The Economic Rape of America - Chapter Two

THE DESTRUCTION OF THE U.S. DOLLAR

You that trample on the needy, and bring ruin to the poor of the
land, saying... We will make the ephah small and the shekel great, and practice deceit
with false balances.
Amos 8, verses 4-5
"It is apparent from the whole context of the Constitution as well as the history
of the times which gave birth to it, that it was the purpose of the Convention to
establish a currency consisting of the precious metals. These were adopted by a permanent
rule excluding the use of a perishable medium of exchange, such as of certain agricultural
commodities recognized by the statutes of some States as tender for debts, or the still
more pernicious expedient of paper currency."
-- Andrew Jackson, 1836
"There is no subtler, no surer means of overturning the existing basis of society
than to debauch the currency. The process engages all the hidden forces of economic law on
the side of destruction, and does it in a manner which not one man in a million is able to
diagnose."
-- John Maynard Keynes, 1920
It is the continuous loss of value that constitutes the destruction of the dollar.
Because it happens gradually most of us are not alarmed by it. It is like the frog in hot
water. If you throw a live frog into boiling water, it jumps out immediately. But if you
put in a pot of cold water on the stove, it just sits. If you gradually heat the water,
the frog just sits. By the time the frog realizes the water is too hot, it doesn't have
the strength to jump and it burns to death. In relation to the sinking value of the dollar
most of us are "sitting frogs!"
This chapter is largely based on The Biggest Con: How the Government is Fleecing You by Irwin A. Schiff. According to Schiff, "U.S. politicians, contrary to the
Constitution and the U.S. criminal code, have conned all citizens out of their money
savings. This monetary swindle was perpetuated despite a reasonably literate electorate,
despite our well-developed financial and banking institutions, and despite our many
institutions of higher learning and the nation's extensive network of information
media." Let us now examine the "mechanics" of the swindle.
THE GREAT MONEY SWINDLE
Look at Figure 1 below, which depicts a Certificate of Deposit for ten silver dollars
issued in 1880. Banking originated in the middle ages. Because of the inconvenience of
carrying a lot of silver or gold, some of it was deposited with a blacksmith, jeweler, or
goldsmith. A certificate of deposit was issued. The certificate could be used as payment.
The holder could present the certificate to the "banker" and receive the silver
or gold it represents, guaranteed by the terms, "payable to the bearer on
demand." Note that the certificate says, "This certifies that there have been
deposited with the Treasurer U.S. ten silver dollars." This Certificate of Deposit is
in the tradition of how banking originated.

Figure 1:

CERTIFICATE OF DEPOSIT
THIS CERTIFIES THAT
there have been deposited with
THE TREASURER U.S.
TEN
SILVER DOLLARS

payable to the bearer on demand

UNITED STATES CERTIFICATE OF DEPOSIT 1880
(REDEEMABLE IN SILVER)
Now examine Figure 2. This is a Silver Certificate which states, "This certifies
that there is on deposit in the Treasury of The United States of America ten dollars in
silver payable to the bearer on demand." For all intents and purposes this Silver
Certificate is equivalent to the Certificate of Deposit in Figure 1. But there is a very
important difference: the Silver Certificate also states, "This certificate is legal
tender for all debts, public and private." This is a reflection of a "legal
tender law." It in effect says, "Citizens are not qualified to choose their
money; government dictates what shall be used as money." This sets the stage for the
swindle. Government can debase the currency and force citizens to use it.

Figure 2:

SILVER CERTIFICATE
THIS CERTIFIES THAT THERE IS ON DEPOSIT IN THE TREASURY OF
THE UNITED STATES OF AMERICA

THIS CERTIFICATE IS LEGAL TENDER
FOR ALL DEBTS, PUBLIC AND PRIVATE

TEN DOLLARS
IN SILVER PAYABLE TO THE BEARER ON DEMAND

UNITED STATES SILVER CERTIFICATE 1934
(REDEEMABLE IN SILVER)
In Figures 3 and 4 below we see the same difference between the gold certificates of
1907 and 1928. As soon as citizens grant their government the power to dictate what shall
be used as money, they open the door to being swindled. Regrettably, that is precisely
what has happened to the American public. And it happened gradually - like it happened to
the frog who burnt to death.

Figure 3:

THIS CERTIFIES THAT THERE IS ON DEPOSIT IN THE TREASURY
OF THE
UNITED STATES OF AMERICA

TEN DOLLARS IN GOLD COIN
PAYABLE TO THE BEARER ON DEMAND

UNITED STATES GOLD CERTIFICATE 1907
(REDEEMABLE IN GOLD)

Figure 4:

THIS CERTIFIES THAT THERE HAVE
BEEN DEPOSITED IN THE TREASURY OF
THE UNITED STATES OF AMERICA

THIS CERTIFICATE IS A LEGAL TENDER
IN THE AMOUNT THEREOF IN PAYMENT OF ALL
DEBTS AND DUES PUBLIC AND PRIVATE

TEN DOLLARS
IN GOLD COIN PAYABLE TO THE BEARER ON DEMAND

UNITED STATES GOLD CERTIFICATE 1928
(REDEEMABLE IN GOLD)
Look at Figure 5 below. Here we have a Federal Reserve Note, dated 1928,
"Redeemable in gold on demand at the United States Treasury or in gold or lawful
money at any Federal Reserve Bank." This means the holder of the note could exchange
it for $10 worth of gold at the U.S. Treasury. However, at a Federal Reserve Bank they
could, instead of gold, give the holder "lawful money." In Chapter One we saw
that "lawful money" is defined by law as gold and silver. No doubt, the term
"lawful money" is introduced as part of the plot to gradually debase the
currency. The water is gradually getting warm!

Figure 5:

REDEEMABLE IN GOLD ON DEMAND
AT THE UNITED STATES TREASURY
OR IN GOLD OR LAWFUL MONEY
AT ANY FEDERAL RESERVE BANK

WILL PAY TO THE BEARER ON DEMAND
TEN DOLLARS

FEDERAL RESERVE NOTE 1928
(REDEEMABLE IN GOLD OR "LAWFUL MONEY")
Now look at Figure 6. This is a National Currency Note, dated 1929, "Redeemable in
lawful money of the United States Treasury or at the Bank of Issue." The
"gold" is gone. Another step of the swindle has been taken. The water is getting
hot!
Observe that neither the Figure 5 Federal Reserve Note, nor the Figure 6 National
Currency Note say anything about "legal tender."

Figure 6:

NATIONAL CURRENCY
SECURED BY UNITED STATES BONDS DEPOSITED WITH THE TREASURY OF
THE UNITED STATES OF AMERICA

WILL PAY TO THE BEARER ON DEMAND
TEN DOLLARS

REDEEMABLE IN LAWFUL MONEY OF
THE UNITED STATES AT UNITED STATES
TREASURY OR AT THE BANK OF ISSUE

NATIONAL CURRENCY 1929
(REDEEMABLE IN "LAWFUL MONEY")
Now look at Figure 7 below, a Federal Reserve Note, dated 1934. "This note is
legal tender for all debts public and private and is redeemable in lawful money at the
United States Treasury or at any Federal Reserve Bank." Compare this to the Figure 5
Federal Reserve Note. One difference is that the "gold" has been dropped.
Another difference is that the 1934 Federal Reserve Note has become "legal
tender." Maybe, when a swindle is pulled on a grand scale, the cruder it is, the more
likely it succeeds!

Figure 7:

THIS NOTE IS LEGAL TENDER FOR ALL DEBTS
PUBLIC AND PRIVATE AND IS REDEEMABLE IN
LAWFUL MONEY AT THE UNITED STATES TREASURY
OR AT ANY FEDERAL RESERVE BANK

WILL PAY TO THE BEARER ON DEMAND
TEN DOLLARS

FEDERAL RESERVE NOTE 1934
(REDEEMABLE IN "LAWFUL MONEY")
Figure 8 shows a recent Federal Reserve Note. It cannot be redeemed for anything. It is
a note to pay nothing. The swindle is complete. The water is near boiling. The frog is
almost dead. Its awareness is far too low for it to realize what happened…
"Counterfeit" means "to copy or imitate in order to deceive" or
"something likely to be mistaken for something else of higher value."

Figure 8:

THIS NOTE IS LEGAL TENDER
FOR ALL DEBTS, PUBLIC AND PRIVATE

TEN DOLLARS

FEDERAL RESERVE NOTE 1988
(NOT REDEEMABLE; A NOTE TO PAY WHAT?
"WILL PAY TO THE BEARER ON DEMAND" HAS DISAPPEARED)
IS THIS COUNTERFEIT MONEY?
Now examine Figure 9 below. Here we have a 1953 $2 United States Note. It is
"legal tender at its face value" and it says, "Will pay to the bearer on
demand." But what is its "face value" and how will the "two
dollars" be paid? Compare this to the 1976 $2 Federal Reserve Note in Figure 10. Here
there is nothing about "face value" or "will pay to the bearer on
demand." Can we conclude that by 1976 the bankers and politicians were so secure in
their belief that the American public had become too brainwashed to notice the swindle,
and that there was no longer any need for pretensions like "face value" and
"will pay to the bearer on demand?"

Figure 9:

THIS NOTE IS LEGAL TENDER
AT ITS FACE VALUE FOR ALL DEBTS
PUBLIC AND PRIVATE

THE
UNITED STATES OF AMERICA
WILL PAY TO THE BEARER ON DEMAND
TWO DOLLARS

UNITED STATES NOTE 1953
(NOT REDEEMABLE; A NOTE TO PAY WHAT?)
IS THIS COUNTERFEIT MONEY?

Figure 10:

THIS NOTE IS LEGAL TENDER
FOR ALL DEBTS, PUBLIC AND PRIVATE

THE
UNITED STATES OF AMERICA
TWO DOLLARS

FEDERAL RESERVE NOTE 1976
(NOT REDEEMABLE; A NOTE TO PAY WHAT?
"WILL PAY TO THE BEARER ON DEMAND" HAS DISAPPEARED)
IS THIS COUNTERFEIT MONEY?
OTHER ASPECTS OF THE SWINDLE
The stage for the swindle was set by the U.S. Constitution, Article I, Section 8,
"Congress shall have power to coin money, regulate the value thereof" - see
Chapter Five. This opened the door to a government monopoly being established. The second
step was passage of the National Bank Act of 1863, which effectively outlawed private
currency. The monopoly was now complete. In 1913 the Federal Reserve System was created,
when Congress (unconstitutionally) delegated its monopoly currency power to the Federal
Reserve Corporation, a private company.
Our Founding Fathers thoroughly understood currency debasement and how it usually leads
to the destruction of civilization. The Coinage Act of 1792 provided the death sentence
for anyone convicted of debasing U.S. coins.
In 1933 President Franklin D. Roosevelt arbitrarily reduced the amount of gold the
dollar represented from one twentieth of an ounce to one thirty-fifth of an ounce. This
amounted to a 43% devaluation (or debasement) of the dollar - a declaration of bankruptcy
stating that the U.S. Treasury would "settle" its debts by paying 57 cents in
the dollar. It also meant, in terms of gold, that overnight the government had robbed the
American people of 43% of their savings. By the standards of our Founding Fathers this was
a crime punishable by death.
In 1934 Roosevelt's "New Deal" took away the American citizen's right to own
gold, a right Americans had enjoyed since the first pilgrims arrived. This also meant the
discontinuation of gold certificates.
In 1963 silver certificates were discontinued. On November 26, 1963, the day of John F.
Kennedy's funeral, the first 50 million "no-promise" Federal Reserve Notes were
released into circulation. We shall return to this topic.
In 1913 when the Federal Reserve System was established, Federal Reserve District banks
were required to maintain a 40% gold backing for Federal Reserve Notes, and a 35% gold
backing for deposits. In 1945 the gold backing for both notes and deposits was dropped to
25%. In 1965 the gold backing requirement for deposits was eliminated completely. And in
1968 the gold backing requirement for Federal Reserve Notes was eliminated.
Up to 1965, U.S. coins (dollar, half-dollar, quarter, and dime) contained 90% silver
and 10% copper. "Coins" of the same denominations minted since 1965 have a
copper core covered with a thin layer of nickel. Are these tokens counterfeit coins?
According to Irwin Schiff:
"Correctly understood, the U.S. government's coinage operation violates Article 1,
Section 8, of the U.S. Constitution. The Constitution empowered Congress to "coin
money," not to produce worthless tokens. The government's coinage operation also
violates Title 18, Section 1001, of the U.S. criminal code which reads as follows:
"Whoever, in any manner within the jurisdiction of any department or agency of the
United States knowingly and willfully falsifies, conceals or covers up by any trick,
scheme, or device a material fact or makes any false, fictitious, or fraudulent statement
or representations, or makes or uses any false writing or document knowing the same to
contain any false, fictitious or fraudulent statement or entry shall be fined not more
than $10,000 or imprisoned not more than five years or both. June 25, 1948, c. 645, 62
Stat. 749." Since the design, composition and structure of U.S. cupro-nickel coins is
nothing more than "a trick, scheme, or device" to conceal their true value,
character, and composition, all persons who have been and are now involved in their
authorization should be prosecuted under this statute."
"Bankruptcy" means settling with your creditors for less than you owe them.
It is a repudiation of your debts and financial obligations. On August 15, 1971 the U.S.
government announced that it was "ending the dollar's convertibility, closing the
gold window, cutting the dollar's tie to gold, and allowing the dollar to float."
This was a declaration of bankruptcy, a repudiation of the obligation of the U.S.
government to redeem its paper IOUs for gold.
On December 18, 1971 the U.S. government raised the "official gold price"
from $35 to $38. This was a devaluation of 8.57%. Again, this was a declaration of
bankruptcy. On February 12, 1973 the "official gold price" was increased to
$42.22 - a devaluation of 10%. However, both of these devaluations were somewhat strange.
Because dollar convertibility into gold had been canceled on August 15, 1971, the new
"official prices" of gold were "prices" at which the U.S. government
refused to sell gold!
Around 1976 Americans' right to own gold was restored, with the gold price at about
$180 an ounce. Currently the gold price is around $350 per ounce. This means that during
the past 60 years the U.S. dollar, in terms of gold, has been devalued by 82.5%. Put in
another way, only 17.5% of the dollar's value remains.
THE EFFECTS OF THE SWINDLE
To make sense of the effects of the great money swindle we can use AIDS (acquired
immune deficiency syndrome) as an analogy. [See #TL09A: AIDS: Bad
Science or Hoax? for an alternative view of the nature of AIDS.] Money is to the
economy as blood is to the individual. The AIDS virus gets into the blood, but for many
years nobody realizes that anything is wrong. The politicians and Federal Reserve bankers
get into the money, but hardly anyone recognizes what has happened. In both cases, for a
long time there are no observable symptoms. In the case of AIDS this is called stage one.
Then symptoms start to appear. The victim is afflicted with unusual infections. Because
the immune system has been considerably weakened, the body struggles with an infection
that a healthy body would handle with ease. The illness can be severe, but eventually the
victim recovers - in a fashion. This is analogous to the Great Depression of the thirties.
It is AIDS stage two.
Eventually the immune system becomes so weak that the patient cannot recover after
being struck by an infection. AIDS stage three. The U.S. economy may not yet be in stage
three. The current depression started around 1987. For every sign of recovery there seems
to be another sign of regression. And the government "cooks the books" (like not
counting as unemployed people who have given up looking for work) to make it look better
than it really is.
The economy, and particularly the U.S. dollar, has been raped by AIDS-infected Federal
Reserve bankers and politicians. To "rape" means "to seize or take away by
force; to despoil." "Rape" the noun means "an outrageous
violation."
In 1791 Thomas Jefferson said:
"If the American people ever allow the banks to control issuance of their currency,
first by inflation and then by deflation, the banks and corporations that grow up around
them will deprive the people of all property until their children will wake up homeless on
the continent their fathers occupied."
To really cure the economy we need to get the Federal Reserve bankers and the
politicians out of our money. And that may be more difficult than getting the AIDS virus
out of the blood of its victims…
PRESIDENTIAL ASSASSINATIONS
President Abraham Lincoln was assassinated after issuing the Greenback, which was a
non-interest-bearing note. President James A. Garfield expressed his concern about
currency problems just before his assassination.
On June 4, 1963 President John F. Kennedy signed Executive Order 11110 providing him
with the authority "to issue silver certificates against all silver bullion, silver,
or standard silver dollars in the Treasury not then held for redemption of any outstanding
silver certificates, and to coin standard silver dollars and subsidiary silver currency
for their redemption…" This seems like an attempt to bypass the Federal Reserve
System by issuing real, silver-backed money to replace counterfeit Federal Reserve Notes.
Kennedy was assassinated on November 22, 1963.
There is a rumor that the "Kennedy silver certificates" were actually printed
and that one of the first things President Lyndon B. Johnson did after assuming power was
to have the "Kennedy silver certificates" destroyed. In 1964 Johnson, serving as
the voice of the Federal Reserve bankers, said, "Silver has become too valuable to be
used as money." This amounted to a brazen boast that the bankers would eliminate any
money with intrinsic value. On November 22, 1963, the day of Kennedy's funeral, the first
50 million "no-promise" Federal Reserve Notes were released into circulation.
The symbolic celebration of the Federal Reserve bankers?