11110) and began an effort to crush the central bank by returning the United States to silver coin and US Notes issued for silver coin deposited in the Treasury of the United States, on a non-fractional basis. Curious that he was assassinated just as he was about to reduce the Federal Reserve to the history books. (Click here for one perspective of these trying events.)
 

This banking practice actually predates "communism" and the religion of Karl Marx. It goes all the way back in history to the Babylonian empire. Today it has been built into the communist model. It is an a-theistic financial system. Remember that the Judao-Christian financial ethic is clearly stated:

"But thou shalt have a perfect and just weight, a perfect and just measure shalt thou have: that thy days may be lengthened in the land which the LORD thy God giveth thee."
(Deuteronomy 25:15, KJV)

The communistic financial ethic is the same a-theistic ethic of millennia past: acquire the real money (gold or silver) of a depositor in exchange for a written promise to redeem it upon demand, and never actually plan to redeem the written promises in whole.

This nation began a movement away from the conservative principles upon which it was founded, including the Judao-Christian ethic, the philosophies of the Greek and Roman empires, the teachings of Adam Smith and ???. The form of adoption chosen by the leaders of the United States in the early 1900's was taxation and central banking with an intention to adopt other communist principles wherever possible. The problem for these communist leaders within our country was that our founding fathers had created a system that was difficult to sweep aside. The resilience of the Constitution of the United States of America in the face of what is actually a philosophy hostile to the individual freedoms and responsibilities embodied in our governing document is amazing.

However, some communistic in-roads were achieved, including one that was specifically refused by the founding fathers both in debate and in the final documents adopted by the States. That particular communist principle is the fifth plank of the communist manifesto which states:

Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.

This principle was adopted in 1913 as the Federal Reserve Act. Since before the formation of a united nation of States, bankers had repeatedly attempted to offer storage of the gold and silver of individuals in exchange for convenient pieces of paper (promissory notes), and had repeatedly issued more notes than gold or silver retained on deposit. These practices had resulted in multiple bank failures and the theft of everyday citizen's personal funds. Practices during the 1800's had also resulted in these financially devastating events.

Is the Federal Reserve Act of 1913 Unconstitutional?
Some would say that the act itself is unconstitutional, however the drafters of that legislation were very careful to skirt the constitution and the implementation of that act and the resulting "fiat" money system are painstakingly planned. While the act itself may not be unconstitutional, the adherence to the act by the States of this union is where the true constitutional question lies.

Article 1 Section 10 of the Constitution of the United States of America states that "no state shall make any thing other than gold or silver coin a tender in payment of debt". Look at your currency. It does not say "IN" payment of debts, rather it says "FOR" payment of debts. Therein lies the careful skirting of the constitution. Does one word matter?

Yes, one word matters. See below for the effect of Cosmetic Changes to the Currency and consider the following questions:

  • What is the difference between "in payment of" and "for payment of"? The word "in" indicates a complete satisfaction of the debt whereas the word "for" indicates a substitution of the debt with another debt, namely the promissory note of the Federal Reserve taking the place of the debt you personally owe.
  • Why was any promise on the currency of the Federal Reserve removed on the day of John F. Kennedy's funeral? By changing the currency's guarantee to be redeemable for gold or silver coin at such a traumatic moment in the history of our nation, the Federal Reserve caught us unaware due to our mourning of a national tragedy.
  • If any State in this union allows you to displace your debt with another's debt, has that State violated the Constitution? No, rather it has allowed you to "pay" your debt by proxy, but the debt remains, and has always remained, though the debtor has changed to become the Federal Reserve, to which the federal government is indebted. In fact, all debts that exist are ultimately the debt of the federal government. Think carefully about this. Every single "dollar" (i.e. Federal Reserve Note) is based entirely on a debt created by the federal government, and this is from where the rarely used phrase "monetize the debt" comes.

With the Federal Reserve Act, the nation was to adopt (without the population really recognizing it) a communist principle in exchange for stability of the nation's banking institutions. However, the process of reserving--on a fractional basis--did not stop. With a much larger system, and with only a small percentage of people expecting to redeem the pieces of paper for the actual deposit they represented, it was even easier to inflate the "money" supply. The real key to confiscation of wealth is to remove the promise to return the deposit to the certificate holder.

While financially devastating, the stock market crash and resulting depression of the 1930's greatly improved the likelihood of wholesale adoption of central banking principles even though the actual cause of the depression was rampant inflation of the money supply by the Federal Reserve and financial manipulation of the free market. Since the vast majority of the people did not understand the devastating effect of the financial system to which they had been subjected, they turned to the leaders and financial professionals for guidance--the very people who caused the problem.

In fact, Paul Warburg, creator and original administrator of the Federal Reserve, stated (as quoted in "The Nation" on February 3, 1932) regarding the stock market crash and ensuing depression:

I have studied finance and economics and international trade all my life, and now, after these recent events, I have come to the conclusion that I know nothing whatever about any of them.

How remarkable that the leaders to which the people turned for solutions to the problems at hand not only were the cause, but also did not understand the effect of their actions on the economy. And now they were expected to solve the very problem they created.

As part of "reform" to ensure this kind of thing would never happen again, gold was de-monetized and actually became illegal to own. Imagine this: the problems were almost entirely due to the fact that when people went to the bank (derisively referred to as a "run on the bank"), they were unable to exchange their paper for the gold or silver it supposedly represented because more paper existed than gold or silver on deposit.

In good faith, people put their dollar weight of silver or gold in the bank in exchange for a promise to receive it back should they so desire. When they desired, it was no longer there. The leaders attributed the problem to gold, but the real problem was the fractional reserve of gold in relation to the paper outstanding. This is like blaming the firearm for the actions of the criminal who uses the firearm to commit a crime. By de-monetizing gold, that portion of wealth was confiscated.

Look at the 10 planks of the communist manifesto. These principles are primarily concerned with confiscation and control. This nation adopted laws and behaviors, which actually are unconstitutional but will never be challenged in court. The leaders of the United States imposed communist principles, such as a heavy and progressive income tax (plank 2), tax/superior title of land (plank 1), and central banking (plank 5). Over the 20th century, many more of the planks were implemented in full or in part in this nation. With the implementation of central banking, real wealth has been confiscated.

This has always been the result of central banking. Throughout history, back to the time of Babylon, paper promises issued as "currency" have always resulted in financial devastation. There is an old phrase: Promises are made to be broken. Certificates of deposit, bank notes, mortgages, and any other form of financial instrument made on paper are simply promises and can be broken, i.e. never honored.

What was unique about the 20th century? This time, for the first time, the people "believed" the rhetoric of the politicians and bankers. In the late 18th century, George Washington, Thomas Jefferson, and other founding fathers recognized the truth and created a constitution for the emerging nation with legal language designed to keep these things from happening. In the 19th century, the leaders of this land understood the danger and Andrew Jackson actually destroyed the control attempted by a central banking cartel. But in the 20th century, no such men of understanding and conviction to protect the people led this nation. In the 20th century, many of our leaders were believers in the religion of Karl Marx.

In the 20th century, the people did not understand the consequences of their leaders' actions. So now, at the turn of the 21st century, the concept of financial responsibility has been lost. In this new century, the people, not only in the United States, but around the entire world, have been fully indoctrinated in the "merits" of communist banking principles without understanding the true nature of those principles. Communism, at least as regards money, has been fully adopted by every nation on the face of the earth.

At the turn of the 21st century, have we experienced anything like our grand-fathers? Actually, yes. Toward the end of the 1990's, the Federal Reserve began raising interest rates drastically. The claim was that the economy was tending toward "inflation" and the country needed to implement some fiscal controls to keep that from happening. This raising of the interest rates was so drastic that the economy, by the year 2001, was in sharp contraction. While pundits and the masses pointed at the President of the United States and while Senators and Congressmen pointed at each other, the truth is that the Federal Reserve is responsible.

In the 1990's, the economy was strong. This had nothing to do with the President's actions, rather with the lowered interest rates early in the decade. When interest rates are low in a "fiat" (promissory note) money system, businesses and individuals borrow, spend, increase production, lower pricing, and build the appearance of wealth. When that appearance of wealth grows sufficiently to result in the appearance of prosperity, the bankers (Federal Reserve) raise interest rates to contract the supply of money resulting in wealth confiscation due to the increased interest payable to the bankers. This is 1929 redux on a smaller scale.

This has occurred nearly every decade since the Great Depression. The intention is to allow for economic growth, then wealth confiscation on a fractional basis. The trick is to do it without causing another depression and to disguise the true causes of the financial shock. While the bankers are counting their "profits", the populace and pundits are blaming each other for high or low taxes (take your pick because it really doesn't matter since taxation is a smoke-screen) and for "wasteful government spending" (which is also irrelevant except that it consumes the appearance of wealth in a nation). While the politicians bicker, the bankers begin lowering interest rates in order to repeat the cycle over the next decade when the economy has recovered from the latest confiscatory action.

The danger is that when the population perceives a loss of value, investors will attempt to "cash out" their appearance of wealth thinking that converting their stock or bond shares into the paper currency of the day will give them some stability of their hard earned "money". In a free market, when supply exceeds demand (such as the supply of stock available for purchase due to massive pending "sell" orders), the price falls. Wholesale selling results in plunging prices. Plunging prices results in depression. And paper currency is not redeemable for any gold or silver making the "money" of the nation potentially worthless. The bankers profit by charging higher interest rates and purchasing stock and/or bonds at heavily discounted prices. To pay the higher interest, more of the appearance of wealth created by the labor of the investor is required and the common person loses a higher amount of their purchase power represented by the paper currency. That "wealth" is transferred by a simple decision into the "profits" of the banker.

The inserted box here is another excellent example of the effect of central banking on the economies of the world as presented at another website. This brief dissertation is excerpted and included here:

An Excerpt Regarding Central Banking and the Federal Reserve System
as Presented at John-F-Kennedy.net (circa 2005 and extant as of July 2008)

(Click here for the full perspective at that JFK site.)
Please note that while I do not agree with many items posted on other areas of their website, this discussion is excellent.

There have been three central banks in our nation's history. The first two, while deceptive and fraudulent, pale in comparison to the scope and size of the fraud being perpetrated by our current FED. What they all have in common is an insidious practice known as "fractional banking." Fractional banking or fractional lending is the ability to create money from nothing, lend it to the government or someone else and charge interest to boot. The practice evolved before banks existed. Goldsmiths rented out space in their vaults to individuals and merchants for storage of their gold or silver. The goldsmiths gave these "depositors" a certificate that showed the amount of gold stored. These certificates were then used to conduct business. In time the goldsmiths noticed that the gold in their vaults was rarely withdrawn. Small amounts would move in and out but the large majority never moved. Sensing a profit opportunity, the goldsmiths issued double receipts for the gold, in effect creating money (certificates) from nothing and then lending those certificates (creating debt) to depositors and charging them interest as well. Since the certificates represented more gold than actually existed, the certificates were "fractionally" backed by gold. Eventually some of these vault operations were transformed into banks and the practice of fractional banking continued.

Keep that fractional banking concept in mind as we examine our first central bank, the First Bank of the United States (BUS). It was created, after bitter dissent in the Congress, in 1791 and chartered for 20 years. A scam not unlike the current FED, the BUS used its control of the currency to defraud the public and establish a legal form of usury. This bank practiced fractional lending at a 10:1 rate, ten dollars of loans for each dollar they had on deposit. This misuse and abuse of their public charter continued for the entire 20 years of their existence. Public outrage over these abuses was such that the charter was not renewed and the bank ceased to exist in 1811.

Regarding the War of 1812
and Wars in General

It is interesting to note that some conspiracy theorists believe that the war of 1812 (and practically any war ever engaged) was instigated, or at least encouraged, by those who profited from deceptive banking practices wishing to loan money to governments to finance their expedition and charge interest. The classic example often cited by these conspiracy theorists is WW1 wherein Paul Warburg was head of the Federal Reserve in the US and his brother, Max Warburg, was head of the German central bank. To the conspiracy theorist, this indicates that a cartel instigated and financed both sides of the war, charging interest while millions were slaughtered and economies were ruined, allowing purchase of assets at a fraction of their prior value.

The Bolshevik Revolution

It is also a matter of history (though revised to hide the truth) that the Czar of Russia and his family were slaughtered in 1918 during the Bolshevik Revolution because he refused to allow a "fiat" monetary system, insisting that the money of Russia would remain gold and silver coin.

The result was a communist government that immediately adopted the 5th plank of the communist manifesto while simultaneously confiscating the wealth of its citizenry and slaughtering millions of its people.

The war of 1812 left the country in economic chaos, seen by bankers as another opportunity for easy profits. They influenced Congress to charter the second central bank, the Second Bank of the United States (SBUS), in 1816. The SBUS was more expansive than the BUS. The SBUS sold franchises and literally doubled the number of banks in a short period of time. The country began to boom and move westward, which required money. Using fractional lending at the 10:1 rate, the central bank and their franchisees created the debt/money for the expansion.

Things boomed for a while, then the banks decided to shut off the debt/money, citing the need to control inflation. This action on the part of the SBUS caused bankruptcies and foreclosures. The banks then took control of the assets that were used as security against the loans.

Closely examine how the SBUS engineered this cycle of prosperity and depression. The central bank caused inflation by creating debt/money for loans and credit and making these funds readily available. The economy boomed. Then they used the inflation which they created as an excuse to shut off the loans/credit/money. [Emphasis added, and interestingly is the exact same excuse central banks use today when instigating a contraction of the money supply knowing full well the people do not understand what these things mean, click here for the example presently before us in 2008]

The resulting shortage of cash caused the economy to falter or slow dramatically and large numbers of business and personal bankruptcies resulted. The central bank then seized the assets used as security for the loans. The wealth created by the borrowers during the boom was then transferred to the central bank during the bust. And you always wondered how the big guys ended up with all the marbles.

Now, who do you think is responsible for all of the ups and downs in our economy over the last 85 years? Think about the depression of the late '20s and all through the '30s. The FED could have pumped lots of debt/money into the market to stimulate the economy and get the country back on track, but did they? No; in fact, they restricted the money supply quite severely. We all know the results that occurred from that action, don't we? Why would the FED do this? During that period asset values and stocks were at rock bottom prices. Who do you think was buying everything at 10 cents on the dollar? I believe that it is referred to as consolidating the wealth. How many times have they already done this in the last 85 years? Do you think they will do it again?

Just as an aside at this point, look at today's economy. Markets are declining. Why? Because the FED has been very liberal with its debt/credit/money. The market was hyper inflated. Who creates inflation? The FED. How does the FED deal with inflation? They restrict the debt/credit/money. What happens when they do that? The market collapses. Several months back, after certain central banks said they would be selling large quantities of gold [this occurred in the late 1990s and early 2000s], the price of gold fell to a 25-year low of about $260 per ounce. The central banks then bought gold. After buying at the bottom, a group of 15 central banks announced that they would be restricting the amount of gold released into the market for the next five years. The price of gold went up $75.00 per ounce in just a few days. How many hundreds of billions of dollars did the central banks make with those two press releases?

Gold is generally considered to be a hedge against more severe economic conditions. Do you think that the private banking families that own the FED are buying or selling equities at this time? (Remember: buy low, sell high.) How much money do you think these FED owners have made since they restricted the money supply at the top of this last current cycle? Alan Greenspan has said publicly on several occasions that he thinks the market is overvalued, or words to that effect. Just a hint that he will raise interest rates (restrict the money supply), and equity markets have a negative reaction. Governments and politicians do not rule central banks, central banks rule governments and politicians.

President Andrew Jackson won the presidency in 1828 with the promise to end the national debt and eliminate the SBUS. During his second term President Jackson withdrew all government funds from the bank and on January 8, 1835, paid off the national debt. He is the only president in history to have this distinction. The charter of the SBUS expired in 1836. Without a central bank to manipulate the supply of money, the United States experienced unprecedented growth for 60 or 70 years, and the resulting wealth was too much for bankers to endure. They had to get back into the game. So, in 1910 Senator Nelson Aldrich, then Chairman of the National Monetary Commission, in collusion with representatives of the European central banks, devised a plan to pressure and deceive Congress into enacting legislation that would covertly establish a private central bank. This bank would assume control over the American economy by controlling the issuance of its money.

After a huge public relations campaign, engineered by the foreign central banks, the Federal Reserve Act of 1913 was slipped through Congress during the Christmas recess, with many members of the Congress absent. President Woodrow Wilson, pressured by his political and financial backers, signed it on December 23, 1913. The act created the Federal Reserve System, a name carefully selected and designed to deceive. "Federal" would lead one to believe that this is a government organization. "Reserve" would lead one to believe that the currency is being backed by gold and silver. "System" was used in lieu of the word "bank" so that one would not conclude that a new central bank had been created. In reality, the act created a private, for profit, central banking corporation owned by a cartel of private banks. Who owns the FED? The Rothschilds of London and Berlin; Lazard Brothers of Paris; Israel Moses Seif of Italy; Kuhn, Loeb and Warburg of Germany; and the Lehman Brothers, Goldman, Sachs and the Rockefeller families of New York. Did you know that the FED is the only for-profit corporation in America that is exempt from both federal and state taxes? (emphasis added) The FED takes in about one trillion dollars per year tax free! The banking families listed above get all that money. Almost everyone thinks that the money they pay in taxes goes to the US Treasury to pay for the expenses of the government. Do you want to know where your tax dollars really go? If you look at the back of any check made payable to the IRS you will see that it has been endorsed as "Pay Any F.R.B. Branch or Gen. Depository for Credit U.S. Treas. This is in Payment of U.S. Oblig." Yes, that's right, every dime you pay in income taxes is given to those private banking families, commonly known as the FED, tax free.

Like many of you, I had some difficulty with the concept of creating money from nothing. You may have heard the term "monetizing the debt," which is kind of the same thing. As an example, if the US Government wants to borrow $1 million, they go to the FED to borrow the money. The FED calls the Treasury and says print 10,000 Federal Reserve Notes (FRN) in units of one hundred dollars. The Treasury charges the FED 2.3 cents for each note, for a total of $230 for the 10,000 FRNs. The FED then lends the $1 million to the government at face value plus interest. To add insult to injury, the government has to create a bond for $1 million as security for the loan. And the rich get richer. The above was just an example, because in reality the FED does not even print the money; it's just a computer entry in their accounting system.

To put this on a more personal level, let's use another example. Today's banks are members of the Federal Reserve Banking System. This membership makes it legal for them to create money from nothing and lend it to you. Today's banks, like the goldsmiths of old, realize that only a small fraction of the money deposited in their banks is ever actually withdrawn in the form of cash. Only about 4 percent of all the money that exists is in the form of currency. The rest of it is simply a computer entry. Let's say you're approved to borrow $10,000 to do some home improvements. You know that the bank didn't actually take $10,000 from its pile of cash and put it into your pile? They simply went to their computer and input an entry of $10,000 into your account. They created, from thin air, a debt which you have to secure with an asset and repay with interest. The bank is allowed to create and lend as much debt as they want as long as they do not exceed the 10:1 ratio imposed by the FED. It sort of puts a new slant on how you view your friendly bank, doesn't it? How about those loan committees that scrutinize you with a microscope before approving the loan they created from thin air. What a hoot! They make it complex for a reason. They don't want you to understand what they are doing. People fear what they do not understand. You are easier to delude and control when you are ignorant and afraid.

Now to put the frosting on this cake. When was the income tax created? If you guessed 1913, the same year that the FED was created, you get a gold star. Coincidence? What are the odds? If you are going to use the FED to create debt, who is going to repay that debt? The income tax was created to complete the illusion that real money had been lent and therefore real money had to be repaid. And you thought Houdini was good.


 Additional note: Central banking is the 5th plank of the communist manifesto and 
 the Income Tax is the 2nd plank of that manifesto, and both were adopted/implemented within 
 the United States of America in 1913 with introduction of the Federal Reserve Act and the 
 16th Amendment to the Constitution of the United States of America.

The preceding excerpt provides another clear example of how these principles work. I found this in July 2008 during the so-called "crisis" when markets were drastically down and "gloom and doom" filled the media reports. I was seeking additional information about the Federal Reserve Act of 1913 and, by happen-chance, came upon this exposť. There is much truth available instantly on the internet, and finding those nuggets of truth, even buried within dubious presentations, is the beauty of the free flow of information available on the internet. 
                     Please note, much of that site whence came this discussion is, in my opinion, filled with errors 
                     and seems to envision a conspiracy under every rock, yet when a moment of truth is observed, it 
                     should be embraced, though all else may be questionable.

While my thoughts in this section have been here since the late 1990s, sometimes other examinations may be useful as was the item above found in the Summer of 2008. There is even a petition to dissolve the Federal Reserve: click here.

Having read my thoughts, and those of others, what does all this mean?

To Summarize: In reality, by adoption of the communist principle of central banking, the wealth of this nation was, and continues to be periodically, confiscated. This has been accomplished by:
  1. securing deposits of gold and silver of the masses
  2. inflating the number of certificates for those deposits
  3. contracting the money supply (certificates for money) by raising interest rates and other manipulative actions
  4. causing the populace to hurry to the bank to redeem their certificates for the gold or silver which was supposed to be on deposit in the bank's vault
  5. closing the banks due to their inability to redeem the certificates for the gold or silver the certificate holder had deposited
  6. blaming the gold and silver itself for the financial destruction caused by the bankers
  7. de-monetizing gold (and eventually silver)
  8. continually manipulating the money supply to expand and contract the economy of this nation so as to confiscate wealth into the hands of a few

The Effect of Cosmetic Changes to Currency
Is it a "cosmetic" change to remove a promise to pay money from a promissory note? The notes of the Federal Reserve began as any normal promissory note. A careful examination of early notes revealed that the wording on the note actually was a sentence, stating something like:

The United States of America... promises to pay to the bearer on demand in gold or silver... ten dollars... payable at the Treasury...

This language was spread out over the note in various fonts and size of type. Why is this? To make it pretty? Or was this practice intended to make it easy for a cosmetic change to go unnoticed? Look at a $10 bill today. At the top it states "FEDERAL RESERVE NOTE" and near the top are the words "UNITED STATES OF AMERICA". There is no sentence today, only a statement of two indicia: quantity (TEN) and unit of measure (DOLLARS) but no substance. There is also a statement "This note is legal tender for all debts public and private." Where is the promise? The fact that it is a "NOTE" means that it is a promise, but the promise is missing.

The truth is that the cosmetic changes of the "currency" over time have not only been cosmetic, but have actually been confiscatory in nature. In essence, gold or silver deposited in the past will never be returned to the depositor. And as of 2003, the dollar weight of silver exchanged for a single $1 note can only be acquired from a coin dealer for between 8 and 15 $1 notes depending on the "aesthetic quality" of the coin, which is an intentional effort to make the populace believe the coin is only a "relic of the past". As of 2003, a troy ounce of silver can be obtained for 7 $1 Federal Reserve notes. In a best case scenario, as of 2003 the $1 note has been diluted such that a true dollar weight of silver requires approximately 7 to 15 times what was originally exchanged for it. That is the confiscatory nature of cosmetic changes.

The Effect of Cosmetic Changes to Currency
In summary, words mean things and changing terminology or revising the "words" of a promissory note does in fact have disastrous consequences, specifically the confiscation of wealth. Only so long as the people remain ignorant and duped will this fraud go unchallenged.

The Conclusion: There is no Money in the United States
Does this surprise you? Remember, according to law, money is defined as follows:

"The terms 'lawful money' and 'lawful money of the United States' shall be construed to mean gold or silver coin of the United States." 
12 U.S.C. 152

Today, there is no gold or silver coin used in exchange of goods or services, nor "IN" payment of debts. What is used today are notes of the Federal Reserve System which promise absolutely nothing and are engraved with the inscription indicating its use is "FOR" payment of debts. Every Federal Reserve Note is based on a debt instrument.

Consider this carefully: ALL DEBITS = ALL CREDITS. Every monetary asset of any person or entity (DEBIT) is a Federal Reserve Note (an off-setting CREDIT on the books of the Federal Reserve). The few coins that exist with a DOLLAR denomination are not actually in circulation "as money" and neither are these labeled according to the actual number of Federal Reserve Notes for which the metal may legitimately be exchanged.

The Conclusion: There is no Money in the United States
In summary, with regards currency, the entirety of DEBITS equals the entirety of CREDITS, and none of those aggregated monetary assets or liabilities are consistent with the legal requirements of "lawful money" in these United States of America.

So What Do I Do?
What are you doing now? Working, trying to make a living, providing for your family? You now have an understanding of the nature of money and how it functions around the world today, but nothing has changed. The sun will come up tomorrow. You will still need to work and earn "money" to pay for the needs of yourself and your family. The motto of the Boy Scouts of America ("Be Prepared") is valid. You must always be prepared, as best as you can, for whatever contingencies life may throw your way.

But what you also now have is an understanding... and that is important. This understanding gives you an advantage. You now know that ultimately the monetary systems in place around the globe today are based on faith and not on any tangible thing on deposit in any location in any nation. You also know that when the Federal Reserve raises interest rates, the intention and actual effect is to contract the money supply within an 18 to 24 month time period, resulting in reduced economic growth at best, or recession (depression) at worst. Lowered Federal Funds rates result in economic improvements over an 18 to 24 month time period. Watching the actions of the Federal Reserve and timing investments appropriately minimize the personal effect of this intentional manipulation of the money supply and our economy. This advantage will help you better time your equity vs. debt purchases and sales. This advantage will help you determine how much "liquidity" you should have. Think about this very carefully and understand that politicians have virtually no effect on these fluctuations, rather the Federal Reserve's interest rate manipulation is the real culprit regarding economic conditions.

You still have the responsibility to act prudently within this system to the betterment of yourself and your heirs. How do you do that? Return to the question at the beginning of this section: What are you doing now? Are you saving some of your hard earned "money"? Are you planning for retirement by paying off your house, car, and credit cards? Are you funding your children's future education?

The only concern regarding this particular topic is whether you have made any preparation for the future in the event that these monetary systems fail. You may ask, "How can I prepare for that? I am not a finance person."

Consider your investment alternatives. Don't listen to the hype of the gold and silver investment specialists who try to sell "shares" in gold and silver. These are typically not good investments for wealth creation since the prices are artificially set by a combination of "the market" and "analysts". You have to play the game, noting that it is a game of chance and being as prepared for the "bad roll of the dice" as you can be.

Remember, the inflation problem. Remember that interest rate and market manipulation cause expansions and contractions in the economy based on the faith of the participants. When the faith is low, it is usually the result of increased interest rates causing people to sell ownership in stock in order to pay increased debts and interest. They can no longer spend "money" on the things needed for their businesses, rather they must pay more of their wealth to the loaners of their "money". This ripples throughout the economy, contracting the "money supply", causing recession/depression. As "consumer confidence" returns to a higher level (this just means that people have an increase in faith in the economy and in the monetary system in place), the economy will again expand until some point at which the central bank will want to reign in some of the wealth.

The economy always, eventually, recovers. Why? Because we are human beings and we desire to build a better future. The most entrepreneurial among us will see tough times as a challenge to be overcome and will become even more efficient in their process of manufacture, or will devise a new product or business, or... fill in the blank. We are creators of wealth. Our labor and ingenuity will always triumph over loss, though it may take some time in a difficult economic situation.

But how do you prepare in the event of a complete collapse of the monetary systems in place today? That is a good question. Consider another question: If the monetary systems in place today collapse, what will the currency be worth? Nothing? Running to the bank to "get your money" will be an exercise in futility. The banks would close temporarily until the mint could print enough paper to represent all of the demand deposits in all banks. All deposits under $100,000 are "FDIC Insured". What does that mean? That means that the government guarantees that all funds up to $100,000 in an account will receive corresponding paper currency in the event of collapse. But it is still only paper! In a true collapse what is that paper worth? Nothing because it promises to pay absolutely no thing on deposit any where.

If the paper ever becomes worthless, only hard assets will have value. Unencumbered property, gold and silver coin, food, and other assets viewed as having an intrinsic worth will be valuable commodities in such a situation. Gold and silver coin will most likely be the best medium of exchange in such a situation since it is still today easily measured, easily divisible, and easily aggregated for exchange. How much would a dollar weight of gold be worth? Of silver? Whatever you can exchange it for. Haggling, a lost art in this nation, would likely become necessary again in such a scenario.

So What Do I Do?
In summary, what are you doing now? What you now have is an understanding giving you an advantage. You now know that money is not based on any tangible thing on deposit. You also know that when the Federal Reserve raises interest rates, the intention and actual effect is to contract the money supply within an 18 to 24 month time period, resulting in reduced economic growth at best, or recession (depression) at worst. Watch the Federal Reserve and time your investments appropriately so as to minimize the effect of this intentional manipulation of our economy. Determine how much "liquidity" you should have. Recognize that the Federal Reserve's interest rate manipulation is the real culprit regarding economic conditions. "Be prepared" for the worst. Have unencumbered assets at the ready, and learn to "haggle".

Examples of Money in Recent US History

2nd Bank - $10
Continental Currency $30
1891 - $50 in silver note
1907 - $10 in gold note
1914 - $10 federal reserve note
1915 - $10 bonded federal reserve note
1928 - $10 gold federal reserve note
1928 - $10,000 gold or lawful money federal reserve note
1928 - $2 legal tender federal reserve note
1934 - $5,000 lawful money federal reserve note
1934 - $5 silver federal reserve note

for more images of currencies issued, visit http://www.frbsf.org/currency/bills.html

What is Money?

On this page I have an exhaustive essay.

Have you ever wondered what money is? You may ask, "Why would I ever wonder that? Isn't money the paper we exchange for goods and services, or the demand deposit in my checking and savings accounts?" What if the answer to both of your questions was "No"--would you be confused?

To truly understand this topic will require that you set aside everything you have been taught about money as it exists and is used in the world today. Why? Because "money" does not exist today.

"What??" you may ask incredulously. This is a surprise to most people. Today, "money" does not exist, rather only promises of money exist (pieces of paper such as the US Federal Reserve credit notes) and these promises are circulated as money today even though they actually promise to pay absolutely nothing on deposit anywhere. These promises are used as if they were money. And these promises will never be honored because there is absolutely nothing on deposit for which these credit notes can ever be redeemed.

Confused? It is understandable that one would be confused by the preceding statements.

How can this be? Suppose someone were asked to produce an amount of money, for example ten dollars. That individual would probably reach into a pocket or purse and retrieve a piece of paper approximately seven inches long and three inches tall bearing markings indicating a nationality, some control numbers, a portrait, and a designation of "TEN DOLLARS"--or perhaps a combination of other denominations of similarly shaped paper which would aggregate to ten dollars. In response to the query, has the individual with a "ten dollar note" actually produced "TEN DOLLARS" in money? No they have not. While that production would in fact be ten dollars in "currency", it definitely is NOT ten dollars in "money". Still confused?

So what is this "currency" and how does it relate to "money"? Here we will discuss the origin of money, what actually constitutes money in any given society, and what is the official money of the United States of America. When we have examined these concepts, you will no longer be confused, however, you may be very disturbed by what you have learned.

Also, you may read a long ignored dissertation which was the basis for the U.S. Constitution's prohibition against "paper money" by clicking here. This dissertation is an in depth examination of the evils of "paper money" from 1792 written by Roger Sherman, one of the greatest minds influencing the founding of the United States of America.

 

"Money" and "Tender In Payment of Debts" as Defined By Law

"The terms 'lawful money' and 'lawful money of the United States' shall be construed to mean gold or silver coin of the United States." 
12 U.S.C. 152

"The money of account of the United States shall be expressed in dollars or units, dimes or tenths, cents or hundredths, and mills or thousandths, a dime being the tenth part of a dollar, a cent the hundredth part of a dollar, and a mill the thousandth part of a dollar; - and all accounts in the public offices and all proceedings in the courts shall be kept and had in conformity to this regulation." 
31 U.S.C. 371 (later recodified as 5101)
      see also:   Coinage Act of 1792
                      31 U.S.C. 314 (and 821)

"No State shall... make any thing but gold and silver coin a tender in payment of debts." 
U.S. Constitution, Article 1, Section 10, Paragraph 1

Statesmen and "Money"

"All the perplexities, confusion, and distress in America arise not from defects in their constitution or confederation, not from want of honor or virtue so much as from downright ignorance of the nature of coin, credit, and circulation"
2nd President of the United States, John Adams

"The corporations which create the paper money can- not be relied upon to keep the circulating medium uniform in amount. In times of prosperity when confidence is high, they are tempted by the prospect of gain, or by the influence of those who hope to profit by it to extend their issues of paper beyond the bounds of discretion and the reasonable demands of business. And when these issues have been pushed on from day to day until public confidence is at length shaken, then a reaction takes place, and they immediately withdraw the credits they have given; suddenly curtail their issues; and produce an unexpected and ruinous contraction of the circulating medium which is felt by the whole community."
7th President of the United States, Andrew Jackson,A Political Testament (His document regarding governance and including an extensive dissertation on the extreme dangers of a central bank)