How exactly does the federal reserve have a monopoly on our currency?
Do they punish anyone or any organization that issues competing currenices?
Good question. I’m not an American so I don’t know your laws. But I know for a fact that:
- you are legally bound to accept FR notes if they are offered as settlement of debt
- there are capital gains taxes on potential sound monies
- you have to pay your taxes in FR notes
The last point is particularly important. Imagine the following conversation with the taxman:
IRS: “How many dollars did you earn last year?”
You: “None.”
IRS: “None? How did you survive?”
You: “Well, me and a few friends; a carpenter, a builder, a dentist, a chef, a gardener use our own money called “scribd”. We have our own agorist underground. It’s great! No inflation, no taxes, very liquid, and totally discreet.”
IRS: calls police
Better answers will follow below (or even above now, since I was slow), but in the mean time, I’d just want to point out that if you don’t pay your TAXES in the currency your government dictates that you must pay them in, then you will be in a w0rld of s1ht!
That takes it very far on the way of being the one feasible dominating currency. If one runs a shop selling goods, and is forced to pay a VAT percentage on every sale, and a profit tax percentage on every gain, in dollar, then it’d be impractical to allow ones customers to pay in any other currency. Then one wouldn’t just buy and sell goods, but be running a currency exchange service too, and that’s maybe not ones core competence, since one actually just want to run a goods shop.
I’m convinced that tax laws are cruical for the existence of fiat money. Without taxes it would be very difficult for government to enforce use of its fiat currency. And then the particular tax laws which exempt debt payments to lenders from “profit” tax, but not dividend payments to equity holders, further accelerate the FRB system.
Tax goes hand in hand with fiat/FRB/debt!
Indeed, ProudCapitalist.
IIRC, the income tax and the Federal Reserve Act passed in the same year - 1913.
Coincidence?
Correct, fiat money does not work without taxation. With a tax the government has a catchall “evading taxes” law with which to prevent any competition.
Yes. There was income tax way before 1913, since the war of northern aggression.
And there were monkeys in the Congo. I’m quite good at this - we should chat some time.
US Code, Title 18, Part 1, Chapter 25,
§ 486. Uttering coins of gold, silver or other metal
Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title, or imprisoned not more than five years, or both.
http://www4.law.cornell.edu/uscode/18/usc_sec_18_00000486----000-.html
Like others have said, the Fed has a monopoly because of taxes, and they have a little thing on their currency that says it is good for all debts public and private. You can issue your own currency, and they can not go after you for it, but getting others to find value in it is tricky. There will be an exchange rate, or what is the point to having your own currency. There is a town in Iowa named Vedic City created by the Maharishi that started their own currency. I do not know if they still use it or if they went back to the dollar, but basically their currency is only good in their city and they need regular dollars when they deal with anyone outside of their city.
On the other hand, just about anything can be a competing or substitute currency. When you do something for trade, those become currency. There is always the tax issue though.
If issuing your own currency itself is not illegal, why did they confiscate and force the people who made the Ron Paul gold coin dollar to stop?
Wow, no wonder 13 is such an unlucky number.
BTW, I am envisioning a future in which the main currency of choice is frequent flyer miles.
The Rev
My bet would be because of the marketing of the dollar and the government took the view that they are presenting it as official US currency. I know they are not, but it all depends on the presentation. The real sticking point is on the top of their site where they call it America’s Inflation Proof Currency. It would be hard or impossible for the government to legally stop you from issueing a town or state currency that was marketed as non official currency or just a subsistute currency for that area.
I also think Ron Paul and his supporters scare the hell out of the government and they want to suppress and disenfranchise them. People who want actual freedom scare those who want power.
It seems the law only bans private coinage. However, the Secret Service has been known to bust makers of pink dollar-looking slips of paper. Granted people don’t pay much attention to the currency, I highly doubt a pink slip of paper would slip by(real bucks are made from preworn denim and fresh linen).
they can stop you easily. all they have to do is force you to account for everything in US dollars for tax purposes. if you refuse you are arrested for tax evasion. if you comply…well everyone who uses the currency has to keep track of the exchange rate of your dollars to US dollars and then calcualate taxes based on that. Who is going to do that?
I mentioned earlier that taxes are going to be the problem, which is why those who have keep it at a 1 to 1 with the dollar or some simple multiple, making it just an alternate instead of a replacement currency.No on e said that creating your own currency with a changing exchange rate was going to be easy, and that might be why people have not done it. That is the difference between possible and probable.
The easiest would be to pull a John Galt and start a society out of view of the government and then make your own currency. Or take over your own island nation and make your ideal society.
Do your business in US issued Gold and silver coins. A Nevada man did. He was declared innocent of any tax wrong doings by a jury.
The coin says “$50” on it. So you paid your worker “$50”. The government didn’t like that. The IRS wanted the guy to pay taxes due for the value of the gold coin. But the jury turned the government down. Also, the government accountants in the case when cross examined by the defence couldn’t give any laws or codes that pertained to the situation at hand. The “government expert witnesses” looked foolish to the jury. The IRS accountants had never seen such a case before and couldn’t answer the defences questions.
I promise you the IRS code and US laws will in the future fix this “gold $50 coin” error to make sure you pay the street value in taxes. But as far as I know, the laws haven’t been fixed yet. So if your employer pays you in $50 US mint gold coinage, you file your taxes stating that you made less then $50 a week.
The gold in such a coin is probably worth almost 50 times its face value. With such coins, one can do tax free business! Every time it changes hands, the gov’t looses the tax rate (on that type of transaction) times the gold value of that coin minus $50. With 30% tax rate that is about $700. And every coin could be transacted 1000s of times every day… What a loop hole!
Anobody here heard of the Liberty Dollar?
It was backed by Silver, and the Treasury deemed their business completely legal
The Feds shut them down
Did you see Harksaw’s post? It is illegal to issue your own coin.