Chris Yuhas Blog: True Economics and Politics

Amendment giving the 10th Amendment Teeth?

Posted in Politics by Christopher Yuhas on October 19, 2010

“[The States] alone being parties to the [Federal] compact… [are] solely authorized to judge in the last resort of the powers exercised under it, Congress being not a party but merely the creation of the compact and subject as to its assumptions of power to the final judgment of those by whom and for whose use itself and its powers were all created and modified.”
– Thomas Jefferson: Draft Kentucky Resolutions, 1798. ME 17:387

There are surely violations of State and Individual Rights by the Federal Government that are ongoing and blatant. Health-care, banker bailouts, the PATRIOT Act, and many others make that list, including the Federal Government pledging to prosecute Californians who choose to use cannabis if approved by the States voters in Proposition 19.

The Constitution was created by the States, and the Federal Government was granted its power from the MORE powerful States. This is Affirmed by Article 5 of the Constitution that reads:

The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.

States can modify the Constitution without any Federal input. That clearly shows that the Federal Government is INFERIOR to the sovereign States.

We fight for the 10th Amendment and State rights of Nullification, the process of dismissing unconstitutional Federal Law, but how will this ever be upheld by a VERY biased Supreme Court or Lower Court.

These Federal justices, although appointed for life, were appointed by the Federal Executive AKA President of the US, Confirmed by the Federal Legislative Upper House AKA Senate of the US, and ARE part of the Federal Government that was granted power by the States. Now with this bias, how can we honestly say that even with a lifetime appointment that any Federal Court would interpret the Constitution, created by the States, the way the States intend it should be interpreted. The Supreme Court of the United States granted itself the authority to interpret the Constitution, in Marbury vs. Madison. Fat chance of fairness of the Federal Courts when the Federal Government is a party!

The first response to that would be to create an Amendment to correct a specific problem were having with the Federal Government. The next question is how many problems are there? Too many to count in my opinion. But why are there so many? There are so many because the Constitution is being interpreted by the very people that were intended to be limited by it. TAKE THE POWER OF INTERPRETATION OF THE CONSTITUTION AWAY FROM THE FEDERAL COURTS.

I believe we need a court, SUPERIOR to the Supreme Court of the United States, interpreting the Constitution on behalf of the very States that created it. Here is a model amendment I came up with to propose how we should put the interpretive powers back with the States:

United States Court of Constitutional Interpretation

Section 1 – Establishment

The United States Court of Constitutional Interpretation is hereby established.

Section 2 – Powers

The United States Court of Constitutional Interpretation’s judicial power shall be Superior and extend to all Federal Courts, including the Supreme Court of the United States. The USCCI, or by request of ½ of the State Legislatures, shall have the exclusive power of original or appellate jurisdiction of any case in Federal Courts.

The USCCI and its decisions shall supersede all Federal Court decisions and shall be case law for Federal Courts to follow.

The President of the United States, the United States Congress, the Supreme Court of the United States, and all Branches of the United States Military shall be bound, subservient, and shall enforce the USCCI’s rulings.

Section 2 – Limitations of Powers

The USCCI shall have no original jurisdiction over cases of individual State matters, unless the United States shall be a party.

The USCCI shall interpret this Constitution and its Amendments, in reasonable context and reasonable definition, of the year in which the Constitution or the Amendment was ratified by the States.

The USCCI shall not interfere with the right of a States Convention, unless the Convention, by a majority requests it. The USCCI may only advise a Convention and shall have no legal power over it.

The USCCI shall be subservient to this Constitution.

Section 3 – Structure and Operation

Each State Legislature shall send 3 delegates of their choosing, to be Judicial Delegates of their State. Each Judicial Delegate shall have one vote. Each State shall determine criteria for the appointment of their Judicial Delegates. Each State, by the States criteria, may recall a Judicial Delegate. States shall determine terms and term limits of their Judicial Delegates.

Each State shall have each delegate swear or affirm allegiance to their State and this Constitution, and each Judicial Delegate shall publicly denounce, nor take during their service, any title of Power, Status, Office, or Nobility granted by a foreign body, foreign State, or entity that has not sworn allegiance to this Constitution. A violation, determined by a trial conducted by the USCCI, will result in an immediate lifetime removal by more than 2/3 of the Judicial Delegates convicting or 2/3 State Legislatures may determine conviction or innocence after the Judicial Delegates trial; Lifetime removal may be overturned only by ¾ of the State Legislatures in agreement.

Every case heard may include unlimited Constitutional debate. Debate will come to a force vote, if 2/3 of Judicial Delegates or 2/3 of the State Legislatures, agree the debate shall end.

There shall be three Grand Justices of the Republic, elected by Judicial Delegates, that shall not vote, except in cases where a tie vote occurs. Grand Justices shall serve for life unless demoted by 2/3 of the State Legislatures or 2/3 of the Judicial Delegates vote, at which time, the State which the Grand Justice is from, will decide what 3 Judicial Delegates will remain in that State’s service.

The Grand Justices of the Republic shall determine what cases are brought before the USCCI. Cases shall be immediately prioritized for debate upon 1/2 of Judicial Delegates request or 1/2 of the State Legislatures request, of any matter within the USCCI’s Constitutional jurisdiction. In the event of a queue, a supplemental request of ½ of the Judicial Delegates or ½ of the State Legislatures shall determine the order in which matters are heard. State Legislature requests shall take priority over the Judicial Delegates requests.

Section 4 – Funding

The USCCI will request a budget with majority approval of State Legislatures. Costs shall be apportioned among the States.

Section 5 – Ratification

There shall be no time limit for State Legislatures to ratify this Amendment.

Section 6 – Definititions

United States Court of Constitutional Interpretation is also known as the USCCI.

Federal Courts include the Supreme Court of the United States and all inferior courts.

All input regarding this model Amendment will be appreciated and noted.

In California the right to openly defend one’s self is in jeopardy

Posted in Civil Rights by Christopher Yuhas on May 25, 2010

The natural right of self-defense is being unconstitutionally attacked by the California Assembly Bill 1934, also known as the open carry ban. Open carry is defined as the right to carry a non-concealed arm in public, provided it is unloaded.

It is first important to understand that the State and the Federal government have no authority to deny any citizen the right to bear arms. An understanding of the type of government that America is, which is a Constitutional Republic, and how the Constitution was framed will clarify any confusion.

After the 13 original colonies, which were the original States, gained their independence from Great Britain there was a loose set of rules on which the government rested called the Articles of the Confederation, which served the country’s infancy until the ratification of the Constitution without the Bill of Rights in 1788. It is important to understand that the States at the time, and still are, the highest law of the land and may nullify Federal Law, meaning rendering Federal Law useless, as the States see fit. Remember, the states started the Federal Government, and may end it as they see fit, as We the People have contracted the States to have this power. However, the founding fathers saw that human rights, which are inalienable and cannot be infringed, must be protected as no State or Federal government has the right to take them away.

James Madison, also known as the “Father of the Constitution,” saw that tyranny could find its way to the American people without the Bill of Rights in place. Out of the original 12 that were presented to Congress, 10 were adopted to bind the Federal and State governments to it, and one became inherently unique to America which protected all other rights; the Second Amendment right to bear arms. When researching how to interpret the Constitution, one should research the Federalist and Anti-Federalist Papers, which are papers clarifying how amendments and parts of the Constitution were meant to be interpreted. The intent of what the Second Amendment embodies can be found in the Federalist Paper #46 written by Madison himself:

But were the people to possess the additional advantages of local governments chosen by themselves, who could collect the national will and direct the national force, and of officers appointed out of the militia, by these governments, and attached both to them and to the militia, it may be affirmed with the greatest assurance, that the throne of every tyranny in Europe would be speedily overturned in spite of the legions which surround it. Let us not insult the free and gallant citizens of America with the suspicion, that they would be less able to defend the rights of which they would be in actual possession, than the debased subjects of arbitrary power would be to rescue theirs from the hands of their oppressors. Let us rather no longer insult them with the supposition that they can ever reduce themselves to the necessity of making the experiment, by a blind and tame submission to the long train of insidious measures which must precede and produce it.

This specifically shows that the intent of the Second Amendment is that all persons able to bear arms should form a citizen run militia. This would eliminate the possibility of tyranny from the government. The People are to be trusted with that right because the power of the Constitution is granted by the people and the people alone. Ultimately, the Constitution was created to provide a limited scope of power to be granted to the Federal Government. The Amendments and Bill of Rights are incorporated which legally binds them to the Federal Government and the States as that was the intent of its ratification. Therefore, State and Federal governments are legally obligated to equally enforce all amendments.

With the understanding that the right to bear arms is the right to prevent tyranny, it is also understood that it is a right to self defense. How is an individual able to enjoy life, liberty, and property if there is no right to defend themselves from harm? If there is no right to bear arms, then the government would have to provide an armed guard for every citizen’s self-defense and that wouldn’t be liberty. This would mean that the government would have to tax citizens to provide self-defense, thus making taxation the means of self-defense. Would this make sense for a country that had a REVOLUTION over taxes? The people reserve the right to decide whether to defend themselves or not.

The attack on the right to bear arms openly was introduced in California by Assemblywoman Lori Saldana from San Diego’s 76th District. Saldana’s reason for introducing this legislation was,

Their [referring to Legal open carriers] threatening and confrontational conduct intimidates the public, wastes law enforcement resources and needlessly increases the risk of firearm-related deaths and injuries.

The situation involved 60 law abiding open-carry activists coming together cherishing their right to bear arms in a free country and concerned law abiding locals on the beach. The concerned locals called the police in fear of the firearms. They weren’t threatened, all of the owners of the firearms were legal, and no arrests were made.

Just because a person has a firearm in their possession, does not make them evil, nor does it instantly possess them to treat others with ill-intent. The locals were in fear of a threat that didn’t exist with the firearms. This is called hoplophobia, which is a fear of firearms. The Constitution only protects natural rights and does not guarantee a protection of fears. Protection of fears may be obtained through a licensed psychologist outside of the realm of taxpayer dollars.

The facts are, that no threats or intimidating movements, were made to the people on the beach, which effectively dispels the notion that the people were intimidated purposely. The locals who were in fear of the firearms, were the ones who called the police, thus being the ones responsible for the waste of law enforcement resources, not the law abiding open carriers. The biggest misconception in Saldana’s reasoning for the introduction of the open carry ban is that it somehow it will decrease crime. She believes that open carry needlessly increases the risk of firearm related deaths and injuries.

Telling citizens that banning open carry will decrease crime is statistically incorrect. Open carry states have nearly 50% less overall crime index per capital (p. 5) than states with aggressively restricted open carry laws like the proposed open carry ban. Therefore, statistically, keeping open carry would increase the probability that crime will not go up.

The United States Bureau of Justice Statistics determined that over 70% of crimes committed against citizens happen when they are NOT at home (p.69-70), which comes from their National Crime Victimization Survey (NCVS). Therefore, open carry bans would not allow a citizen to bear arms, when in fact 70% of crimes would be committed when they are not armed for self-defense.

In the case of the District of Columbia vs. Heller, one piece of data submitted to the Supreme Court was a survey done on convicted criminals and how they would respond to an armed victim by James Wright and Peter Rossi. Their shocking survey used in Supreme Court testimony (p. 32), covering 11 prisons in 10 States discovered the following:

• 34% of the felons reported personally having been “scared off, shot at, wounded or captured by an armed victim.”
• 8% said the experience had occurred “many times.”
• 69% reported that the experience had happened to another criminal whom they knew personally.
• 39% had personally decided not to commit a crime because they thought the victim might have a gun.
• 56% said that a criminal would not attack a potential victim who was known to be armed.
• 74% agreed with the statement that “One reason burglars avoid houses where people are at home is that they fear being shot.”

Saldana also states that it will reduce firearm injuries and that she is very concerned for the public safety. According to the California Department of Public Health 2007 death statistical tables, a Californian is 10 times more likely to die in a car accident than from a firearm, and a Californian is 80 times more likely to die from circulatory disease than a firearm. It seems hypocritical that open carry activists who were obeying the law, had the police called on them, by Saldana’s supporters, and were accused of wasting law enforcement resources, which ultimately are tax payer resources. Why the demonization of firearms when there are much more pressing issues such as heart disease and car accidents? That would be less wasteful than attacking the right of citizens to bear arms.

The open carry ban is troubling given the state of financial crisis in California. The bill is a state-mandated program and will somehow have to provide money for grants to the counties for enforcement. More regulation will equate to more taxes. A state 100 billion in debt cannot afford any further expenditures.

The bill does not apply to the following:

(a) An officer or employee of the United States of America, or of this state or a political subdivision thereof (b) A person engaged exclusively in the business of obtaining and furnishing information as to the financial rating of persons. (f) A collection agency or an employee thereof (g) Admitted insurers and agents and insurance brokers (h) Any bank subject to the jurisdiction of the Commissioner of Financial Institutions (n) Any secured creditor engaged in the repossession of the creditor’s collateral and any lessor (1) The possession of a firearm by an authorized participant in a motion picture, television, or video production or entertainment event when the participant lawfully uses the firearm as part of that production or event or while going directly to, or coming directly from, that production or event.

The citizens may not be armed, however a person is subject to armed intimidation throughout 70% of their day from Federal Agents, anyone involved with knowing a person’s financial history, a collection agency, insurance agents, banks, creditors in repossession, and someone filming movies. A person making a movie has more rights in defending themselves than a law abiding citizen. Do not forget that criminals don’t follow the law anyways, therefore they will be armed too.

The term loaded is being redefined as follows:

(j) For purposes of Section 12023, a firearm shall be deemed to be “loaded” whenever both the firearm and the unexpended ammunition capable of being discharged from the firearm are in the immediate possession of the same person.

And that crime of having an unloaded firearm and ammunition not attached carries this punishment:

(7) In all cases other than those specified in paragraphs (1) to (6), inclusive, by imprisonment in a county jail not to exceed one year, by a fine not to exceed one thousand dollars ($1,000) both that imprisonment and fine.

This bill is a direct attack to dismantle everything that holds the Constitutional Republic together which is the right to self-defense and the right to a free society absent of tyranny. The Open-Carry Ban, AB1934, is a draconian measure that forces good law abiding citizens to be disarmed during the times when 70% of crimes occur, forces good people to be subject to imprisonment for exerting a right that the Federal Government and State governments have no right to take away, and forces a socialist redistribution of wealth from taxation to protect a small group of people from their misguided fears. A citizen simply needs to look to the Constitution for the answers that will clarify what limitations are put in place on the State and Federal government. In closing, the words of Cesare the Marquis of Beccaria-Bonesana, who literally devised the basis for all modern penal codes adopted by the Constitutional Republic of the United States said:

Laws that forbid the carrying of arms . . . disarm only those who are neither inclined nor determined to commit crimes . . . Such laws make things worse for the assaulted and better for the assailants; they serve rather to encourage than to prevent homicides, for an unarmed man may be attacked with greater confidence than an armed man.

Strip the Federal Reserve of all powers using The Free Competition in Currency Act of 2009

Posted in Economics by Christopher Yuhas on February 24, 2010

The best way to destroy the capitalist system is to debauch the currency. – Vladimir Lenin

A chilling revelation from a person who succeeded in destroying free markets and liberty in his own country. Any prudent individual who believes in the economic liberty that capitalism provides, would do everything to stop this. Even if you did not believe in capitalism, I’ve never heard of the thunderous roar from any man or woman that enjoys to make the same amount of wages while losing purchasing power.

Lets put the Federal Reserve in perspective and in very simple terms. The Federal Reserve is like a national bartender serving only one brand of Beer while making all others brands of beer illegal. Here is the scenario. The Federal Reserve Bar only has enough beer to serve 20 customers. But every year since 1969 there have been more than 20 customers looking for Federal Reserve Beer. Since there is no other beer that may be served the Federal Reserve, adds water, dilutes the beer supply, thus reducing the potency, and provides for all the guests that show up after that maximum of 20 have been served. Each guest now gets the same volume of Federal Reserve Beer, however, diluted to the point where you may now call it non-alcoholic. That’s the Federal Reserves power over our money supply in a nutshell.

Now with a simplified explanation of their monopolistic position over the American currency, how do they create the money which dilutes wealth? The Federal Reserve has three tools in which they manipulate the money supply.

  1. Open Market Operations. Open Market operations are purchases or sales of US Treasuries by the FOMC (Federal Open Market Committee) of the Federal Reserve. When the Federal Reserve purchases treasuries, they simply deposit money into the seller’s bank account and voila, money created in the banking system. When they sell treasuries they take payment of from buyers which reduces money in the banking system. Thus “printing” money out of thin air.
  2. Discount Rate. The discount window loan is where banks go to borrow money from the Federal Reserve when they cannot borrow from any other institution for just about any reason. When the loan is made, the Federal Reserve deposits the loan in the banks account, thus money being created out of thin air, regardless of any guarantee.
  3. Reserve Ratio. The current rate on 50M or over is 10%. That means a banking institution may take a savings deposit of $5,000,000.00 transfer 10% of it to the Federal Reserve, which eventually pumps $50,000,000.00 into the money supply to loan to the public. Thus the member banks themselves creating money out of thin air mostly at interest!

Now lets examine the effect on the monetary system when currencies are allowed to compete, and given full convertibility in depository institutions, even allowing the Federal Reserve to continue to do everything it does with the exception of forcing the public, through Legal Tender Laws, to use its brand of currency.

  1. Open Market Operations. The Federal Reserve begins to purchase treasuries thus increasing the money supply. Those in a free currency system, may now convert their Federal Reserve Notes (incorrectly called Dollars) to whatever currency they wish in their depository institution; possibly a new gold backed currency, possibly a new silver backed currency, the Yen, the Yuan, or any other. This in turn increases the supply of the Federal Reserve Notes from lack of confidence and the person who converted their notes into other currency, and lowers the value of it until the Federal Reserve proves they have a generally acceptable increase of tangible assets or reduces their supply to stabilize its worth.Thus a check and balance on this action of the Federal Reserve.
  2. Discount Rate. People holding Federal Reserve notes in their depository institution see that the Federal Reserve just made a large loan at the discount window to a bank. This loan is deposited in that banks account thus creating money out of thin are. The holders of the Federal Reserve Notes are not confident in the company that the loan was made to because it increased the money supply and their financial troubles might not be solved by the loan, therefore, because of the Freedom of Currency they may convert their Federal Reserve Notes to any other currency with their depository institution. Thus a check and balance on this action of the Federal Reserve.
  3. Reserve Ratios. An institution that receives a $5,000,000.00 deposit now transfers 10% of that money into the Federal Reserve. The system eventually pumps $50,000,000.00 of Federal Reserve Notes in the monetary system. Thus money created out of thin air. From audits of either the Federal Reserve, or the banking institution, the people see that the Federal Reserve has increased the money supply and is now diluting wealth. They may now convert their Federal Reserve Notes at their banking institution into any other currency thus protecting themselves from inflation on that currency. Thus a check and balance on this action of the Federal Reserve.

“They will come to learn in the end, at their own expense, that it is better to endure competition for rich customers than to be invested with monopoly over impoverished customers.” – Frederic Bastiat

To stop the tyranny of inflation we must stop the monopoly of the money supply. Yes the Federal Reserve should be audited, but lets take the real power away from them which is not their secrecy, although the secrecy must be removed to bring criminal charges to those involved with financial tyranny, we must repeal legal tender laws which IS the monopoly of the money supply.

We as Americans were founded to not even give the Government a monopoly of violence, thus the Second Amendment, and even the Declaration of Independence confirms this. Why would we allow the banking institutions to just control another currency just to create a monopoly over it. We must allow private minting of coin, private issuance of currency, and allow foreign currency to use to settle contracts and cut a monopoly right out of the picture.

HR 4248 the Freedom of Currency Act 2009 does just this. It repeals Legal Tender Laws and prevents capital gains on certain coins and bullions. I believe it requires an amendment for depository institutions to allow the convertibility of one currency to another upon demand of the consumer to reduce the delay in the actual convertibility. Surely they may have some transactional fee for doing this, however what’s a processing fee when you have Federal Reserve Notes that lost over 95% of their purchasing power since 1913? End the Fed, by giving us capitalism, which is the freedom of currency!

If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. – Thomas Jefferson

Recommended read:

Denationalisation of Money: The Argument Refined ISBN: 0255362390

Federal Reserve or the Gold Standard?

Posted in Economics by Christopher Yuhas on October 19, 2009

CPI Chart

The Federal Reserve is charged with combating inflation and providing a more stable monetary and financial system by authority of the US Congress under the Federal Reserve Act of 1913. They have failed that responsibility. Due to the fact that they have an unchallenged authority to dictate monetary policy, which is setting interest rates and the money supply, they are solely to blame for the 95% devaluation of the American dollar since 1913, following the Keynesian economic ideology that promotes fiat currency, centralized banking, and heavy intervention to the economy it serves.

From the brief analysis given below, the argument for an immediate implementation of the gold standard, will be substantiated by showing that gold in free markets can regulate the inflation of currency than the Federal Reserve.

In any particular school of economics, a widely accepted truth is that inflation’s primary causes are interest rates and the money supply. When any central bank, like the Federal Reserve Corporation, wants to slow down inflation, the first order of business is that interest rates must be raised. When interest rates rise, people are less likely to borrow money. When borrowers have to pay a premium over a longer period of time it discourages riskier investments, thus the economy becomes limited in available money for investment since individuals and institutions are more likely to save.

10 Year FED Rate

If economists from many economic schools and perspectives teach that inflation of currency can be slowed by raising interest rates, it seems from the historical data chart from the Federal Reserve Corporation’s own data, that interest rates are dropping, which is encouraging more spending, usually with traditional risk assessment non existent,  thus causing more inflation.

US Currency in Circulation

The second major action a central bank has in its arsenal to combat inflation, is the direct manipulation of the money supply. A simple rule of supply and demand can easily explain why this method is effective. If you want to increase the value of anything, make it less available. For instance, a Mickey Mantle rookie card can fetch a premium in the $200,000.00 dollar range because of the rarity of the commodity. If there were to be a sudden increase of Mickey Mantle rookie cards, in the millions for example, the commodity is now diluted its luster to fetch a premium because buyers know it is not that rare. The same rule with any currency applies, such as the United States dollar. The US currency has declined over 95% since 1913, and knowing this simple rule, some currency should be removed from circulation to maintain the strength of the currency. The exact opposite is happening today. The money supply has more than doubled in the last two years, adding to even more inflation, contrary to sound rules of economics.

The Federal Reserve Corporation also sets the standards of reserve requirements that banks must hold. For every 1 dollar a US bank saves, they can lend out 10 by creating money in a keystroke. This is called fractional reserve lending. This policy has contributed heavily to the decline of the dollar as banks have feverishly been lending out money, which is only backed by a tenth of the amount. This risky policy equates to US banks being able to have person deposit money into their institution, and then create 10 dollars of money out of thin air to lend, thus diluting the value of the dollar even further. If the reserve requirements were set higher, to at least a 5:1 reserve requirement, and as only a temporary measure, this would force banks to analyze risk more effectively and not engage in the toxic subprime mortgages market, for people who should not have been able to afford the house in the first place.

A prudent individual would then look to the audits of the Federal Reserve Corporation, hoping to discover, bad investments with other central banks and corrections on their fiscal policy, however they have exemptions of being audited on the their most important actions:

(b) Under regulations of the Comptroller General, the Comptroller General shall audit an agency, but may carry out an onsite examination of an open insured bank or bank holding company only if the appropriate agency has consented in writing. Audits of the Federal Reserve Board and Federal reserve banks may not include—
(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;
(3) transactions made under the direction of the Federal Open Market Committee; or
(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection

Given the scope of what the Government Accounting Office, is prevented by law to audit, it would be very difficult to say exactly what is going on behind closed doors. The reality is that the Federal Reserve Corporation deals in the trillions, while the United States Congress only deals in the billions, yet Congress can be fully audited, but the Federal Reserve Corporation cannot under law be scrutinized on the 4 subsections. These exemptions must be removed so that the failures can be assessed and more efficient safeguards to prevent inflation put into place.

The first recommendation is to conduct a full audit of the Federal Reserve Corporation. Only a full audit can determine why interest rates were left unusually low and the money supply was effectively doubled, when economists would agree that the opposite, being raising interest rates and reducing the money supply, would have started a correction for the inflation.

Gold Std

The next recommendation would be the full scale implementation of a 100% gold standard with all currency redeemable in a fixed weight of gold. Gold, as in the CPI index chart (above), quickly corrects the inflation of the currency. The times in US history when inflation went high, on a gold standard, is during times of war, when convertibility of currency to gold was suspended to help fund the campaign. When the wars were concluded gold became convertible, and corrected the value of the currency. This is also a check and balance for risky lending of banks, and putting a strict restraint to prevent Congress from heading to the printing press to fund their next policy. The gold standard effectively puts an end to fractional reserve lending which forces banks to back all holdings with full convertibility to gold. This in turn would force banks to use traditional risk assessment when lending money, rather than the extreme risk that is plaguing the US economy today. Again, the gold standard prevents politicians from running to the printing press, when they want to fund a program or an unpopular war, which would traditionally require people to vote for a tax increase. Politicians usually run to the printing press to fund wars, as most citizens would generally not vote to do so. The 1900’s gave rise to central banking in Europe, and naturally war followed because politicians could run to the printing press to make currency and without being backed by gold or a metallic. They continually dilute the money supply at the expense of the citizens, without a tax being voted on to fund their war. Even former Federal Reserve Chairman Alan Greenspan warned of currency abuses by politicians in the absence of the Gold Standard in his 1966 Gold and Economic Freedom:

“This is the shabby secret of the welfare statists’ tirades against Gold. Deficit spending (inflation of currency) is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism towards the Gold Standard.”

With all information considered, and a recommendation of the 100% Gold Standard, you now have a metallic that has the ability to control inflation by being convertible at all US banking institutions, which is essentially the free market itself. Therefore, there are no needs for a central bank when the 100% Gold Standard with dollars payable on demand in gold. The Gold Standard had been a self regulating and effective tool combat inflation. The Federal Reserve Corporation should be converted to a public organization and restructured under the US Treasury Department. The Federal Reserve System could then be used as a real tool to combat inflation to regulate and inspect all banking institutions across the nation ensuring they are holding sufficient gold for surrender, given the total currency in circulation.