Many folks are under the false impression that the US Constitution grants the federal gummint and/or Federal Reserve Bank [sic] the exclusive right to coin and issue money. Article I, Section 8 of the US Constitution says, “The Congress shall have Power […] To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.” There is no exclusive right to coin money, only to set the exchange rate between the States, and determine weights and measures, and the “dollar” is a weight and measure, by definition.
In fact, anyone can produce a dollar, provided it meets the congressionally approved definition of a “dollar”. It gets tricky, though, because the evil federalist dictator Abraham Lincoln destroyed the de jure Republic, and the Federal Reserve Act of 1913 mucked around with the definition of a dollar, and then the despicable statist Richard Nixon, citing executive power under the Gold Reserve Act of 1934, completely trashed it, so that today a dollar is defined as a unit of itself.
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The Gold Reserve Act, enacted by the evil Socialist Franklin Roosevelt, gave the US Treasury exclusive possession of all US minted gold coins and gold certificates (warehouse receipts). The Coinage Act of 1965, enacted by the insane drunkard Lyndon Johnson, finished real dollars by removing the link to silver.
The Coinage Act of 1792 established the U.S. dollar as a specific weight of silver, with one dollar equaling 371.25 grains of pure silver or 24.75 grains of gold. A grain is defined as 1 grain = 0.0648 grams, and 480 grains equals 1 troy ounce.
The origin of the term “dollar” further tells the tale.
“Dollar” comes from the 16th century German town of Joachimsthal (now the Czech town of Jáchymov), where coins of high quality silver were minted, called Thalers. Thalers eventually morphed linguistically into “Dollars”. Though weight and purity of the thaler/dollar varied over time, it has generally been about one ounce of high quality silver, though not necessarily “fine silver” (99.9% pure).
The 1792 Coinage Act specified a silver dollar as the basic unit of money to be 24 grams of silver, alloyed with 4.5 grams of copper for durability.
The upshot of all this was that anyone — a state, a bank, a private mint — could create dollars, provided they met the specifications of the Coinage Act — 371.25 grains of silver in a 90/10 alloy with copper, and Congress had the right to set the exchange rate with the US dollar, as well as the silver weight that constituted a “dollar”.
Fast forward to 1998, and a fellow by the name of Bernard von NotHaus. He created something called the Liberty Dollar (LD), which was made of or backed by silver and gold, and came in rounds (coins), paper and digital forms. The paper dollars were not “currency,” but rather “warehouse receipts” that could be traded in for the actual metal that backed it. Von NotHaus’ vault was regularly audited and the metals were assayed to assure quantity and quality. No paper LD could be issued, except that the amount in metal was on deposit in the vault. The Liberty coins were minted of 99.9% fine silver in various denominations, as were the gold coins. The face values were deterimined by market price of bullion.
I had a Liberty Dollar redemtion center back then, where folks could trade FRNs for LDs, or vice versa. I also handled calls from merchants who had received them from customers, but found they couldn’t deposit them. I would show up and give them FRNs for the LD paper or coins, and everyone was happy. I’ve never met Von NotHaus, but someday I would like to.
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Von NotHaus ended up on the wrong end of the FBI, as free thinkers often do. He was convicted of several bogus charges in 2007, including couterfeiting and fraud, and sentenced to a few months of house arrest and a couple of years’ probation. Deep State lawfare is nothing new, especially when their pyramid schemes are threatened.
His experience was not unlike the Knights Templar several centuries earlier. The Templars originated the modern banking system by doing much the same as Von NotHaus: a traveller could deposit gold and silver with the Templars in one location (a commandary), and take a warehouse receipt. The traveller could redeem that receipt at his destination for the equivalent amount, less a small handling fee.
Eventually, the warehouse receipts became a currency of their own, as bearers traded them in commerce, rather than handling the actual assets. This naturally rankled the royals and the Temple (Vatican), who liked to have a monopoly on currencies, so the Templars were attacked and slaughtered, beginning on 13 October 1307, by French king Phillip IV and Pope Clement V.
Not much has changed in 700 years.
