- Fiat monetary system and paper money inflation being some of the greatest enemies of liberty and prosperity of the people, legal tender laws are strictly forbidden.
Since no individual can rightfully force his neighbor to transact or not to transact in certain medium of exchange, he cannot delegate such authority to his government. Also, free competition in currencies, by the force of Free Market, prevents the government from plundering the people through legalized counterfeiting and debasing of the currency.
Therefore: the government shall make no law establishing an exclusive form of currency that the people are forced to use in private transactions, neither shall it prevent operation of private currencies, mints, or free competition in currencies among private citizens, nor charge capital gain, sales, or any other taxes, duties or fees on the medium of exchange. The right of the people to transact among themselves in any currency they choose shall not be abridged.
Brief explanation of the benefits of this amendment:
- Fiat (unbacked) "money" is the single greatest instrument of plunder ever invented by the mind of man. Free Competition in currencies kills fiat, because fiat cannot exist without a government forced monopoly and coercion, because, again, fiat (unbacked) currency is nothing but an instrument of plunder of the people by the government, via legalized counterfeiting and inflation. Free Market, absent government coercion, will reject such a fraudulent currency, because no one likes being plundered!
So, Free Competition in currencies slays fiat, and with it welfare state and war state, because it makes it impossible for the government to rob and plunder the people, and steal their wealth through legalized counterfeiting and inflation.
Thus, Free Competition in currencies binds the government down with the chains of sound money, making possible liberty and prosperity of the people.
Money rules the world, and he who rules the money rules the world. No law gives government more power than legal tender law, for it creates a government forced monopoly on counterfeiting; allowing politicians and the bankers who bought them to confiscate people's property through the most insidious and deceitful tax of all -- counterfeiting and inflation.
This one amendment, if implemented, would end government fiat, because it cannot exist without coercion. And government fiat will be rejected in a free market of currencies in favor of a more honest and stable one, such as a 100% commodity based, interest free currency. As the result it would effectively end war-state and welfare state, for it would make it IMPOSSIBLE for the government to fund all these unconstitutional ventures through the evil and insidious robbery known as legalized counterfeiting and inflation.
This amendment does not force anyone to do anything, but on the contrary, frees people up, to allow competition in currencies, so the good money can crowd out the bad. Imagine, for instance, gold or silver money, competing side by side with Federal Reserve Notes. People will soon notice that the purchasing power of their gold money is constantly increasing, while the purchasing power of unbacked paper money is constantly going down. It will have the appearance of prices going up when expressed in Federal Reserve Notes, and at the same time the prices on the same items expressed in gold or silver money going down! Which money do you think people will prefer to get paid in? That money which preserves and increases their purchasing power of course! When this happens people will begin rejecting Federal Reserve Notes in favor of a more sound 100% commodity based currency! Thus once government force is removed from the realm of money and free competition in currencies is allowed, fiat debt based money will end, because they will be rejected by the free market! You do not need legal tender laws to force people to accept good and honest money, but only bad and dishonest ones. The dirty little secret is that you only need legal tender laws if you are going into government forced counterfeiting business. That is the only reason for such laws.
The problems in our monetary system were created by introduction of improper government force into the realm of money, creating a government forced counterfeiting monopoly known as fiat; therefore the solution is to remove that improper government force, which would kill fiat, and allow Free Competition in Currencies, which will result in establishing of the most stable and honest monetary system known to man by the force of Free Market (most likely 100% commodity based monetary system like gold or silver), because no one likes being plundered.
Money is just another product that is used as a medium of exchange. And free market can perfect that product just as much as it can perfect a car, an iPod or a light bulb, much better than the government ever can. And if people are truly free, they should be able to choose any medium of exchange they wish, as long as they commit no fraud.
To criticism that it would produce chaos:
Any manner of chaos is better than the forced, orderly plunder and confiscation of people's property through paper money inflation, that is the only alternative to this amendment. Of course, if gold and silver were the only tender used by the government (as Constitution demands) this problem would be largely alleviated, but the problem I see is that the government could (unconstitutionally) make government issued paper receipts for gold or silver to be legal tender, and then inflate the receipts. (This has actually happened in the early 1900's.) If a private bank did this and there was a run on the bank it would go bankrupt, but in case of government they will put taxpayers on the hook for this. (Hence was Roosevelt's forced confiscation of people's gold in 1930's to remedy such a run on banks, so people could not demand their gold anymore.) So it's better explicitly put government out of legal tender business all together. The free market can decide perfectly well what the medium of exchange should be.
To criticism that these provisions are already implied in the existing Constitution, we say true, (the authority to establish a legal tender,--an exclusive monopoly on the means of exchange,--is not granted in the Constitution, therefore it is denied under the 10th Amendment), but it was already subverted and ignored by the Congress for over a century, so we are adding stronger language in the form of an explicit amendment, so that the Congress may not easily subvert and overturn it again. It's all about persuasion in the end: the more clear, persuasive and explicit the law is, the more likely the people will uphold and obey it to preserve their liberty (the need amply demonstrated by the last 100 years).
Plus, allowing free competition in currencies is the most harmonious and the least disruptive way to restore an honest and sound monetary system. Let free market decide, or in other words, let the people decide. And then the most efficient and most stable monetary system will naturally emerge, which historically always has been gold and silver. Freedom and prosperity will win out in the end.
If these six words, "legal tender laws are strictly forbidden" were part of the Constitution, we would've had a very different country now!
Remember: "Government forced Paper" = Tyranny; Gold + Silver + Righteousness = Liberty.
This is the key of power right here. Paper money fraud is what empowers the government to step out of its Constitutional bounds and become a tyrant through counterfeiting and theft; and Gold makes all this for the government impossible, and binds this fraud down, keeping people free and prosperous.
The best way to restore such honest and stable, 100% commodity based monetary system, is to allow free competition in currencies which is the goal of this amendment.
- Paper = Tyranny;
Gold + Silver + Righteousness = freedom!
The choice is yours!
This amendment is part of 5. Please see here: The Fundamental Principles of Liberty