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moneymetals

Trump’s bellicose rhetoric contrasts sharply with his prior posture

Well now, without further delay, let’s get right to this week’s exclusive interview.

George leef

Mike Gleason: It is my privilege now to welcome Forbes Magazine columnist George Leef. George is a hard money advocate and a law graduate who has dedicated his professional life to teaching and education rather than practicing law, and over the past fifteen years has worked at the James G. Martin Center for Academic Renewal, a free market think tank that takes a critical view of higher education. Underneath George's byline on any of his Forbes.com columns, you'll find the words, "I write on the damage big government does, especially on education." And today, we're going to get into just how uneducated many are when it comes to the government's heavy-handed role as to our money.

George, thank you very much for taking the time to visit with us today. How are you?

George Leef: I'm very good, and my pleasure to be on with you, Mike.

Mike Gleason: I'm excited to cover this topic with you and first would like you to brush up our listeners on the role the US government was originally designed to play vis-à-vis our money. And contrary to popular belief, nowhere in the Constitution do we find anything about granting our governmental overlords a monopoly power in the creation of money, do we?

George Leef: No, we don't. The Constitution sets forth the powers that the government is supposed to have. In Article 1, Section 8, the powers of Congress are enumerated and that includes the power to coin money and regulate the value thereof and also the power to punish counterfeiting of US securities or US money. As I note at the beginning of my article, which is available on Forbes.com, that does not include the power to create a governmental monopoly in the creation of money. There would be no reason to think that the founders would have wanted such monopoly for several reasons. They had been unhappy with British monopolies like the East India Company that tried to sell them overpriced tea, and we know what happened to that tea.

We also know that at the time prior to the founding and after the ratification founding, there was lots of non US-produced coinage in circulation. There were coins in circulation that had been minted by the Spanish government. That's where we got the idea that the “piece of eight” and “two bits”. The colonists liked to cut the Spanish eight-real piece up into smaller pieces and they used that in trade. There were also privately minted coins in circulation. The people who wrote the Constitution knew about this and it didn't bother them in the slightest.

What they had in mind as the monetary system of the new country would be based on gold and silver. In fact, they wrote that into the first Coinage Act in 1792. They couldn't have cared less who minted gold or silver coins. All they were intent upon was that the coinage of the United States not be counterfeited. That, of course, was also written into law early in the country that it was illegal to counterfeit. They did not by any stretch of the imagination envision that the federal government would have monopoly on the production of money.

Mike Gleason: It was a certain amount of gold and silver grains, I guess, made up a dollar. They did have the ability to change that metric if they needed to, but that was the true backing.

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