Money FAQ

What Every American Citizen Should Know About Money

What is the definition of a dollar?
A dollar is a unit of measurement, much like a pound, a foot, or a mile. Specifically, the dollar is a unit of weight. It's defined as 24.75 grains of pure gold or 371.25 grains of pure silver in the U.S. Coinage Act of 1792.

What is fiat currency?
Fiat currency is currency that has no intrinsic value. It has no backing and would be entirely worthless, except for the fact that people have been persuaded to use and accept it as if it had value.

What is a money note?
A money note has a due date, amount of interest and place for redemption.

What is the intrinsic value of a given Federal Reserve Note?
It has no intrinsic value. It isn't even worth the 4.2 cents it cost to print it. Federal Reserve Notes are mere tokens representing a share of the National Debt.

Is the Federal Reserve Act Constitutional?
Yes, according to Article I, Section 8, Clause 17, if the jurisdiction of the Federal Reserve is limited to Washington, D.C. However, if the Federal Reserve is allowed to operate within the 50 States, the answer is no!

What is the money of account in your State and does it comply with the State Constitution?
There is no official money of account in your State. Federal Reserve Notes have usurped State-issued lawful money and today there is no State-issued alternative to using the debt based Federal Reserve Note.

What is the backing for the Federal Reserve Note?
United States National Debt.

What makes Federal Reserve Notes valuable?
The fact you can use them to pay your income tax and the misguided faith of the people in the banking system.

Who owns Federal Reserve Notes?
The privately owned Federal Reserve Banks owns all money in circulation. The Federal Reserve Notes are printed for 4.2 cents per bill, regardless of denomination, and then lent into circulation to be repaid at full face value, plus interest. The printing of the Federal Reserve Notes creates our National Debt.

What is fractional reserve banking?
Fractional reserve banking is the practice that allows all banks under the Federal Reserve system to operate on a fraction of their assets on deposit. This is usually about 9 times the amount of money on deposit! In other words, banks create money (credit based on debt) out of thin air, by making an electronic entry and lending it out at interest. This is how the vast majority of the commercial banks make $60 billion per year in profit. Out of thin air! .

Here is a simple analogy. Say you have a classic Ford Mustang you wish to sell, and you list it in the newspaper classifieds. Say I come by and purchase it from you for $5,000. I explain to you that I don't really have a place to keep the car, and so I'd like to keep it in your garage until I can build one of my own sometime later on.

You agree, and we part company. I now own the car, but it's still in your garage. I come by about one weekend a month to take the car out for a spin, and everything is fine.

Now you get an idea. Since I only come by on the third weekend of every month, you could "sell" the car again to someone else, as long as that other person agrees only to drive it on the first or second weekend of each month. You find another buyer and "sell" the car to her for another $5,000. You give her a fancy-looking title to the car that you created with a computer and a color laser printer. For a year or so, no problem! She drives the car on the first weekend, you clean it up on the second, and I drive it on the third. You've doubled your money, and no one is the wiser.

But trouble lurks. Eventually I build my garage and ask to have my car permanently. Now you have a problem. You've sold one asset two times, issuing two identical, official-looking titles, and now face a "run" - more than one owner wants the asset.

If that analogy sounds farcical, fictional, or nonsensical, it is because no private citizen would ever consider running a scheme like the one above. Anyone caught doing it would be thrown in jail. However, that is exactly what the U.S. Federal Reserve banking system has been doing for over 90 years! The money in your bank account do not actually belong to you, and they might not be available if you try to withdraw them! Fractional reserve banks operate on the assumption that not everyone will want their deposits back at the same time.

Nonetheless, this fraud would become readily apparent if there were ever a run on the banks. If all depositors were to withdraw just 10% of their deposits, the banks would have to close their doors! Even worse, if only 3% of the public withdrew their deposits, the situation would dwarf the Great Depression.

Should we the people actually own our money?
Yes, we should own our money and you do with the gold and silver Liberty Dollar. It is real money that is not under the control of the banks.

The Founding Fathers of this country believed that and specified that in the U.S. Constitution. Later, Thomas Jefferson described that in a letter to the Secretary of the Treasury, Albert Gallatin in 1802.

When was the Federal Reserve Act enacted by Congress?
In 1913.

When was the graduated Income Tax enacted?
Also In 1913. It was no coincidence that it was passed the same year that the Federal Reserve Act was passed.

Are income taxes related to the monetary system?
Yes, income taxes are needed to pay the interest on the money that is owed to the Federal Reserve Bank. Currently almost 50% of income taxes goes to pay the interest on the Federal Debt, and with more National Debt, the percentage is rising precipitously.

How are they related?
The current monetary system could not survive without the income tax money. The debt that backs our currency is created for and pays interest. The Federal Reserve issues more currency every year, hence more debt is entered onto the books. The interest payments continue to grow. The more money issued to pay the interest, the more debt is created. The entire system is a spiral that has only one possible outcome - monetary collapse.

The only lasting solution is a return to a sound money system that is 100% backed by precious metals. The Liberty Dollar offers such a solution.

Can debts be paid with Federal Reserve Notes?
Technically, No. A debt cannot be paid in fiat currency. They can only be discharged; that is, passed on to someone else.

Should the Federal Reserve Act be abolished?
Yes, before it collapse as it is not sustainable. In fact, if things continue in the direction they are going, the GAO's current estimates predict that this generation will face a tax rate of over 85% within their lifetime, simply to pay the interest on the ever ballooning National Debt.