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9. Determine the number of all the Federal Reserve Notes in circulation and then calculate the real-dollar value of each one by dividing the value of the precious metals by the number of Notes.
10. Retire all Federal Reserve Notes from circulation by offering to exchange them for dollars at the calculated ratio. There will be enough gold or silver to redeem every Federal Reserve Note in circulation.1
11. Convert all contracts based on Federal Reserve Notes to dollars using the same exchange ratio. That includes the contracts called mortgages and government bonds. In that way, monetary
values expressed within debt obligations will be converted on the same basis and at the same time as currency.
12. Issue Silver Certificates. As the Treasury redeems Federal Reserve Notes for dollars, recipients will have the option of taking coins or Treasury Certificates which are 100% backed.
These Certificates will become the new paper currency.
13. Abolish the Federal Reserve System. It would be possible to allow the System to continue as a check clearing-house so long as it did not function as a central bank. A check clearing-house will be needed, and the banks that presently own the Fed should be allowed to continue performing that service. However, they must no longer receive tax subsidies to operate, and competition must be allowed. However, the Federal Reserve System, as
presently chartered by Congress, must be abolished.
14. Introduce free banking. Banks should be deregulated and, at the same time, cut loose from protection at taxpayers' expense.
No more bailouts. The FDIC and other government 'insurance'
agencies should be phased out, and their functions turned over to real insurance companies in the private sector. Banks should be required to keep 100% reserves for demand deposits, because that is a contractual obligation. All forms of time deposits should be presented to the public exactly as CE)s are today. In other words, the depositor should be fully informed that his 1. Since the v a l u e of F R N s w o u l d be f i r m l y established in t e r m s of real dollars, there w o u l d b e n o c o m p e l l i n g reason t o exchange t h e m , a n d i t i s possible that p e o p l e w o u l d c o n t i n u e t o use t h e m i n d a i l y commerce. Therefore, t o retire the F R N s a n d m a k e the t r a n s i t i o n as q u i c k l y as possible, it w o u l d be necessary to have the b a n k s a u t o m a t i c a l l y exchange t h e m for real d o l l a r s w h e n e v e r they are deposited.
I n s h o r t o r d e r , t h e y w o u l d become collectors' items a n d historical curiosities.
A REALISTIC SCENARIO
577
money is invested and he will have to wait a specified time before he can have it back. Competition will insure that those institutions that best serve their customers' needs will prosper.
Those that do not will fall by the wayside—without the need of an army of bank regulators.
15. Reduce the size and scope of government. No solution to our economic problems is possible under socialism. It is the author's view that the government should be limited to the protection of life, liberty, and property—nothing more. That means the
elimination of almost all of the socialist-oriented programs that now infest the federal bureaucracy. If we hope to retain—or perhaps to regain—our freedom, they simply have to go. To that end, the federal government should sell all assets not directly related to its primary function of protection; it should privately sub-contract as many of its services as possible; and it should greatly reduce and simplify its taxes.
16. Restore national independence. A similar restraint must be applied at the international level. We must reverse all programs leading to disarmament and economic interdependence. The
most significant step in that direction will be to
There are hundreds of treaties and administrative agreements that must be rescinded. There may be a few that are constructive and mutually beneficial to us and other nations, but the great majority of them will have to go. That is not because we are isolationist. It is simply because we want to avoid being engulfed in global tyranny.
Some will say that paying off the national debt with Federal Reserve Notes amounts to a repudiation of the debt. Not so.
Accepting the old Notes for payment of taxes is not repudiation.
Exchanging them for their appropriate share of the nation's gold or silver is not repudiation. Converting them straight across to a sound money with little or no loss of purchasing power is not repudiation. The only thing that would be repudiated is the old monetary system, but that was
It has been their ticket to profit and power. Inflation is repudiation on the installment plan. The present system is a political trick, an 578
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accounting gimmick. We are merely acknowledging what it is. We are simply refusing to pretend we don't understand what they are doing to us. We are refusing to play the game any longer.
MEASURING THE SIZE OF THE HANGOVER
So those are the sixteen steps, but what are their effects? It should come as no surprise that there is a price to
