Are You An Automatic Teller Machine For Washington?

December 18, 2009

This week’s news headlines report that President Obama, while at the Climate Conference in Copenhagen, pledged $1 BILLION DOLLARS of American taxpayer money to slow the deforestation of the Amazon rain forest.

In Brazil. Yes, that rain forest.

That is one thousand million dollars. And nobody knows what “slowing deforestation” means, or who will receive the money or what it will finally be spent for. Apparently, Mr. Obama thinks that he may spend American tax money any way he pleases…like a monarch.

I know that one billion is a tiny sum in comparison to the trillions that Washington spends yearly. But it’s indicative of a criminal condition that has been shared by all Washington politicians except Rep. Ron Paul of Texas.

Unless you’ve been living in a cave for the last ten years, and you just came back to “civilization,” you’ve probably heard that the government in Washington has been on a spending juggernaut. Since George Bush’s first term as President, Washington has been burning through money like wildfire through the chaparral of Southern California. Obama picked up the book of matches where Dubya dropped them.

When is the last time that you heard a news story about the Federal Government cutting spending? I mean actual spending, not just when DC announces that they deferred an automatic increase built into some spending bill. I mean actually cutting spending, laying off people and cutting back real services. That is what the states have to do (except California, apparently) when they have a budget shortfall. And that is what regular citizens and businesses have to do when their income is exceeded by expenses.

Another story this week showed how Federal jobs paying over $100,000 per year have mushroomed in the last 18 months. DC is on a hiring spree.

But in DC, Congress and the President just keep writing bad checks and they DEMAND that America covers them.

Remember when President Ronald Reagan promised during the 1980 presidential election to eliminate the Departments of Education and Energy? How did that turn out? Now we have even more Cabinet Departments, like Homeland Security.

Washington’s politicians are spending money at a rate heretofore unheard of in human history. And, with the methods that Washington uses to hide their profligate spending, it is nearly impossible for even skilled auditors to see what desperate financial shape America is in. There are estimates that total Federal Debt added to future spending commitments are over $100 Trillion Dollars. That’s way too much for the normal mind to fathom.

But is it America that is desperate financial condition…or just Washington, DC?

This question is one of the most crucial questions facing Washington…and any state that eventually decides to secede from the USA.

Any state that leaves the United States to become its own sovereign nation instantly repudiates any and all American debt forever. Overnight, Washington will have to face the reality that a large amount of taxpayers just disappeared. And it’s not just the immediate revenue that Washington will miss…it’s the future debt that they expect YOU and your grandkids to pay on their behalf.

For example, when Texas secedes to become a new nation, over 24 million people will vanish from the US Federal tax rolls. And, when you consider that Texas traditionally sends Washington more revenue than they get back in Federal pork spending, the pain for Washington will be even more severe.

Washington is treating America like a big Automatic Teller Machine (ATM). The politicians slide in their card, and out comes cash. And when the ATM runs out of money, they just call the Treasury Department and tell them to run the printing presses on overtime. Or, they “slide in their card” and borrow money from the world. All the while, they devise cunning ways to transfer more and more money from your personal and business accounts into theirs.

At some point, the American citizenry must decide that they refuse to be treated like an ATM for Washington. My prediction is that this tipping point will occur when the Dollar collapses and rolling bank holidays begin to happen all over the USA. When the credit cards, debit cards and ATM cards for Americans cease to work, and Americans cannot get their own money out of their banks, Americans will begin getting very focused. So will state politicians.

Sadly, I also predict that most of the American states will keep their lips locked onto the Washington nipple, and they will wait for Washington to tell them what to do next. But for those few states that sense this historic moment, they will launch out into the deep waters of liberty and save their own lives. And for the liberty-loving Americans that witness those secessions, it will be their signal to run…not walk…to get themselves relocated to those new islands of freedom.

“Timid men prefer the calm of despotism to the tempestuous sea of liberty” Thomas Jefferson, 1796.

DumpDC. Six Letters That Can Change History.

© Copyright 2009, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

Ron Paul For First President of New Texas!

December 13, 2009

When Texas inevitably secedes from the United States, it will need a President. I nominate favorite son Ron Paul, of Lake Jackson, Texas as the first President of the new nation.

There is no other person that has the credentials of Dr. Ron Paul. Doctor Paul ran a successful ob/gyn medical practice before entering politics, so he knows small business. He served as a flight surgeon in the U.S. Air Force during the 1960s. He has been a US Congressman for Texas’ 14th District since 1997, returning to Congress after previously serving in the same capacity in the late ‘70s and early ‘80s. He knows the Washington culture and the Washington games from the inside. His record of voting against pork-barrel spending has gotten him the nickname “Dr. No.” Congressman Paul has often been the lone voice on Capitol Hill for compliance with the Constitution of the United States. Paul enjoys a national reputation as the premier advocate for liberty in politics today. Dr. Paul is the leading spokesman in Washington for limited constitutional government, low taxes, free markets, and a return to sound monetary policies based on commodity-backed currency.

Recently, Paul sponsored HR 1207, the Federal Reserve Transparency Act, designed to regulate and audit the Federal Reserve. On December 9, 2009, he introduced the Free Competition in Currency Act in Congress, which if enacted, would get the government out of the money business.

He is known among both his colleagues in Congress and his constituents for his consistent voting record in the House of Representatives: Dr. Paul never votes for legislation unless the proposed measure is expressly authorized by the Constitution.

No other person in Texas can show a lifelong commitment to liberty like Ron Paul can proffer. No governor, Senator or other Congressman can compare their voting records and legislative records with Congressman Paul. All others would be proven to be big-government spenders and friends to tyrants…or tyrants themselves.

I heartily encourage Ron Paul to voice his support for Nullification and eventual Secession in a prepared statement delivered in an open session of the United States House of Representatives. That would throw an ideological hand grenade into the Washington political culture that would reverberate from that moment forward into the history books. That one speech would mesmerize and captivate the Main Stream Media. Paul, his speech and Texas would be the Number One headline for weeks. The line of media interview requests for Rep. Paul would be as long as the Rio Grande…and just about as shallow.

Few events could bolster the cause of nationhood for Texas as the unflagging support of Ron Paul. I dare to say that few events could galvanize the support of Texas citizens as much as Ron Paul’s support of the concepts of Nullification and Secession.

Not since John C. Calhoun’s advocacy of Nullification in the 1830s, and the formal secession of South Carolina in 1860, would Washington’s applecart be up-ended like a simple statement of support of Nullification and Secession from Ron Paul.

But please note: I am not recommending that ANY ACTION toward secession be taken any time soon. The national political events that will precipitate secession have yet to occur. And Timing Is Everything.

Just as George Washington was swept into the Presidency after the 1776 secession, so too would Ron Paul be the logical and emotional choice for Texas.

Perhaps Dr. Paul could convince Judge Andrew Napolitano to relocate to Texas and become the first Vice President or Chief Justice of the New Texas Supreme Court?

The Texas Nationalist Movement is the current driving force for the secession of Texas from the United States. The TNM is presently reaching out to Texans across the state and telling the story of the many reasons that nationhood is best for Texas…and Texans.

The TNM is currently spearheading a petition drive to collect signatures from Texans who support the concept of secession. TNM leaders want to be able to present thousands of signatures to the Governor on January 11, 2011, the opening day of the next Texas legislative session. The petition requests that a straight up or down referendum be scheduled so that the people of Texas may vote themselves whether or not to secede from the Union.

Fore more information about the Texas Nationalist Movement, go to: A basic membership is a mere $20.

DumpDC. Six Letters That Can Change History.

© Copyright 2009, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

Why Switzerland Is Still Free and America Is Not

November 13, 2009

by Ron Holland

The American Time magazine article headline asks, “Will Switzerland Vote to Ban Minarets on Mosques?”

Swiss citizens are becoming concerned about the threat that Islam presents to their traditional culture, economy and religious institutions. As an American, I know how I would vote were I Swiss but the decision will be made by the Swiss electorate as they have this referendum right on all issues.

In Switzerland, the people still rule and have the ultimate right to decide decisions above the government or parliament. Through the right of referendum they can cancel legislation and with the initiative they can pass or create legislative action on issues parliament refuses to act upon.

The bias and closed statist views shown in the article is business as usual for the US media elites out to protect the American political establishment and are so evident in this headline and article. It isn’t the question they asked but rather the question they didn’t dare ask is the “700-lb gorilla in the room.”

Quoting from the article, “Critics say the SVP, the largest party in Switzerland’s coalition government, has taken advantage of the country’s unique brand of direct democracy to push its populist, anti-immigrant agenda on the Swiss electorate. Citizens have the right to propose new laws in Switzerland – the only thing they need to force a nationwide vote on an initiative is a petition of 100,000 signatures.”

The question not asked is why doesn’t the American electorate have oversight over legislation and unpopular government regulations in the United States like in Switzerland? Imagine if 4% of the American voters signed a petition requiring a nationwide vote “yea or nay” on the banking bailouts, going to war in Iraq, auditing the Federal Reserve, nationalized health care or on the trillions in new Washington debt added because of the financial meltdown. The United States would still be a decentralized republic with limited government had we had the political option to hold back Washington and the special interests.

How America would be different if we had Swiss-style political rights to restrain government where the people rule instead of the special interests. Imagine an America where the billions in graft and political influence that control Congress could still buy legislation but not ultimate control if we as a people could overrule their actions.

What if the will of the people still ultimately controlled the political system and direction with true limited government at the federal, state and local level? Imagine the American electorate overriding Congress and demanding a strong dollar backed by real gold reserves, an audit of the Federal Reserve, a rollback of the bailouts, a declaration of war for foreign military intervention, the abolishment of the Patriot Act and a return to banking privacy.

Yes, a Swiss political party (The Swiss Peoples Party) promotes a nationalist agenda to the Swiss voters and they will ultimately decide in referendum yes or no on the issue. This is currently impossible in the United States but Swiss direct democracy and limited confederation government have worked in Switzerland for hundreds of years.

This is far superior to the two-party monopoly in America where the elites controlling both parties can push their self-serving agendas without restraint. Currently, short of the Tenth Amendment movement, state nullification or outright state secession, there is no real effective way to push back against Washington.

Until the American people can find a way to restrain the Federal government, the bureaucracy and the judiciary, the best place for Americans to secure and safeguard their wealth is outside their own country. Switzerland is one of the best jurisdictions to consider because their political system has preserved the rights and freedoms we once had as Americans. Still the ultimate problem for Americans is the necessity to restore our liberties at home because history has shown that wealth without liberty is only a temporary condition at best.

I say, it is time to take a real look at direct democracy in the United States or else Americans who value their property and liberties will have little choice but to first transfer their wealth to safety outside the US as it will be lost in the coming crash of treasury debt and the dollar. Next we must stand and fight the Washington leviathan through the political tools of the 10th amendment and John C. Calhoun’s political ideal of nullification both of which the Feds will probably just ignore. Our final democratic political tool is to exercise the political right of state-by-state secession with all the political and historical baggage this entails.

Trust me, Swiss style direct democracy in the United States would be an easier way to control Washington and the special interests but we only have a few years before the Washington debt and dollar collapse is upon us. Therefore I’ll close with a question. Is anybody here for secession?

Ron Holland works in Zurich and is a co-editor of the Swiss Mountain Vision Newsletter.

Copyright © 2009 by

Listen To This Radio Broadcast About Secession

November 11, 2009

Russell Longcore was the guest on American Freedom Radio on November 6, 2009. Lt. Col. Karen Kwiatkowski (U.S.Army Ret.) is the host of the show. Russell was on for the entire hour, and discussed secession with the host.

Here is the link to hear the broadcast:

American Freedom Radio – Russ Longcore Interview

Could (State) Secession Become a Real Austrian Opportunity?

November 10, 2009

by Robert Eschauzier

At the core of Mises’, Hayek’s, Rothbard’s and, more recently, Hoppe’s work lies the recognition that governance of markets and societies is a spontaneous and civilizing force far too complex to be “managed” by any form of monopolistic government. For this reason I will attempt to address the pitfall and opportunity which secession from the Federal leviathan might present from the Austrian perspective, especially as so brilliantly outlined by Hans-Hermann Hoppe is his most recent book Democracy: The God That Failed. Since there has been a flurry of essays about Texas secession recently, I will use that State as an example even though the principles discussed apply to all attempts at secession.

The Pitfall

There is only one problem with formal secession by one of the States, but it is a big one. If it is organized by a group of individuals under the color of “The State of Texas” and presented as a formal declaration by them as coming from “Texas,” then no substantive change will have been achieved. Separating Texas from the USA does little more than ease the burden of (Federal) taxation and regulation, while leaving the principle of institutional monopoly government and its modern version of “Democracy” completely unchallenged. It is only the scale of government which is being addressed, not its criminal and cancerous nature. Smaller than the Federal monster, the newly seceded State’s government will nevertheless continue to metastasize as its parasitic nature demands.

The Opportunity

Secession, from an Austrian perspective, offers an opportunity to completely repudiate the very concept of institutional monopoly government no matter what label (democracy, republic, constitutional etc.) is put on it. To achieve this, requires first of all that a group of incorruptible individuals wrest control of the existing State government apparatus from the current group of “business as usual” politicians. That this may be so impossible to achieve as to render useless anything I write from here on may be true. I will nevertheless take the optimistic view in an attempt to come up with a set of practical steps which such a group might undertake to achieve a truly Austrian and lasting secession which results in complete abolition of Government.

1. Declaration of Secession: (The need for this first step is primarily to deny those who run the Federal Government and opportunity to “come to the rescue” with its military forces if the State were abolished a priori.)A formal Declaration of Independence and Secession would have to be written and ratified, likely by the legislature and signed by the Governor. A date for publication in all Media has to be chosen. Formal presentation to (and therefore recognition of) the Government of the US or the United Nations should not be attempted as a matter of principle. One cannot claim that Mr. Obama has no right to (forcefully) impose his dictates on others while then behaving towards him as if he does. If military intervention ensues anyway, then all bets are off in the short term even as the true tyrannical nature of government becomes exposed for all to see.

2. Dissolution of State Government: Once State secession has been achieved, a proclamation must be issued, disbanding all forms of monopolist government, including the formal disbanding of the existing State legislature and resignations of its members and the Governor. All existing “elected” politicians will be encouraged to seek suitable employment in the market. “Lower” levels of government (county, city etc.) should be encouraged (but must never be forced) to follow suit.

3. State “Services”: A planned conversion of all existing State Government Agencies to non-monopoly services must be initiated. This must be executed in a humane manner so as not to unreasonably punish workers and others (“clients”) who currently depend on these agencies.

4. Currency: Monetary policy is the preferred tool of monopoly governments for political market manipulation. The creation of currencies is a competitive function of the market just like any other economic activity. It must never be allowed to be subject to political fiat.

5. Dispute Resolution: Government courts must be abandoned, to be replaced by competing arbitration services, many of which already operate successfully today.

6. Taxation: With the dissolution of the State Government all forms of State taxation or tariffs become a non-issue.

7. Government Land: Land “owned” by the Texas government must be returned to private ownership. Hoppe elaborates on methodology for this at length, so I will refrain from doing so here. Ownership of Federal lands would initially have to remain unchallenged or at least approached very carefully so as not to give those who run the Federal Government an excuse to initiate military action “to protect its legitimate interests,” in mind. In the mean time, any individual or groups who after secession wish to acquire such lands may negotiate with the bureaucrats and politicians in Washington to their heart’s content.

8. Immigration: In a system where ALL land and infrastructure (except initially, Federal) is privately owned, all individuals, regardless of their origin, are trespassing if they access a property without permission of its owner(s). Except for Federal lands, would-be immigrants would therefore have to seek those owners’ permission and, if allowed access, become that owners’ responsibility. Migration therefore becomes just another self-regulating activity.

9. Social Services: Millions of individuals presently receive Federal or State benefits of some sort. Those who wish to continue receiving Federal hand-outs, would be free to do so and, if necessary, migrate to any region still associated with and subject to the dictates of the Federal government. Those who wish to throw off this yoke of slavery, will no doubt find many neighbors (now freed of tax burdens) and local church and other volunteer organizations willing to help any who are in genuine need of assistance.

10. Law Enforcement: Laws are just political opinions “enforced” by (the threat of) violence. Those currently engaged in the practice of “Law Enforcement” may be encouraged to find employment and retraining with non-monopoly security services or to move to regions where their skills at terrorizing innocent people may still be in demand.

11. Crime Prevention: Protection from criminals and other (statist) invaders will most likely be offered by insurance companies who contract for these services with companies skilled in such matters such as possibly some existing mercenary outfits which seek to enjoy the moral high ground of serving a willing client instead of a terrorist monopoly government. The market will govern spontaneously which insurers will thrive and which will fail.

12. Health Care: Healthcare will be provided by practitioners and organizations on a competitive basis. Private, competitive insurance plans will no doubt proliferate. Similarly, quality assurance/monitoring will be offered by these insurance providers and “accreditation services” through regular quality audit procedures. Private charity, both intra- and extra-family, will take the place of Medicare and similar “services.” The need for such charity will be magnitudes reduced, because both medical services companies and their clients will operate in a market environment free of government taxation and regulation.

13. Financial Services: Caveat emptor! Private rating services together with liability insurers will audit those engaged in issuance and trading of all financial instruments. Any financial service which fails such audits has little to no chance of surviving for more than a few days or weeks.

14. Environment: First and foremost, pollution will be a matter of (encroachment on) private property rights and must be addressed as such by the parties in question. Preservationists will be free to use their own funds to buy any property they wish to protect. They can also use their wealth to try and encourage voluntary conservation activities by third-party property owners.

15. Education: Schooling will be offered by competing entities, funded commercially as well as by various volunteer religious and other special interest groups. Teachers will be welcomed and employed based on their qualifications. Note also that home schooling is very much alive, especially in Texas.


That it would take years to bring a plan such as outlined above to a successful conclusion is obvious. With the newly emerging strength of the secessionist movement, Austrian economists and thinkers may have a real chance at seizing the reigns of civilization from the statist tyrants. Let’s hope we do.

November 7, 2009

Robert Eschauzier is a dual citizen of Canada and The Netherlands. A life-long entrepreneur, he considers himself an arch “autarchist,” meaning that he views society/nature as a self (auto) regulated arrangement, rather than a non (ana-) regulated one. Since discovering LRC and about ten years ago, he has been a voracious if informal student of Austrian economics. He currently lives and works in Chicago.

Copyright © 2009 by


November 9, 2009

Part 7 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 SIX of this Commentary explained what the Establishment and common Americans might do in the face of adoption by the Islamic world of gold and silver as media of exchange. Completing that analysis…

E. Finally, in all of this, average Americans should not assume self-righteous airs. They deserve to be in danger. And it is their responsibility to take appropriate action. For, according to the theory of “self-government” on which the United States supposedly operates, they have brought all of these perils upon themselves.

1. A people’s accountability for the actions of their government is proportionate to that government’s representative nature. If public officials are chosen through fair elections, and their powers defined and limited by a constitution which the people themselves retain the right and power to interpret, amend, and enforce, then the people are ultimately responsible for every illegal act that those officeholders perpetrate in their name and that the people refuse or fail to punish. The principals must answer for the damages caused by the acts of their agents that the principals empowered and tolerated those agents to commit.

If, knowing or with reckless disregard of the facts, the people actively aid and abet, accede to, applaud, approve, accept, or even acquiesce in the dishonest and criminal acts of public officials and the special interests that suborn them, they are just as responsible as the perpetrators. Perhaps even more so, because it is the people’s legal and moral duty, as well as their own self-interest, to arrest such behavior and arraign the malefactors before the bar of justice, inasmuch as the people put the malefactors into positions of power in the first place.

The Constitution makes pellucid in its Preamble that We the People are the authors of, and thus necessarily both legally and morally accountable for, the laws of the United States and their applications and misapplications by the public officials We the People select to enact and administer them. So, if We the People stand idly by, while malevolent officeholders commit criminal acts in their name and under the color of their laws, their silence betokens consent, their consent imputes guilt, and their guilt renders them fit subjects for retaliation by the victims of the officeholders’ crimes.

A blind, unthinking patriotism cannot excuse inaction. A patriot loves his country and stands behind its legitimate authority. The essence of America is her Declaration of Independence and Constitution. A citizen who does not check every act of every public official against those documents is no patriot, only a chauvinist. No one may hide behind the plea that he has a duty to support the government “right or wrong.” For if public officials are wrong (in the sense of violating the Constitution), then to that extent they do not constitute “the government” at all; their acts are not “governmental” acts but mere private wrongdoing; and every patriot’s constitutional duty is to oppose them and rectify the situation. Indeed, that people demand what is right in the face of official wrong is the essence and the test of true patriotism.

On the other side, neither can it be a valid reason for inaction that the present political system is thoroughly corrupt. If it is, who let it degenerate to that level, if not the American people themselves? Who allows it to remain corrupt, if not they? And who will ever correct the situation, if they do nothing?

That certain individuals in temporary control of the apparatus of the General Government have launched a global attack against the Islamic world (and, truth be told, against Islam itself) is no excuse for common Americans’ complicity or inaction. As the first, most important, and defining principle of constitutionalism teaches, not all acts that persons in public office may perform are legitimate acts of government. No electoral mandate, party platform, political policy, or majority vote in Congress or the Supreme Court can justify a war of imperial aggrandizement. As the Preamble to the Constitution emphasizes, We the People delegated powers to the General Government “to provide for the common defence”, not to attack other nations. Indeed, aggression against other nations violates “the Law of Nations”, “Offenses” against which the Constitution empowers Congress “[t]o define and punish,”[1] not to approve and facilitate. So, their perpetrating a policy of international aggression is a sufficient and compelling reason for removing from office–and, one would hope, prosecuting to the utmost–not only those who actually put such a policy into operation but also those who advise, devise, and promote it, as well as those who have the power and duty to intervene, but stand silently by, watching everything but doing nothing. That, surely, is the fundamental and fully justifiable lesson of the war-crimes trials of Nuremberg and Tokyo, which are now part and parcel of the precedents that make up “the Law of Nations”.

Therefore, if domestic public officials in this country oppress foreigners–and, on the basis of the predictable consequences of that oppression, then attempt to subject Americans to the further oppression of a domestic police state–We the People have a duty (and, indeed, a desperate self-interest), not to obey them, but to change the personnel in, or if necessary even to pull down the structure of, the erstwhile “government”–or be held at least morally accountable before the entire world. As the Declaration of Independence emphasizes, “when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.” “[I]t is their duty”. Yet what course of action are far too many Americans following? Resistance at the polls? Remonstrances to political leaders? Even self-preparedness for an ultimate day of reckoning with the monetary, banking, and other crises the Establishment has made inevitable? Or a self-imposed reluctance to face reality, coupled with retreat into the fantasylands of “sports”, “entertainment”, and general hedonism–while continually re-electing the evildoers or their political clones?

2. A collapse of the Establishment’s Ponzified monetary and banking systems might strip Americans of their black glasses of willful blindness. The key qualification, of course, is “might”. That vanishingly few Americans have awakened to their victimization, and identified the villains responsible for it, suggests that far too many Americans may never arouse themselves from their self-imposed slumber. Admittedly, that the Establishment’s monetary and banking policies rest on lies, larceny, and thoroughgoing lawlessness may not be as obvious as that Pearl Harbor suffered no “sneak attack” or that the cross fire in Dealey Plaza was the work of no “lone gunman”. Nonetheless, the evidence is accessible to and understandable by every American of average intelligence who bothers to search the open literature. Indeed, common sense teaches that the monetary and banking systems cannot be less corrupt than the total political-cum-economic regime of which they constitute important parts–and in the nature of things must be expected to be even more septic, the love of money being the root of all evil.

From even superficial research, every American can discover the absence of any truly patriotic “public interest” in this country’s monetary and banking systems. And, just as easily, Americans can uncover the presence of parasitic special interests, composed of a small number of identifiable individuals self-consciously organized in families, groups, corporations, and so on, who originally put central banking across in 1913, who systematically expanded its powers thereafter, and who now ruthlessly run it for their and their clients’ personal advantages (and, as a necessary consequence, the personal disadvantages of everyone else).[2] Yet, with all this information readily at hand, most Americans have failed to educate themselves. And the few exceptional individuals have proven unable, so far, to translate their knowledge into a movement for monetary and banking reform–proving, once again, that no man is likely to be taken for a prophet in his own country.

In historical context, this is hardly surprising. In the last mammoth crisis of fractional-reserve central banking in the United States–the banking collapse of 1931-1932 and the Great Depression that the Roosevelt regime perpetuated until World War II–Americans by the tens of millions allowed themselves to be deluded, manipulated, and even stampeded by the Establishment into sinking the vampiric fangs of political banking and political currency into America’s throat even more deeply than ever before. Proving not only that Experience keeps a dear school, but also (and more depressingly) that her students rarely learn the lessons she teaches most emphatically.

So, if new monetary and banking crises were to occur in the near future, in the course of Muslims’ adoption of silver and gold as their media of exchange, whom would many Americans be likely to blame? Or, more realistically put, whom would the Establishment deceive many Americans into blaming?

On any moral, political, or economic calculus, no blame should properly attach to Muslims. All peoples, everywhere in the world, have a natural, inalienable right to choose whatever honest media of exchange they desire. And of all contemporary media of exchange, the only ones that can be deemed as honest as human endeavors allow are silver and gold. Moreover, Americans’ own Constitution requires that their governments–National, State, and Local–employ silver and gold as their official media of exchange, to the exclusion of any other. So, Americans cannot possibly fault Muslims (or anyone else) for using the very media of exchange We the People themselves have mandated for the United States.

Rather, Americans should condemn their own erstwhile public officials, and the special interests that pull those Pinocchios’ strings, for leading this country into such a morass by launching a perpetual global assault on Islam while America remains vulnerable to the most effective–indeed, devastating–counterattack Muslims could employ in defense of themselves, their countries, and their religion.

The Constitution provides that “[t]he United States shall guarantee to every State in this Union a Republican Form of Government.”[3] This presumes that what the Preamble calls the “more perfect Union” of “[t]he United States” will collectively remain “a Republican Form of Government,” too, because the Union consists of individual States that are each “guarantee[d]” to be of such “Form.” No republic, though, can survive if its ultimate guardians, its people, remain mere dumb spectators while their own erstwhile “representatives” engage in coldly calculated, systematic deracination, depravation, depredation, and demolition of their country.[4] In this, too, perhaps Americans can learn a lesson, or heed a warning, from the Islamic world: As the Sunan Al-Nasa’i[5] recites,

A man asked the Messenger of Allah: “What kind of jihad is better?” He replied, “A word of truth in front of an oppressive ruler!”


1, Article I, Section 8, Clause 10.
2, See M. Rothbard, Wall Street, Banks, and American Foreign Policy (1995), at; [Read] J. Livingston, Origins of the Federal Reserve System: Money, Class, and Corporate Capitalism, 1890-1913 (1986); G. Kolko, The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916 (1963); W. Greider, The Secrets of the Temple: How the Federal Reserve Runs the Country (1987).
3, Article IV, Section 4.
4, Just so that no one intent on misconstruing my words can attribute the promotion of “racism” to me, the reader should understand that I use the word “deracination” to mean a “detachment from the customs and traditions of one’s country”. See Webster’s Third New International Dictionary (1971), at 607. This preemptive explanation would not be necessary were the political world not filled with people who are as unscrupulous as they are illiterate.
5, One of six leading collections of hadith, recognized by Sunni Muslims.

© 2006 Edwin Vieira, Jr. – All Rights Reserved


November 7, 2009

Part 5 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.)

e. Even were circumstances propitious for the use of both silver and gold as media of exchange, would not Muslims, no less than Americans, suffer from the same disincentives against employment of specie coins in everyday transactions? No. Indeed, quite the opposite–because at least two “large players” exist for catalyzing the transition throughout Dar al-Islam from fiat currency to silver and gold coin (or electronic variants thereof).

(1) The first “large player” could be the Islamic oil reserve, on access to which the continued economic functioning, let alone prosperity, of the West depends. If major Islamic oil-producing nations began to demand payment for their oil in gold and silver (specie), rather than some fiat currency such as Federal Reserve Notes (FRNs), Western countries would have no choice (short of invasion of those nations and expropriation of their oil) but to pay in specie. To obtain that specie, they would have two choices: (i) to exchange their own products for specie, to that extent returning directly to a “specie standard” and demonetizing FRNs in their own economies; or (ii) to remain strictly on the FRN standard and exchange FRNs for specie as needed. If they exchanged FRNs for specie, however, the value of specie as against FRNs would rise, because (all other things remaining equal) if the supply of specie remains constant, but the demand for it increases, the “price” of specie in the medium of exchange used to purchase it must go up. Eventually–and most probably quite soon–parties that found themselves constantly exchanging the FRNs they received in other economic transactions for the specie necessary to purchase oil would start demanding to be paid in specie in those other transactions, so as to eliminate the cost of exchanging FRNs for specie. This would depreciate the value of FRNs even more. Gradually, this process could drive the entire economic systems in those countries dependent upon Islamic oil in the direction of a new “specie standard.”

This scenario depends, however, upon operation “from the top down:” that is, the leaders of various Islamic oil-producing nations must decide to demand specie for their oil. These leaders form very small parts of Islamic society. Some of them are the Western Establishment’s clients, collaborators, or quislings. Others are susceptible to bribery, blackmail, or the ever-present threat of being Saddamized with “regime change.” Few would be likely to risk the loss of their own power, prestige, and perquisites for the speculative general welfare of common Muslims.

(2) The second “large player” could be Islam–the religion–itself. This scenario is more likely, because its operation comes “from the bottom up:” that is, through the great mass of Muslims themselves–who, to a very significant degree, have nothing to lose and everything to gain.

The generally acknowledged “five pillars” of Islam include:

* bearing witness that there is no God but Allah, and that Muhammad is His Prophet;
* daily prayers (salaat);
* fasting in Ramadan;
* the hajj, or pilgrimage to Mecca; and
* paying zakat (variously, zakaat or zakah), what non-Muslims might call a tithe.

The tithe is mentioned along with daily prayers over seventy times in the Qur’an. A commonplace analogy is that, just as prayer is an act of worship Muslims perform with bodily actions, the tithe is an act of worship Muslims perform through economic transactions. It is religiously obligatory charity, amounting to 2-1/2% of a Muslim’s wealth above a certain exemption, that the faithful must pay year around, in money or in goods, directly to the poor or to some charitable agency. Those who fulfill this duty are promised rewards in the world to come; those who evade it are threatened with eternal punishment. Most importantly in the context of this Commentary, Islamic law holds that: (i) mere debt cannot function as money; and therefore (ii) the tithe, if paid in money, must be paid in silver or gold. So typical Western fiat currencies, which are all nothing but debts politically privileged to circulate as currency, cannot be used to pay the tithe.

Little insight is necessary to realize why a religious-cum-political movement that restored the Islamic tithe in the full strictness of Islamic law could be the motivation and the catalyst for reintroduction of gold and silver coin (the dinar and dirham) as common media of exchange throughout the Muslim world:

* The tithe is religiously required of all Muslims.
* If paid in money, it must be paid in silver or gold.
* It must be paid regularly (at least yearly) as proceeds are earned.
* Because the tithe must be paid in silver and gold, and regularly, Muslims would soon require that silver and gold coin also be received in the underlying transactions on which the tithe is assessed. For Muslims would not want to incur the added expense of resorting to specie brokers to make the necessary exchange from fiat paper currency to precious metals. Moreover, the tithe not only would be paid in by the productive, but also would be paid out to the needy, who would then themselves immediately spend it back into the Islamic economy, completing the cycle of circulation. So the Muslim world would increasingly, and perhaps soon exclusively, operate with silver and gold coin as its common media of exchange in day-to-day transactions (that is, on the basis of what Americans know as “gold-clause contracts”).

Use of specie throughout Islam would

* stimulate productive economic activity;
* promote the elimination of usury (which is inherent in modern fractional-reserve banking and fiat currencies);
* reduce, and perhaps eliminate, the circulation of Western fiat paper currencies in Dar al-Islam, thereby curtailing the economic power and influence of the Western central banks that emit them;
* create economic, and thus engender political, unity among Muslims; and overall
* strike a blow at Western economic imperialism–which operates through and in conjunction with politically privileged fractional-reserve banks–and therefore at Western political and cultural imperialism, too.

In this process, the religious aspect would be the central, compulsive, driving, and rewarding force. Muslims would turn to gold and silver coin, not simply in spite of any attendant economic costs, but even because those costs would become part and proof of their sacrifice and service to Allah. Thus, “Islamic fundamentalism” would overcome economic transaction costs. Faith would prevail over the materialistic scramble for profit. Spiritual man would prove superior to economic man. And the increasing benefits from the expansion of the use of silver and gold coin as media of exchange would provide religious, as well as economic, confirmation of the wisdom of this course: Allah blesses those who obey Him. Not only in Dar al-Islam proper, either, but also in non-Islamic countries where Muslims constitute sizeable segments of the populations.

f. Into this process would doubtlessly intrude, sooner rather than later, what most scholars recognize as, if not the sixth pillar of Islam, at least tangential to all five: jihad.

(1) In Arabic, jihad means simply to strive or to struggle. Specifically in Islam, jihad imports dedication of a believer’s total resources and application of his utmost efforts to the promotion of Islam and against its enemies. This effort ranges from the believer’s inward, personal, perhaps invisible jihad to perfect his own faith, to his outward, overt, and collective participation in various worldly jihads to defend, advance, and even expand Islam across a hostile globe.

Today, “the inner jihad” increasingly merges with “the outer jihad,” because Muslims quite rightly understand Western political, economic, cultural, and especially military incursions into the Islamic world as designed to defame, subvert, corrupt, and ultimately destroy “Islamic fundamentalism”–that is, true Islam–and to replace it with pseudo-religious modernism, then indifferentism, and then the apostasy and even atheism that rampant materialism and hedonistic consumerism depend upon and foster. So, whatever Muslims can, in justice, do in self-defense to deter, resist, and defeat such subversives, aggressors, and oppressors, and preserve their freedom to live in their own lands according to the tenets of Islam, they can hardly be faulted for wanting, and trying, to do.

(2) Besides, to Muslims the use of silver and gold as means of self-defense in a jihad against Western imperialism and neo-colonialism would satisfy the fundamental criteria of a just war. First, in Muslims’ eyes the struggle is both unavoidable and purely defensive. They see the West as having launched political, economic, cultural, and military aggression against Dar al-Islam, and as promising more of the same, if not worse, in the misnamed but perpetual “war on terror.” (In principle, this war will never end while a single Western soldier sets his foot on Muslim ground.)

Second, Muslims can expect to win the monetary battle–because, in any fair competition, silver and gold will inevitably triumph over fiat paper currencies and bank credit.

Third, an Islamic victory would not entail Muslims’ conquest, oppression, or exploitation of the West, but instead the economic and then political and cultural liberation of Western peoples from their own domestic deceivers, exploiters, and oppressors. The economic freedom that silver and gold provide would encourage, enable, and empower Western peoples themselves to overthrow the corrupt and corrupting regimes that propagandize, plunder, and persecute them. So, rather than dividing Muslim from Western peoples, this jihad would forge a new solidarity amongst them all.

Fourth, Muslims would wage this jihad not merely for their own personal gain, but also on behalf of universal principles of truth and justice, for the benefit of all humanity. Their truth would prove to be everyone’s truth, because the laws of economics apply universally.

Thus, on any theory, Muslims could, and probably will, embrace the use of silver and gold as fully justifiable means of “outer jihad.” At base, too, such use does not depend even upon Muslims’ invoking the right of self-defense against alien aggressors, because it is required in any event by the Islamic pillar of zakat: that is, it is already part and parcel of every believer’s “inner jihad.”

(3) True, Muslims’ adoption of silver and gold as their exclusive media of exchange would have profound economic, and then political, effects on the West–all of them negative from the Establishment’s point of view. But if the West’s monetary and banking systems did suffer crises, or even collapsed, it would be the Establishment’s own fault for foisting such inherently flawed and dishonest schemes on the people, and the people’s own fault for allowing themselves to be so misled and misused–and, if the truth be told, set up for the fall.

Crises in and the collapse of the West’s monetary and banking systems might ultimately be all to the good of everyone concerned, however, not only because they would impede the Western Establishment’s incursions into Dar al-Islam (and thereby reduce the threat of endless world war), but also because they might inspire Western peoples to take back control of their own countries.

© 2006 Edwin Vieira, Jr. – All Rights Reserved


November 6, 2009

Part 4 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 THREE of this Commentary explained why a domestic crisis would probably not provide an occasion for reform of America’s monetary and banking systems. Continuing that analysis…

2. For constitutional change to occur, irresistible pressure for reintroduction of silver and gold coin (or their electronic surrogates) as media of exchange in American markets would have to build up before the Establishment could do much to reduce it. This could arise from a foreign crisis the Establishment could not control. Such an event might force the Establishment to return to the practical operations of constitutional money and banking in order to retain any hope of remaining in power at all. Or a foreign crisis might encourage and enable other centers of political and economic power in the federal system–such as the States–to introduce gold and silver as media of exchange in their own economies, in order to protect themselves and their citizens.

3. The eruption of a foreign monetary and banking crisis in the not-too-distant future is possible–even probable–in the Islamic world. Ironically enough, too, precisely because of what the Establishment is doing there.

a. Dar al-Islam (as Muslims denote the territory in which Islam predominates) already sees itself as targeted, besieged, invaded, and increasingly occupied by the West. For generations, the Islamic world has been the victim of a cold war: aggression that tip-toes in on the little cat’s feet of economic exploitation, pseudo-intellectual ridicule and bullying, political assaults, and cultural subversion aimed at control of Muslims’ primary resource (oil), and transmogrification of Islamic society along both:

* socio-economic and cultural lines–the insinuation of modernism in all its pernicious forms, including population control, radical feminism, the sexual revolution, hedonistic consumerism, and rampant materialism; and, ultimately,
* political lines–the imposition of what cheerleaders for Western intervention call “democracy,” so as to turn Dar al-Islam into a thoroughly demoralized, degenerate, manipulated, and subservient satellite of the West.

b. Most importantly, the economic, political, social, and cultural attacks all coalesce in a religious conflict: the Western Establishment’s assault on so-called “Islamic fundamentalism.” Here, one must speak plainly: To the Establishment, the pejorative buzz-word “fundamentalism” means any religion that teaches belief in a personal God, in transcendent justice (that is, eternal rewards and punishments for man’s conduct in this world), in absolute morality, in natural law, and ultimately and especially in objective truth. For–in the fields of money and banking, no less than in others–the Establishment cannot deal with objective truth, and therefore must deny that it exists.

Absent objective truth, the Establishment does not have to explain and defend what it is doing, because objective explanations and defenses are not possible, and therefore cannot be demanded. And if objective explanations and defenses are not necessary, the Establishment can never be held accountable for what it does. This is why the Establishment embraces the Supreme Court’s idiotic dictum that “[a]t the heart of liberty is the right to define one’s own concept of existence, of meaning, of the universe, and of the mystery of human life.”[1] That is, “I have a right to my truth, which is not necessarily your truth”–or, there exists no real “truth” at all, only supple excuses for some people’s vicious appetites, and slick rationalizations for their aggression against others.

If both the Establishment and its opponents have an equal right to define their own economic conceptions of “sound” money and “honest” banking, and their own legal conceptions of “constitutional” money and banking–and if they can define ALL “existence, * * * meaning, [and] * * * the universe,” they certainly can define these lesser-included matters–then the issue reduces to the stark question of naked power: Whose “truth” is to prevail? In other words, to Humpty Dumpty’s observation to Alice in Wonderland, that who is to be master is the pith of the problem. On this score, even were the Supreme Court correct that “[a]t the heart of liberty is the right to define one’s own concept of existence, of meaning, of the universe, and of the mystery of human life”, nonetheless the Constitution foresees that individuals may be deprived of their liberty–and property and even lives, too–with “due process of law.”[2] So, inasmuch as the Establishment controls the apparatus that claims the prerogative to tell Americans what constitutes “due process of law” (in particular, the courts and the law schools), its “right to define * * * existence, * * * meaning, * * * the universe, and * * * the mystery of human life” becomes paramount. Not a very comforting thought for any individual whose “liberty” and “property,” let alone “human life,” may be subject to the Establishment’s self-interested “defin[itions].”[3] When secular humanism degenerates–as it inevitably must–into secular elitism, the hoi polloi had better fear for their lives.

c. Beyond this Kulturkampf, though, the Islamic world is also assaulted by hot war: the forces of occupation that march in wearing combat boots, their deployment rationalized by a bastard progeny of the Brezhnev Doctrine, that politicians and bureaucrats puporting to speak for “the United States” may invade Dar al-Islam any time, any place, to strike at “terrorists;” occupying the land, overturning governments, killing or maiming those who resist (and many others who do not, but simply wander into the line of fire), and setting up new “democratic” puppet regimes. Not surprisingly, the whole Muslim world is desperate to fight back. (After all, how would you feel if United Nations “blue helmets” marched into America on the same theory?) But how can Muslims possibly defend themselves against the greatest military power in world history?

4. One alternative for an Islamic counterattack stands out among the rest.

a. Plainly, it would be futile for Muslims (or apparently Americans themselves, for that matter) to expostulate on the illegality of the Establishment’s military adventurism. For example, that in none of these incursions to date has Congress actually “declare[d] War”, or has anyone actually proven that “the common defence” and “the general Welfare” of the United States (as opposed to neo-imperialistic expansion aimed at promoting the goals of various selfish special-interest groups) are at stake, as the Constitution requires. Or that, inasmuch as the sole constitutional authority of the United States in the premises is to “guarantee to every State in this Union a Republican Form of Government,”[4] not a “democracy”, the General Government can claim no power to impose “democracy” on foreign nations. Or that, because the freedom Americans enjoy consists of “the Blessings of Liberty” their Constitution secures in the Preamble, the General Government cannot bring “freedom” to anyone by violating the Constitution. Or that, because Congress’s only relevant power is “[t]o define and punish * * * Offenses against the Law of Nations”,[5] it cannot authorize, enable, or even tolerate the President and the Armed Forces to violate “the Law of Nations” by preemptively marching into other countries to effect “regime change” on the basis of falsified evidence of an impending attack. Or that, because the Constitution is superior to any treaty, none of the foregoing can be undertaken under color of some directive or purported authorization from the United Nations or other multi-national or supra-national entity. Bootless, indeed, would be such remonstrances. For an Establishment that refuses to obey its own Constitution will not shrink from defying “the Law of Nations” or even “the Laws of Nature and of Nature’s God” to which the Declaration of Independence appealed and on which all governmental authority in America rests and to which it must conform.

b. Then, too, Muslims cannot resist these incursions in the short run by massing conventional armies, navies, and air forces. Their scientific, technological, and industrial bases are too limited for that. And they cannot win in the long run by employing the low-intensity, irregular warfare the Establishment self-righteously condemns as “terrorism”, either. For the Establishment will cite such “terrorism” as an excuse for perpetuating and intensifying its offensives against Dar al-Islam, at least as long as sufficient American blood and treasure remain to be expended in campaigns of “pacification.”

c. But the Islamic world could strike a sudden, debilitating, and potentially fatal blow at the Establishment’s Achilles’ Heel–its Ponzified monetary and banking systems–through adoption by some significant portion of the world’s over 1.1 billion Muslims of gold and silver coin as their common media of exchange: specifically, the Islamic gold dinar and silver dirham. This is not idle speculation, but an imminent fact. Already the Internet is burgeoning with information that anyone who searches for web sites dealing with “the gold dinar” can discover for himself. So, what appears here is by no means news to Muslim monetary and economic theorists and activists–only to most Americans. No Muslim firebrand needs these Commentaries to understand the potential for exploiting the Islamic gold dinar and silver dirham as levers to overturn the Western Establishment’s monetary and banking systems. They already know it, and are encouraging their fellow Muslims to act upon that knowledge. But every American needs to become aware of this situation, in order to take appropriate countermeasures against what almost surely is coming.

d. Perhaps most interesting is that Muslim proponents of reintroducing specie as media of exchange focus, not simply on gold (which is the almost exclusive preoccupation of the few Western advocates of sound money), but also on silver. In this, they display great insight. In the West, even the most ardent advocates of gold often deny that silver is any longer a monetary metal. These friends of sound money forget, however, that silver’s monetary character, no less than gold’s, is contingent on the economic and legal context in which they are used as media of exchange.

Recall that silver lost its place as a monetary metal co-equal with gold not as the result of silver’s economic inferiority, but as the consequence of an international political conspiracy to “demonetize” it.[6] Which conspiracy then turned the same tactics on gold, in favor of fiat central-bank paper currency.[7] And succeeded in both instances.

Today, the partisans of legal-tender fiat currency contend that gold, as well as silver, is no longer a monetary metal. This argument is not without empirical evidence, inasmuch as neither silver nor gold circulates as a medium of exchange to any significant degree in any country’s markets, let alone throughout the world, as both gold and silver once did. On the other side, though, one can ask whether contemporary fiat paper currency, being merely an evidence and instrumentality of perpetual debt, is properly “money” at all, even though it does circulate to the practical exclusion of gold and silver. These disputes prove that what markets use as media of exchange can be controlled by law, by economics driven by law, by public ignorance and apathy, by the criminal politics of conspiracies among officeholders and special-interest groups, and especially by all of these operating in tandem. So, the answer to the assertion that silver is not a monetary metal is that it has been made so, just as gold has, and that, when once again offered to knowledgeable people as a medium of exchange in a usable form and under favorable legal and economic circumstances, silver will be accepted as such, just as gold will be.


1, Planned Parenthood v. Casey, 505 U.S. 833, 851 (1992), reaffirmed in Lawrence v. Texas, 539 U.S. 558, 574 (2003).
2, See Amendments V and XIV, Section 1.
3, See, e.g., Roe v. Wade, 410 U.S. 113 (1973), and Victor Sperandeo & Alvaro Almedia, Crashmaker: A Federal Affaire (2000), ch. 117.
4, Article IV, Section 4.
5, Article I, Section 8, Clause 10.
6, See, e.g., M.W. Walbert, The Coming Battle: A Complete History of the National Banking Money Power in the United States (1899).
7, See J. Livingston, Origins of the Federal Reserve System: Money, Class, and Corporate Capitalism, 1890-1913 (1986).


November 5, 2009

by Dr. Edwin Vieira, Jr., Ph.D., J.D.

Part 3 of 7

(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 TWO of this Commentary explained that America does not have constitutional money and banking because the Establishment wants the very opposite. In this regard…

(3) Emphasis on inflation–expansion of the supply of legal-tender fiat currency and credit–cannot be exaggerated. Because, being in principle a Ponzi scheme, the pyramid of fractional-reserve banking must continue to swell in base and height, or implode upon itself. The ballooning pyramid, however, stands precariously upside down, on the relatively tiny apex of the real economy, which is forced to support an ever-expanding load of insufficiently productive, or actually unproductive and eventually destructive, debt and speculation. (The swelling “derivatives markets” stand out as egregious examples of this “casino capitalism”.) Thus, the socio-economic structure becomes increasingly top-heavy, unstable, and dysfunctional, subject to recurrent crises, and even self-cannibalistic: racing with accelerating celerity towards its own demise in hyperinflation, depression, or the one followed by the other. And with either result creating social chaos that will culminate more likely than not in a police state–and another politically orchestrated hunt for scapegoats, to turn common people’s wrath away from the real culprits.

To these long-term effects, though, politicians and special-interest groups typically pay no heed. Together, the shortness of human sight and the brevity of human life are the bane of all social stability. Precisely because the acaparadores–the political looters–are mortal, but society is (relatively speaking) immortal, political looting is a paying proposition. If the fatal consequences of their misguided policies inevitably fell on the special-interest groups that promoted them, and on the politicians who enacted them, prudence (or plain fear) would effectively deter most dangerous legislation. Inasmuch, however, as one generation of public officials and their clients can often benefit immediately from some perverse policy, while leaving the next generation of taxpayers and manipulated voters to suffer its inevitable ill effects, then avarice, ambition, and the lust for power will always come to the fore. As long as the political present is a “free rider” on the economic future, politicians and special-interest groups today will always seek to feather their own nests at the expense of other people who live in a distant tomorrow. This is one reason why a firm belief in an immortal afterlife of sure and certain rewards and punishments is so important to society; and why aggressive atheism and agnosticism–especially when officially imposed or promoted–are so destructively antisocial, but so personally profitable to predatory politicians and special interests.

As to money and banking, modern politicians’ only concern during their tenures is to maintain the Ponzi pyramid of fiat currency and credit in some semblance of precarious balance–notwithstanding that the illusion of temporary stability allows for continuing and even exacerbating the very real malfunctions of the system that, carried far enough, must result in its self-demolition, and with it society’s economic and political disintegration. The longer the system continues to “work”, the deeper the grave it digs for society. The Establishment’s notion that it “controls” America’s monetary and banking systems is, therefore, fundamentally delusive and fatally dangerous. At this point in the inevitably calamitous cycle of fractional-reserve central banking and fiat currency, the Establishment no more “controls” those systems than the lady from Niger who rides on the back of a tiger in the children’s nursery rhyme dominates the beast. But, just as she, the Establishment cannot afford to ease its white-knuckled grip on the reins.

c. This sorry situation does not continue because the American people themselves can do nothing about it. No, indeed.

(1) Many champions of the free market say that Americans cannot have constitutional money and banking because of the present legal-tender statute: Title 31, United States Code, Section 5103. They contend that it is first necessary to repeal this statute if Americans are to make any headway against the Establishment’s regime of phony rag currency, slug coinage, and Ponzified central banking. This idea is dead wrong.

Americans even now have the rights:

* to make so-called “gold-clause contracts” under Title 31, United States Code, Section 5118(d)(2)–and thereby to avoid the legal-tender law altogether; and

* specifically to enforce such contracts through private arbitration–and thereby largely to stay out of the General Government’s and the States’ kangaroo courts.

Thus, the legal-tender statute is no legal barrier to any individual who wants and knows how to circumvent it, and is willing to bear the rather high economic costs of doing so. And in a society of intelligent and patriotic people the legal-tender statute would prove to be no great economic barrier, either, because the economic burden of avoiding it would decrease in direct proportion to the number of people who took such action. So, believing that the legal-tender statute is always an insurmountable hurdle serves only to confirm people in an ill-advised resignation to the status quo.

(2) Other advocates of sound money excuse Americans’ inaction on the grounds that any major reform must await an initiative from Congress, to which the Constitution delegates the power “[t]o coin Money, [and] regulate the Value thereof”, in Article I, Section 8, Clause 5. This, also, is erroneous. In Article I, Section 10, Clause 1, the Constitution denies to every State the power to “make any Thing but gold and silver Coin a Tender in Payment of Debts”–thus, in that “but”, plainly reserving to each State the power to make such coin “a Tender” within her jurisdiction. And surely with respect to the performance of their sovereign governmental functions of taxation, public spending, borrowing, taking of private property for true “public use” through eminent domain, and adjudications in their courts, all of the States can choose to employ gold and silver as their media of exchange to the exclusion of Federal Reserve Notes, bank deposits, or any other currency.[1] For this result, no Congressional action is necessary.

d. The plain fact is that America does not have constitutional money and banking because the majority of Americans apparently does not know enough to want them, or does not want them enough to demand them. Ignorance and disinterest, of course, must be the reasons in the representative Republic which, subject to pervasive manipulation or not, America still remains as a matter of law. But why is this so?

(1) A large number of Americans actively or passively sides with the Establishment. These Americans are disinterested in constitutional money and banking because they have (or think they have) personal pecuniary interests in unconstitutional money and banking. After all, redistribution of wealth requires not only redistributors, but also recipients of the wealth redistributed. (Ironically, though, many of these recipients are as much the victims of the system as they are its beneficiaries. For example, impoverished people already, or soon to become, utterly dependent on the collapsing Social Security and Medicare schemes.)

(2) Most Americans are woefully ignorant of their legal rights and economic options as to “gold-clause contracts”. And most of those who have informed themselves about these matters shrink from employing such contracts because of the costs of using silver and gold as their media of exchange, including: (i) education costs of the parties to the contracts, their lawyers, their accountants, and so on; (ii) transaction costs of drafting the contracts, and of obtaining, transferring, and storing the gold and silver coins specified as media of payment; and (iii) such regulatory costs as determining how these transactions will be taxed, especially as to “capital gains and losses”, when their values are stipulated in silver and gold, not paper currency. For these reasons, silver and gold coin will not effectively compete with irredeemable paper currency as media of exchange in the marketplace until either:

* large numbers of Americans become willing to absorb the costs necessary to start such a parallel coinage system; or

* a “large player”–such as a government or a major private producer or retailer–comes into the market to lower the costs for everyone; or

* Americans become aware of how such technological advances as private electronic gold currency can greatly simplify the use of specie; or

* governments significantly reduce the regulatory costs associated with the use of gold and silver as common media of exchange; or

* the long-term costs of continuing to employ fiat currency become widely apparent and intolerable; or ·some combination of these alternatives supervenes.

(3) Finally, Americans’ political leadership in the States is to a woefully large degree clueless, visionless, and feckless. Typically, if they consider the subject at all, State legislators supinely defer to Washington, D.C., on monetary policy, with no concern either that the General Government’s decisions are endangering the economic security of their own States, or that their mindlessly robotic reliance on those decisions mocks this country’s federal structure, destroys one of the major checks and balances in the constitutional system, and encourages hubris, irresponsibility, imprudence, and arbitrary exercises of power by the Federal Reserve System and the special interests it serves. So, although (as I have explained in earlier Commentaries) initial reform of the monetary system could begin in the States–and that is probably the only workable route to a peaceable solution–such reform will require very hard slogging.[2]

B. To be sure, another possibility for triggering reform could be a crisis which forces the issue. But what sort of crisis might that be?

1. It cannot be simply a domestic crisis. A purely domestic crisis would likely not be bring about an orderly and measured transition in the direction of constitutional money and banking–primarily because the Establishment, desperate to defend its own position, and with many of the high cards of power already in its hand, could and would thwart any change for the better.

In any domestic monetary and banking crisis, Americans could expect not only economic stringencies; uncertainty, confusion, and fear engendered by ignorance; mass hysteria whipped up by the big media; and strident political demagoguery–but also total centralization in Washington, D.C., of control over money, banking, finance, and the stock and commodities exchanges, through an industrial-strength Caesarism that would make Franklin Delano Roosevelt look like Thomas Jefferson. The result being that the Establishment would suppress the use of silver and gold as media of exchange (or even stores of value) in the open markets, and probably would be applauded by a populace that knew no better and cared less. (What would occur in the black markets, though, would likely be something else altogether.)

Even without inventing any novel “emergency powers”, the Establishment, on the basis of existing statutes, regulations, and judicial precedents which could be twisted to rationalize new statutes or regulations, might easily:

* require reporting of all transactions involving money or media of exchange other than legal-tender paper currency or bank deposits;
* impose confiscatory taxes on all transactions involving silver and gold;
* declare “gold-clause contracts” unenforceable in the courts, or illegal altogether;
* confiscate gold and silver coin and bullion from private owners;
* outlaw the mere possession of gold or silver in any form, without some “license” or other special governmental permission; and, overall,
* establish a pervasive and thoroughgoing financial police state of surveillance, regimentation, confiscation, and prohibition aimed at “demonetizing” gold and silver.

That none of these measures would be constitutional would not deter the Establishment, just as the unconstitutionality of similar actions proved no barrier in the past. So, a domestic crisis would be unlikely to generate significant impetus for change in a constitutional direction, but would probably serve merely as the occasion and excuse for the Establishment to demolish what little remains of Americans’ constitutional freedom in the area of money and banking.


1, See, e.g., Lane County v. Oregon, 74 U.S. (7 Wall.) 71 (1869), and
2, See my earlier three-part Commentary, The State electronic gold currency plan.

Taxation In New Texas

November 2, 2009

by Russell Longcore

In this article, let’s chew over the methods a new nation might use to collect revenue. Taxation is supposed to just collect revenue to fund government operation. Customarily governments use taxation to encourage or discourage certain types of behavior within the jurisdiction of that government. Inherent in that type of misuse of taxation is the desire of certain persons to avoid taxation at the expense of the remaining population. But who could blame them? Hence bad tax policy creates lobbyists.

The Gross Domestic Product for Texas in 2008 was $1.245 trillion dollars. The 2008-2009 Texas tax revenue totaled $167.8 Billion from all sources. The State of Texas spends an enormous amount of money annually on social welfare programs and myriad services that are mirror images of its daddy in Washington. I figure about half of the budget could be entirely eliminated in a New Texas.

Sales Tax

Most taxation allows a government to set a budget and then use all their methods of taxation to collect what they need. A sales tax forces a government to formulate a budget based on revenue received. Over time the government can more accurately predict expected revenue, but cannot just tax more heavily to make up shortfalls. A properly crafted constitution would prevent the State from coining money and regulating its value, which would also prohibit printing money to make up a tax shortfall.

This seems to me to be the most equitable form of taxation. But that even-handedness works best when it is tied to a monetary system of 100% gold and silver as money. Even if the new nation still chooses to inflate the currency through monetary policy and fractional reserve banking, and assesses taxes through inflation, the sales tax could still provide a useful governor on the engine of the State.

In an economy where sound money existed, every person within the boundaries of the nation would pay sales taxes on goods and services for personal consumption. The citizen, non-citizen resident and the visitor would all pay sales tax. I am not in favor of exemptions for anyone.

There are some folks in America that are promoting a national sales tax as the “Fair Tax.” But is it fair? Fairness is always open to interpretation. And I’ve always heard that “Fair” is a place you take your pig to win a blue ribbon. The fair tax would be levied once at the point of purchase on all new goods and services for personal consumption. Their proposal also calls for a monthly payment, made by the US Treasury, to all family households of lawful U.S. residents as an advance rebate of tax on purchases up to the poverty level. Seems unduly confusing and complicated and still exempts certain persons from paying tax. The present aberration promoted by radio talk host Neal Boortz , Rep. John Linder and Senator Saxby Chambliss is anything but fair.

My complaints about their “fair tax” are:

• That it seems to do nothing to curb Federal spending.

• They set their sales tax at 23%. I believe the rate should not exceed 10% and should be set in stone in the Constitution.

• The concept of the rebate and exemption for people who fall under a certain amount of income. Those people use government services, and should pay for them like everyone else.

Counties and cities could assess a maximum total sales tax burden of 5%. Even if it were 10%, it would be workable. Once again, the sales tax should be etched in stone in the Constitution, not changeable without a constitutional convention.

Don’t freak out about my percentages. I’m not an accountant or a state budget wonk. Even if the total national and local sales tax burden ended up at 20%, it would mean massive tax relief for Texas citizens, visitors, non-citizens and property owners. It would also mean strict spending limits for the New Texas.

There is also another sales tax that can be utilized. A SPLOST is a Special Purpose Local Option Sales Tax. This is a way that a tax can be levied by any county, for the purpose of funding the building and maintenance of parks, schools, roads, and other public facilities. A SPLOST has a time limit and the tax is customarily decided by a public referendum.

Income Tax

Happily, Texas has no personal income tax. Income taxes are universally hated by individuals, but loved by governments. The governments use income taxes to reward some and penalize others. They use it to create class conflict and class envy. And they use it to punish highly compensated individuals. In the US, normal due process is inverted and individuals are presumed guilty of alleged tax crimes. Countries with an income tax own the citizens and own their incomes. Individual liberty and income tax are not compatible in any way.


A tariff is a duty imposed on goods when they are moved across a political boundary. Tariffs, or lack of tariffs, encourage or discourage imports inside a nation. Tariffs encourage protectionism.

There are various types of tariffs:

Ad Valorem, or value added, is a set percentage of the value of the good being imported. It can be manipulated by the importer by declaring low values. Tariffs rise or fall based upon prices.

Specific tariffs that doesn’t vary with prices.

Revenue tariffs can be used against importers by countries that do not produce the good imported. For example, Iceland could slap a tariff on Columbian coffee, since it doesn’t grow coffee.

Prohibitive tariffs are set so high that almost no one imports that particular good.

Protective tariffs artificially inflate prices on imports and protect domestic industries. These are sources of enormous corruption and bribery.

Environmental tariffs are recent additions, assessed to punish the importers of other countries for perceived sub-standard environmental standards.

All of the tariffs are penalties against others. When there are penalties, it affects competition and the free market. Seems to me that a nation without tariffs would enjoy the lowest prices for goods, both imported and domestically produced. All producers would have to compete on a worldwide basis.

Property Tax

Property taxes on real and personal property are confiscatory. If you own a piece of property, and you have to pay property taxes each year, you are in essence leasing the property from the State. Don’t believe it? Think that you own the property free and clear? Just stop paying your property tax. Eventually, the State will confiscate your property under threat of death. Don’t believe it? When the Sheriff comes to confiscate your property, resist with armed force. When you sell your real property, you are essentially transferring a lease obligation to the new property owner.

Property taxes have to be assessed based upon property value. The state or county assessor’s office sets the property values and is not that concerned with accuracy. It is in their interest to overvalue your property and force you to challenge it. It’s also in their interests to bestow tax exemptions as favors.

Property tax revenues also benefit from currency inflation. That’s one reason why governments like inflation. Property taxes are customarily assessed by local governments, such as counties and cities, to fund their operations. But they could also fund operations through sales taxes.

Excise Tax

Excise tax is a tax on the production or sale of a good produced within the country. Typical examples of excise duties are taxes on gasoline, tobacco and alcohol. The producer pays the tax directly to the government, but the consumer pays the cost of it, as it is included in the sale price of the product. The excise tax can account for as much as half the retail price of the goods, and sometimes more.

Excise taxes are often assessed to discourage the consumption of goods and services that the State determines to be harmful to our health and morals. So, they tax things like gambling or smoking. This is the Nanny State at its worst.

Death Tax

Estate tax is a tax on the total value of the money and property of a person who has died. There is a difference between “estate” and “inheritance” tax. Inheritance taxes seek to tax the beneficiary of the estate. This is another confiscatory tax imposed by the Feds and the state. An estate is the accumulated assets of a person, and most assets have already been taxed repeatedly during the accumulation period of a lifetime. This tax simply shows the rapacious appetite of the State.

Historically, there have been three estate taxes enacted, in 1797, 1862 and 1898 and each was repealed after a short time. The most recent estate tax was enacted in 1916 and has escalated ever since.

There is no good reason why estate or inheritance taxes should be assessed. They only redistribute wealth and are a disincentive to wealth accumulation and entrepreneurship.

User Fees

User fees could be assessed in three categories:

* fees that fund necessary services, such as for utilities;
* fees that fund services that add to the quality of life, such as for parks and recreation; and
* fees that fund regulatory and administrative processes, such as for licenses and permits. (Don’t get me started on licensure…another state ripoff)

But no government should be permitted to charge these fees unless voters agree. That way, citizens decide what services they want and are willing to pay for.


There are probably methods of taxation that I’ve missed, since there are so many methods that government uses to steal money from its citizens at the point of a gun. But I believe that the best method of collecting tax revenue is the sales tax. It seems to be the method that is most equitable to all individuals. It also seems to be the tax that most binds the government against acts of tyranny. But the sales tax should also provide the government with abundant revenue. Not all they want, but all they need.

During the Reagan administration, nominal income tax rates were lowered. Tax revenues went up significantly as this spurred a surge in entrepreneurship and investment. People had more of their money, and used some of it to make more money. Unfortunately, Reagan did not clamp down on spending, so his tax rate slash and runaway spending still made for bigger government.

I believe that a New Texas with a single sales tax as its source of revenue would be such a magnet for capital that nothing like it would exist on the planet, and nothing like it would have ever existed in the history of the human civilization. People from all over the earth would be emigrating to, and investing in, the New Texas.

Think about the freedom you’d feel if the sales tax was the only source of tax revenue assessed against you, the citizen. No income tax, no excise tax on gasoline or smokes, no tax on your investment income or savings, no property tax on your real and personal property, low prices on imported goods since there are no tariffs, and when you die, 100% of your assets go to whomever you choose.

Want to live in a nation like that? I know I do.

Remember that this sales tax solution must be inexorably linked to a sound money system for it to work as well as it should. But if the State enacts monetary law and banking law that facilitates inflation and the fractional reserve banking system, the sales tax as the single tax source for government revenue could still provide a useful governor on the engine of the State.

Also remember that I could be wrong about all of this. Check it out for yourself.

DumpDC. Six Letters That Can Change History.

© Copyright 2009, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.