Monday, October 6, 2008

Jefferson speaks to the heart of the matter...

It was reported today that 60% of the American public think we could be headed for another Depression. I don't know if the American people have a clue where we're headed but Thomas Jefferson warned us over 200 years ago of what might happen should we continue on our present course of financial infrastructure.

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802) 3rd president of US (1743 - 1826)

In another letter (to John Taylor) dated November 26, 1789, Jefferson wrote: "I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing. I now deny thier power of making money or anything else a legal tender."

For the record, the founding fathers of the United States authorized only gold and silver coin as legal tender in payment of debts. Under
Article 1, Section 8, Clause 5 of the Constitution, Congress was given power to: "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures."

Article 1, Section 10, Clause 1 of the Constitution states: "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

The central problem with the American economy today is that it is (unconstitutionally - to the extend it was never amended) founded upon paper (fiat) money - that is, founded upon nothing at all.

An in-depth video of this unconstitutional situation is here. It runs about an hour in length.

From Richard Russell's Dow Theory column today: "New lows -- On July 15 there were 1304 new lows on the NYSE, A RECORD. Therefore, I took July 15 as the "internal low" for the stock market. I didn't think the July 15 performance would be surpassed. But today there were 1663 new lows on the NYSE. Thus, the record of July 15 has been surpassed today. Anyway you look at it, this is not good. Today, there were 3298 stocks traded on the NYSE. This means that an incredible 50.4% of all the stocks traded on the NYSE hit new lows today. Amazing."


Anonymous said...

The first quote is a well-known fake, documented many places. Snopes is the handiest link:

In addition, the constitution makes no restriction on the federal government using paper for legal tender. The clause in question forbids only the STATES from making any thing but gold or silver legal tender for payment of debt. It does not apply to the national government.

Keith said...

Thanks for your input. It is true that the statement you mention is in dispute. I disagree that it is a "well-known" fake, however. The source is undetermined but that is not the same thing as making it fake. Certainly, Jefferson distrusted banks as his famous political conflicts with Alexander Hamilton bear out. Even admits to this.

As to your second comment, my writing of this piece was perhaps unclear. The point I intended is NOT whether paper money is constitutional, rather it is that "legal tender" must be based upon something, generally - but not necessarily - gold or silver. The sections I quoted pretained to "coin" but more specifically they pretain to "substance" or "value basis". Fiat money is not constitutional. And that is what we have.

Thanks again for reading.