We are solvent so far as we can acquire legal tender to pay our debts.... ...we are continuing commercial operations in backruptcy using a commercial instrument that benefits us by allowing us to operate outside Constitutional bounds...I like your refreshing courteous tone and sense of reason; if you can add focus I'll give you half of this years' citrus crop.
What I'm getting from you is that even though we may be able to "acquire legal tender to pay our debts", you're concerned that we'll still face bankruptcy because of two things: constitutionality and the substance for which FRNs can be redeemed.
First, Article I Section 10 of the Constitution forbids the States to make treaties a use anything but gold and silver for tender. The fact that the federal government sees fit to make treaties and use anything but gold and silver for money hasn't bothered the courts yet. You can let me know if that ever changes, but in the mean time lets deal with the fact that the federal government chooses to make treaties and use anything but gold and silver for money.
Second, in 1801 a dollar could be redeemed for dollar's worth of gold or a dollar's worth of everything else. Two hundred years later that gold is worth $14.38, but everything else is worth $14.67. You can go ahead have the gold, I take everything else.
The bottom line is that whether the dollar says FRN or SC, we can still redeem it for gold. The difference is that inflation is now stable and before it flew all over the place.
It's one thing for people to say they like gold because it's really neat-- I agree, it is neat. That said, let's agree that feeding our families and keeping America strong is more important. America was never as strong or as wealthy until we chucked that silly gold nonsense and assumed a sense of responsibility over our affairs.
Financial upheaval is really serious business. During the havoc wrought by the gold standard, people suffered and died horrible deaths. We don't ever want to go back to that again.
Thank you.
Concerning the judges: I don't see them as infallible. They can be as corrupt as any gangster. So the fact that they don't have a problem with something means nothing.
Let's be a little more accurate. Buying gold from a dealer is not redemption any more than buying a coat from a store is redemption. In order for there to be a true redemption, you need a claim check for a specific item such as the coat on rack 22, or twenty dollars in gold coin payable on demand to bearer. Big big difference.
I see your inflation chart and concede that the large amplitude graph until 1950 shows painful inflations and deflations which appear to average zero. Then after 1950 except for the inflation of the '70s, there appears to be a +6% average inflation rate. It's a tradeoff, one set of problems for another. We don't have to suffer the pain of deflations anymore but then we do have to deal with persistent inflation that is never corrected.
Regarding the inflations and deflations, why so much inflation, the deflation? Because even under a gold standard so called, banks found ways to proliferate paper in excess of deposit of metal. Nicholas Biddle was infamous during the Jackson administration for repeatedly extending credit, then calling it back in, deliberately to make a mess of the economy hoping people would blame Jackson for their suffering. They didn't. Jackson won a second term and stopped the 2nd Bank of the US. Prior to 1929, the Federal Reserve was already in business flooding the economy with paper money that went into the stock market. So, bankers not content to follow the law are to blame for those inflations and deflations, not the gold standard.
An example of an inflation that could be blamed on gold was the one that happened in Spain after gold was looted from the South Amer Indians; Silver after the Franco Prussian war, Germany dumped Silver and established a gold standard with gold that previously belonged to the French.
America was never as strong or wealthy....I credit technology and liberty with these developments, not the advent of the Federal Reserve. If anything, we have prospered in spite of it. What about now? China is growing stronger, are we? As our factories are shuttered are laid off factory workers creating enough new wealth to more than make up for the lost business to China?
A sense of responsibility.....what could be more irresponsible, more immoral, more wrong, more unlawful, than robbing creditors and bestowing favors on debtors by brute force of government? Governement is the biggest debtor of all. To the contrary, the epitome of responsibility is to pay just debts in full with full value; this can only be done with gold, perhaps imperfectly at times, but it is as close to perfection as one can hope to be. Inherent in the tendering of paper is the near certainty that the purchasing power value tendered, regardless of face value, dollar for dollar, is not equal to the purchasing power value specified by contract.
I disagree with your opinion, respectfully, that it was the gold standard itself that caused the suffering to which you refer. I offer instead that the suffering was caused by the titanic battles over control of the economy between the friends of paper money and the hard money advocates, and that the unfortunate victims were caught in the middle.
Respectfully.
