A woman from Kunming, Yunnan province, China filed a lawsuit against the Federal Reserve Bank, for “shrinking” her original deposit of $250 made in 2006—she says the deposit was allowed to lose a third of its value.
This would never have happened if there was broader understanding of the vast difference between currency and money. Episode One of our ongoing video series, The Hidden Secrets of Money, explains the difference—only money is a store of value.
This is precisely what the wise Chinese woman knows. “She claims it was a result of the Federal Reserve issuing too much money [currency],” according to the South China Morning Post. Her attorney, her son Li Zhen, called the lawsuit "litigation for the public good" which aimed to stop the Fed from continuing its quantitative easing policy and promote people's awareness of their rights.
The suit alleges "the abuse of monopoly in issuing currency," and was issued last month at the Kunming Intermediate People's Court–the court has yet to decide whether to officially place the case on file.
In reference to a new Chinese “Anti-Monopoly Law enforced in 2008, there have not been many lawsuits in this regard,” Li commented on whether he felt the local court would decide to hear the case.
The judges were "greatly surprised" to see the indictment, said the 36-year-old lawyer, adding he was the first mainlander to have filed a lawsuit against a foreign country's central bank. The suit claims since 2006 the purchasing power, or value, of the cash shrunk by 30%, and requests two things: “the Fed halts the abuse of its monopoly over the issuing of dollars and that it makes a ‘symbolic compensation’ of US$1.”
Li said that after referring to Black’s Law Dictionary, the most cited dictionary in the United States, he concluded that "the Fed is a private institution instead of a government department.”
U.S. financial institutions are required to invest in the Federal Reserve System, and receive a fixed, 6% annual dividend. Nice.
Li’s conclusion?
"Since the Fed is a private institution which enjoys a monopoly over the issuing of currency, US dollar holders can sue it for printing too much money”
He meant currency.
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