By 1933 the Federal Reserve Bank had 'loaned' so many FRNs into circulation that it became impossible for the Federal Reserve or the U.S. Treasury to ever fulfill their contractual obligations and redeem all those FRNs in Dollars and the Federal Reserve along with the Treasury and the United States went into bankruptcy as evidenced by the passage of House Joint Resolution 192 which, in effect, monetized the debt. In other words, the 'IOU one Dollar' was no longer redeemable in Dollars and the acceptance of such was mandatory and required the discharging of any accrued debt. This meant in short, that no one was going to get paid ever again �" at least not in Dollars but instead with IOUs. The acceptance of the IOU by law was monitory and resulted in the acceptance of payment or discharge of debt. This resolution resulted in the END OF THE DOLLAR as the United States national currency and it was then replaced by the Federal Reserve Note -- an IOU. Since gold would no longer be needed, it was rendered illegal, at this time, to own gold and all gold was confiscated from the people.

The 'IOU one Dollar' has consequently been colloquially misnamed as the 'Dollar' as it replaced the Dollar and the Dollar was consequentially removed from circulation. Dollar coins, however, continued to circulate up until 1964 after which time they became debased to reflect the falling value of the non-redeemable IOU (FRN). The FRN was and still is not a 'Dollar'. A Dollar was and still is defined as 371.25 grains of silver. So those who use terminology such as 'Dollar Meltdown' are factually incorrect (sorry Charles), for in fact it should be termed the 'FRN meltdown'. I, in fact, have some of those Dollars in the form of Morgan Dollars and as of yet I have not seen them 'melt down' but they have instead retained a significant purchasing power.

The scenario I present here is different than commonly understood, because, the thought of our national currency 'the Dollar' melting down is quite scary and presents a dire situation where we are left with no currency to conduct business. On the other hand, the thought of the FRN melting down might bring joy and spring in one's step, at least for those in the liberty community, being that the goal is to end the FRN, anyway, and its demise only aids in our cause. The problem that comes into play is when one is still dependent on the FRN and is still exchanging ones' labor for it. Then the meltdown of the FRN results in the meltdown of the individual dependent upon it.

The Exodus from Slavery
The transition from slavery to freedom goes like this: First, eliminate credit card debt by whatever means necessary. It may mean default; it may mean paying it down; it may mean debt negotiation; or any other creative means that only individuals such as Morpheus could dream up. Second, a paper FRN is better than a digital FRN. Keep money in the banking system only for paying bills that cannot be paid for with cash. No loans for no reasons. Not even houses or cars. Buy at auction, pay with cash.

Every FRN in circulation was spent into circulation by someone who borrowed it into existence and is still paying interest on it. Remain cognizant of the giant sucking sound that is constantly sucking money out of circulation in the form of interest. And remember there is never enough money in circulation to pay the interest plus the principal on the money in circulation. Loans defaulted on, result in effect, of the creation of an interest free fiat currency. All that money is spent into the community (hopefully, and not sent to china) while the interest on the debt is nullified. This allows many transactions for free without the cost of the interest on the currency. This is far superior to an interest bearing fiat currency. Dave Ramsey says to be debt free is the new BMW. I say to default on a loan is the new BMW. Congratulate your neighbors and bring them gifts every time they default on a loan because they are stimulating the economy by spending money into circulation and then nullifying the debt on that money. The money that is spent into circulation does not disappear when the debt disappears; it continues to circulate, and it’s even better if it is converted to cash.

Of course this is a temporary solution and should be followed with the use of silver coins that are circulated into the community to replace the fiat paper. Silver coins can circulate thousands of times at zero cost to the community being that they are not borrowed into existence and have no debt attached to them. They are also, obviously more stable than paper. Buy and hold silver coins, but most importantly get rid of them. Take them to your local farmer’s market and see who will accept them in exchange for beats or carrots. Wealth comes through trade, not hording.

A simple hypothetical example (something that I’m not advocating for, and don’t understand the legality of, but for illustrative purposes only). Say one borrows one hundred thousand FRNs, converts them to silver coins, and then uses the silver coins to pay members in his community to say build a house. He then consequently, defaults on the debt. The debt is gone, and the house gets resold at a fraction of the cost to another member in the community. Meanwhile, the silver is still circulating in the community and being used to fund many new projects and bringing wealth to the community. Banks soon learn they can’t make money in the banking industry and, consequently, determine that they must take up new skills to survive like farming or laying bricks.

We Are Not Going Back to the 1700s �" The Role of Technology
The responses from many when first encountering sound money arguments are, “why would we want to go back to the 1700s”. The answer is that we wouldn’t. We want to go forward to the future of space colonies and flying cars. The path the get there requires the principals that we learned in the 1700s.

Computers and the internet are not going away. They will be the vehicles that will springboard us to our goals. There is a strong need for digital currencies and still much freedom on the internet. And on internet, THERE ARE NO BORDERS. Now is the time to strike, while we still have this freedom.

What we can learn from the Federal Reserve System is the convenience factor. To penetrate the soccer moms of America (not literally), we will need to compete with the convenience of the FRN, without the debt slavery and without the instability. The success of the Federal Reserve System is in part due to the standardized clearing house transaction protocol. It doesn’t matter where one banks, a routing number and an account number will enable the transfer of funds electronically from one’s bank to any other bank nation-wide (or even globally for that matter).

To ultimately eliminate the FRN from our lives, we need the equivalent of this in the freedom community. It wouldn't necessarily need to be centralized, but we do need a common protocol or a language that is open that all computers will be able to speak. Simple canned code snippets could be inserted into web sites everywhere that communicate with distributed currency exchanges similar to the design of BitCoin; but linking gold backed currencies rather than a fiat currency. This would enable various existing hard currency organizations to transfer value, gold silver, or whatever back and forth electronically.

Private investors could facilitate the currency exchange by placing buy and sell orders in various currencies reducing the commission cost of currency conversion through competition. In essence it means a redesign of Wall Street; a Wall Street exchange, by the freedom movement, and for the freedom movement.

The Liberty Trade Project
As a result of the preceding information, we have begun a project called LibertyTrade.net. The first part of the project is simply to facilitate the posting of items for sale while enabling the use of competing currencies. Although in the future, there will most likely be a convergence into a single currency standard, (because the world will most certainly demand it), it is important at this time to facilitate an open market with competing currencies of different types. Ultimately the market will determine what the end currency will look like but I’m guessing that it will not look like the FRN which is currently gasping for its last breath!

As of yet LibertyTrade.net has not implemented transactions using digital currencies, but instead, it currently allows search and posting of various currency types. It currently operates much like craigslist.org only with some additional features. It allows the posting of items for sell with a title, description, and images. The seller can also specify what currencies they will accept. When buyers search on the sight, they will be able to search on a given currency and the search results will display the items for sale from sellers who accept that currency. In the future we will also be enabling the use of different types of digital currencies and allow transactions much like ebay with paypal.

We are also currently working on a joint venture with freedomsphoenix.com that will be available in a couple of weeks. It will allow sellers to sell items and get paid in silver ‘dime cards’ which will be code named ‘shinies’ from the popular sci-fi series Firefly. Merchants will be able to post items for sell and specify as a currency accepted a ‘shiny’ and when a buyer buys an item, they will be able to go through Dwolla.com (allows bank-to-bank FRN cash transactions) to purchase ‘shinies’ from freedomsphoenix.com that will then get shipped as payment to the seller.

 

The sound money movement is growing rapidly and with this increased awareness and with technology on our side, we will soon be able to blaze past the Federal bureaucrats and they won’t even know what hit them. The future is, indeed, bright and exciting and the free market of ideas will bring us the tools that we need to make it happen.