This article was published by The McAlvany Intelligence Advisor on Wednesday, January 23, 2019:
Wyoming legislators are determined to expose the fraud of the Federal Reserve Note. Last summer they overwhelmingly passed the state’s legal tender law, which brought the state back into compliance with Article I, Section 10 of the U.S. Constitution: “No State shall … make any Thing but gold and silver Coin a Tender in Payment of Debts.”
Last week those legislators presented three more bills that, if passed, will require the state’s treasurer to invest 10 percent of the funds held in the state’s pension fund, its reserve fund, and its mineral trust fund in gold and silver. Each bill has 15 or more cosponsors and they are being sold to other legislators as a necessary counterbalance to those funds’ traditional holdings of government bills, notes, bonds, and other investments. This is especially persuasive as those funds have suffered paper losses of more than $200 million thanks to investments in foreign securities.
Not only does the state’s legal tender law restore citizens’ right to use specie instead of Federal Reserve Notes in their daily transactions, the new law removes the state’s previous taxation of those transactions. But it does much more than that: the new law has the potential of exposing the fraud of the Federal Reserve Note and along with it the fraud of the Fed itself.
Mike Maharrey, the Communications Director of The Tenth Amendment Center, put it well: “By removing the taxes on the exchange of gold and silver, Wyoming will treat specie as money instead of a commodity. This represents a step toward reestablishing gold and silver as legal tender and breaking down the Fed’s monopoly on money.”
William Greene, assistant professor of political science at South Texas College and analyst at Mises Institute, explained how important Wyoming’s move back to the Constitution is – it could lead to Gresham’s Law in reverse:
Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a “reverse Gresham’s Law” effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes).
As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state – as people in other states carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve notes for any transactions.
Along the way, it would expose the gigantic fraud perpetrated on the American citizenry by the Fed, a fraud exposed by none other than a former chairman of the Fed itself: Alan Greenspan. In 1966 Greenspan penned “Gold and Economic Freedom” for Ayn Rand’s Capitalism: The Unknown Ideal, where he wrote:
Government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which – through a complex series of steps – the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold.
But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise.
Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy’s books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.
Greenspan added that citizens are caught in a trap thanks to the Fed’s claim of a monopoly on what now passes for money:
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold.
It’s a dirty little secret that few know about:
This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.
Any expansion of freedom is welcome. If it results in the diminution of the Federal Reserve’s credibility, so much the better.
The Tenth Amendment Center: Wyoming Bills Would Expand Use of Gold and Silver, Foundation to Undermine Fed’s Monopoly on Money
Campaign for Liberty: WY C4L Continues Fight to Restore Sound Money
The Tenth Amendment Center: Wyoming Legal Tender Act Treats Gold and Silver as Money; Foundation to Undermine the Federal Reserve
Alan Greenspan: Gold and Economic Freedom, 1966