Does anyone know of any law in existence that forbids a private individual or organization from releasing their own paper currency? I ask because i've been doing research and the only thing i could find was http://www.law.cornell.edu/uscode/18/usc_sec_18_00000486----000-.html:
Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title (!1) or imprisoned not more than five years, or both.
however, this only relates to coins. I was arguing with a friend that competing currencies should be legalized and they challenged me to find the law that makes paper money illegal and i can't exactly find anything. I just sort of assume if anyone tried it the government would get them on a technicality but does anyone know of any examples of this, or any law i might have overlooked?
edit: second question... i was under the impression part of ron paul's presidential platform is to 'legalize competing currencies', however it appears http://www.libertydollar.org/ this is a competing currency that's still operating. what's the deal with this?
nje5019:edit: second question... i was under the impression part of ron paul's presidential platform is to 'legalize competing currencies', however it appears http://www.libertydollar.org/ this is a competing currency that's still operating. what's the deal with this?
The Liberty Dollar company was raided, presumably under the law you cite above. All Liberty Dollars they held were seized, as were their gold reserves.
yeah, i'm aware it was raided, but at the same time they appear to still be in business and serving customers. They're still selling liberty dollars and there's even a registry on the website of companies that accept the currency. On the website it says:
WHAT DO THE AUTHORITIES THINK? Well, the Federal Reserve, the U.S. Treasury Bureau of Engraving and Printing, and the Secret Service have all commented from inquiries from newspapers that the Liberty Dollar is legal and not counterfeit. Many of the articles are posted on the site.
I'm pretty confused about this becaus based on a lot of things I've read (such as Ron Paul's book "Gold, Peace, and Prosperity"), it's illegal to do what this company appears to be getting away with doing.
I downloaded one of the PDFs and the properties, not of the file, but of the document from inside revealed that it was created in 2006, *before* the legal action was taken - 2007.
I was actually about to post a thread asking essentially the same thing. Even aside from coins and paper currency, is there a law against using anything other than U.S. currency as money? For the sake of argument, what about sea shells?
This may be our answer,18 USC 486 and 489. Check the link:
Statement Introducing the Free Competition in Currency Act
13 December 2007
even if there were a competing paper currency, federal reserve notes still have several subsidies. 1 - they are legal tender. 2 - all nationally chartered banks must be members of the federal reserve
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True, but the only reason the dollar has any value right now is that there are no better alternatives. Even with its advantages, a private currency would do very well in this environment.
Even if you disagree, there isn't a strong argument not to at least let people try to trade with what they want.
nje5019: Does anyone know of any law in existence that forbids a private individual or organization from releasing their own paper currency? I ask because i've been doing research and the only thing i could find was http://www.law.cornell.edu/uscode/18/usc_sec_18_00000486----000-.html: Sec. 486. Uttering coins of gold, silver or other metal Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title (!1) or imprisoned not more than five years, or both.
It would be interesting if this law was challenged due to its unconstitutional nature and brought to the Supreme Court. Article I Section 10 of the U.S. Constitution states: "No state shall....coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts..."
But the federal government is no State government.
scineram:But the federal government is no State government.
Right, if the federal Supreme Court admitted that Congress only has the strictly delegated powers listed in Article I Section VIII, legal tender law is just the tip of the iceberg. When is the last time you heard of any branch of the federal government try to restore power to the states or the people? It rarely ever happens. Even when the SC declares something unconstitutional, it generally gives and opinion that somewhat justifies Congress's constitutional rationale and paints a clear path for them take in the future, even though that path is itself unconstitutional.
Bobby:True, but the only reason the dollar has any value right now is that there are no better alternatives. Even with its advantages, a private currency would do very well in this environment.
You are basically talking about a black market currency. Its contracts would have to be enforced privately, outside of public light (it is not the contracts or the currency but their enforcement that is illegal). Such an environment is more prone to fraud and theft.
So why not trade and contract in paper money, but save in gold or silver? There are additional subsidies to paper. To sell paper in exchange for gold is subject to both capital gains and sales tax. So, your gold savings are taxed at a fraction of whatever rate the gov/central bank decides to inflate.
So you either have to enforce contracts illegally or evade taxes to make it "worth it".
Also, read Mises's regression theorem:
http://mises.org/story/1333
It basically says nothing can become money unless it has pre-existing prices, ultimately derived from some commodity source through barter. Notice how America and most other nations slowly abandoned gold money, step by step. It was not until 1971 that most major fiat currencies were totally decoupled from gold, after the people were conditioned to believe the fiat paper was as good as gold. And notice that many commodity prices today strictly follow the price of gold, rather than their being priced strictly according to the supply and demand schedules for the commodities and for the fiat money.
meambobbo: [You are basically talking about a black market currency. Its contracts would have to be enforced privately, outside of public light (it is not the contracts or the currency but their enforcement that is illegal). Such an environment is more prone to fraud and theft.
[You are basically talking about a black market currency. Its contracts would have to be enforced privately, outside of public light (it is not the contracts or the currency but their enforcement that is illegal). Such an environment is more prone to fraud and theft.
I wasn't. When you postulated "even if there were competing currencies" I assumed you meant competing currencies were legalized.
Bobby, I'm not sure we're on the same page. I was saying that while producing and using the currency in transactions would be perfectly legal, using force to settle contracts would not be. Because the government would not enforce them, they would need black market enforcement, or otherwise be unenforceable and meaningless.
If the government did in fact enforce the contracts, then yes, it would be very conducive to competing currencies. I believe the digital gold currencies, such as gold money and e-gold, would see much more popularity.
meambobbo: Because the government would not enforce them, they would need black market enforcement, or otherwise be unenforceable and meaningless.
Because the government would not enforce them, they would need black market enforcement, or otherwise be unenforceable and meaningless.
Assuming something like Ron Paul's legislation above were passed, would there really be no way to enforce contracts involving competing currency trades? Surely there has to be some way to litigate.
Bobby:Assuming something like Ron Paul's legislation above were passed
Yes, I completely agree with RP on this one. Unfortunately, I don't think more than 3 congressmen would vote for it, while voting yes to just about everything else...
If the currencies did not have fixed exchange rates and were freely traded, there would be no real reason to enforce the contracts in a different manner.
let's say a debtor works hard and saves up his entire repayment in one lump sum of cash, but in Zimbabwe dollars. All of a sudden the money is near worthless. This is not the creditor's fault, who specified payment in gold, not Zimbabwe dollars. The debtor speculated incorrectly by saving that currency, and he should be held accountable for repaying the loan as stated. He can sell his money for whatever little gold it will get him. And he can go back to work.
The creditor and others could be charitable toward his cause, but they should not be compelled to do so.
Maybe the use of other currency is not straight out unlawed.
But what is important is that TAXES must be paid in legal tender! That is why fiat currencies such as USD exist, it's because of the tax code. If you don't have the fiat currency handy on tax day, then the governement will put you in deep §h1t...
So, look up whatever paragraph in the tax codeit is that specifies that taxes must be paid in legal tender. There's your answer, I think.
It's not fascism when the government does it.
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