The end of June marked what is
hopefully the end of the Federal Reserve's policy of quantitative easing. For
months the Fed has purchased hundreds of billions of dollars of Treasury
debt, enabling the government to fund its profligate deficit spending, push
the national debt to its limit, and further devalue the dollar. Confidence in
the dollar is plummeting, confidence in the euro has been shattered by the
European bond crisis, and beleaguered consumers and investors are slowly but
surely awakening to the fact that government-issued currencies do not hold
their value.
Currency is sound only when it
is recognized and accepted as such by individuals, through the actions of the
market, without coercion. Throughout history, gold and silver have been the
two commodities that have most fully satisfied the requirements of sound
money. This is why people around the world are flocking once again to gold
and silver as a store of value to replace their rapidly depreciating paper
currencies. Even central banks have come to their senses and have begun to
stock up on gold once again.
But in our country today,
attempting to use gold and silver as money is severely punished, regardless
of the fact that it is the only constitutionally-allowed legal tender! In one
recent instance, entrepreneurs who attempted to create their own gold and
silver currency were convicted by the federal government of
"counterfeiting". Also, consider another case of an individual who
was convicted of tax evasion for paying his employees with silver and gold
coins rather than fiat paper dollars. The federal government acknowledges
that such coins are legal tender at their face value, as they were issued by
the U.S. government. But when it comes to income taxes owed by the employees
who received them, the IRS suddenly deems the coins to be worth their full
market value as precious metals.
These cases highlight the fact
that a government monopoly on the issuance of money is purely a method of
central control over the economy. If you can be forced to accept the
government's increasingly devalued dollar, there is no limit to how far the
government will go to debauch the currency. Anyone who attempts to create a
market based currency-- meaning a currency with real value as determined by
markets-- threatens to embarrass the federal government and expose the folly
of our fiat monetary system. So the government destroys competition through
its usual tools of arrest, confiscation, and incarceration.
This is why I have taken steps
to restore the constitutional monetary system envisioned and practiced by our
Founding Fathers. I recently introduced HR 1098, the Free Competition in
Currency Act. This bill eliminates three of the major obstacles to the
circulation of sound money: federal legal tender laws that force acceptance
of Federal Reserve Notes; "counterfeiting" laws that serve no
purpose other than to ban the creation of private commodity currencies; and tax
laws that penalize the use of gold and silver coins as money. During this
Congress I hope to hold hearings on this bill in order to highlight the
importance of returning to a sound monetary system.
Allowing market participants
to choose a sound currency will ensure that individuals' needs are met,
rather than the needs of the government. Restoring sound money will restrict
the ability of the government to reduce the citizenry's purchasing power and
burden future generations with debt. Unlike the current system which benefits
the Fed and its banking cartel, all Americans are better off with a sound
currency.
