Parallel Currencies And The Roadmap To Monetary Freedom

[Eugen Leitl]

http://www.forbes.com/sites/jonmatonis/2012/08/07/parallel-currencies-and-the-roadmap-to-monetary-freedom/

Parallel Currencies And The Roadmap To Monetary Freedom

It may not be as historically significant as President Nixon closing the gold
window in 1971, but Rep. Ron Paul laid out the framework for the inevitable
monetary confrontation of the future in his final U.S. Domestic Monetary
Policy Subcommittee hearing on bSound Money: Parallel Currencies and the
Roadmap to Monetary Freedom.b

The experts testifying included Robert Gray, Executive Director of the
American Open Currency Standard, Forbes contributor Nathan Lewis, author of
Gold: The Once and Future Money, and Dr. Richard Ebeling, Northwood
University economics professor. Rep. Paul also included a prepared statement
from constitutional lawyer and monetary expert, Dr. Edwin Vieira, who was
unable to attend.

Summarizing the August 2nd Congressional hearing, Alex Newman wrote for The
New American:

    According to Paul, the only way to stabilize the economy is by returning
to monetary freedom and legalizing constitutional money. And until the U.S.
government and the Fed get out of the way so the American people can choose
what money to use without government coercion, the economy will never be
truly stable and the supposed brecoveryb will be billusory,b he added.
Meanwhile, other nations are already catching on to the hoax even as
Americans lack the freedoms that citizens in some other parts of the world
have to invest and protect their wealth from inflation.

Largely echoing the sentiments of the chairman, the experts agreed that since
the creation of the Federal Reserve in 1913 the dollar has lost 98% of its
value and that central banking is a form of central planning with no place in
a free society.

Generally, the repeal of legal tender laws will allow individuals to decide
what to use as the preferred medium of exchange and open the door to
alternative currencies without threat of prosecution.

Rob Gray has been a tireless advocate for alternative open currency systems
and he is right to say bleave our money aloneb but I fundamentally disagree
with his stance on legal tender laws. He believes that the only effect of
legal tender laws is that if a debt is incurred without a specific agreement
for a particular type of payment, then that debt can be discharged with the
declared legal tender, or federal reserve notes. He even goes on say that, in
addition to not calling for repeal, he is in favor of existing legal tender
laws because they are so innocuous.

Although technically correct in stating that legal tender laws do not result
in btax obligation, exclusive requirement, and/or mandatory acceptance,b Gray
misses a major and symbolic effect that they do have and sometimes itbs a
chilling effect.

The legal tender laws have the effect of giving one form of money an
artificial preference over another by making that form of money acceptable
for the payment of taxes. Therefore, it indirectly puts forms of money
without legal tender status at a disadvantage because people will perceive
the blegallyb preferred monetary unit as having an underlying value greater
than zero. That is why I oppose legal tender laws, Mr. Gray.

Then, a bit of bitcoin drama occurred when Rep. David Schweikert (R-Arizona)
initially referred to the cryptocurrency as bumb&.what was one of them
called?b&.somethingb&.coinb near the end of the hearing. To my knowledge, that
is only the second time that bitcoin has been entered into the congressional
record. The first being when Prof. Larry White mentioned bitcoin in his
prepared testimony for the Free Competition in Currency Act of 2011.

Contrary to Nathan Lewisb statement that bevery currency has an issuer,b
bitcoin does not require an issuer.

Proving once again that events in the real world unfold faster than those in
power can comprehend, the participants probably did not know that bitcoin is
currently the largest distributed computing project in existence today,
passing the Search for Extra-Terrestrial Intelligence (SETI) project some
time ago.

They probably were also not aware that bitcoin is a three-year-old
decentralized bootstrapped currency with a $100 million plus monetary base
that is immune from government regulation and, more importantly, immune from
the crippling effects of monetary policy.