Secession and the Power of the Purse

You may have seen Edwin Vieira’s three-part series at DumpDC.com, which was a dissenting opinion about secession. I think that his analysis is wrong in all but two points. After all he is a Yankee and educated at Harvard (Just kidding, Ed…kind of…mostly). But there is one point he makes that is unarguable. That is the absolute requirement of a seceding state to wield the Power Of The Purse.

The Power of the Purse is the ability of the seceding state to establish its own money.

I’ve written over and over about this for months and feel like the Lone Ranger. I see all sorts of activity in states like Texas and New Hampshire about secession, and the educational activities that these secession hotbeds are doing is crucial. There is such a dearth of knowledge in the populace about secession that it won’t happen unless the citizens know about it commonly.

But the movement won’t move forward unless someone takes control of the Power of the Purse.

The successful secession will be preceded by the establishment of a new currency that is based in precious metals. Any state that tries to secede without its own new currency is destined to fail. You cannot counterfeit your way to prosperity.

Try to wrap your head around a hypothetical secession scenario for a moment:

State X issues a Declaration of Independence, followed by an Ordinance of Secession, which sets forth the terms under which the state is seceding. Washington refuses to accept the secession. DC begins its retaliation and its efforts to bring the rogue state back into the fold.

The first and most effective weapon Washington could wield is money. The Federal Reserve and Treasury could shut off all transactions with all banks within the seceding state. No more cash sent to those banks. This move alone would severely curtail commerce within days as banks would run out of cash within hours. Then, Washington could just play a game of “chicken” to see who blinks first.

A concurrent move could be to suspend Federal payments of any kind to residents of that state, including Social Security, Federal pensions, Medicare, Medicaid, Veterans health benefits and such. The howling would be deafening.

If that state was still relying on Federal Reserve notes and Washington’s banking system, it would likely capitulate quickly. So much for sovereignty…so much for liberty.

But a state that had planned ahead by establishing a new monetary system would not be brought to its knees so easily.

First, the new currency must be based only on gold and silver. A new monetary system that mirrored the counterfeiting ways of Washington won’t work.

Next, State X must write a new constitution that prohibits fractional reserve banking, the method whereby banks create money from thin air.

Next, State X must establish the weights and fineness (purity) of the new currency without establishing its value.

Next, State X must enact laws that provide for the private minting of gold and silver coins. So long as the privately minted coins meet weight and fineness standards, they will be considered legal tender. That means that competition would be introduced into the minting of money, thereby allowing the free market to set the value of the money supply.

Right now, a state could begin to require its citizens to pay their taxes with gold and silver coins or electronic money (ecurrency).¹ Ecurrency facilitates electronic transactions in commerce without carrying around coin. Naturally, it would make sense that State X would assess no taxes of any kind on currency or precious metals transactions. Establishing this payment system now would begin to (a) educate Joe Citizen about sound money, and (b) start filling state coffers with real money.

Along with this initiative, State X MUST wield the Power of the Sword, coming in my next article.

Secession is the Hope for Mankind. Who will be first…and wisest?

DumpDC. Six Letters That Can Change History.

¹Read more about gold-backed money at Edwin Vieira’s website: Edwin Vieira . Scroll down until you find the article entitled “The State Electronic Gold Currency Plan.”

© Copyright 2010, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

11 Responses to Secession and the Power of the Purse

  1. Tom Utley says:

    South Carolina Sound Money bill

    If this actually passes, we could see some more fireworks in South Carolina. It might be 1860 all over again

  2. Cross-Posting Great Links For The Convenience Of New-Comers!

    https://dumpdc.wordpress.com/2010/01/30/secession-and-sound-money/#comment-581

    The Liberty Dollar was doing so well in educating and establishing a sound monetary instrument that the GUNvernment raided them and stole all the gold, silver, warehouse certificates, dies, engravings, office equipment, and even all those freshly minted Ron Paul commemorative pieces.

    You can find out more by visiting:

    http://www.libertydollar.org/

    http://www.norfed.org/

    http://en.wikipedia.org/wiki/Liberty_Dollar

    http://en.wikipedia.org/wiki/Digital_gold_currency

    http://en.wikipedia.org/wiki/Gold_as_an_investment

    http://en.wikipedia.org/wiki/Silver_as_an_investment

    http://en.wikipedia.org/wiki/Platinum_as_an_investment

    http://en.wikipedia.org/wiki/Palladium_as_an_investment

    http://en.wikipedia.org/wiki/Local_currency

    http://en.wikipedia.org/wiki/Alternative_currency

    http://en.wikipedia.org/wiki/Complementary_currency

    That ought to get you started!

    .

  3. ernie gurzler says:

    I agree the first preparatory step should be a sound money law for secession.

    To Tom Utley on the SC bill, How likely is it to pass?

    I do see one thing wrong with the way the bill defines legal money, it allows the US Government through Congress to set which coins are legal. Kind of defeats the purpose of having independent sound money.
    They should have just left it at a weight of silver, which could be equal to the fine silver in the dollar of the US 1792 Coin Act, but allow anyone to mint Palmetto Dollars ( SC being the Palmetto State).

  4. […] and the Power of the Sword As I mentioned in the Power of the Purse article, you may have seen Edwin Vieira’s three-part series at DumpDC.com, which was a dissenting […]

  5. […] and the Power of the Purse Posted on February 15, 2010 by Bill Miller This article by Russell D. Longcore on DumpDC.com The successful secession will be preceded by the establishment of a new currency that is based in […]

  6. Mark Herpel says:

    Hello,
    Great post. It is not necessary for the state to proclaim honest money or for the state gov. to pass an honest money bill in order for any population to gain ‘currency’ independence. We all hope the Montana, Indiana or South Carolina Honest Money[Constitutional Tender] bills will pass someday soon, but local communities can begin today creating a supportive alternative currency for their area. Connected to the dollar or not…any local community can issue and circulate local money. The popular ones today can be backed by dollars, with the future option of using a commodity, or the AOCS [American Open Currency Standard] already offers local currency made of silver. Here are a few examples in the US right now.
    http://www.berkshares.org [backed by USD with commodity option in future]
    http://www.bouldercurrency.com/ [just opening next month]
    http://theplenty.org/
    A local currency can legally operate with great success today, alongside whatever national currency is in place (USD). Made of gold, silver or backed by dollars, local money gives strength to an area or community just as you discuss in your above article. Any area can gain a good bit of financial independence with local currency. Digital gold currency may be at odds with the Federal Reserve and gov right now in the US, but local currency is LEGAL and offers substantial benefits. Start today, hopefully some honest money legislation will pass down the road but no need to wait. Begin structuring your local community’s independence today and build on it.

    Mark Herpel
    editor@dgcmagazine.com
    editor@ccmag.net
    http://www.twitter.com/pdxcurrency

    P.S. Love DumpDC

  7. […] nation/states. They no longer possess the very things that define sovereign nation/states…the power of the purse and the power of the […]

  8. […] note: I have written over and over and over about how secession cannot be successful without The Power of the Purse. But what you may not have noticed is that Washington is dying for EXACTLY this reason. The […]

  9. […] the first thing that a state must do at secession is invent a monetary system…that is the Power of the Purse. Creating gold money is a lot easier than you […]

  10. […] the first thing that a state must do at secession is invent a monetary system…that is the Power of the Purse. Creating gold money is a lot easier than you […]

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