In reponse to Karl on the Kucinich Bill.

I feel honored to have my name in the headline of Karl's blog, must have done something right - or wrong in this case.  Karl did not like me calling him out on his defense of Kucinich Bill and decided to skewer me a bit.  All in good fun, I had no intention to make this personal what so ever even if Karl believes that I have an "absolute vacuum" between my ears.  Meh, helps with the neck pain at least.

Karl does not actually state his defense for the bill or any of the points I brought up as to why the bill is just a blatant Marxist lurch, but instead focused on the Constitutional aspect of the debate.  Fine, if Karl believes that Congress can be trusted to maintain the supply of money, believes that paying off the existing national debt in newly printed United States Notes is somehow possible without a major debasement and thinks Congress should control money for the purpose of infrastructure investment - so be it. 

To the Constitution we go.

Karl demonstrates why the Supreme Court is such a failure, his ability to interpret words is quite astonishing:

Heh wait a second... how do you regulate the value thereof of something you coin if that thing is a metallic currency standard - and only metallic currency linked to gold (and/or silver) can be emitted?  You can't - that's the entire point of such an attempt. 

You only regulate the value thereof if you are using "coin" in the meaning of "emit an indica of" - as you "coin" a SBA Dollar, a Quarter, or a Penny, none of which necessarily have any particular metallic content.  You then can regulate their value by...... an act of Congress!

To somehow assume that the words 'regulate the value thereof' necessarily implies that a metal outside of precious gold/silver is being used has no basis what so ever.  Interestingly citing Quarters which USED to have actual silver content until it was changed or a penny whose copper value exceeds that of the actual penny (thus prompting anti-melting laws) are poor examples at best.

See, none of this really matters, because let us go back to Section 10, which I already mentioned previously, specifically the line:

make any Thing but gold and silver Coin a Tender in Payment of Debts;

So if States can only accept gold and silver and cannot themselves coin money, which only Congress can do - then please tell me, how is it possible that the coin is anything EXCEPT gold and silver!?   Karl should stop parsing sentences to suit his agenda and look at the entirety of the document, a document that clearly states who has the power to coin Money and what this Money should consist of.

Moving on...
 
Karl's point is that I did not bother to read the rest of Section 8, a bit presumptuous, but fine:

He didn't bother to read the rest of Section 8 and he intentionally refused to recognize the regulation of value of currency.  But Section 8 states as its second clause:

To borrow money on the credit of the United States;

And here's the tie to the problem with the "metalhead" pronouncements:  A Bill of Credit is in fact exactly that - it is a thing that has value only predicated on the future ability of the nation to raise funds through taxation.

As you can see the regulation is a red herring since Section 10 mandates payments to be in the form of gold and silver.  The ability of Government to borrow money does not in any way negate that money should have value.   Yes, Karl is correct , the credit is predicated on the future ability to raise funds through taxation, so what?  If we used gold in today's world and I had a steady job, would Karl let me borrow some gold coins knowing that I will pay the money back because I have a job?  Similarly would Karl lend some gold coins to the Government knowing that it too can repay the money - albeit through a much less virtuous manner? 

Without delving into the merits of whether Congress *should* have the power to borrow money, neither regulation of Value nor the ability to borrow displaces the idea that money should have inherent value!  Whereas Karl is jumping through hoops to prove his point, I am simply reading the document at it's face value.  Face value states that money should be in gold and silver and Bills of Credit are explicitly outlawed.

Karl's then rehashes his previous flawed point:

You probably have some in your pocket right now.  They're called quarters, dimes, nickels and pennies and, if you have any, US Dollars.

They have no metallic value relationship to their denomination yet they are not debt-bearing instruments.  They are in fact exactly the same thing as a Bill of Credit - exactly what Congress is explicitly authorized to issue against the sovereign credit of the nation, and which it is empowered explicitly to regulate the value of.

No kidding!!  Our Government is using fiat money, that is the whole problem in the first place.  The US Dollar in fact also once had value and a direct relationship to gold.  

The U.S. dollar was created and defined by the Coinage Act of 1792. It specified a "dollar" to be based in the Mexican peso at 1 dollar per peso and between 371 and 416 grains (27.0 g) of silver (depending on purity) and an 'eagle" to be between 247 and 270 grains (17 g) of gold (again depending on purity).  

In case you are wondering why weights and measures are so critical.  So by pointing out that today's coins have no relational tangible value is the same thing as me stating that our dollar is no longer 17g of Gold, no kidding!?  This is also why we have a huge 'junk silver' market where people are paying top dollar for old coins that contained actual silver.  Welcome to the world of fiat where money can be created out of thin air.

His point regarding Anti-Federalist is the only one I can't argue, but we also do not know whether the author of #44 and his interpretation was so outlandish at the time that nobody at the Convention bothered to address it because Section 8 and 10 clearly demonstrated that no fiat currency was possible.

None of this makes me a "goldbug" or "metalhead" or whatever other label one wishes to conjure up, it simply makes me a believer that money must have value.  If I create something and you give me pieces of paper whose value I cannot trust and in fact whose value may actually be zero at some point in the future then I will be reluctant to give you anything.   Yes you can give me a cow (assuming I need one) or some other good of comparable value, but humanity has determined this approach to be non-practical and has somehow chosen precious metals to serve the purpose of barter.  Money simply makes barter practical.  By introducing fiat money that can be created at any time makes the entire system unpredictable, fragile and prone to collapse.   This is why the average life span of fiat currency is 40 years and yet if you were to obtain old Egyptian or Byzantine gold coins you will be rich as hell even to this day. 

The founding fathers figured that part out, yet Karl for all his intelligence and wisdom has not.