There is a group of people who call themselves the Convention of States (COS). They are going around the country advocating for a convention to amend our nation’s Basic Law. Their cause is set out in Article V of the US Constitution and reads, in part,
“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; ….”
US Constitution (ratified in 1789), Article V. Philadelphia, Pennsylvania.
The italics are mine and are meant to emphasize the thrust of the COS movement that believes, and rightfully so, that the Washington, D.C. establishment is so deeply entrenched that it will very likely never undertake what is necessary to fix itself and thereby heal our nation.
In order to force the establishment’s hand the COS movement is seeking the support of every State and Commonwealth legislative body across the nation to call for a convention to amend the Constitution. I applaud this effort.
Now, you may ask, what good it would do to amend a body of law whose spirit and substance are frequently flouted by Congress, simply ignored by our nation’s ever expanding, unelected, bureaucrats — euphemistically called the executive branch, but more accurately labeled the American administrative-welfare-security state —, and too often reinterpreted or more simply by-passed by our nation’s unelected judicial oligarchy, more commonly known as SCOTUS or the Supreme Court of the United States. Indeed, your rhetorical reservation would not only be well understood, but greatly appreciated. For, it is not possible, unless by improbable coincidence, to fix a problem that is not first well-understood. Still, however, your reservation would be incomplete. For, if nothing else, the COS movement refocuses our attention on the de jure, federal nature of our de facto national government and reminds us that our single best check on congressional, administrative, and judicial overreach at the national level is our State legislatures, Commonwealth assemblies, and those among our federal court justices who remain loyal to the US Constitution and have yet to succumb to the corrupt system that nurtures their existence.
The year 1913 was not a particularly good year for America, for in late spring of 1913 the 17th Amendment was ratified by the American people, and in early winter, many months later, Woodrow Wilson, our nation’s 28th president signed into law the Federal Reserve Act.
Although the 17th Amendment was billed a boon for American democracy, it took from our State legislatures the right to hire and fire our US Senators on the spot, eliminated thereby our State’s strongest check on the D.C. Establishment, and turned our selection of US Senator’s over to the media moguls and their closest friends — in short, big money. If this were not bad enough, a privately owned banking cartel called the Federal Reserve System was established with monopoly control and ownership of our nation’s money supply. Since its creation our nation has yet to experience a year of economic growth without some sort of inflation and has undergone numerous, ever more devastating, boom-and-bust cycles — this is to say nothing of the endless warring that has followed in the wake of its creation including two World Wars, a second direct attack on the homeland by a combination of external and internal hostile forces whose origin remain a mystery because of government cover-up, and global terror.
With this brief introduction I would now like to turn your attention to the several proposed balanced budget amendments frequently advocated by those who support the Convention of States movement.
Most people understand the need for a household to maintain a balanced budget. One simply cannot spend more than what one earns or otherwise receives without going into debt or engaging in some sort of theft. We naturally conclude, therefore, that there is no reason why a government of, for, and by The People should not behave similarly.
Now, there are times when the best managed firms and households must go into debt, and there are businesses — especially those in real estate — that could not exist without a substantial amount of debt. This is because debt is often used as an accounting means to avoid having to pay taxes. It is not my goal, however, to discuss these matters, because, in and of itself, the ability to borrow from, and lend to other market agents is a good thing. Indeed, an important goal of every well run firm, household, or government is a positive or, at minimum, near zero net cash flow.
Market behavior is rarely predictable with very much precision, and an efficient household, firm, or government does not wish to hold more cash than it truly needs. As a result, there are times when all of us are inclined or even feel compelled to borrow in order to make ends meet. Borrowing allows us to maintain an even cash flow, even though part of that flow is ultimately drawn from our stock of real wealth. When we borrow we diminish our stock of wealth in exchange for liquidity and an even flow of cash. And, when we lend, we increase our stock to achieve the same.
It is, of course, nice to always maintain a net positive cash flow, because this means that our stock of wealth is always rising and our material standard of living forever improving. Then too, we should not forget our spiritual well-being that is not an entirely other matter, because our health and wealth can be at times, and are very often, closely tied. Everyone has to find his own formula, however.
There is nothing coincidental about the D.C. establishment spending more money than it receives in the form of revenue obtained from taxation and user fees. For, its endless deficit spending is propped up by the Federal Reserve System. Our nation’s corporate banking cartel and the US Government walk hand-in-hand , as they skim together the real wealth of entrepreneurs, workers, and producers of real wealth in general.
In the end, while we are negotiating at the front door with an armed IRS agent, Congress in collaboration with our nation’s banking cartel sneaks in through the backdoor and robs our safe — this is to say nothing of our refrigerator and gas tank, if we have managed to afford a garage. The notion that inflation is a kind of tax is by no means idle. Our nation was founded, in part, on the notion that we, who rule by the consent of the governed, should and must not be taxed without representation before whom we have selected to govern over us. When the honest taxman appears at our front door, he is visible and his behavior can be observed. When our government sneaks in the backdoor with its banking cronies, it is always dressed in black and difficult to detect in the shadows.
Unfortunately, it has been this way since before our nation was founded. What is important, is that the matter has grown steadily worse and is now rapidly accelerating with few signs of stopping — well, at least, not among those who are profiting from the theft.
Unfortunately, those who want us to ratify a balanced-budget amendment, “End the Fed”, or replace our current money supply with Bitcoin, do not understand well the nature of the problem.
Counterfeit is counterfeit no matter who produces or trades with it. It is a false substitute for an otherwise perfectly good commodity that has all the properties of a good source of real money. No, Bitcoin is not counterfeit, although it does often pose to be something that it is not — namely, digital gold. Bitcoin can never replace a precious metal such as gold or silver, for it is not a thing. It is energy that depends on a massive amount of infrastructure for its existence and continued maintenance. This infrastructure includes underground and underwater cables, elaborate computer banks, massive amount of electricity production, and satellites — all of which can be sabotaged in the blink of an eye by strategically placed and/or properly aimed and delivered explosive devices. Gold and silver in contrast can be held in our pocket, if push ever comes to shove on the global chessboard of state and corporate politics. And, it need not be turned on or off, or be in search of an internet connection in order to be traded. In brief, there is no more secure form of money than gold or silver. Yes, as an individual you can be robbed, but an entire nation cannot be paralyzed for lack of a proper money supply.
Finally, it is neither the FED, nor the absence of a balanced budget amendment that is the problem; rather, it is the nature of our money supply. We must put an end to the immoral and nefarious practice of lending and borrowing money into existence.
A proper amendment would be one that bans the borrowing and lending of money into existence and fixes the value of the US dollar to a specific amount of silver or gold, but not both. After this, it is just a matter of one: ever so incrementally, but relentlessly contracting our money supply as banks settle their outstanding loans and establish reserves equal in amount to the paper, plastic, or electrons that they lend out; and two, creating ever smaller denominations of the dollar to account for the ever greater worth of our money supply as the number of goods and services rise in number and quality with each new technological innovation and discovery.
For the moment, our money supply is the only “commodity” whose perceived shortage is compensated with a counterfeit substitute, rather than technological innovation and greater supply, or alternatively, accommodating higher prices and smaller units of distribution. This state of things is an anathema to free-market principles that was designed by bankers with the blessing of government to transfer real wealth from the many to the few without their knowledge.
Those who complain about the disparity between those who own property and those who do not, between those who collect rent from its ownership and those who do not, must understand that silver held in one’s pocket is a piece of the earth whose rent is captured by its sheer possession. For, under a true gold or silver monetary regime the value of the money that you hold in your hand increases as the supply and quality of all other goods and services increases at a faster rate. Rather than experiencing incremental or sudden price inflation as we experience today, we would experience incremental price deflation as the value of our money grows, and the relative price of all other goods and services fall.
Do not be duped by the charlatans of monetary sophistication. Money is nearly as old as the Jewish, Christian, Muslim, and Hindu faiths combined. It does not require a genius to understand — just good common sense and the courage to stand up for what is morally correct. The tiny country once called the United Dutch Provinces (Dutch Republic) built a global empire during the 17th century in the absence of statutory counterfeit. With these words I am not advocating for empire, but I am emphasizing that statutory counterfeit is entirely unnecessary for robust economic growth and investment.
In liberty,
Roddy A. Stegemann, First Hill, Seattle 98104
Author of Mount Cambitas - The Story of Real Money