Public education had indoctrinated every one of us in Enlightenment rationalism. We don’t know any other way to think about the world. We’ve been taught that we have to abstract the essential principle of everything, separating it from all distracting particulars and details. But however useful they may be to discussions, abstracts will mislead us unless we remember that they are merely imaginary categories, and not real.

No matter what crazy conclusions result, the modern world plods on, enslaved to “scientific” rationalism. We are slaves to abstractions, to unreal things that do not exist. It is worse than being ruled by the dead. It is being ruled by the non-existent, for the benefit of a very few living. When a monetary system substitutes abstractions for realities, the error quickly and cruelly avenges itself – for real, and not in the abstract.

Our abstract monetary system creates money by borrowing it into existence through banks. Eventually, those who create the money will enslave everyone else in debt, and end up owning all property. The abstract will consume the reality. The only solution is, don’t use their money.

Part I: How I Learned About Our Monetary System

In 1987 an attorney in Memphis, Tennessee, informed me that an Assistant US Attorney for the Western District of Tennessee had called me “the most dangerous man in the Mid-South.”

Imagine the terror you would feel if someone named you that. What sorts of criminals does the US Attorney’s office deal with? Was I a drug trafficker? No. Bank fraud perpetrator? Check kiter? Purveyor of prostitutes? Pornographer? Briber of government officials? Murderer? Terrorist? Communist revolutionary?

No. None of these. I was the quiet father of seven children and a businessman. How on earth could the Assistant US Attorney dealing with all sorts of criminals call me “the most dangerous man in the Mid-South”? How could I be the most dangerous man in the Mid-South?

Because I had aimed a dagger at the heart of the American system: I had opened a gold and silver bank.

That’s probably a crime you didn’t know existed. You never heard of any Russian anarchist revolutionaries meeting in cellars and plotting to set up gold & silver banks, did you?

Crazy? The more I thought about it, the more I realized that the Assistant US Attorney had gotten it right. To her system, to the “American way of life as we know it,” and to her way of thinking, I was the most dangerous man in the Mid-South, but not because I was anything important in myself. Rather, I presented that one little needle point of truth she and her cohorts couldn’t let in, because that tiny needle point is plenty big enough to pop their enormous balloon of delusion, deceit, illusion, and lies. And that balloon supports all their power.

That system of lies enslaves every one of us, steals our capital day by day, and makes sure that we can never own or accumulate property to pass on to our children. Worse yet, the only force that keeps us slaves is our own cooperation. We forge our own chains, daily, and we fasten them firmly on our own wrists and ankles. Any day we want, we can drop those chains and walk out free men and women. Later I’ll tell you just how to do that.

To understand the American “system” or “the American way of life as we know it,” you must understand a bit of history. By the time the War Between the States ended, there had been a coup d’etat in the United States. The North didn’t win the war, and the South didn’t win the war. Big business won the war, and ever since, big business has been re-organising the country and the people to suit its own purposes and profits. That is the American system: Big Business runs the government. And its beating heart is the fraudulent monetary system that feeds and supports it.

What This Article Will Do

Its structure is really very simple. It only has one theme, moving from the abstract to the real. From symbol to substance. If you bear in mind that everything I am about to say will help you move from the abstract to the real, then you will easily understand it all.

My article is divided into two parts, first about the nature of money and our present monetary system, and second about how you personally can secede from that system. You don’t have to overthrow the government, you don’t have to abolish the federal reserve, you don’t have to elect congressmen or senators or presidents or dog catchers, and, best of all, you don’t have to throw any bombs. All you have to do is begin using rights and powers you already have. All you have to do is to step out of the shadows of delusion, deceit, illusion and symbol, and into the light of substance. Move from the abstract and imaginary to the real. And, it will make you money.

Two Theories of Money

There are two and only two theories of money, both known & described since the days of Aristotle.

One theory holds that money must have substance, the other that money is only a symbol. Symbol, or substance. If money must have substance, then it must contain some value itself. If money is only a symbol, an abstract representative of value, a tool society arbitrarily creates for itself, then any representation will do, from paper notes to electronic computer entries. After all, the money needs no value itself, it only represents value. Money is only a disembodied idea, not a concrete reality.

The money we choose will affect everything else in our world. The entire monetary question boils down to this, whether our lives will be ruled by realities, or by abstractions. Real things, or non-existent illusions conjured up to seduce and defraud us. Real things and real values we freely choose for ourselves, or unreal abstracts forced on us by somebody else. If money must have value, then I have to go out and earn – accumulate – real wealth. If money is merely a symbol, then productive work is unnecessary. Whoever creates the symbols controls society, and the rest of us become their gulled slaves.

Symbol v. Substance: Reciprocity v. Hot Potato

When money has substance, perfect reciprocity rules every human exchange. Why? Because money as substance requires that whatever is used as money has value itself. Real people value that money for some real benefit it confers by its nature. When I exchange using money of substance, every transaction is complete and just, trading value for value. I give you a weight of gold or silver or tobacco or goats, and you give me a specified amount of lumber or milk or vegetables or cloth. Good for good, measure for measure.

Don’t miss the essence of this transaction: you and I exchange real things, genuine, physical substances. Value for value. Reality for reality.

When I exchange money as symbol, then no transaction is ever complete, or equitable. It is never complete because the symbolic money does not pay anyone. It does not deliver anything of substance, it merely transfers a promise to pay. It transfers the obligation to pay the transaction to the next person who ends up with the symbol. Symbolic money creates a never ending game of hot potato.

Using symbolic money, no transaction is ever equitable, because in every transaction one party receives something of substance, some valuable real thing, while the other receives only a symbol. That symbol, in turn, represents – nothing! We’ll look at it more closely in a minute, but take my word for it now. Whether the symbol represents only debt (the negation of value), or whether it represents only confidence (the willingness of the next victim to take it), the symbol itself has no value.

A Tool of Love or Power

There is no other system or theory of money besides these two. Money either exchanges substance for substance, or substance for symbol. Money is either a tool of mutual enrichment and love, or a tool of exploitation & power. By “love” I mean not sentimental affection, but the justice of the Golden Rule. As Andrew Lytle observed, “The opposite of love is not hate, but power.”

These two monetary systems are utterly incompatible. Where they exist side by side, one will always drive the other out of existence, just as bad money armed with government force always drives good money out of circulation. Only one monetary system is compatible with freedom, and that is substance. Only one system can protect and maintain property rights, and that is substance. A symbolic money system will eventually transfer title to all property to whoever creates the symbols. Think about it: it must end that way. On one side are people who can only get money by working for it, while on the other are those who create it out of thin air. At what point will the “creators” decide they have created “enough” money? Answer: when they have created enough money to own everything.(i)

Banks

By now either a big light bulb has lit up in your mind, or you have no idea what I am talking about. An example will explain how substance and symbol differ.

It’s Monday, and you’re a little short on cash this week. You see your friend Joe, who always seems to have money. You pull Joe aside and ask him to borrow $50 till you get paid on Friday. Generous Joe agrees to lend you the money.

Now as far as you and Joe are concerned, Joe loaned you something of substance, even though it was only a piece of paper with a picture of a dead yankee general. Why? Because even though the money itself is symbolic, Joe had to trade something of real value – his labour – for the fifty. At the end of the week, when you get paid, you give Joe back substance for substance, equal for equal.

But what happens when you borrow money from a bank? Banks don’t loan you anything of substance. They don’t even loan you money. They loan you credit. And that credit they create by exercising a privilege – a title of nobility – granted by congress or state legislature. That’s right, government grants banks the privilege to create credit out of thin air. (If you disbelieve this, try issuing your own bank notes and see what happens.)

If you still believe that when you deposit $100 in the bank, they put it in an envelope with your name on it and then carefully place that envelope in the safe, you have another thing coming. And when they make a loan, they don’t go into the vault and take your $100 bill off the shelf and loan it to the borrower. Oh, no.

Here’s how a bank loan works. You’ve been depositing your money at the Metastatic National Bank for ten years. You’ve taken out a car loan through them, and a mortgage, and paid them both off. You want to buy another car. You need $10,000, so you go see Fred, your friendly loan officer.

“Fred, I need to borrow $10,000 to buy a car,” you say.

“Well,” Fred says, “you’ve always been a good customer of the bank. You’ve always paid your notes on time. Here, fill out these papers giving us a lien on the car, and we’ll put the money into your checking account.”

Then Fred calls upstairs to Louise-in-accounting, and he says, “Louise, our good customer here wants a loan for $10,000. Credit that loan to his checking account, would you?”

So Louise-in-accounting turns to her computer and enters a loan on the books (an asset of the bank), for $10,000 and posts a $10,000 entry to your checking account (a liability to the bank).

Now ask, Where was the $10,000 the second before Louise posted the transaction? It wasn’t in the bank vault. It was nowhere. It only came into being when Louise created it through the miracle of double entry book keeping.

And even if the bank had handed you one hundred $100 bills, they would still be creating the money out of thin air. They’d be handing you the $100 bills somebody else had deposited, not their $100 bills. The bank’s assets and liabilities -- the $10,000 loan to you and the $10,000 liability to a depositor -- would balance the books exactly the same.

Reserve Requirements

Hey, wait a minute, Moneychanger! What about the banks’ reserve requirements? Aren’t they supposed to keep in reserve a certain percentage of all the money deposited with them?

It’s amazing how effective the banking system’s propaganda is. Whenever I ask people how much banks keep in reserves, their answers vary from 50% to 10%, but never come close to the real truth – probably because it’s so outlandish that nobody could imagine it.

For every $100 you deposit in your bank, the banking system can create $16,258.45 to entice and enslave your neighbours. Friends, meet the Tapeworm. This is the ultimate financial ju-jitsu, leveraging your own financial strength against you and your neighbours.

What Does The Bank Loan You?

From my loan example you ought to draw two obvious conclusions. First, that the bank risks nothing at all in the loan. If you default on the loan, they lose nothing -- their credit cost them nothing, remember? -- but they gain the property you pledged. If you pay the loan off, the bank gets your money for which they laboured not a second and risked not a penny of real value. They have enslaved you with a non-existent abstraction. They got your “something” for their nothing (“credit” or symbolic money).

Second, it is obvious that the value of the bank’s franchise — the privilege of creating money out of thin air – is not sufficiently measured by the bank’s “income.” That is, the value of the bank’s privilege is measured not only by the “dollars” that it receives in interest for loaning out its credit, but also by the full capital amount of the credit it creates. Therefore the profit to the bank on this $10,000 loan is not the $1,000 in interest the borrower will pay over the life of the loan, but the $1,000 in interest plus the $10,000 credit the bank created.

From this, it ought to begin to dawn on you that whenever government grants an entity the monopoly privilege of creating money out of thin air, sooner or later that entity will own all the property in the country. By the power of an abstraction, an artificial mental construct, a thing that does not exist, namely, symbolic money, all property in American society has been gradually being taken over by the banks.

Now perhaps you are beginning to understand why I said earlier is that the whole issue is, which will rule us, reality or an abstraction? And why I also said that freedom and private property cannot long coexist under a symbolic money system.

Credit Cards and Seigniorage

Let’s examine also what happens with credit cards. First, I need to explain “seigniorage” (SEEN – yur – idg)

Seigniorage is the difference between the value of money and the cost to produce it. Once upon a time it accrued to the government that minted coins. When the bullion value of the coin is less than its face value, the difference is seigniorage.

For example, in 1853 the U.S. price of silver had risen so much against gold that even the small change was being melted down and sold as silver bullion. In order to keep small change in circulation, congress made dimes, quarters, and halves subsidiary coins. That is, they reduced the amount of silver in them to less than a dollar’s worth. (The law defined (and still does) a dollar of silver as 371.25 grains of pure silver. Until 1853, 10 dimes or 4 quarters or 2 halves contained 371.25 grains of silver, same as a dollar. After 1853 they contained about 6-1/2 less silver. That 6-1/2% was seigniorage or profit to the US government.)

Now think about credit card companies. What do they do? At your order – whenever you use the card – they create money for you. Only the money they create isn’t minted out of metal, it’s minted out of imagination and administration. And other than the tiny cost of that administration, it costs credit card companies nothing to mint credit card money. And because you and thousands of businesses willingly accept imaginary credit card money, the credit card companies are willing to profit from near 100% seigniorage.

Once again, you give them your substance, and they give you a symbol.

Borrowing Money Into Existence: The Game of Cards

All money today is borrowed into existence. At its birth, it comes into the world with a burden – an interest rate burden. Here’s how it works.

Imagine five people shipwrecked on a desert island. After a few weeks they get bored. One survivor, whom we’ll call “Banker”, has a deck of cards. Another person approaches Banker and asks to borrow his cards.

Banker answers, “I’ll be glad to loan you my cards, but nobody plays for free. At the end of an hour, each of you must pay me the 13 cards I loaned you, plus one card as interest. As security in case you can’t pay me back, you can put up all your real and personal property as collateral.”

So the other four shipwreck victims pledge their property, take their 13 borrowed cards, and sit down to play. Now you don’t need to be a mathematics professor to know that a deck of cards contains only 4 times 13 cards = 52 cards, and that at the end of the hour, it will still contain only 52 cards. But at the end of the hour, each borrower must repay 14 cards. Obviously, it can’t be done, so at the hour’s end, at least one player, and maybe more, will go broke and lose all his property. If all play cards equally well, they’ll all go broke in the first hour.

As long as the players keep playing – keep borrowing money into existence – then some will continue to go broke. Eventually banker, who owns all the cards, will wind up with all their property.

This story illustrates two inevitabilities about our present monetary system:

• Eventually, the money issuer winds up with all the property, and




• Whenever the money supply fails to grow by enough to pay the interest burden created by borrowing the money into existence, bankruptcies will multiply and the economy will slip into incurable deflation and depression.

Why There Will Be No Deflation

The federal reserve (and every other central bank) is a machine created to inflate the money supply by loaning money into existence. Like Kryptonite to Superman, its mortal enemy is deflation. So the Fed will always inflate the money supply. Always.

How hilarious, then, is the idea that the Federal Reserve is “fighting inflation”? The Fed doesn’t fight inflation, it is inflation.

However, it is the Fed’s job to “fight inflation fears,” in the same way that the beaters in a big game hunt are used to flush the game into the shooters’ sights. They keep the animals in the trap until the shooters are ready to shoot them. Whenever inflation fears threaten confidence in the dollar, whenever the nervous victims threaten to flee from the line of fire, the Fed will roll out the propaganda cannon and fire loud, noisy blanks about how hard it is fighting inflation, so you won’t notice that you’re running smack into the shooters’ guns.

By Their Fruits Ye Shall Know Them

What is the outcome of this monetary system? All consumerism, all boom/bust investment cycles, all bubbles, all abuse of debt, have their roots in this monetary system – plus the death of the local economy

It creates money that otherwise wouldn’t exist, imaginary money. Do you remember what happens when you’re playing Monopoly™ and the game’s banker hands you $2000? Why, you spend it just as fast as you can. After all, it’s not like money you had to earn yourself.

When banks make huge amounts of credit available, it lowers interest rates. Low interest rates make all sorts of projects appear to be profitable that really are not. So people borrow money, because it’s cheap.

To consumption it adds huge artificial demand at the margin because it makes consumption look much cheaper than it actually is.

That additional consumption demand also hurts the local economy. Once the money flowed in a circle in local economies. People bought what they needed from their neighbours. But when most of what they “need” is not available, it must be imported. Then the money that used to circulate locally must leave to pay for the imports. Pretty soon, nothing produced locally is consumed locally.

If it is not spent on consumption, that hot borrowed money then goes looking for a big return. It flows into whatever is fashionable at the time. Right now, that happens to be real estate. Any sane person knows that property has an economic value, that is, how much return can it generate? Any sane person also knows that a 1,500 square foot home, even in California, cannot have an economic value of a million dollars.

So our present monetary system not only transfers all property eventually to the banks, it not only teeters always on the edge of collapse because it borrows money into existence, it also funds the insane, wasteful consumerism that American society is addicted to, and it funds the ridiculous investment bubbles that continually fleece us.

The fruit of the system is seen in the debt.

Today, the US government admits to a debt of about $8.3 trillion. If they were forced to use honest accrual accounting, it would be closer to $60 trillion. Before the Federal Reserve system, the debt was 10% or less of Gross Domestic product. Today, it’s about 66%.

Personal and corporate debt is estimated at another $30 trillion dollars, about 2-1/2 times the current GDP of $12 trillion.

We were once a nation of independent freeholders who owned property and worked for ourselves. Today, we are a nation of serfs. The banks own our property and we work for them or some other corporate master. All of this has happened because we were willing to accept abstract, rather than real, money.

Witnesses

Don’t take my word for the contention that the money we use is wholly symbolic and backed by nothing. Let’s get some credible witnesses. Let’s call somebody from the government.

G. Thomas Woodward, Specialist in Macroeconomics, Economics Division, Congressional Research Service, the Library of Congress, from “CRS Report for Congress “Money and the Federal Reserve System; Myth & Reality”, July 31, 1996, Publication 96-672 E.

“The principal form of currency in the United States consists of Federal Reserve notes. These notes are by law “legal tender” . . . A great deal of concern is often expressed about what “backs” a Federal Reserve Notes. Technically, the notes are collateralized by holdings of securities – mostly those of the United States government. Many people, however, feel that this begs the question. What then “backs” the securities that back the Notes? “The short answer is nothing. There are no real assets, public or private, that are specifically pledged to collateralize the debt of the government. The government borrows on its “full faith and credit,” which is to say that it borrows as long as everyone thinks it is able to service the debt. This means that ultimately nothing backs the money (Except the full faith and credit of the US government.) (ii.) [All italics in original]

Part II: Seceding From The Monetary System

To secede personally from the monetary system, every one of us must stop thinking of money, and start thinking of wealth.

About 650 B.C. a new technology arose in Lydia, in Asia Minor. It was destined to change the entire world. It was called “coinage.” Until coinage, every transaction paid in copper or silver or gold required different sized ingots to be weighed out, after they had first been tested for purity. Using metallic money was slow, and risky. Direct barter was more efficient, but it limited trade.

The object of economic activity was not piling up money, but building wealth. Wealth might be slaves or land or goats or sheep or cattle or ships, but whatever it was, it was real and could produce more real wealth.

Then Came Coinage

Then along came coinage, and the object shifted away from building wealth to piling up money. Although the money itself was metal, coinage took wealth to another level of abstraction. Coinage was not wealth itself, but an abstraction of wealth.

This abstraction nearly did the Greeks in. They were quick to adopt every new technology, and so they quickly adopted coinage. Within about 50 years, by 594 BC, the money abstraction had so pervaded the Athenian economy that the commonwealth’s life was threatened. Spurred by easy credit, farmers had pledged their lands and even their wives and children to borrow. They quickly lost farms and wives and children, and many were even sold into slavery themselves. To save Athens, in 594 Solon instituted the “shaking off of burdens”, cancelled much of the debt, freed those enslaved by debt, and forbade using selves, wives, and children as collateral. Athens was saved.

What had happened? The Greeks had been so enamoured by money, the abstraction, that they forgot wealth, the reality. Along with wealth, they forgot even greater obligations owed to the commonwealth, to their forefathers, and most of all, to their wives and children and to themselves. They were enslaved by an abstraction.

Same Story, Different Time & Place

Today we find ourselves in a similar situation, where greed for abstract money has blinded our society to real wealth, and to all other values.

So the first step you must take to secede from the monetary system is to stop thinking of ‘wealth” as abstractions like financial assets, stocks, bonds, dollars, and start thinking about wealth as “productive assets” like businesses and farms that can produce and keep on producing without constantly feeding them more and more expensive inputs.

The next step necessary to monetary freedom is that you must make that movement as a community in the local economy. You cannot merely save yourself by running off and hoarding silver and gold, because every economy is a network of individuals and transactions. All by yourself you can’t have an economy, only have a hermitage. We must rebuild our own local economies first, or we can’t rebuild anything else.

Your motivation here must be love, not mere sentiment or affection, but the determination to do justice by every man. Part of loving your neighbour is helping him succeed, and helping to create and keep an environment where you can prosper together.

Finally, our first rule must be, whatever replaces the present monetary system must work. It must make us more prosperous, not less. We can’t just impose something on ourselves and others for blind ideological reasons. Rather, if we are going to change anything, it must be a change for the better.

Using Gold and Silver As Money

There are numerous “community currency” ideas, old and new. They may be good or bad, workable or not, but I won’t speak to any of those because they are all variations of the symbolic money theory. On the other hand, gold and silver money has worked for 4,500 years of recorded history.

Classical economics demands that money serves three functions: store of value, standard of value, and medium of exchange. Presently, silver and gold perform the first function very well, but politics keeps them from performing the other two. Both the standard of value function and the medium of exchange function are critical to monetary freedom.

Numeraire

A money serves all these functions when it is our numeraire. The numeraire is simply the money we think in terms of, our common denominator. If you live in France, you think in francs – well, you used to. Now I suppose you think in Euros. If you live in England you think in pounds, and in the US you think in dollars.

We must replace the dollar as our numeraire with silver and gold. Let them become our standard of value and they’ll soon become our medium of exchange.

Standard of Value

A standard of value means, what is something worth in terms of that measure? We must think in terms of ounces, and not of “dollars.”

Imagine a piece of property, 58.5 acres, asking $155,000. Allowing $75,000 for barn and house, that’s $80,000 or $1,367.50 an acre. In 1999 the same acre cost $750, so the price has nearly doubled.

But in dollars, not in silver. What if, at the end of May, 1999, you had converted your dollars into silver? Silver then cost $4.973/oz. At the same time, comparable land where I live was $750 an acre, or 150.8 ounces of silver per acre. At the end May 2006 silver was at $13.013, so the land that costs $1,367.50 an acre today only costs 105.09 ounces of silver. In other words, the price of land where I live, although it has nearly doubled in dollar terms, has fallen over 30% in silver terms.

Land’s price has not risen in gold terms, either. At the end May 1999 gold stood at $270.40 an ounce, while land was $750 an acre, so an acre of land cost about 2-3/4 ounce of gold (2.774 oz exactly). At the end May 2006 gold traded at $657.50, so the land that costs $1,367.50 an acre today only costs 2.08 ounces of gold an acre. In other words, the price of land where I live, although it has nearly doubled in dollar terms, has fallen over 25% in gold. (to 74.9%).

These examples easily explain silver & gold’s recent superiority as a “store of value.” If you had been planning to buy land and counting on dollars to store your value, you would have lost about half your value while you were waiting. With silver and gold, your money would have gained over 25% in value.

Metals v. Stocks

The metals’ standard of value function offers even more information about true value when we compare it to stocks. In nominal dollar terms stocks don’t appear to have done too badly in the last 7 years. In fact, they stand just about exactly at the same place they stood in August 1999.

But what happens when you value stocks against silver and gold? You can see that they have dropped 58% against silver and 60.5% against gold. It doesn’t matter how much the White House’s Plunge Protection Team has managed to manipulate stocks in dollars, valuing them in silver and gold reveals how terribly stock values have dropped since 1999.

This demonstrates the numeraire function of money. We have to learn to value things not in paper dollars, whose value jumps up and down so often that trying to nail down a value in dollars is like trying to shoot skeet off the back of a bass boat in a thunderstorm. Rather, we have to learn to value things in terms of silver and gold, which will yield either a steady, or a steadily declining price.

I can calmly forecast that because presently both silver and gold are in a “primary uptrend” or bull market that will last another five to ten years at least.

Medium of Exchange

But our project to free ourselves seems stumped when we come to the “medium of exchange” function. Why? Because by political manipulation silver and gold have been demonetized. I can’t take my 100 ounce silver bar or gold coin down to the grocery store and buy bread with it directly. First, I have to find somebody willing to exchange it for paper dollars, then take the dollars to the grocery store to buy bread. The inconvenience alone keeps me from using silver and gold as money, and it was intended that way.

But what if it isn’t inconvenient? What if people in a local economy began to accept silver and gold among themselves, every day, as they buy and sell to each other?

Here is the key to your shackles: you free yourself, and deny the Tapeworm use of your wealth, when you use gold and silver coin to store value and exchange directly.

This is the great secret of the American system, not only concerning our rights to sound money but most of the rest of our “stolen” rights as well. They aren’t really stolen: we are fooled into renouncing them voluntarily.

Beyond all question (I say on the authority of years of study) you have a common law, constitutional, and statutory right to gold and silver money. In fact, the notes of the federal reserve bank, or any other bank, are not “money” under current law, they are “notes.” A “note” is not money but an obligation to pay money. They may be “legal tender”, but they are not money.

But wait! If they’re legal tender, that means that legally we are forced to accept them, huh? Not at all. That’s the catch. You can stay out of the legal tender system by specifying in advance what form of payment you will accept. Legal tender only operates by default, when no specification to the contrary is made. However, you are free to contract for specific payment in any form you desire: silver, gold, goats, fava beans, you name it. You merely need to make that known by contract or public announcement.

What stands in the way of your monetary freedom? Two things: ignorance, and laziness. Ignorance, because you don’t know how to use silver and gold as money, and laziness because it’s easier to use paper money or credit cards. Now I may be able to help you with the ignorance, but the laziness you’re going to have to take care of yourself.

Practicalities

Okay, so I’ve convinced you, but now how do you start using silver and gold every day? First, it’s nothing but a simple exchange rate problem. In the US we have a huge internal market, so few of us have ever dealt with foreign currencies. But there are people all over the world who live near national borders – probably a lot of them in Washington state near Canada – who deal in diverse currencies everyday.

If they can do it, you can do it.

For most daily transactions, you’ll be using silver. Today an ounce of silver brings about $12.00. Ten silver dimes, which contain nearly three-quarters of an ounce, cost about $8.75. The smallest generally available gold coin, a 1/10 ounce, costs about $68.

How can you learn what those exchange rates are? That’s what the Internet is for. You can go to the sites of the futures exchanges and look up prices, or you can go to my website , scroll down the home page to the yellow banner that says, “Download Free Portfolio Calculator,” double click on that, and fill out the pop-up form. That will automatically add you to the list to receive my free daily e-mail commentary, which includes the prices of dozens of items and spot gold and silver.

To make life easier for you, Catherine Austin Fitts and I have put together a website. All you need to do there is enter the spot gold and spot silver price and the amount you want to pay in dollars, hit the update button, and it will immediately tell you how much silver, or silver and gold, you need to pay that dollar amount.

Before too long, you won’t even need that website calculator. You’ll be making those calculations in your head, and then you’ll stop thinking in dollars altogether and begin thinking in silver and gold.

Then you and your neighbours can keep your wealth at home, circulating in your own local economy, blessing and enriching one another.

Think about it. All you have to lose is – your chains.

Footnotes

i.Consider the bank of England, founded in 1694. By 1749 the government owed the bank £9 million (2,118,600 ounces of gold). The total value of all gold minted in England from 1216 to 1760, about 550 years, was only £41,071,727. In about 50 years the Bank of England held a claim on nearly a fourth of that. See,, Federal Reserve Bank of St. Louis Review, April 1984, Vol. 66, No. 4, p. 15, “A Private Central Bank; Some Olde English Lessons” by G. J. Santoni. For British mintage figures, see Silver Bonanza by James Blanchard and Franklin Sanders, page 41. Jefferson, Louisiana: Jefferson Financial, Inc., 1993.

ii. CRS Publication 96-672-#, pages 11 & 12. Here’s more in the same vein: “The lack of backing, however, has no bearing on the suitability of Federal Reserves notes as currency. Money exists to facilitate exchange, functioning as a “medium” or middle part of a transaction. In a modern economy, every time someone purchases something, he engages in half of an exchange: one thing of inherent value has changed hands, with the buyer getting what he wants, but the seller [is] still looking to get something of value in return. Money is a token given the seller signifying that he is still owed something of value. A transferable IOU is ideal for this purpose.

The government creates money out of nothing in order to purchase goods and services of value [The banks create money out of nothing in order to purchase assets of value, and the banks create most of the money. In fact, the government creates none at all, and didn’t when Mr. Woodward wrote this, as he would have known if he hadn’t been an economist.] The note that it pays with is basically an IOU...

“Debt makes good money because the debt of one person or institution is an asset to whomever it is owned. Consequently the debt can be used for exchange by the creditor (the individual who holds the debt), and then in turn by the person who receives it, and so on [the game of hot potato I described above] When the chain of transaction comes round to the original issuer (the debtor), the debt can be cancelled against whatever obligation one has toward the issuer , and the series of exchanges becomes complete."

Consequently, Federal Reserve notes and other paper money are indeed “unbaked” IOUs. The fact that they are IOUs is the very thing that makes them suitable to be money.

iii. “Modern Money Mechanics: A workbook on Bank Reserves and Deposit Expansion. Federal Reserve Bank of Chicago. Originally written by Dorothy M. Nichols in May, 1961, revised June 1992 by Anne Marie L. Gonczy. Page 3.

vi. Letter to the Secretary of the Treasury Albert Gallatin (1802); later published in The Debate Over The Recharter Of The Bank Bill (1809). Wikiquotes

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Franklin Sanders [send him mail] has been brokering physical silver and gold since 1980 and trading metals even longer. He publishes a monthly financial newsletter, "The Moneychanger." In 1993 he wrote Silver Bonanza for Jim Blanchard, and in 2004 published Why Silver Will Outperform Gold 400%. For more information visit his website , where you can sign up for his free daily gold & silver market commentaries. He lives on a farm near Dogwood Mudhole, Tennessee amidst a mob of children and grandchildren.