I’ve discussed just a few benefits of sound money in the last two weeks, and contrasted them to the perils of fiat currency. Sound money keeps government spending in check, keeps trade fair and honest, which reduces the temptations, and many underlying causes, for governments to wage wars. It also gives you the peace of mind of knowing that your savings will be able to sustain you in your retirement.
So if sound money is such a good thing, what is stopping people from simply trading with each other in gold and silver? Why are you still being paid in fiat dollars, and why can’t you pay for gas in gold? The answer is that the government has enacted policies that provide considerable stumbling blocks to such transactions.
One of the main stumbling blocks is Federal legal tender laws, which state that government-controlled fiat currency MUST be accepted for many kinds of monetary transactions.
In light of this, Gresham’s Law takes effect. Gresham’s Law states that bad money drives out good money. Meaning, if someone is forced to accept your bad money, it is to your advantage to pass it off, like a hot potato, in exchange for something of value. Any good money you have, you will hoard. Eventually, real money is driven out of circulation and under people’s mattresses, so to speak. In the absence of legal tender laws, people are free to accept the medium of exchange of their choice, and are likely to insist on payment in something of real value.
Related to legal tender laws, contracts in gold are not enforced. Meaning if two parties agree to exchange goods or services for gold, and end up in a dispute, the courts will simply settle the dispute in Federal Reserve notes. Governments should do very little, in my estimation, but it should enforce contracts and property rights through the courts. But in this instance it shirks this basic duty, when it comes to gold, as one way to keep control of our economy and the medium of exchange.
One is also expected to pay sales tax on the purchase of gold. This is as ludicrous as if you paid sales tax at the bank when you converted dollars into quarters! The IRS also expects you to pay capital gains tax on gold, which is so backwards, since gains on gold really represent decline in the value of the dollar!
Legal tender laws should be repealed at the Federal level. Congress has the Constitutional duty to protect the integrity of our money. However, since it has passed this duty off, and the Federal Reserve has only debased our currency, Congress should no longer force Americans to do business in dollars if they would prefer to transact in gold, or silver, or cigarettes or seashells, for that matter.
Free people should be free to associate and do business in ways that benefit them. Instead they are forced to use the unstable dollar to their own detriment, and the benefit the government.
Processing your request, Please wait....
Today, I went to the beachfront with my kids. I found a sea shell and gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.” She put the shell to her ear and screamed. There was a hermit crab inside and it pinched her ear. She never wants to go back! LoL I know this is totally off topic but I had to tell someone!
Report this comment
Like or Dislike:
1 
0
Nice post at Ron Paul on Legal Tender Laws. I was checking constantly this blog and I am impressed! Extremely useful info specially the last part
I care for such information much. I was looking for this particular information for a very long time. Thank you and best of luck.
Report this comment
Like or Dislike:
1 
0
It’s not that I want to copy your web-site, but I really like the style and design. Could you tell me which style are you using? Or was it tailor made?
Report this comment
Like or Dislike:
0 
0
Very very good publish, thank you a lot pertaining to sharing. Do one happens with an RSS feed I can subscribe for you to?
Report this comment
Like or Dislike:
0 
0
Someone essentially help to make critically articles I would state. That is the very first time I frequented your website page and thus far? I surprised with the analysis you made to create this actual post extraordinary. Excellent activity!
Report this comment
Like or Dislike:
0 
0
I am delighted that I discovered this website, exactly the right info that I was looking for!
Report this comment
Like or Dislike:
1 
0
[...] Reading: Ron Paul on Legal Tender Laws No Comments Read [...]
Report this comment
Like or Dislike:
0 
0
beacon mantel clocks…
An impressive share, I just given this onto a colleague who was performing a little analysis on this. And he in fact bought me breakfast simply because I found it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for investing …
Report this comment
Like or Dislike:
0 
0
cheap fast cars…
There are certainly a great deal of details like that to consider into consideration. That is an excellent stage to bring up. I offer the thoughts over as general inspiration but clearly there are questions like the one you deliver up where the most es…
Report this comment
Like or Dislike:
0 
0
Nespresso…
Hello there, I found your website via Google while looking for a related topic, your web site came up, it looks great. I have bookmarked it in my google bookmarks….
Report this comment
Like or Dislike:
0 
0
Bass Fishing Boats…
Hey there, You’ve done a great job. I’ll certainly digg it and personally recommend to my friends. I am confident they’ll be benefited from this web site….
Report this comment
Like or Dislike:
0 
0
New Macbook Review…
Great post! I always look forward to checking your blog every day!
…
Report this comment
Like or Dislike:
0 
0
2011…
Everything is very open and very clear explanation of issues. was truly information. Your website is very useful. Thanks for sharing….
Report this comment
Like or Dislike:
0 
0
Potato And Leek Soup Prissy displace. I take something author provocative on trenchant blogs . It present ever be stimulating to have off their writers and recitation a less something from their keep. I’d prefer to use with all the assemblage in my l…
Prissy displace. I take something author provocative on trenchant blogs . It present ever be stimulating to have off their writers and recitation a less something from their keep. I’d prefer to use with all the assemblage in my little weblog whether yo…
Report this comment
Like or Dislike:
0 
0
Memory Foam Mattress Reviews It’s a salutary ignominy you don’t hold a supply money secure! I’d definitely employ money for this unusual webpage! That i speculate for the period existence i’ll be bookmarking together with including an individual’s Pr…
It’s a salutary ignominy you don’t hold a supply money secure! I’d definitely employ money for this unusual webpage! That i speculate for the period existence i’ll be bookmarking together with including an individual’s Provender that instrument my prim…
Report this comment
Like or Dislike:
0 
0
2011…
Thanks for another great article. Where else could anyone get that type of info in such a perfect way of writing? I have a presentation next week, and I’m on the look for such information….
Report this comment
Like or Dislike:
0 
0
free dating site in qatar…
Websites worth visiting……
Report this comment
Like or Dislike:
0 
0
Awesome website…
Really nice blog. I will check back for more information on this subject later….
Report this comment
Like or Dislike:
0 
0
Legal tender law, Federal Reserve notes & policy’s are illegal, the Us Congress has authority to create money.
+ we could add Bernanke to the world records, he will be remembered as the greatest thief of 20th / 21st century.
Go Ron Paul
»crosslinked«
Report this comment
Like or Dislike:
0 
0
Gold won’t really stop government manipulation and deficit spending. As long as they can keep printing bonds, they will promise anything in them, they can still offer taxpayers’ blood or public US lands, etc, for repayment.
For another take on Money, I reccomend Edwin C. Riegel’s ‘New Approach to Freedom’ and ‘Private Enterprise Money’.
http://www.mind-trek.com/treatise/ecr-pem/index.htm
Report this comment
Like or Dislike:
0 
0
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.
Reread. RP assertion above stands. “which state that government-controlled fiat currency MUST be accepted for many kinds of monetary transactions.”
Report this comment
Like or Dislike:
0 
0
Far be it for Me to contradict the Physician’s teachings. But, no federal statute exists requiring acceptance of legal tender. The US treasury’s website explicitly state My assertion as fact: http://www.ustreas.gov/education/faq/currency/legal-tender.shtml. I do agree a misconception exists among People leading Them to believe They must accept federal notes. However, several cases exist illustrating the misconception as just that: a misconception. An Attorney would be in a better position than I to elaborate on this issue, though.
Report this comment
Like or Dislike:
0 
0
the bailout is as R.Paul says. I despise any multimillionaire congress-person who votes for it. Just as bad as all those who voted for the patriot act without even reading it!!! notice how little you hear of Cheney or Haliburton these days. I’m disgusted by the super vague disclosure laws pertaining to politicians’ declaration of income & assets. Is our congress voting for the bailout because they themselves are heavily invested personally in these sinking ships? Do they ever REALLY vote for the consensus of those they are supposed to represent? In the interest of security to our nation, will G.W. use the financial corruption and failure to declare martial law?
Kick out the ‘Federal Reserve Board’ and get back to gold or silver or fresh eggs. Restore our Constitution while there remains a chance.
Get rid of the 2 Party system. You are merely Joe Blow representing the people of your district. People at the poverty level don’t benefit from tax credits. AGHHHHHHHHH
Report this comment
Like or Dislike:
1 
0
I think that the financial market problem was well timed for those in power. Everything begins to happen and receive media attention after the 2 presidential candidates had been decided. If these problems had been going on during the earlier campaigning, people would have been more likely to vote for Paul in the primaries. Now is the time for a 3rd party libertarian to rise onto the presidential scene. Is there no one willing or able to step up to the plate and receive some media attention so the american people know who he/she is?
Report this comment
Like or Dislike:
0 
0
Id just like to know your view of the apparrent agreement by both parties on the $700bn bailout, and i hope you(or someone near you) sees this comment so that you could give a reply.
thanks!
Report this comment
Like or Dislike:
0 
0
I have never felt so patriotic my whole life. Reading your content and seeing your viewpoint is refreshing and inspiring. I intend to really research the Libertarian candidate, as I cannot stomach the republicrats any longer. I think that my values fall in line with the libertarian mind set, but I am still researching it. I am encouraging others to do the same.
Thanks Ron Paul for speaking to me with truth and honesty in your messages!
Report this comment
Like or Dislike:
0 
0
Ron Paul is a genius. Too bad he is no longer running for president because he might have gotten elected and been able to do something about the mess we are in. All his posted discourses are fine and give us something to think about but, other than that, what do they really accomplish? Nothing. Thanks RP for dropping out of the race. Love ya.
Report this comment
Like or Dislike:
0 
0