The Ghost of Money
At the start of the Ukraine war, Biden placed a number of economic sanctions on Russia thinking that they would be able to deliver Russia a strategic defeat. The biggest sanction imposed, however, was Biden’s decision to weaponize the paper dollar by removing Russia from the Swift system.[1]
Swift is a co-operative that facilitates “trillions of dollars worth of transactions” a day.[2] Removing Russia from that system basically made them a pariah and unable to trade beyond their own borders. By excluding Russia from international trade, many were worried that Biden’s use of the dollar in this way “would accelerate efforts by it [Russia] and China to create rival payment systems that did not use the US dollar.”[3] Not surprisingly, this acceleration did happen.
Reacting to the fallout from Biden’s disastrous decision recently prompted President Trump to threaten the group looking to unseat the dollar’s reign in the international arena. Known as the BRICS[4] nations, President Trump threatened BRICS with 100% tariffs, if they back any currency that seeks to replace the “mighty U.S. dollar” as the world’s reserve currency[5] a process also known as de-dollarization. BRICS has expanded to a total of 9 countries with three more making applications to join, and 30 others interested in joining as well.[6]
The warnings in this arena have now shifted towards President Trump as others are now warning that “If Trump made good on his threats, this would accelerate dedollarization, speed up global efforts to reduce dependence on key US exports, and quickly bring a nation that has spent decades exchanging green pieces of paper for real, physical goods to the brink of economic ruin.”[7]
This warning highlights the basic weakness of the U.S. dollar. We have convinced the entire world that worthless little “green pieces of paper” are actually the most valuable commodity on the planet. Unfortunately, as with all scams, the façade is about to fall and will take us all down with it.
The scam actually began with the design of the paper dollar by using a portrait of our first and greatest president on the dollar bill. Given his feelings on the subject of paper money, the whole thing, no doubt, was concocted as a way to create the illusion of legitimacy. In monetary circles, this would be known as a counterfeit narrative!
In a letter written to Jabez Bowen dated January 9, 1787, George Washington wrote that “Paper money has had the effect in your State that it ever will have, to ruin commerce—oppress the honest, and open a door to every species of fraud and injustice.” Given his strong sentiment, it is clear that he would never have changed his position on the matter. He wasn’t alone in his feelings on the subject, either.
James Madison, aka the Father of the Constitution, called paper money a “wicked project” and a “pestilence.”[8] Thomas Jefferson agreed with these assessments. “Paper is poverty,” he argued in 1788. “It is only the ghost of money, and not money itself.” Later in 1817, he wrote that “Paper money’s abuses also are inevitable and, by breaking up the measure of value, make a lottery of all private property.”[9]
More importantly, Congress has no constitutional authority to authorize the printing and use of paper money. Under the U.S. Constitution, Congress is only given the power to “coin money.” More importantly, according to Madison, the absence of paper money in the Constitution was not an oversight. In fact, the topic was hotly debated during the Constitutional Convention.
On a motion to strike the words giving Congress the power to “emit bills of credit on the credit of the US,” James Madison explained in a footnote that he voted to strike those words being inserted into the Constitution when he “became satisfied that striking out the words . . . would only cut off the pretext for a paper currency, and particularly for making the bills a tender for public or private debts.”[10]
After the debate on paper money concluded, the authorization to grant Congress the power to print paper money in the Constitution was voted down – making gold and silver the only money authorized by the Constitution.[11] People tend to forget that the federal government is a government of delegated and limited powers, and that it can only exercise the “few and defined powers” delegated to it in the Constitution.[12] It cannot assume powers. The power to print or authorize the printing of paper money is not mentioned in the Constitution, which means it does not have that power.
The foundation of our monetary history can be summed up with one short sentence found in the 1844 Supreme Court case Gwin v. Breedlove,[13] wherein the U.S. Supreme Court (hereinafter “SCOTUS”) wrote, “By the Constitution of the United States, gold and silver coins made current by law can only be tendered in payment of debts.” Everyone understood at the time that paper currency was not allowed under the U.S. Constitution, and that the only legal currency is gold and silver.
Daniel Webster, who was one of our greatest U.S. Senators, eloquently affirmed this lost truth. He was unrivalled as an orator and a statesman. He was also an attorney who lived and served in the early nineteenth century and eloquently noted on the Senate floor what everyone knew at the time – Congress “clearly has no power to substitute paper, or anything else, for coin, as a tender in payment of debts and discharge of contracts.”[14]
He went on to argue that this principle was actually “sacred” and should be held as such at all costs: “The legal tender, therefore, the constitutional standard of value, is established and cannot be overthrown. To overthrow it, would shake the whole system. The constitutional tender is the thing to be preserved, and it ought to be preserved sacredly, under all circumstances.”[15]
Unfortunately, his counsel along with the Constitution itself were ignored some 35 years later by a rogue Supreme Court which lacked the same kind of respect for our sacred founding document as did Senator Webster and many others at the time. Unfortunately, at the start of the Civil War, Congress ignored what everyone understood at the time and printed up $150 million in paper money, also referred to as “greenbacks”, in order to fund the war. SCOTUS actually dodged the case that was filed to challenge Congress and would not hear the case.
It was not until after the war that SCOTUS finally heard another case challenging the unconstitutional decision of Congress to print paper money. In that case, SCOTUS agreed that it was unconstitutional. SCOTUS noted that, before the war, those who “doubted” or “who were strongly averse” to paper currency “were silent” or “felt themselves constrained to acquiesce” by “the advocates of the measure.” Chief Justice Chase, who as Secretary of the Treasury at the start of the Civil War, admitted to being one of those who “acquiesced,” but stood up to the paper money powers and struck down the power of Congress to print paper money saying that it was not in line with “the letter and spirit of the Constitution.”[16]
Yet, the paper money forces were not to be denied. Just two years later, following a shake-up of SCOTUS, another case came before the Court, and it overruled itself on the matter. In that case, SCOTUS claimed that since “every independent sovereignty other than the United States” could print paper money, we were at a disadvantage. SCOTUS then used this argument as justification for ignoring the Constitution because, without the power to print paper money, it meant that the government lacked the “means of self-preservation.”[17] With their decision, it meant that Congress would be allowed to print all of the paper money their greedy little hearts desired. Now you know why Congress won’t ever balance the budget. Why would it? If it can print as much money as it wants, there is no motivation to be frugal.
Just as Daniel Webster warned, our economic system has been shaken many times since that fateful moment. It has ripped us from our constitutional core and thrown us into a lawless, war-driven economy with all of its busts and booms and has swung wide open the door for our national government to run wild with no limitations on its powers.[18]
Every problem in our society today can be traced directly back to the decision to ignore the Constitution and allow the printing of paper money. Instead of trying to prop up a failing unconstitutional monetary system that forces everyone in the world to us worthless little “green pieces of paper” to buy and sell with, President Trump should focus on our U.S. Constitution and not some scam created by a bunch of evil and conspiring politicians who have no regard for the rule of the Supreme Law of the Land.
We need to return to the gold and silver coins of our U.S. Constitution instead of the mere “ghost of money” before it’s too late.
Madame Publius
[1] https://www.cnn.com/2022/02/26/politics/biden-ukraine-russia-swift/index.html
[2] https://www.ft.com/content/69f72de5-d727-496d-9f9d-316db7bdaf03
[3] Id.
[4] BRICS stands for Brazil, Russia, India, China, South Africa. Three other countries have applied to join BRICS -- Turkey, Azerbaijan, and Malaysia – while many others have expressed an interest in joining the bloc.
[6] https://finance.yahoo.com/news/trump-threatens-100-tariff-bric-190819520.html
[7] https://sputnikglobe.com/20241201/trumps-threat-of-100-tariffs-targeting-brics-would-blow-up-in-americas-face-heres-why-1121061233.html
[8] Madison, The Federalist Papers, Ltr. 44, ¶4.
[9] https://www.nationalreview.com/2011/07/founders-no-fans-paper-currency-deroy-murdock/ (emphasis added)
[10] https://fee.org/articles/the-constitution-and-paper-money/
[11] James Madison’s Notes of the Constitutional Convention, August 16, 1787.
[12] Madison, The Federalist Papers, Ltr. 45, ¶6.
[13] 43 U.S. (2 How.) 29 (1844)
[14] Daniel Webster, in a speech before the Senate on December 21, 1836. From A plea for the Constitution of the U.S. of America: wounded in the house of its Guardians by George Bancroft, pp. 93-94.
[15] Id. (emphasis added)
[16] Hepburn v. Griswold, 75 U.S. 603 (1869)
[17] Knox v. Lee, 79 U.S. 457,529 (1871)
[18] I’ve written extensively about this topic in my recent book, The U.S. Paper Dollar: “Alarming as the mark of the Beast in Revelations” by Madame Publius. https://a.co/d/d1WQmCg