Part 6 of 7
by Dr. Edwin Vieira, Jr., Ph.D., J.D.
(Editor’s Note: While I disagree with the author’s interpretations about the US Constitution, the rest of his scholarship should be read by all.)
PART FIVE of this Commentary explained how Muslims’ adoption of gold and silver coin as their media of exchange could happen, and what effects it could have. Continuing that analysis…
5. It may seem paradoxical that the Western Establishment’s monetary and banking systems could collapse, simply as the result of Muslims’ reestablishment among themselves of honest monetary weights and measures. But that reintroduction of specie as media of exchange in the Islamic world would have immediate and profound economic, political, and social effects in the West cannot be doubted.
a. The exchange values of silver and gold would increase dramatically as against fiat currencies, and the values of fiat currencies would correspondingly decrease, especially with Western currency traders and other speculators in the forefront of selling those currencies short. Imagine simply what the effect in the gold and currency markets would be if, say, 500,000,000 Muslims exchanged Western paper currencies for but 1 ounce of gold apiece over the next two weeks.
b. Through the inexorable operations of the free market, pressure would build for:
* employment of “gold-clause contracts” in the West;
* American businessmen to start pricing ordinary goods and services in silver and gold;
* American banks to make available silver and gold checking and savings accounts–and, if they refuse, for new financial institutions to emerge that will assist people in employing silver and gold as stores of value and media of exchange; and
* governments to integrate the precious metals into their own monetary transactions, especially to maintain the real values of their tax revenues, and to pay lenders and other economically savvy creditors who will accept nothing else.
c. All this would eviscerate the Western Establishment’s credibility internationally and encourage challenges to its leadership domestically. In particular, Muslims throughout the world would realize that the economic, political, and military power the Establishment now exercises over Dar al-Islam can be thwarted, and even rolled back, if they rigorously perform their religious duties. Thus, the workings of the free market would actually encourage, strengthen, and prove right “Islamic fundamentalism.” In the monetary field, economic science would validate faith. “The invisible hand” would be proven the product of “intelligent design.”
C. How the Establishment would respond to these challenges is easy to envision. The fundamental predictive principle is that the Establishment cares about only the maintenance of its own power, to be achieved at any cost, unless and until faced down by countervailing power.
1. The Western banking banditti and their political fantoccini would probably try to protect themselves through police-state attacks against the market’s spontaneous reintroduction of silver and gold as media of exchange. Employing such measures domestically, though, would have little effect internationally, except to encourage Muslims to go even further and faster, by evidencing to them how effectively their use of the dinar and dirham is deranging what they denounce as “the Great Satan” in his own lair. And to encourage other people everywhere else throughout the world to consider dumping fiat currencies in favor of gold and silver.
2. To be sure, the Establishment might attempt to apply financial police-state tactics against Dar al-Islam itself, such as:
* embargoes on credit to those parts of the Islamic world that employ silver and gold as media of exchange;
* refusals to deal with any Islamic nation that will not accept Western fiat currencies and bank credits on at least equal terms with specie;
* resurrection of Franklin D. Roosevelt’s “Trading with the Enemy Act” ploy to rationalize world-wide quarantines, sterilizations, sequestrations, and even seizures of silver and gold from Muslims (and perhaps everyone else);
* denunciation of silver and gold as “monetary weapons of mass destruction,” or some other gobbledygook calculated to stir up hysterical fear of and hatred against use of the precious metals as money, and against those who advocate such a course; and perhaps even
* demands that Islamic nations either suppress their own citizens’ use of silver and gold or be subjected to B-52 carpet-bombing, invasion, occupation, and “regime change.”
If the Establishment lashed out with such frantic tactics, however, even the most somnolent Muslims would likely be steeled in their commitment to reintroduce a monetary system in conformity with the Qu’ran.
Whether the Establishment could effectively employ the relatively small military forces of the United States and its allies against 1.1 or so billion Muslims (almost 20% of the world’s population) to suppress their use of gold and silver remains to be seen. In light of its resurrection, appropriation, and worldwide application of the Brezhnev Doctrine, however, the Establishment can be expected to try.
3. All of which portends a possible rapid descent into the hellish conditions of an undeclared, unending world war, both abroad and at home. Of necessity, the war would be undeclared, because the true antagonists would be the Western Establishment’s bankers and their political cronies, on the one side, and the common people of the entire world (Americans included), on the other–and this fact could not be allowed to be exposed in Congress or the media. In this war, victory for one side would necessarily entail the utter destruction of the other side: Either Islam, or the Establishment, would have to go under. The bankers and their puppet politicians would understand this, even if most Americans would not.
D. What should common Americans do to protect themselves and their country–as opposed to the Establishment–from these dangers? They still have time, albeit probably not much. Although Muslim theorists and activists have already become vocal on this issue, average Muslims in large numbers are only just awakening to the silver lining in the clouds of Western warplanes and cruise missiles threatening them, and to their golden opportunity to play a leading role on the world’s economic, and even political, stage. It may be years (although, perhaps, not many of them) until charismatic Islamic religious leaders emerge to preach a return to honesty according to the precepts of the Qu’ran, and hundreds of millions of common Muslims then follow them. But when such a leader–some Mahdi–finally appears, watch out!
1. Americans must recognize that, in justice, morality, law, and common sense, the Establishment has no valid claim to stop Muslims (or anyone else) from using gold and silver as their media of exchange. Such is all Muslims’ legal right and, of more consequence yet, their religious duty. Moreover, the use of gold and silver is every American’s constitutional right, too, and the Establishment’s political duty, as summarized in the absolute mandate that “[n]o State shall make any Thing but gold and silver Coin a Tender in Payment of Debts,” Congress’s power “[t]o coin Money, [and] regulate the Value thereof, and of foreign Coin,” and the principle that “whatever functions [the government] are, by the Constitution, authorized to perform, they are, when the public good requires it, bound to perform.” So, on no valid reasoning can the Establishment deny to Muslims (let alone to Americans) what the Constitution proclaims as a fundamental individual right, limitation on governmental power, and even governmental duty.
2. Americans face an inevitable meltdown of their present monetary and banking systems no matter what the Islamic world does or does not do. If Muslims turned to silver and gold, however, they would provide everyone else with an example throughout Dar al-Islam of what needs to be accomplished globally, and assistance in bringing about positive monetary change everywhere. Obviously, if America’s monetary and banking systems are headed for collapse anyway, rebuilding them on an economically and morally sound basis will be far easier if a large segment of the world is already employing silver and gold as its media of exchange. So, instead of blaming Muslims for causing a monetary and banking crisis that the Establishment set in motion decades ago, Western and other peoples should thank them for taking the initiative, and see them as the source of necessary succor after the monetary and banking roof falls in.
3. Rather than allowing the Establishment to react in its usual ham-fisted manner to a global monetary and banking crisis the Establishment itself has caused, Americans should take control of their own monetary destiny, and minimize their country’s vulnerability, by themselves restoring constitutional money and banking as soon as possible–if not by a single comprehensive Congressional reform, then incrementally State by State, or as a last resort even individual by individual.
a. Initial legislative reforms must come State by State, because a national political movement for sound monetary reform simply does not exist in this country, and cannot be created in the foreseeable future. Too few people understand the problem, and apparently even fewer care enough to do anything about it. In some small States, however, leaders with insight and foresight may emerge, the electorate may be educated, progress may prove possible, and a paradigm for constructive change may be created. Moreover, State-by-State reform from the bottom up is more desirable than Congressional reform from the top down, because it will allow for careful experimentation with and refinement of the methods for introduction of silver and gold into each State’s financial operations and economy. A workable basic program already exists, as my earlier three-part Commentary, The State Electronic Gold Currency Plan, explains. There being a way, all that is needed is the will.
b. Congress could play a subsidiary, albeit nonetheless important, role in reform, however, by enacting legislation to remove all the financial-cum-legal disabilities that now hinder the use of silver and gold as media of exchange. For example, all exchanges of silver and gold useful as currency (whether in the form of coins, bars, electronic units, or otherwise) for Federal Reserve Notes and United States base-metallic (“clad”) coins should be exempted entirely from National and State “capital-gains taxes,” “sales taxes,” and so on–so that these exchanges are treated, for all tax purposes, as no different from exchanges of Federal Reserve Notes for United States base-metallic coins and vice versa. That is, all such money-for-money exchanges should be declared to be nontaxable events.
Inasmuch as Congress requires the Treasury to mint gold American Eagle and silver Liberty coins to the extent necessary to meet public demand, and inasmuch as Congress has declared these coins to be “legal tender” equally with Federal Reserve Notes and base-metallic coins, thereby facilitating the use of the Eagle and the Liberty as currency, it is incongruous in the extreme that the exchange of (say) “$450” in Federal Reserve Notes for a “$50” gold American Eagle coin should be subject to a “sales tax,” or that an exchange of a “$50” gold American Eagle coin for “$450” in Federal Reserve Notes should be subject to a “capital-gains tax” simply because the coin was originally obtained for “$420” in Federal Reserve Notes. As such taxes hardly draw substantial revenues into the National and State treasuries, they could be foregone with no appreciable burden, while simultaneously encouraging the use of silver and gold as media of exchange, and thereby providing at least a form of monetary insurance that would prove absolutely necessary for the country should events such as those described in this Commentary come to pass.
1, Article I, Section 10, Clause 1.
2, Article I, Section 8, Clause 5.
3, United States v. Marigold, 50 U.S. (9 Howard) 560, 567 (1850).
© 2006 Edwin Vieira, Jr. – All Rights Reserved