Forum Post: What Is A "Dollar"?
Posted 12 years ago on Dec. 4, 2011, 10:12 p.m. EST by ProAntiState
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What Is A "Dollar"?
An Historical Analysis Of The Fundamental Question In Monetary Policy by Edwin Vieira, Jr.
Introduction
The question "What is a 'dollar'?" may seem trivial. Everyone knows what a "dollar" is - or, at least almost everyone thinks he does. In fact, however, very few people could correctly define a "dollar.” And even fewer know why a correct definition is vital to their continued economic and political well-being.
Analysis
- Why is a correct definition of the term "dollar" important?
The United States has a highly advanced free-market economy. In a free- market economy, the prices of almost all goods and services are stated in units of money. Under present law - and, as will be described below, from the very beginnings of this country - "United States money is expressed in dollars .”1 Moreover, all "United States coins and currency (including Federal Reserve Notes ) are legal tender for all debts, public charges, taxes and dues.”2 Thus, all "coins and currency (including Federal Reserve notes * )" that are "expressed in dollars" are both money and legal tender. For this reason, accurately defining the noun "dollar" is mandatory, in order to know what is supposedly the official "Money" of the United States and what constitutes "legal tender for all debts, public charges. taxes and dues.”3
- Do the present monetary statutes intelligibly define the "dollar'"?
Unfortunately, the present monetary statutes do not define the "dollar" in an intelligible fashion.
a. Federal Reserve Notes. Most people associate the noun "dollar" with the Federal Reserve Note ("FRN") "dollar bill,” engraved with the portrait of President George Washington. This association is mistaken.
No statute defines - or ever has defined - the "one dollar" FRN as the "dollar,” or even as a species of "dollar.” Moreover, the United States Code provides that FRNs "shall be redeemed in lawful money on demand at the Treasury Department of the United States * or at any Federal Reserve bank.”4 Thus, FRNs are not themselves "lawful money" - otherwise, they would not be "redeemable in lawful money.” And if FRNs are not even "lawful money,” it is inconceivable that they are somehow "dollars,” the very units in which all "United States money is expressed.”5
People are confused on this point because of the insidious manner in which FRNs "evolved" - actually, degenerated is a more appropriate verb - from the late 1920s until today. FRNs of Series 1928 through Series 1950E carried the obligation "The United States of America will pay to the bearer on demand [some number of] dollars.” Prior to 1934, the notes carried the inscription "Redeemable in gold on demand at the United States Treasury, or in gold or lawful money at any Federal Reserve Bank.” After 1934, the notes carried the inscription "this note * is redeemable in lawful money at the United States Treasury, or at any Federal Reserve Bank" (post-1934). Starting with Series 1963, the words "will pay to the bearer on demand" no longer appear; and each FRN simply states a particular denomination in "dollars.”
With and after Series 1963, the promise of redemption also vanished from the face of each note.6 Thus, on their faces FRNs became, in the apt description of banking expert John Exter, an "I.O.U. Nothing" currency. This change in the mere language printed on FRNs could not transform their legal character, however. If FRNs were not "dollars" when they explicitly promised to pay in gold or "lawful money,” they did not magically become "dollars" when they stopped explicitly promising to pay in anything at all.7
b. United States coins. The situation with coinage is more complex, but equally (if not more) confusing. The United States Code provides for...
http://www.fame.org/HTM/Vieira_Edwin_What_is_a_Dollar_EV-002.HTM
Whatever the value of a dollar is, you can be sure that it won't be nearly as much when hyper-inflation kicks in. It's the only way the current administration can deal with the enormous amount of debt we have. Just watch.
Correcting a few mistakes: The SECRET BAILOUT of domestic and foreign banks, to the tune of $16 trillion dollar$, is a NOT FREE MARKET principle.
Anybody who states: "The Free Market is Capitalism" are wrong. Capitalism is a society's enforcement of ownership laws. The Free Market is one way to represent the motive for economic activity. There are, of course, other representations.
Anybody who states: "Only Real Americas" support the Free Market are wrong. The Free Market has NO LOYALTY to a government. The Free Market mechanism can be summed up as a "Tug of War" between "FEAR and GREED. I feel sorry for money managers like PIMCO's Bill Gross. He got chastised for not buying US Debt. because he stated it was a bubble.
It has become apparent that one form of "lawful money" has become mortgage debt. In effect, the Federal Reserve is in the process of trying to make your house a fractional banking system. But, your house does not meet reserve requirements. The mortgage holders do not expect your house to pay the mortgage, they expect the homeowner to do it. Banks are still insolvent because housing price is still in decline. $16 trillion dollar$ will not be enough.
Fannie and Freddie's accounting fraud has placed trillions of fraudulent mortgages in the financial system. G.W. Bush's stance on Reagan proved that DEBT did not matter has, in effect, HYPER-INFLATED housing prices. The mechanism for this hyper-inflation is through Taylor's rule on the User Cost of Capital with respect to housing prices. Trillions of dollars of Freddie and Fannie's fraudulent mortgages can effect the housing prices nation wide. Their accounting fraud was at the national level, not at the local level were their mortgage came from. This is the primary reason "Tranching" was not effective in mitigating the financial crises.
Something to wipe my ass with.
See http://en.wikipedia.org/wiki/Spanish_dollar.