Posted by Paul Andrew Mitchell, B.A., M.S. on July 15, 1998 at 13:17:17:
In Reply to: WE MAY NEVER SEE A RETURN TO GOLD AND SILVER posted by Shane Hanson on July 13, 1998 at 19:13:17:
: I am posting a message here because after having read a large number of the postings and replys I beleive that many of you are very knowledgable on the subject of restoring our constitutional government. I will accept any and all replys weather posted here or sent to me via e-mail.
: I would especially like a reply from Paul Mitchel as I believe he is one of the more knowledgeable persons in these matters.
: Also feel free to copy and send this message to any one who may have a solution and have them respond to my e-mail address TruthZone1@aol.com
: Now the problem,
: I have been studying for quite some time now on the reestablishing of our constitutional government. I have found that what I beleive to be the root cause of the decay of our freedoms (out side of multiple acts of corupt men) I beleive it to be our present standard or system of money, brought about by various acts since the 14th ammendment.
: In The Constitution of the United States Artic1e 1 Section 10 it states that the only way to discarge debt is with gold and silver. So if I use a federal reseve note to buy an item, food, the debt for that item is not paid. When the circle of who owes, for the item purchased, is complete it is me that still owes for that item. I am then bound (enslaved) to discarge that debt lawfully (with gold or silver).
: And so begins the problem,
: Lets say by some chance I do obtain gold or silver for a service I provided. You cannot purchase gold or silver with federal reserve notes as you will still owe for it. Now if I decide to use it no one is willing to take it as payment. I am forever stuck having to purchase my food with a debt and there by enslaved.
: I know there is a solution ALL of america must once again start mining gold or silver and using it to pay debt and buisnesses must once again start accepting gold or silver for debt. But I see no possibility of this
: The question is how in all the wide universe am I to remove this horific burden. Untill we/I/you are able to pay debts in gold or silver we/I/you are slaves. No freedom or liberty or justice for all.
: HELP!!! HELP!!! HELP!!! HELP!!! HELP!!! HELP!!!
: I do hope everyone see were I am coming from on this it is in my opinion the single most impotant area that need to be dealt with before any of us can reestablish our freedoms.
Assume for the moment that the Congress can be
persuaded to face the cruel facts, and to abolish
the federal income tax completely (because those
tax revenues are not paying for ANY government
services whatsoever) and replace it with nothing
at all (not even a national sales tax). Where
does this action leave us, as a nation and as an
The answer is important and also difficult,
because of the economic complexities that were
introduced by the Federal Reserve System.
In the book entitled "The Federal Zone,"
the IRS and the Federal Reserve Banks are
likened to two pumps, working in tandem: the
banks pump money and credit INTO the economy,
and the IRS pumps (sucks?) money and credit
OUT of the economy. The real economic reason
for having an IRS, in its present configuration,
is to maintain the purchasing power of Federal
Reserve Notes. If FRN's were allowed to flood
the marketplace, without a counter-balancing
force to remove them from the marketplace, we
would experience the very same hyper-inflation
which plagued Germany after World War I.
Thus, it is clear that, to stop this essential
connection, the two pumps must be stopped
at approximately the same time.
Only a very few, quite brave Americans have had
enough courage and insight to face a solution
which may not be too obvious to those who are
less educated about monetary systems, and
monetary fraud. This solution is, very simply,
that the foreign banks who have extracted immense
wealth from America, via the federal income tax,
must now "eat" the Treasury Bonds which they
purchased with money they created out of thin
air, quite literally.
Remember, the FRB pays Printing and Engraving
less than 3 cents per FRN, REGARDLESS OF THE
DENOMINATION on each FRN. Then, FRB obtains
a legal lien on collateral equal to the face
value of the FRN, PLUS INTEREST. Thus, for
a total cost of 3 cents ($0.03), FRB gets to
collect about $107.50 from our economy
(assuming 7.5% interest on a $100 FRN).
This much leverage is obviously unjust
enrichment, because the $0.03 "cost" is
also created out of thin air.
The crucial connection which must be recognized
is that FRN's do not get created now, until and
unless the debt ceiling is raised. Put in
simpler words, FRN's do not get created, until
and unless more Treasury Bonds are sold, and
FRB gets preferential treatment on the purchase
of such bonds.
Thus, to break the cycle of monetary fraud,
cash must be created without also increasing
the federal debt, without also authorizing
the issuance and sale of additional Treasury
Bonds, and without also increasing inflation.
Remember, higher prices are not the "cause"
of inflation; higher prices are the "effect"
of inflation, which is defined to be a
disproportionate increase in the money supply,
relative to the amount of goods and services
The solution which JFK devised, was to authorize
the printing of "U.S. Notes" (the ones with the
distinctive "red dot" Treasury emblem). Some
believe that it was this action, among others,
which cost JFK his life.
U.S. Notes were a straightforward solution to
eliminating the connection between cash creation
and debt ceiling increases. JFK's U.S. Notes
were NOT created at the expense of additional
debts payable to foreign banks, via the
Treasury Bonds which would normally have been
sold to those banks. Despite the obvious risks
inherent in this solution, it remains a viable
one, whether or not those U.S. Notes are
actually redeemable. Please defer, for the
moment, the question of redemption.
The main advantage which U.S. Notes have over
Federal Reserve Notes, is that the former have
no interest expense attached to them, whereas
the latter do have an interest expense attached
to them (in addition to the problem of the
FRB's huge leverage, discussed above).
Another, quite similar solution is to issue
"Silver Bonds" which are Treasury Bonds which
are only redeemable in silver substance, at their
maturity date. A proposal was made last year to
issue Silver Bonds with 1-, 2-, and 3-year
maturities, and interest rates slightly above
market rates. This program would be coupled
with an aggressive federal government program
to mint large numbers of silver dollars (not
the "clad" coins we currently use). Those
individuals and companies who had raw silver
to sell to the Bureau of Engraving and Printing,
would be paid in bank credit, Silver Bonds, or
U.S. Notes, but NOT in FRN's.
The other aspect of this program would be to
recall Federal Reserve Notes on a one-to-one
basis with new U.S. Notes, "over-the-counter"
(i.e. no bank accounts, cash transaction reports,
or SSN's required). FRN's would be treated as
"bearer bonds" (for those of you who know the
meaning of that term).
Once the silver coin production is ramped up,
Congress can deliver on its promise to redeem
Silver Bonds when they mature. Later, as the
supply of FRN's dwindles and the corresponding
supply of U.S. Notes increases, Congress would
be asked to phase in a redeemable U.S. Note,
in a fashion which eases the transition to a
redeemable currency. Silver bonds would be
very attractive investments for public agencies,
like state governments and their political
subdivisions. At maturity, of course, Silver
Bonds could be used to purchase more Silver Bonds.
The quantity of Silver Bonds to be issued, would
be controlled by the amount of silver dollars
to be minted; clearly, this is the kind of
determination which Congress has constitutional
authority to make.
The major problem which must be solved, under
this new national policy, is the massive "skew"
which is present in the substantive equivalent
of the FRN. One silver "dollar" today buys
about seven (7) Federal Reserve Notes. As
long as the FRN circulates, and as long as such
a skew exists, people will be better off to
trade their silver for FRN's, because they
get 7 FRN's for each silver dollar. Obviously,
if you are buying milk and bread, you are much
better off to be holding FRN's, because you
have SEVEN TIMES as much purchasing power
as you would have by holding silver, in the
same "nominal" amounts. ("Nominal" here means
"face value"). Forcing people to exchange
FRN's for silver, in nominal amounts, results
in stealing huge amounts of money from the
people who possess those FRN's. That is the
major reason why U.S. Notes are printed --
to moderate the FRN's inevitable devaluation
Thus, the withdrawal of FRN's from the entire
economy represents a massive, one-time
economic adjustment which must occur.
The proper place for an open and candid
discussion of the consequences, would be
the committee which conducts hearings on
the legislation that must be enacted, for
this program to go into effect.
Without more study, it is impossible to be
exact about the magnitude and distribution
of "damages." But, take this one example:
John Doe is persuaded to spend $100 FRN's
on a silver bond, which matures at, say, 5%
in one year. One year later, he gets $105 in
silver dollars. He then turns around
and exchanges them for $735 in FRN's (because
the FRN's are still circulating at 7-to-1).
Then, he goes to the counter of his friendly
local bank, and exchanges the FRN's for
U.S. Notes, one-for-one. Clearly, this is
not the kind of "appreciation" which Congress
would, or should, intend. Conversely, if the
exchanges flow in the opposite direction, Congress
should never "force" such a massive devaluation
in the common man's purchasing power. The
federal income tax has already done enough of
that, for the past 85 years!! The new national
"policy" is to keep the money in our country.
Putting a future "kill" date on the FRN only
aggravates the problem I have described above,
because people will not be able to "defer"
their decisions after that deadline. As of
a particular date, the FRN is officially
worthless. This "kill" date must also be
coordinated with legislation which dishonors
the Treasury Bonds which foreign banks now
own (i.e. we must shut off both pumps at
approximately the same time).
Clearly, if the Silver Bond solution is adopted,
the maturity dates on these bonds also need to be
carefully coordinated with the deadline for
total withdrawal of the Federal Reserve Note.
FRN's can be used to purchase Silver Bonds;
or FRN's can be traded for U.S. Notes,
"over the counter" and "one-for-one" at
all participating banks (read "all banks"
by law). To illustrate, the ramp-up in minting
of silver coins should begin BEFORE the first
Silver Bond matures, and enough silver dollars
must be warehoused to cover all Silver Bonds
which may get redeemed. By law, I would require
100% of all Silver Bonds to be redeemable,
on demand, as proof of the good faith and
credit of the United States (federal government)
under this new program.
Now, assuming that the U.S. Treasury Dept.
can develop bank and consumer regulations
which smooth this important transition, what
are the real political ramifications?
The answer to that question falls squarely on
the willingness of wealthy foreign banks to
tolerate the huge amount of debt they must eat,
as a result of implementing this solution.
Dr. Edwin Vieira has confronted this problem,
in his essay "Return to Constitutional Money,"
and concluded that these foreign banks should
be given no choice in the matter: either eat
the debt, or face criminal racketeering charges.
There are many educated Americans who fear that
these foreign banks would choose instead to wage
an overt war against America, rather than forego
all this future revenue. The federal government
must face this possibility realistically, and
treat any such threats as nothing less than an
expression of treasonous intent to invade our
shores. A policy of peaceful transition must
be clarified by the Congress, and our loyal
military must be alerted to the probability
of foreign invasion during this period of
Indeed, the foreign invasion appears already
to have begun, under auspices of U.N. command.
The United Nations is controlled by the very
same foreign banks who now hold massive numbers
of U.S. Treasury Bonds slated for dishonor.
I don't want to get too "far out" with a
discussion of probable future scenarios.
However, it is essential to understand that
the foreign banks who presently hold Treasury
Bonds, must face a future in which those
Bonds are destroyed, because it is the new
policy of the United States (federal government)
to dishonor bonds which were acquired by means
of fraud and racketeering by foreign banks,
particularly if the real leverage of their
"scheme" is in a ratio of $107.50-to-$0.03!
I assume you all have calculators to do your
own computation of this ratio.
/s/ Paul Andrew Mitchell
Counselor at Law, Federal Witness,
Private Attorney General, and Candidate
for the U.S. House of Representatives
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