Dr.Clifford F. Thies on Liberty Dollars
by Dr.Clifford F. ThiesProfessor of Economics
Shenandoah University, Virginia
From 1933 to 1977 it was forbidden for any American to own gold bullion. Prior to this, it was thought that the Federal government had no power to make anything illegal. Hence, they needed a constitutional amendment to take away our alcohol, and they tried to control opium through a very high tariff. But, once the Supreme Court, in a 5-4 decision, allowed the Federal government to make gold illegal, it was just a matter of time before the Feds started making more things illegal.
In addition to gold being illegal, it was illegal to write contracts in gold, in any foreign currency, or any form of indexation. The government decided not only what was to be the “legal tender” of the country (which is its power), but what would be the only legal “unit of account” and “medium of exchange.” As to where these powers came from, I just quote Mao, “from the barrel of a gun.”
Fast forward a couple decades and, in 1977, thanks to the leadership of the late Jesse Helms, a U.S. Senator from North Carolina and a then rather young U.S. Congressman from Texas named Ron Paul, the law banning ownership of gold bullion by Americans was voided.
In conjunction with allowing us to own gold, the Helms-Paul act allowed us to index our financial agreements. Subsequently, Sunshine Mining issued bonds indexed to silver, and other private borrowers followed up with bonds linked to other commodities and to the U.S. CPI. There were, however, a number of nagging questions concerning the legality of these bonds. During the 1990s, the U.S. Treasury issued CPI-indexed bonds, and the legality of indexed bonds was no longer in doubt.
Soon after the Helms-Paul voiding of the bans on gold and indexation, banks were allowed by the Federal Reserve to offer customers accounts denominated in gold; which the Republic Bank of New York did. In the 1990s, banks were further authorized to offer accounts in foreign currencies and, today, a growing number of them do (but this is because of globalization, rather than because of concerns about inflation).
Thus it should be perfectly clear that it is legal for individuals, banks and others, to own Ron Paul silver coins, to exchange them with each other as they choose and for whatever consideration they agree, to do this either by physically transferring possession or by paper or electronic transfer of coins held in deposit accounts, and to arrange for deposit of coins in accounts managed by banks or for that matter any other company.
As to whether Ron Paul silver coins are a good deal, I will not comment.
But, having said what I did about Ron Paul silver coins being legal, we also know that, according to the U.S. Supreme Court, the Congress can regulate anything you do or fail to do, with the one exception of sodomy, because it effects interstate commerce. Even if you DON’T do anything, that affects interstate commerce, so the Congress can regulate that as well.
If you doubt me about this, just wait until Hillary is President and the Democrats have 60 votes in the U.S. Senate. I strongly recommend that everybody keep their passports in good order, and sew a good number of gold coins and precious metals into the lining of their overcoat.
The real fools are not people who buy silver at a high mark-up over bullion value. The real fools are those who have their life savings in U.S. Savings bonds and other non-indexed debt instruments.
