A Guest's Contrarian Take On Dennis Kucinich's Recent Attempt To "End The Fed"

Tyler Durden's picture

Submitted by Arkady Kamenetsky of Right Condition

Dennis Kucinich finally shows the world why the Left is also against the Federal Reserve, gains support of Tea Party activist?

I have always mused and wondered out loud about the peculiar alliance
between the likes of Ron Paul - a small government sound money advocate
and people like Alan Grayson and Bernie Sanders who are admitted
socialists.  What is it about these two completely polarizing political
viewpoints that brought them together to fight the Fed?  In fact, I was
utterly shocked that some libertarians mourned the defeat of Alan
Grayson this past November citing his defeat as a loss in the battle
against the Federal Reserve.

At the time my speculation was rather simple.  Socialists resent the
Federal Reserve just as much as we do, however for entirely different
reasons.  We resent the Fed for several basic reasons.  The Federal
Reserve is a monopoly and controls the supply of money.  It centrally
plans interest rates and has a flawed mandate to create full employment
which is an illogical desire - because employment should always be
liquid.  Finally the Federal Reserve has a mandate of steady inflation
which erodes the value of the money we hold and crushes savings bringing
about a 95% decrease in the value of the dollar since the Federal
Reserve's inception.  Leftists like Grayson, Sanders and Kucinich hate
the Fed because it is a private bank and usurps the power of Congress.  I
concede that this is indeed a problem as the Federal Reserve actually
controls more of the US budget than Congress and does so through
unelected officials!   Yet the solution to our fiscal woes is to return
to sound money and to break down the monopoly, something the Left will
surely balk at.  Indeed, here comes a proposal from Rep. Dennis Kucinich
that finally confirms my speculation.

Read full bill at Kucinich's website, which he cleverly and so predictably in true liberal fashion dubs "the National Emergency Employment Defense Act of 2010".

To create a full employment economy as a matter of national economic
defense; to provide for public investment in capital infrastructure; to
provide for reducing the cost of public investment; to retire public
debt; to stabilize the Social Security retirement system; to restore the authority of Congress to create and regulate money,
modernize and provide stability for the monetary system of the United
States, retire public debt and reduce the cost of public investment, and
for other public purposes.


There you have it folks.  Dennis wants the power of the Federal Reserve
in Congress.  His ambitions are actually quite disturbing because he is
also pursuing the flawed concept of full employment, but now he has
added even grander ambitions - the one thing that the horrible Federal
Reserve prevented Congress from doing - creating money for the purpose
of spending it.   Granted with QE2 in full swing it becomes difficult to
make that argument, because buying US debt so that the US Government
can continue functioning is essentially the same thing, but at least our
total debt grows and Americans are still aware of the cost.  With
Kucinich's bill this aspect disappears as money will appear whenever
Congress wishes it to be so and the value imbued in this money will come
through Congress alone - a Chartalist dream come true.

The bill also offers an end to fractional reserve lending, a key
inflationary engine where banks lend to other banks at a fraction
thereby creating mountains of credit on top of a very small amount of
money.  On page 40 of the bill, money in deposit institutions must :  be held for the exclusive use of the account holder; and may not be used by a depository institution to fund loans or investments.

Yeah, that can work when the exclusive lending power now falls to
Congress!  Ironically, there are two ways to stop fractional
reserve lending.  One is to use sound money and prohibit paper from
being pyramided on top of the sound money much like it was done in the
1800s in America (and for 20 years under the Federal Reserve) and the
other way is for Government to take over lending.   Indeed on page 11,
the bill explicitly calls for:

To enable the Federal Government to invest  or lend new money into
circulation as authorized by Congress and to provide means for public
investment  in capital infrastructure.

So not only will the Government take over lending as a whole, but they
will do so for what they dub to be 'good investment' or infrastructure! 
A central planner's dream come true.

This bill also has the support of blogger Karl Denninger a Tea Party
activist from Florida, who in my opinion seriously undermines his
credibility by not only defending the bill out of principle, but also on a Constitutional basis! 

But it would be a monstrous improvement over what we have now, and I
will remind Mush that in point of fact we had Colonial Script some
rather long time ago, and further, there is nothing in The Constitution that prohibits the Federal Government from issuing and fixing the value of fiat currency.  In fact, such is explicitly contemplated and expected by The Constitution. 

Bigger nonsense cannot be found.  Now unless Dennis Kucinich proposes a
return to the gold standard, the entire bill fails along Constitutional
grounds and in fact, this is the very reason the Federal Reserve
exists!!  The Fed has the power to create fiat money BECAUSE it is a
private institution, Congress could never do it and if they could -
there would have been no Fed in the first place.   There are two clauses
in the Constitution that completely disprove Karl's notions.  There is
also the history of the Continental which saw America's first paper
currency go up in smoke due to inflation. 

Keep in mind, anything not specifically enumerated in the Constitution is not allowed. 

Article 1 Section 8 contains the following:

[The Congress shall] To coin Money, regulate the Value thereof, and of
foreign Coin, and fix the Standard of Weights and Measures;

As you can plainly see, Congress has the power to create coins or
regulate other coins and ensure standards in weight.  Nothing about
paper here.  In fact, they go on and in Article Section 10 state:

No State shall enter into any Treaty, Alliance, or Confederation; grant
Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make
any Thing but gold and silver Coin a Tender in Payment of Debts; pass
any Bill of Attainder, ex post facto Law, or Law impairing the
Obligation of Contracts, or grant any Title of Nobility.


Which explicitly bans paper money on a State level or what they call
Bills of Credit and in fact go on and actually demand that payment of
taxes be performed in coin. In fact one could aptly call today's dollars
Bills of Credit. So by not enumerating the power to create paper money
for the Federal Government, while explicitly banning paper money on a
State level the Constitution packs a 1-2 punch that flat out destroys
paper money and insists on money as something that has tangible value.
Does that make me a gold bug? Not at all, use whatever you want for
money, just make sure it has value because as long as money has value
then no institution (Fed, Congress) can make it out of thin air.

Yet Karl insists that this bill is exactly what the country needs
because it promises to be neither inflationary or deflationary. His
faith comes from page 26 of the Bill:

GOVERNING PRINCIPLE OF MONETARY POLICY. The Monetary Authority shall
pursue a monetary policy based on the governing principle that the
supply of money in circulation should not become inflationary nor
deflationary in and of itself, but will be sufficient to allow goods and
services to move freely in trade in a balanced manner.
The Monetary Authority shall maintain long run growth of the monetary
and credit aggregates commensurate with the economy’s long run potential
to increase production, so as to promote effectively the goals of
maximum employment, stable prices, and moderate longterm interest rates.

 Oh ok, so because Congress promises to make sure that the supply of
money and prices remains stable then instability will not happen? If
they promised us unicorns that crapped skittles within a bill does
everyone go out and buy a stable? In fact, Karl dubs this bill 'Delete
the Fed' yet the bill creates a new office called The Monetary Authority
which will have a chairman and appointed members (10 of them) chosen by
the president that will meet on a regular basis and determine the
correct supply of money. Whiskey-tango-foxtrot, we already have that and
it's called the Board of Governors. Instead of getting rid of the Fed
though, Kucinich is going to move the entire reserve system into the
executive branch. What a joke.

Essentially this bill takes the Federal Reserve, renames it, makes it
part of Congress and moves a private monopoly into a public monopoly. So
instead of having the spending habits of Congress show up on the
national debt, everything will now quietly happen through the power of
Congressional members who can order money creation any time they feel
like making an additional investment or building a Bridge to Nowhere.

As one last step before the final takeover, Kucinich plans to eliminate
our debt. Sounds lovely does it not? Page 19 describes the process:

Before the effective date, the Secretary shall commence to retire all
outstanding instruments of indebtedness of the United States by payment
in full of the amount legally due the bearer in United States Money, as
such amounts become due.

Elsewhere in the bill, Kucinich introduces a new money, called the
United States Money although I suggest we just call it a Zimbabwe Dollar
because that is it's destiny and we can save on printing costs. This
United States Money will invariably have a conversion rate to the
current US Dollar. In order for us to retire about 14 Trillion dollars
of private and public debt, imagine for a second just how many new USM
notes must be created? What will be the value of these USM notes? What
happens to the dollar's reserve status that we enjoy now? Let me answer
that for you: a metric ton, value will be non-existent and the one
remaining reason why America is protected from hyper-inflation will be
wiped out.

Mike Shedlock has also written a summary
about this bill and called out Karl Dennginer's support which has now
the potential to escalate into a blog war. This prompted Karl to call
Mish 'mush' and make wild statements about the Constitution.  Karl also
believes that if Ron and Rand Paul are for real than they will support
this bill otherwise they are empty suits and fakes.  I will tell you
this right now, Ron and Rand will never ever support this bill because
it is a hideous and disgusting piece of legislation.

Yes this will will destroy the top banking elite and their easy money
access through inflation, but this is no different than what North Korea
did to it's currency - a gigantic devaluation of the dollar along with
massive takeover by Congress over the last remainings parts of our
economy. 

This is central planning on steroids and yet a Tea Party activist and well known blogger supports it. I am speechless.

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midtowng's picture

Yea. What a darn shame if Kucinich had his way and we actually went back to following the Constitution.

ironymonger's picture

Socialists have a selective fidelity to the Constitution. That is to say none at all.

Dumb Money's picture

Could Free-Gold be a good compromise between Libertarians that want sound money and Socialists that want the printing press to be in the hands of elected leaders?  I think so...

Shameful's picture

Think that line of thinking through.  The money holds no value.  All value stored in things, like gold.  Add in a gov that loves to print.  Hello hyperinflation!  Now if you can get your employers to lock your salary into a set weight of gold your fine.  Otherwise the daily grind of getting your raise.

So could the libertarians acept it, yes.  We would be fine with the socialists melting down their system, but we also know they will pick up their guns and promptly loot us.  So it we have ironclad assurance of no looting, hell have a ball.

Dumb Money's picture

I think you missunderstand me.  What the "socialists" want is not necessarily paper money, but rather, they want congress to control monetary policy (a goal which can be accomplished through unbacked paper money like what Dennis is proposing OR it can be accomplished through Free-Gold).  Libertarians want money to be backed by something that holds its value.  Enter Free-Gold:

 

Free gold is not a gold standard because there is no set price at which paper notes can be exchanged for gold (the price of the gold held by the government floats against the paper in circulation and the Gov would be under no obligation to buy or sell gold except insofar as they are executing monetary policy: there would be no "window" at which holders of paper could force the government to exchange paper for Gov gold). The paper in circulation would represent a claim on government gold holdings: a claim which the government could (theoretically) wait forever to fulfill.

We could execute monetary policy on the basis of maintaining the purchasing power of the notes in circulation indefinitely.

FOFOA is awesome

Shameful's picture

Incorrect.  Socialists want value to which they can redistribute or use to their own ends.  Control of monetary policy can give them that value, but only so long as the currency is a means to store value.  In a system where the currency is openly known to be not a store of value then people will not wish to hold it.  They will instead use the currency to transact and dump it to buy real things.  The socialists would have the currency but no value.  See Zimbabwe.  All the money one could want and no value to it.  Money that has no value is by definition worthless.

And if the gov never fulfilled those gold withdrawals how well do you think the system would hold up?  Seems like De Gaule didn't beleive the US and their lies and helped crash Bretton Woods.  Would you trust a random stranger to hold onto your gold for you?  If so please PM me, ask around I'm a good trustworthy guy!

You cannot have a system that satisfies both the savers and the speculators. Cannot be done.  Hyperinflation is the result as the currency loses it's store of value feature.  Would you accept monopoly money or Zimbabwe money for your labor?  Why not?  It's a unit of exchange just like a value free currency is :)

Dumb Money's picture

"Socialists want value to which they can redistribute or use to their own ends."

All government spending redistributes value regardless of monetary policy.

"And if the gov never fulfilled those gold withdrawals how well do you think the system would hold up?  Seems like De Gaule didn't beleive the US and their lies and helped crash Bretton Woods."

This is confusing Free Gold with the gold standard.  In the 70s, you could exchange $35 for an ounce of gold at the USA's gold window BUT in london you could exchange $40 for one ounce (since this was the REAL rate of exchange).  The obligations that the US did not live up to under BW was the obligation to maintain a FIXED rate of exchange between paper and gold.  Under Free-gold no such obligation would exist and thus there would be no necessity for a "window" at which investors could call the government's bluff.

"Hyperinflation is the result as the currency loses it's store of value feature. "

The store of value would be the gold held by the government. Are you saying that this gold would become worthless?

Shameful's picture

Did you not say that the govs would not be bound to trade out their fun buxs for the gold? You can't have it both ways, they either kick up the gold or they don't. If they don't then it is same as now, purely faith based. If they do have a gold window, then no matter what the price will see a run at it, after all as they raise prices they telegraph they are inflating, which tells people to get gold, which drives up the price, which drives people to get gold, ad infinitum.

Freegold does not deal with the nature of government policy, which is in essence pillage. It is assumed the government will stop inflating because of risk on run of their gold, but that did not stop the US did it? You say they can move the price, but simple logic will tell you moving the price up causes a panic which further forces the price up. After all let us say that we had freegold now. And the price was $100,000 an ounce and you had $1,000,000. You notice some prices move and gold moves to 100,500 would you be more or less inclined to cash out? 120,000? 500,000? And as more people cash out more people want to cash out, it's like a bank run.

Dumb Money's picture

Under free-gold, if the price of gold went up when denominated in (free gold backed) paper, the gold that backs the paper would go up as well.  

 

Lets say that there is a micro-economy with four people: Mr. McGovernment (who has 3 ozt of Gold and a priniting press), Dick (who has 1 ozt of gold and 3 dollars), Jane (who has 5 dollars) and Ben (who has 7 dollars).  In this example the ratio of paper to (gov held) gold is 5:1.  Lets say that Jane is afraid the Mr. McGov is going to print more money and dilute the value of her dollars.  She goes over to Dick and offers him 5 dollars for his ozt.  When he overhears her offer, Ben immediately becomes afraid that his money is becomming worthless too and he goes over to Ben and says "WAIT! i'll give you $7!!!".  This raises the market value of government issued paper to gold to 7:1 (BUT remember: the ratio of dollars to gold in this economy is still 5:1). Hyper-inflation seems immanent.

This turn of events catches the attention and alarm of Mr. McGov since he doesn't want his printing press to loose its power.  He steps in and decides to sell one of his ozt to Ben to stop the Hyper-inflation in progress.  By doing this, Mr.McGov has withdrawn liquidity from the system (he retires the notes he recieved in exchange for his ozt).

Now here is what everyone has: Mr.McGov has 2 ozt and a printing press (which still works, thank God!), Ben has 1 ozt and $0, Jane still has 0 ozt and $5 and finally, Dick still has his 1 ozt and $3.  the ratio of gov-issued paper to gov-held gold is now 4:1 and no one has enough money to bid the price of gold back up to its previous (hyper-inflated) price of $7 per ozt.

 

A few things now become clear:

1. as people reject their paper for gold, the ability of the gov to manage monetary policy INCREASES rather than decreases (Under our current monetary policy and under a green back system, the ability of the Gov or Fed to manage monetary policy decreases as people reject their paper for gold).

2.  The fact of point number 1 means that it is not in Ben's interest to act as if he thinks there is going to be hyper-inflation.  In fact, Ben is actually worse off than he was before since the seven dollars that he had originally could have bought him more than what 1ozt of gold was worth.  In fact, it is JANE who is in the best position since her purchasing power, which used to be 1ozt of gold, has now risen to 1.25 ozt of gold.

Shameful's picture

Ok so you concede that the gov must actively step into the gold market.

Now as to your arrangement, this presupposes that the gov will not use the printing press, because as you point out kicks of a panic to the metal.  How does this square with the soft money redistribution of the socialists, aka print and spend?  Free gold is hard money, or it devolves into hyper inflation as you point out.  The gov must either be exceptionally ware and not print or enter into hyper inflation at the drop of a hat.  Huh sounds like a rigid hard money system to me.

Freegold is not all things to all people.  Either it is the fires of hyper inflation or a exceptionally hard money regime.  There is no in between.  As a gold holder will do fine in either that's fine, but it's disingenuous to claim can have soft money system because of freegold.  In your system you point out the inherent fear of the printing press destroying the transaction currency.  In this way Freegold is not much differnet then a hard gold standard, it's just another way to spin it to make it new.

Dumb Money's picture

"Ok so you concede that the gov must actively step into the gold market."

I always have conceded this.  What i did not concede was that the government must step into the gold market on the whim of those who wish to exchange their paper for gov gold (notice that Jane and Ben had to go to Dick in order to get gold... the option of exchanging cash for the government's gold whenever one wants is not there).  Rather than the paper holders determining when their paper is exchanged for government gold, it is the government that decides (albeit it decides on the basis of the actions of the paper holders).

"Now as to your arrangement, this presupposes that the gov will not use the printing press, because as you point out kicks of a panic to the metal."

What my example shows is that the government IS free to use the printing press IN SPITE of the fact that it might kick off hyper-inflation BECAUSE the government is always equiped to manage monetary policy even if people start to reject paper for metal (it also shows why participating in the early stages of hyper-inflation by biding up the price of the metal would be against one's own interest in a Free-Gold system).

 

Shameful's picture

If the gov does not have a window open then clearly there will be a price found by the market.  So yeah they can hold all the gold they want and the paper transaction currency can melt in a fire.  If the gov does not dole the gold out then can see a panic like in your example and people losing faith and trading up.

Wait govs can consistently head of hyperinflations?  Then why worry at all about monetary policy?  I guess Bernanke really can raise rates in 15 minutes and stop it all.  I'm so relieved.

But for the sake of argument in your example what if they were not so quick on the ball to notice and sell gold into the market?  The price would move up and confidence would be lost.  Now how does money printing fit into that.  In a perfect gold market people would notice that new money sloshing around and start bidding for gold with fun bux.  So the gov has the option to unload gold to stabilize the fun bux or risk hyper inflation.  But like seen in 71 there comes a time when the gov either runs out of gold or no longer wishes to sell, what then? The gov must maintain static gold prices to keep confidence, so if they print they must have the gold to sell into the market to keep things placid.  If they lack the gold or willingness seems like the currency cost of gold sky rockets and people turn away from the paper.  So they can print so long as they have the gold to keep people calm...sounds a lot like Bretton Woods to me.

Dumb Money's picture

In Free-gold, the government has a bit more leeway to print funbux than it does under Bretton woods...

 

 

ok, lets take the same situation: Mr. McGovernment (who has 3 ozt of Gold and a priniting press), Dick (who has 1 ozt of gold and 3 dollars), Jane (who has 5 dollars) and Ben (who has 7 dollars).

 

First, let's examine what would happen if they were under a (bretton-woods-like) gold standard with an exchange rate set by law to  $5 per ozt (with an open gold window of course), and the gov decided to print more paper money.

 

Mr. McGov prints 3 extra dollars.  He gives $2 to Dick for digging a hole and $1 to Jane for filling it.  There are now six dollars in circulation for every ozt held by the government. Jane realizes that the government is printing unbacked dollars and decides that she wants exchange her dollars for gold.  If she goes into the free market and tries to buy gold from Dick, he's probably going to charge her $6.  She therefore goes to the government for a better deal and exchanges $5 for 1ozt (the legally fixed rate of exchange).  When everyone else sees her doing this, they realize that their dollars are unbacked and quickly go and drain all of the government's gold reserves.  In the end, everyone (except Mr. McGov) has 1 more ozt but Jane has 1 worthless dollar and Ben has 2 while Mr. McGov has a worthless printing press and no gold.  These 3 extra dollars were "unbacked".

 

Now let's take the beginning situation and see what happens when the government prints money in a free gold system.  This example begins with the (not fixed) rate of exchange of $5 per ozt.

 

Mr. McGov prints 3 extra dollars.  He gives $2 to Dick for digging a hole and $1 to Jane for filling it.  There are now six dollars in circulation for every ozt held by the government. Jane realizes that the government is printing dollars and decides that she wants exchange her dollars for gold.  Unlike the first example, she cannot go to the government because there is no open gold window and no legally fixed rate of paper/gold exchange.  She must find her gold in the free market.  She therefore goes to Dick and attempts to buy his gold from him for $6 per ozt.  Ben sees this and realizes that HIS money is being devalued as well.  He therefore steps in front of her and offers $7 for Dick's ozt.  Here's where Mr.McGov steps in and sells one of his ozt for $7 (seems a lot like my very first example doesn't it?).  In the end Ben has 1ozt and $0, Jane has 0 ozt and $6, Dick has 1 ozt and $5 and Mr.McGov has 2 ozt and a functional printing press.

Shameful's picture

Ok so in your second example what happens to Jane and her $6?  Does she stop trying to buy gold or she now priced out because the gold ran up to $7 confirming her fears of devaluation?  The gov stepping in there did not stem the fear of all participants, only set a new higher price level which again proves the fears of those trying to buy.  Is she now barred from buying gold because of the new price level?  The only thing about your example is the gov setting old outside the ability of the people to get the currency sufficient to buy it by racing the price super high, which feeds back into fear and panic.  People react emotionally to price swings after all.  How would you feel about your currency if you watched gold jump about 40% tomorrow?  Not to comfortable I would guess and I hazard a guess you would be looking to move that currency ASAP.5/

In fact it's not much different then now, except for the phony paper market.  But pull that phony paper market away and see a rocketing increase in gold, particularly after a bloody and public revaluation and people will be watching that press like a hawk.  So if they try to pull a stunt like in your example they will notice a massive % increase in price and lose confidence.  After all the paper devalued 40% to gold in your example, and that is your example not mine, a good reason not to get stuck holding the paper.

fiddler_on_the_roof's picture

So long as Govt has sufficient Gold in this "freegold" system, it can buy or sell Gold to be the price at equilibrium to the money printing. If Jane/others tried to buy it for more than $6, Govt will sell the Gold and take out the cash which in effect drains money and prevents price rise. The only Question then is proper valuation of Gold with respect to outstanding money.

fiddler_on_the_roof's picture

Excellent writing - "Dumb Money". you have surely enlightened many who read your comments with open mind.

For this to work

(1) Govt should always know the correct price of Gold with respect to Currency and step in

   whenever it goes out of range.

(2) If people speculate too much upwards in Gold, Price of Gold can come down.

(3) Increase in Taxation can also bring Gold price down (which is opposite action of money printing)

(4) Before all this freegold to happen, People's mindset should first change and assign Gold as Money. ie Gold will price the Currency correctly.

(5) Whenever this gets out of whack, People or Govt will step in. If Govt tries to cheat by printing, people will raise it's price and if Govt tries to fight it "unreasonably", all it's Gold will be drained.

 

trav7777's picture

unfortunately, the Consitution gives Congress PLENARY authority over the monetary power.  In fact, the Fed Act should be unconstitutional.  Congress is solely authorized to regulate the value of money and it cannot (see Clitton v. City of New York) delegate its authority to another branch or private actor.

Oh regional Indian's picture

Spot on Trav. Plenary, to clarify, means full. So, Mr. Contrarian is both right and wrong. Dennis K.'s proposed bill is on solid constitutional grounds but with an unfortunate liberal twist, making it in-feasible and im-practical.

What I find even stranger is that with full and open knowledge of what is going on at the Fed and the words and work of people like Congressman McFadden and Lindbergh back in the 20's and 30's, and every speech and act on congressional record, that anyone believes for a minute that someone like a fako-liberal DK will be able to put the mighty FED in place.

What is the point of all this back-and-forth on constitutionality or not of proposed acts when it is in fact ON RECORD that the Fed Reserve Act was passed in near-fraudelant conditions (later much bemoaned publicly by Woodie Wilson) and that the IRS establishing 16 amendment was never ratified by the requisite number of states.

Why then all this talk? Talk talk talk. As if the FED will roll over and die for this gnat on an elephant's ass after it has pretty much controlled the destiny of th eplanet openly from 1913 out and by much the same set of actors for a few centuries before?

The illegality of the scam is open record.

Why has nothing been DONE about it? Can anything be done? Now?

Masterful that they've reduced everyone to mental masturbation.

THE EMPEROR IS NAKED!

THE EMPEROR IS NAMED!

THE EMPEROR IS NAKED!

ORI

http://aadivaahan.wordpress.com

theperegrine's picture

Putting Congress in charge of monetary policy would create a worse scenario than the one we already have.   But it might merely create a layer of abstraction....the foxes would still be running the henhouse, they'd just have to train the hens to echo their arithmetic convincingly.

 

To whatever extent Congressional agents *could* be held accountable by voters, we'd have a supremely dumb mob in charge of interest rates and QE.  We don't learn enough in our public school civic classes to grasp this material.

 

I'm certain Kucinich means well.  There are no obvious solutions to the problem of corruption.

midtowng's picture

The compromise would be going back to a bi-metal standard, like the Constitution said.

It didn't say gold standard. That's what the eastern banks wanted. It said bi-metal.

Dumb Money's picture

Free-Gold is not a gold standard.

AnonymousAnarchist's picture

Dennis means well but he is naive (if you don't know what I am talking about, watch the zeitgeist series). Whether the institution with the money monopoly is called the Fed or the US government, the result is the same. As with everything, there should be a free-market in money. The market historically has chosen gold and silver but, if the market chooses something else, so be it.

Eliminate the Fed. Eliminate the state.

FatFingered's picture

I'll take either Ron Paul's Free Competition in Currency Act of 2009 or Skittles coined directly from the unicorn's arse (multi-colored standard, of course).

 

http://www.govtrack.us/congress/billtext.xpd?bill=h111-4248 

trav7777's picture

The constitution does NOT bind Congress to a bimetallism standard.

It merely prevents the States from tendering anything other than gold or silver coin for the payment of debts.

Congress is free to coin and regulate the value of Money.

Dr. No's picture

Midtown is kinda right.  The articles of confederation outline "alloys".  I know, the AOC are dead, but the same people wrote the new one and no doubt some of their intents got washed away like all political processes.

A Nanny Moose's picture

Bi-metalism, with its fixed rate of exchange would fail....again.. The rate of exchange must be allowed to float freely, otherwise you are subject to Gresham's Law.

Eliminate legal tender laws. Allow competing currencies. The rules in the Constitution are for government to follow. They place no limits on private entities unless fraud is committed.

Freewheelin Franklin's picture

What libertarians want, and I can't speak for all, is competing currencies, with no legal tender laws, and real free banking.

Freewheelin Franklin's picture

Free banking:

 

a regime where note-issuing banks are allowed to set up in
the same way as any other type of business enterprise, so
long as they comply with the general company law. The
requirement for their establishment is not special conditional
authorization from a government authority, but the ability
to raise sufficient capital, and public confidence, to gain
acceptance for their notes and ensure the profitability of the
undertaking. Under such a system all banks would not only
be allowed the same rights, but would also be subjected to
the same responsibilities as other business enterprises. If
they failed to meet their obligations they would be declared
bankrupt and put into liquidation, and their assets used to
meet the claims of their creditors, in which case the shareholders
would lose the whole or part of their capital, and the
penalty for failure would be paid, at least for the most part,
by those responsible for the policy of the bank. Notes issued

under this system would be “promises to pay,” and such
obligations must be met on demand in the generally accepted
medium which we will assume to be gold. No bank
would have the right to call on the government or on any
other institution for special help in time of need. . . . A general
abandonment of the gold standard is inconceivable
under these conditions, and with a strict interpretation of the
bankruptcy laws any bank suspending payments would at
once be put into the hands of a receiver.

- Vera C. Smith, The Rationale of Central Banking (1936)

Freewheelin Franklin's picture

Free banking:

 

a regime where note-issuing banks are allowed to set up in
the same way as any other type of business enterprise, so
long as they comply with the general company law. The
requirement for their establishment is not special conditional
authorization from a government authority, but the ability
to raise sufficient capital, and public confidence, to gain
acceptance for their notes and ensure the profitability of the
undertaking. Under such a system all banks would not only
be allowed the same rights, but would also be subjected to
the same responsibilities as other business enterprises. If
they failed to meet their obligations they would be declared
bankrupt and put into liquidation, and their assets used to
meet the claims of their creditors, in which case the shareholders
would lose the whole or part of their capital, and the
penalty for failure would be paid, at least for the most part,
by those responsible for the policy of the bank. Notes issued

under this system would be “promises to pay,” and such
obligations must be met on demand in the generally accepted
medium which we will assume to be gold. No bank
would have the right to call on the government or on any
other institution for special help in time of need. . . . A general
abandonment of the gold standard is inconceivable
under these conditions, and with a strict interpretation of the
bankruptcy laws any bank suspending payments would at
once be put into the hands of a receiver.

- Vera C. Smith, The Rationale of Central Banking (1936)

Ray1968's picture

Never trust a liberal... even you agree with him on a point or two.

midtowng's picture

Never trust someone who believes in labels.

LowProfile's picture

Liberal, conservative, who really gives a fuck as long as they keep it contained within their own county/town/city.

It's just when one or the other tries to force the state or country to obey their will that shit gets fucked.

Lord Koos's picture

Conservatives can be very selective as well.

Temporalist's picture

He is no Constituionalist he just wants to create a socialist state.  Polar opposite of the intention of the Constitution.  I like Kucinich but not his leftwing policies and one can almost see the gears turning in his mind on how to create and spend money that the U.S. doesn't have.

Clint Liquor's picture

Kucinich wants to follow the Constitution? That's means only Gold and Silver money. Cool!

TheJudge2012's picture

Kucinich made Ron Paul's Hall of Shame list when he voted against his audit.

http://www.campaignforliberty.com/materials/HR1207-Shame-List.pdf

Always good to question the little frauds motives.

TheJudge2012's picture

Bernie Sanders killed Ron Paul's audit in the senate. Ron Paul picked the wrong person to sponsor his bill in the senate.

CrockettAlmanac.com's picture

What a darn shame if Kucinich had his way and we actually went back to following the Constitution.

Kucinich introduced legislation to ban all pistols and all semi-auto firearms.

JonNadler's picture

to restore the authority of Congress to create and regulate money

 

'Create'? How about 'coin', Dennis, big diferencia, you know.

Armchair Bear's picture

The Constitution mandates a silver standard, not gold.  But if we did "go back" to a gold standard, is there even any gold in Ft. Knox left - or just plated titanium bars?