You appealed to yourself as an authority on finance and economics.



Barter and alternative currency are "allegedly" (see below) legal, but not to repay public or private debts. You could not give a bank $10,000 worth of pigs to pay off a $10,000 loan, nor could you give the government $10,000 worth of pigs to pay off a $10,000 tax bill.

Now when you consider what percentage of the economy these types of payments are, it's easy to see how a de facto ban on other forms of currency has taken place - and that was exactly the intention of those who crafted the system.

Actually, the government does threaten people who choose to use a different currency:

'Liberty Dollars' Can Buy Users A Prison Term, U.S. Mint Warns

"So says the U.S. Mint, which would like to remind Liberty Dollar users that since the United States already has its own currency, the only thing Liberty Dollars buy in these parts is a jail term."

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Gold has intrinsic value besides its value as money. Fiat currency does not. If the legal tender laws were repealed tomorrow, no one with half a brain would use federal reserve notes, because they're worthless without the government forcing you to use them. Choosing a form of currency is a peaceful, honest, voluntary activity. Government has no right to interfere in this choice.

Expanding the money supply does not "grow" the economy. Expanding the money supply creates inflation, as proven by Milton Friedman:

"... a world monetary system has emerged that has no historical precedent: a system in which every major currency in the world is, directly or indirectly, on an irredeemable paper money standard . . . It is worth stressing how little precedent there is for the present situation. Throughout recorded history . . . commodity money has been the rule. So long as money was predominantly coin or bullion, very rapid inflation was not physically feasible . . . The existence of a commodity standard widely supported by the public served as a check on inflation .. . The key challenge that now faces us in reforming our monetary and fiscal institutions is to find a substitute for convertibility into specie that will serve the same function: maintaining pressure on the government to refrain from its resort to inflation as a source of revenue. To put it another way, we must find a nominal anchor for the price level to replace the physical limit on a monetary commodity." - Milton Friedman, "Monetary Policy in a Fiat World"

The reason we've been able to avoid hyperinflation so far is because the income tax is used as a buffer against the fiat currency. If you repealed the income tax tomorrow and allowed the government to print money at the same leves they do today, you would see runaway hyperinflation similar to what happened in Germany in the 1920's.

The Federal Reserve now admits Friedman's conclusions are correct:

"The "Great Inflation" of the 1970's challenged and permanently altered economic theory. It vindicated the once-controversial analysis of Milton Friedman, then at the University of Chicago.

"Friedman's monetary framework has been so influential that in its broad outlines at least, it has nearly become identical with modern monetary theory," said the Federal Reserve governor Ben S. Bernanke, at a recent conference at the Federal Reserve Bank of Dallas. (The full text of his speech is available here)

Mr. Bernanke is not a former Friedman student. He did his graduate work at M.I.T. Someone reading Milton Friedman's monetary economics today is likely to miss its significance, Mr. Bernanke noted, much as an apocryphal student called Shakespeare's plays "just a string of quotations."

"His thinking has so permeated modern macroeconomics that the worst pitfall in reading him today is to fail to appreciate the originality and even revolutionary character of his ideas, in relation to the dominant views at the time that he formulated them," he said.

Against the conventional wisdom, Mr. Friedman argued that "inflation is always and everywhere a monetary phenomenon." Inflation had nothing to do with aggressive unions, greedy businesses or even oil cartels -- the bad guys who took the blame in the confusing 1970's. Prices shot up everywhere because the federal government made the supply of money grow faster than the real economy created value. Based on the historical record, he argued, the effects of monetary policy were fairly predictable.

In a 1970 lecture, "The Counterrevolution in Monetary Theory," Mr. Friedman outlined 11 propositions about how monetary policy affects the economy. All were wildly controversial, almost disreputable, at the time. Most are accepted today."

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"All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident." - Schopenhauer