The Congress shall have Power . . . To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
~Article I, Section 8, Part 5
The Constitution is clear that Congress has the authority to coin money. The Constitution mentions only gold and silver coins. The section in which the authorization to coin money appears also mentions that Congress has the right to fix the standard of weights and measures.
The Founding Fathers did not call for paper money, because all of them had been through a disastrous period of American history with respect to paper money inflation during the War for Independence.
Our country is now repeating this experiment with paper money and getting the same result. Inflation has destroyed 95% of the value of the dollar since I was a boy.
Strictly interpreted, the Constitution does not permit paper money, only gold and silver. This was first violated by allowing government paper money backed by gold. Then the gold backing was removed.
Capital gains taxes and special laws stopped the use of gold and silver.
Just repeal of these taxes and laws would permit gold and silver coins to circulate beside paper money. Americans could then choose, in each transaction, their preference. If this were done, either the coins would drive the paper out of circulation, or inflation of the paper money would stop. This is opposed by the Federal Reserve and Congress because they get a lot of political and economic power by printing money and inflating the money supply.
These people argue that they need to be able to print money in case the economy has a difficult problem. Why not just have Congress save money for a “rainy day?” This is what we ordinary people must do.
The Federal Reserve
No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts;
~Article 1, Section 10, Part 1
In the final days of 1913, when many in Congress had returned home for the Christmas vacation, the remaining House and Senate members passed the Federal Reserve Act, and President Wilson signed it into law within hours. That law delegated congressional control over American money to the Federal Reserve System, which is controlled by a committee of the Federal Reserve Bank.
As the American dollar has come to be used as currency throughout the world, the Federal Reserve Bank has become the most powerful bank in the world.
The Federal Reserve Bank became so powerful that Congress dared not even audit its activities. In principle, the “Fed” is supposed to supply Americans with honest and reliable money. Yet, there is not a single example in history where men were given the power to print money or debase coinage and did not abuse that power. The Fed has proved to be no exception.
The Fed should be completely audited – not just partially – and Congress should assert its constitutional authority to assure that Americans have a sound currency that is not inflated. If the Fed cannot do this – a goal that it has completely failed to meet so far and is unlikely ever to achieve – the Fed should be ended.