Silver Is Money: Part One
Flowing Hair Silver Dollar
This commentary was originally posted at www.financialsense.com on 29th April 2005.
There are those within the precious metals financial newsletter business that have a very large and loyal following that occasionally borders on the edge of sycophantic idol worship, whether intended or not. Recent articles concerning silver have come forth from well-meaning advisors, the contents of which may be right, or they may be wrong, or a little of both. The purpose of this article is to simply offer a different view, not often told. It is up to the reader to decide the veracity of the information herein provided.
One writer in a recent article from this past August makes the statement that silver is "predominantly not a monetary metal." He goes on to say, "gold is a predominantly monetary metal, whose price is determined by its value as a monetary asset."
Next the author continues with: "the production of silver is 7 times the production of gold by weight", yet, "in dollar terms the gold market is about 70 times the silver market." "Why the discrepancy - cause gold is money and silver is primarily an industrial commodity."
Further on the writer espouses that " if we look at both gold and silver in U.S. dollars, then whatever the effects the dollar had on gold, it would have a similar effect on silver." "If both were priced as money, the charts of both would look the same, but they don't."
We will closely examine the above statements in a moment, but first I would like to address something else said within the article. The article was written in August of 2004, yet when the author talks about the performance of silver, he uses dates of 1994-1999 and the year 200l.
Mention is made that the price of silver hardly budged from 2001-2003, yet within that time frame silver hit a low of near $4 per ounce and a high of over $5 an ounce, which is close to a 25% increase from low to high.
Perhaps it is coincidental, but he leaves out the year 2004, the best performing year for silver, going from a low of $4.50 in 2003 to a high of $8.25 in 2004, which is better than an 80% move. Also, some of the silver mining stocks that he says are hard to find good quality companies in, doubled and tripled in price (Hecla, SSRI, PAAS). But, that is if you bought at the correct time and sold within the correct time - some call it timing, which isn't always easy, it's not meant to be.
Let's take a little closer look at these statements to see if they stand up to the light. We will list them in order using a shortened version to more easily address the issues presented.
Gold is predominantly a monetary metal
Silver is predominantly not a monetary metal
Gold's price is determined by its value as a monetary asset
Whatever the effects the dollar has on gold, it would have a similar effect on silver
If gold and silver were priced as money, the charts would look the same, but they don't.
WHATEVER THE EFFECTS OF THE DOLLAR
The statement that "whatever the effects the dollar has on gold, it would have a similar effect on silver" cuts right to the chase. In order to be able to judge the merits of the statement, it is obviously mandatory to know what a dollar is. Nowhere in the article from which the quotes came from, can a definition of a dollar be found.
In like manner, the statement that "if gold and silver were priced as money, the charts would look the same, but they don't" - implies an understanding as to the definition of what money is and what is meant by "priced as money". Nowhere in the article are there explanations or definitions for these terms as well.
But the author of the article in question need not worry, he is in good company, as the Federal Reserve Chairman, Governors, and other interested parties don't seem to know either. The U.S. Code is a monstrously huge work, yet it does not contain a definition of the dollar. It seems that nobody knows, or if they do, they don't want to tell - which is a bit strange if true.
And the same holds true for a definition of money, as the U.S. Code states:
Federal Reserve Act
SECTION 16 - Note Issues
1. Issuance of Federal Reserve Notes; Nature of Obligation; Where Redeemable
Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are hereby authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve Bank.
So, if Federal Reserve Notes can be redeemed in lawful money, are they themselves lawful money? Otherwise, what would be the need or reason to redeem them for lawful money, if they already were? Unless, of course, what is meant is that you can redeem one Federal Reserve Note for another one, which, makes about as much sense as anything else the Federal Reserve has ever done. For a more detailed explanation see Honest Money, Part VII: The Moneychangers - Secrets of the Temple.
What possible reason could there be to keep the definition of our unit of account hidden from public view? It's like saying, "were not going to tell you what a foot is, you'll have to guess", or "we're not going to tell you what a gallon is, just estimate". Imagine what would happen if a loyal citizen wrote in on their tax return, "I don't know for sure what I owe, but this should be close".
Some say that the Federal Reserve Note is a dollar, but then some would say, is a Federal Reserve note a dollar or a dollar bill; and is there a difference between a dollar and a dollar bill? Conundrums, conundrums, what are we to do? Perhaps we should look to the Constitution and the Original Coinage Act of 1792. Maybe they can tell us something - that some may not want us to know, otherwise, they would tell us - wouldn't they?
Please note, this will be a bit of a trip, but keep in mind our quest is to see if silver is money.
THE CONSTITUTION ON MONEY
Article 1, Section 8, Clause 5 of The Constitution states that Congress has the "power to coin money" and furthermore Article1. Section 10. Clause 1 specifies that " No State shall...coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt." (click on any underlined links to view complete document)
The Constitution undeniably grants Congress the power to coin money, i.e. to form and shape precious metals of silver and gold; and to regulate their weight and purity; and to affix the stamp of the issuing government thereon.
From ages long ago, before the time of the Bible, man has coined metal to be used as money. Accordingly, money is brought forth into society to be used as a medium of exchange to facilitate the trade of goods of all kinds. The use of money involves the progress from direct exchange or bartering of goods, to the indirect exchange of goods using a common medium: money.
The free acts of individual commerce, that collectively form an economic body of trade, chooses and decides by its own internal market forces of supply and demand; and the subjective value theory of marginal utility, what commodity is most widely accepted as "the medium of exchange" - money, that which has the lowest declining rate of marginal utility or value.
The Constitution clearly states that money is to be coined and that only gold and silver coin (i.e. money) is a tender in payment of debt. Note that Congress was never granted the power to print money, only to coin it. Nor were they granted the power to loan money, only to borrow it.
Let us now turn our attention to the The Coinage Act of 1792 (click on any underlined links to view entire document) to see if the Founding Fathers and Congress explicitly defined the dollar.
1867 - Seated Liberty Dollar
COINAGE ACT OF 1792
The Coinage Act of 1792 (click on link to view) was the legislative means to implement by statute, the monetary system of the government, according to the monetary powers granted in the Constitution.
In Section 20 of the Coinage Act we read "...that the money of account of the United States shall be expressed in dollars or units." We are getting closer to our goal for a definition of a dollar. Congress in Section 20 clearly states that the money of account of the U.S. is expressed in dollars, which are units.
In Section 9 of the Coinage Act we read "...that there shall be from time to time struck and coined at the said mint, coins of gold, silver, and copper, of the following denomination, values and descriptions, viz. Eagles - each to be of the value of ten dollars or units and to contain two hundred and forty-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold."
Here we clearly see that Congress coined Eagles that were of the value of ten dollars or units. But an Eagle was not a dollar, but of the value of ten dollars. So, what is the definition of a dollar?
Further on in Section 9 it is stated "...dollars or Units - each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenths parts of a grain of pure silver, or four hundred and sixteen grains of standard silver."
At long last, the goal we have been searching for, the definition of a dollar or unit: each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenths parts of a grain of pure silver, or four hundred and sixteen grains of standard silver.
According to the documents we have so far examined, we find that the Constitution grants Congress the power to coin money while explicitly limiting the states to make "any Thing but gold and silver Coin a Tender in Payment of Debt."
We further find in the Coinage Act of 1792 that the money of account of the United States shall be denominated in dollars or units of the value of a Spanish Silver Dollar, as was current at the time (1792).
The Gold Eagle was to be minted to have a value of ten dollars or units. This means that originally our monetary system had as its standard the Spanish Silver Dollar, and that the Gold Eagle coin was not a dollar, but was measured against the silver standard, being valued at ten dollars or units or 3,712 - ½ grains of fine silver. Congress had statutorily defined and legislatively implemented a bimetallic system of coinage - that had the Silver Dollar as the standard where:
"...the proportional value of gold and silver in all coins shall be fifteen to one, according to quantity in weight, of pure gold or pure silver and that all the gold and silver coins which shall have been struck at, and issued from the said mint, shall be a lawful tender in all payments whatsoever, those of full weight according to the respective values herein before declared, and those of less than full weight at values proportional to their respective weights".
The widely accepted belief that originally the United States was on a monometallic gold standard is incorrect. The idea that Congress had originally ever issued a gold dollar or that the Constitution ever granted Congress such power is also incorrect.
The first (and only) monetary standard was a silver standard that defined the dollar as a specific weight of silver, as well as establishing that the dollar was the money or unit of account. However, a bimetallic monetary system of coinage was also established by the Constitutional mandate to Congress to "coin Money, regulate the Value thereof."
The word "regulate" means to "adjust", as in one thing to another - which in the use of coins refers to systems of weights and measures and the regulation of such weights and measures to the standard, which is the "measure" they are to be regulated to or against.
As stated in the Coinage Act of 1792 - Section 11 introduces an exchange ratio of 15 to 1, according to weight. Therefore, although a dollar was defined as 371.25 grains of silver, gold exchanged for a dollar at 24.75 grains of gold (10 x 371.25 divided by 15).
Also, Section 9 of the act defined the Eagle as containing two hundred and forty-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold.
To reiterate: the standard was Silver - the then current Silver Spanish Dollar known as Pieces of Eight, coupled with a bimetallic system of coinage using both silver and gold.
Note, however, that the "dollar" that the Coinage Act of 1792 statutorily decreed was not the exact original "Constitutional dollar" - but as the act says, "...each to be of the value of a Spanish milled dollar." Thus, "each" denotes something that is not the Spanish milled dollar but is to be the "value" (specific weight and fineness) of the Spanish milled dollar.
Furthermore, originally there was no gold dollar - only a gold Eagle valued at ten dollars. The Coinage Act of 1849 created the first gold dollar 57 years later. Any reference to an "original gold dollar" dating back to the Constitution is incorrect.
This is not a matter of semantics - there are very important distinctions of detail involved that have greatly affected our monetary history - especially our present system of irredeemable paper fiat currency, incestuously wedded to its sibling: fractional reserve banking, spawned in greed - nurtured by the lust for power.
1904 Morgan Silver Dollar
SILVER STANDARD WITH A BIMETALLIC COINAGE SYSTEM
As we have seen, the Constitution along with the Coinage Act of 1792, established by statutory decree that the dollar was the unit of account and also declared that a dollar or unit was "each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure silver, or four hundred and sixteen grains of standard silver".
According to statute, the United States was on the silver standard. However, as we have seen, Congress also decreed that gold coins were to be minted and circulated along side of silver coins, and fixed the statutory valuation of silver to gold at 15 to 1.
In other words, Congress had "fixed" the exchange rate between the two metals. Thus, the United States was on a silver standard, but it was also on a bimetallic system of coinage, that included gold to be circulated at a "fixed" exchange rate to the silver standard.
Such a system can present problems, however, as the free market exchange rate between gold and silver can diverge from the statutory or legally fixed exchange rate - necessitating the adjustment of the other metals legal value up or down to conform to the statutory fixed rate of exchange.
In other words, Congress was trying to make two different types of metal coinage equal in purchasing power. This was not a good idea and would have been better left undone. This also raises the very interesting question as to whether or not this "fixing" was an accidental mistake, by very learned men, well acquainted with this exact monetary issue, as the discussions of such are in the Congressional records.
Past historical monetary writings also address the issue in detail. Perhaps such was not a mistake, but was very much intended and planned, although unknown by most but a select few. We will trust the reader with making such determinations, as the following discussions occasion.
LEGAL TENDER & PURCHASING POWER
Involved in the issue of "fixed" exchange, are the ideas of legal tender and the concept of purchasing power.
Legal tender has to do with distinguishing between the legal or juristic meaning of money, and the purely economic meaning and use of money. The term legal tender refers to the medium of payment that is designated as the legally accepted settlement of debts, especially debts due and owed to the government.
Money in the purely economic sense is commonly referred to as the medium of exchange or that which the common man uses to exchange one good for another to facilitate commerce and trade.
In a free market environment, whatever is determined to be the legal medium of payment (legal tender) must first naturally evolve as the accepted medium of exchange. Man by free choice determines what is to be money - the most commonly accepted or marketable medium of exchange. See GOLD: Sovereign of Sovereigns for a more detailed explanation.
A truly free society or government will only declare as legal tender, that media that society has already chosen as the accepted medium of exchange by its own free will. As we have seen with the development of our Constitution and its monetary policy, the dollar was the unit or medium of exchange that was the most accepted then current medium - a specific weight and fineness of silver - the "silver dollar."
Any alteration in this Constitutional dollar, both as the medium of exchange and the medium of payment or legal tender - without a Constitutional amendment - would not be the workings of a free society or government, but one of forced obedience.
This also goes to the point that the legal intrinsic value of the dollar is the physical amount of silver or gold as measured against the "standard," which in the case of the U.S. dollar is a specific weight of silver.
However, the economic value or purchasing power of the medium of exchange is not "intrinsic", as it is not based on an objective determination or standard, but on the subjective valuations of the market participants. Some refer to this as the subjective theory of value or the theory of declining marginal utility.
It is exactly this difference between the legal intrinsic value of money based on an objective standard or defined weight of metal - versus the subjective value of the medium of exchange that changes according to the supply and demand of the marketplace - that precludes any system of bimetallic coinage, that sets one metal as the standard, and then declares the other metal to be exchangeable for the standard metal at a fixed rate of exchange, to be inherently doomed to fighting free market forces and laws of supply and demand, continually requiring regulatory legislation and adjustment. Such is not the workings of a truly free market, but of a contrived or fixed market.
Although in the strict technical and statutory sense, the standard was silver and the system of coinage was bimetallic - in all practical applications or according to the prevailing populist views - the system was a duo metallic system that reciprocally recognized and exchanged one metal for the other. As will be shown, however, the system fluctuated back and forth from one metal to the other, and with good cause - the purposefully contrived reasons of power and influence: all in the pursuit of profit and gain.
Establishing fixed exchange rates allows "Gresham's Law" to enter the picture, whereby an artificially overvalued money tends to drive an artificially undervalued money out of circulation.
Free markets and supply and demand being what they are, inevitably the market values one metal over the other. Eventually one metal is driven out by the other. This process is oft times referred to as "demonetization". But remember, bimetallism under a fixed standard is not necessarily a completely free system.
Starting slowly in the 1780s, the market value of silver slid downwards, steadily continuing down through the 1790s, up until about 1804-1805; mainly in response to the increased supply of silver from Mexico and the diminishing supplies of gold from Russia; while at the same time, its mint price remained the same, thereby causing silver to be overvalued in relation to gold.
Gold coins started to flow out of our country and ceased to circulate, while silver coin flowed in and was abundant. Gold coin was melted down and exported abroad. From 1800 to 1834, only silver coin circulated as the currency of choice. Gold had been driven out - but by what force? Might there be an unseen "guiding hand"?
First, gold was driven out of circulation, and then over time silver became the lackey, until eventually both metals were driven into exile and buried beneath a mountain of worthless paper debt and hollow promises to pay: that is our now current system of paper fiat - a mere shade of its former self. But such events beg the question: a lackey of whom or by what power?
Congress would have been better off to have simply minted gold Eagles without fixing a dollar value on them, thereby allowing the free market forces of supply and demand to regulate their exchange rate value. This would help prevent the "authorized" control by other than free market principles or by "others."
Because of this flaw in a bimetallic system of coinage that has one metal as the standard and then fixes the exchange rate between the two metals, and the resulting "crying" up or down of the value of one metal in regards to the other - our monetary history was one where first one metal was dear and the other shunned, and vice versa, on several different occasions.
"It is the clouds that make the snow
and thunder comes from lightning without fail;
The sea is stormy when the winds have blown,
but it deals fairly when 'tis left alone."
CONCLUSIONS THUS FAR
It has been shown that the both the Constitution and the Original Coinage Act of 1792 established the monetary standard to be silver, in conjunction with a bimetallic system of silver and gold coinage.
The definition of a "dollar" has been found to be a specific weight and fineness of silver; commonly referred to as the silver dollar: 371.25 grains of silver.
The silver dollar was the unit of money or account that the Constitution and the Original Coinage Act of 1792 established.
Silver was exchangeable with gold at the rate of 15 to 1.
Neither the Constitution nor the Original Coinage Act of 1792 mentioned or established a gold dollar.
A U.S. gold dollar did not exist at this time in history and did not appear until 1849.
The gold eagle coin was of the value of ten dollars - the dollar being defined as the standard weight of silver of 371.25 grains of silver.
Gold exchanged for a dollar at 24.75 grains of gold (10 x 371.25 divided by 15), however, there was not any actual gold dollar coin.
The Constitution established that the States could not accept anything but gold and silver coin as legal tender and that Congress had the authority to mint silver and gold coins, but not the authority to print or emit bills of credit or paper money.
SILVER IS MONEY
The Constitution and the Coinage Act of 1792 both have provided definitions as to what our monetary standard was: a definite weight of silver; and what the monetary system was: silver and gold coin. Without a constitutional amendment, which has never occurred, the same standard is still in effect, whether or not it is followed and practiced - by both the public and or the government. As it is said, ignorance is no excuse for the law - by those that legislate it or not.
An unconstitutional act is against the Supreme Law of the Land, and is as if it never happened. Two wrongs do not make a right. There is a difference between legal, lawful, and constitutional. The Constitution came first, the laws of the land came after. We The People came before the Constitution and before the government enacted by the Constitution, which is why We The People are Sovereign.
Now that we have discovered just what the Constitution and the Original Coinage Act of 1792 established as our monetary standard and system, and what a dollar and money is and isn't, let's return to the original task of deciphering the statements in a recent article on silver that stated:
" if we look at both gold and silver in U.S. dollars, then whatever the effects the dollar had on gold, it would have a similar effect on silver." and "if both were priced as money, the charts of both would look the same, but they don't."
The constitutional dollar is a specific weight of silver. The money of the United States has been defined as silver and gold coin, not bills of credit or paper fiat money. Silver was and is the standard by which the dollar was defined. To accept Federal Reserve Notes or bills of credit as a replacement for the constitutional hard money standard, without a constitutional amendment, is to turn our monetary system upside down - now black is white and white is black.
To say that "whatever the effects the dollar had on gold, it would have a similar effect of silver" is complete nonsense according to the Constitution and the Original Coinage Act of 1792. It mistakenly accepts the unacceptable. It is using the wrong standard as in a double-standard.
To say "if both were priced as money, the charts of both would look the same, but they don't" is once again, complete nonsense according to the Constitution and the Original Coinage Act of 1792. Money was defined as specific weights or coins of silver and gold, how can one speak of pricing money by that which it is - they are one and the same.
It is only when the unacceptable is accepted; when the unconstitutional is deemed constitutional; when paper fiat Federal Reserve Notes are accepted in lieu of silver and gold coin, that one can even speak in such double talk as if it made any sense about cents, which it does not. This is why it is referred to as a standard - that by which other things are compared and measured against.
This is why the claim is made that we do not know what a dollar is. This is why a Federal Reserve Note can be said to be redeemable in lawful money.
This is why a one ounce silver coin says one dollar on it, yet it can be sold in the market place for $7 dollars.
Silver Peace Dollars 1922
This is why a one ounce gold coin says $50 dollars on it, but can be sold in the marketplace for almost $450 dollars.
It's called - double-speak or double standard. Wealth transference and nothing more - but perhaps less than nothing will result.
MONETARY VERSUS INDUSTRIAL
Often times the distinction is made between metals being monetary as opposed to being industrial. Common sense, along with the Constitution and Coinage Act of 1792, clearly explain what constitutes monetary metals: silver and gold coin. So what happened along the way from 1792 to the present, to make it appear that the original silver standard is no longer valid and in effect, affect, and or usage? Why do many speak of silver as being only an industrial commodity, when in fact it is the standard of our monetary system?
A lot has happened, more than can be here described. For a more detailed explanation see Honest Money, Part III: Coinage Acts from 1834-1900 as well as the entire Honest Money Series.
Basically what has happened is that the elite money powers have intentionally messed with our monetary system of silver and gold coin to intentionally take advantage of the inherent difference between the fixed rate of exchange and the market's rate of exchange; which in turn allowed them to purposefully first drive one metal (gold) out and the other (silver) dearer, and then vice versa, until they could manipulate the system so as to be able to give either of the metals a bad name and image to effect what some would call demonetization.
But true demonetization cannot be so determined, it takes We The People to want and ordain changes to our Constitution - it cannot be had by illusion and delusion - the money wizards are powerful, but not as powerful as We The People - unless we accept the unacceptable.
The markets are a law unto themselves and will not be denied. The market is more powerful then any single player or group of market players, no matter how large, as the market is the collective whole of all players. The primary long term trend will always assert itself in due time and course.
As such, those who partake of fixing the fixings should note the workings of a pendulum, and the law behind its motion: two factors effect the swing: length of the pendulum and gravity, which is determined by mass. The faster a pendulum swings, the farther outwards it moves or swings - but the number of pulses does not change. Somewhat related to how a point becomes a circle and time - the measurement of change.
The demonetization of silver was act one of the plan to place the United States and the world on a gold backed standard, to be followed by a totally fiat paper system; all carefully planned and orchestrated steps to bring about a global system of paper currencies; with the final goal of a one world fiat currency - founded and based on a system of perpetual credit and debt of We The People - a system no less oppressive, then the bondage of feudal slavery and tyranny.
The idea was born in infamy, by the elite international bankers, and then pedaled to the United States, Germany, France, and the rest of Europe. The war reparations that France had to pay were involved, as well as foreign trade with India and China, and other eastern nations that were on a silver standard, and the effects all this had on foreign "exchange" and trade, especially to the international elite of England and Lombard Street. As Baron Rothschild once said, "I care not who is King or Queen, as long as I control the money."
This is how silver came to be viewed as an industrial metal as opposed to a monetary metal - because the money powers could not control a hard money system, they needed an elastic monetary system that could be inflated to suit their purposes of wealth transference - when and by how much they desired. The Federal Reserve Act clearly explains it:
Federal Reserve Act
To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.
[Dispersed throughout 12 USC; ch. 6, 38 Stat. 251 December 23, 1913.]
And how is the Federal Reserve supposed to supply an elastic currency? The Act answers that as well:
Federal Reserve Act
Section 16 - Note Issues
1. Issuance of Federal Reserve Notes; Nature of Obligation; Where Redeemable
Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are hereby authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve Bank. [12 USC 411. As amended by act of Jan. 30, 1934 (48 Stat. 337). For redemption of Federal reserve notes whose bank of issue cannot be identified, see act of June 13, 1933.]
Federal Notes "to be issued by the discretion of the Board of Governors" - would that be the same as whenever they want, however they want, in whatever amount they choose? "Federal Notes to be issued for the purpose of making advances to Federal reserve banks and for no other purposes."
And by what policy is the Federal Reserve to attain its stated purpose. Once again, the Act provides a most clear explanation:
Federal Reserve Act
Section 2A - Monetary Policy Objectives
The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates. [12 USC 225a. As added by act of November 16, 1977 (91 Stat. 1387) and amended by acts of October 27, 1978 (92 Stat. 1897); Aug. 23, 1988 (102 Stat. 1375); and Dec. 27, 2000 (114 Stat. 3028).]
One can search the Federal Reserve Act and the United States Code forever without finding a definition of what is meant by: "the economy's long run potential to increase production", or "to promote effectively the goals of maximum employment", or "stable prices", or "moderate long-term interest rates"; and God only knows what it means to "maintain long run growth of the monetary and credit aggregates commensurate with"; and so far He hasn't chosen to tell us mere mortals.
THE LONG AND THE SHORT OF IT
Taras Dolphin 300 BC
The Coinage Act of 1873 is the last piece of evidence we will examine that shows that silver was greatly messed with, and with an intended purpose, just as gold has been.
COINAGE ACT OF 1873
In the Coinage Act of 1873, Congress for the very first time stated that gold coins of the "one-dollar piece", which contained 23-22/100 grains of fine metal - "shall be the unit of value."
As previously shown, however, the Constitutional "dollar" was a specific silver coin of a standard weight and fineness. Without a Constitutional amendment to change the original standard, the Coinage Act of 1873 that purports to effect such change, is undeniably unconstitutional.
Syrian Legionary Issue of Augusta VIII
The Act also stopped the minting of Silver Dollars, which is beyond question an unconstitutional act - once again, requiring a constitutional amendment authorizing such change.
Upon first consideration, it would appear that this act demonetized silver coinage, although unconstitutionally; and placed the new gold dollar at the head of the class as the standard - but did it?
Well, not exactly - as it seems that "someone" thought of covering their butt - for the following verbiage is part and parcel of the Act: "...this act shall not be construed to affect any act done, right accrued, or penalty incurred, under former acts, but every such right is hereby saved", even if such "acts done" and "rights accrued" were "inconsistent" with the 1873 Act.
All of which means that we were still technically (statutorily) on the Constitutional Silver Standard, but practically (as in usage) on the new gold standard - so although the powers that be were trying to make it appear, through illusion and delusion, that silver had been demonetized - in truth it had not.
Only a Constitutional Amendment can demonetize it, and then only within the United States. Such is the power of silver and gold - back through the history of the ages.
However, such false beliefs or lies, when told often enough, for long enough - end up becoming the accepted state of how the general public perceives things to be, which was the intended goal of those that were manipulating the "appearances", by the various "changes" we have seen implemented throughout our monetary history - showing that our monetary policy has devolved, not evolved, and that unseen hands were guiding such change.
The unacceptable has been spoon fed to We The People to become the acceptable.
So don't be fooled - Silver Is Money, always has been, most likely always will be - at least until a constitutional amendment changes the Silver Standard that the United States monetary system is built upon. Do not buy the song and dance they are peddling - for when the music stops there will be hell to be paid.
"'The cause of the lightning,' Alice
said very decidedly,
for she felt quite sure about this,
'is the thunder - no, no!' she hastily corrected herself, 'I meant the other way'.
'It's too late to correct it,' said the Red Queen:
'When you've once said a thing, that fixes it, and you must take the consequences.'"
The United States Silver Dollar Coin
The Constitutional Standard of Honest Money
It's Time Has Come.
As to every purpose there is a season and to every season a purpose.
Part II - The Seasons - to be forthcoming