Texas Congressman Ron Paul, in the midst of campaigning, came back to Washington to address Federal Reserve Chairman Ben Bernanke on the role the Fed is playing in the nation’s economy. He informed Mr. Bernanke that though they are claiming there is only a 2% inflation increase, that the reality is more like 9%. He even began his comments by asking Bernanke if he purchased his own groceries at the store and was aware of the prices being paid. Mr. Bernanke did say that he purchased his own groceries.
Paul then addressed the fact that the fiat money that the Fed produces is unconstitutional.
Let me take a moment to address the Constitutional issue. The Constitution explicitly says,
Article I Section 10
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
Now The Constitution is not a list of what the federal government cannot do. It is not a list of prohibitions on the federal government.
The Constitution is a list of what the federal government is authorized to do, with all else being denied to it by default and reverting back to the states. The absence of specific constitutional authorization for anything means that the federal government is denied authorization by default.
How do I know this? Well the Constitution gives us that as well.
RIGHTS RETAINED BY THE PEOPLE
The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.
POWERS RETAINED BY THE STATES AND THE PEOPLE
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
The Constitution also says who is to coin money. That responsibility lies with Congress.
Article I, Section 8, Clause 5
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
So there are several things that we can derive from the simply language of the Constitution here:
1. The federal government (The Congress) is authorized to coin money.
2. States are not authorized to coin money.
3. States are authorized in determining what can be used as a tender in payment of debts. States are then prohibited by the Constitution from making any Thing but gold or silver coin a tender in payment of debts.
All of this is very important in dealing with fiat currencies, which are not authorized in the Constitution.
Paul went on to pull a silver coin from his pocket and deliver the following, showing the value of the metal increasing over the past 5 years versus the decline of the current fiat system.
“I have a silver ounce here, and this ounce of silver back in 2006 would buy over 4 gallons of gasoline. Today it’ll buy almost 11 gallons of gasoline,” he said. “That’s preservation of value and that’s what the market has always said should be money. Money comes into effect in a natural way, not in a edict, not by fiat, by governments declaring it is money.”
“The record of what you’ve done in the last six years is destroy the value of real money.” he added.