Currency as Debt: A New Theory of Money
Exchange Value
 

My Dear Friend,

I have learned that America’s success in using gold and silver as currency in trade and commerce was due in large part to the fact that the people controlled production. The Founding Fathers planned things that way. America’s Constitution provides Congress the power to coin money and regulate the value thereof, but the general populace produced the gold and silver. Any person could take gold or silver to the government’s mint and exchange the metal for standard coin.

A common standard, established in 1792 by law at 371.25 grains of silver and known as a dollar, provided the people a method to determine exchange value. Indeed, using this dollar standard, all items in trade and commerce can be said to have an exchange value, that is, the instantaneous parity of a thing at the time of the exchange.

Establishing a standard was a good idea as there must be a foundational definition of exchange, a common denominator of measurement. In the physical world, there are only three fundamental units of measurement: space, mass, and time.

Therefore, the quantity of a standard circulating commodity currency, specified as a unit of mass/weight, tends to be self-regulating, the volume limited by natural law. This is obviously not true for an irredeemable paper currency although the paper might be denominated in dollars. The cost of production of a fiat paper currency is so low that the self-regulating tie to the physical world is broken.

As we saw in previous letters, some people believe this disconnection is a crime. People have good cause to be irritated, but they should focus their concern on the fluctuating exchange value of the fiat currency, why the value fluctuates, and who receives the benefits of these changes in value. As we previously have seen, the substance of the currency is a secondary issue.

Currency used as money represents wealth but is not wealth (goods and services) itself. Regardless of whether a person participates in barter, trade, or commerce, all such transactions are exchanges of wealth. In all transactions made using the concept of money, the currency represents an unfinished exchange of wealth.

Therefore, the substance of the currency is not as important as the exchange value. In our modern money system the exchange value is unfortunately purposely inflated and deflated, and that artificial manipulation is the root of the anger we see surrounding this issue.

The National Economic Stabilization and Recovery Act, NESARA, remedies this situation by restoring to circulation both gold and silver coins, and providing a mechanism to determine the exchange value of both the paper and commodity currency. The new paper currency will not be redeemable in specie but will be exchangeable for specie at a published rate. This provision restores the linkage between the conceptual world of money and the physical world of trade and commerce. Incidentally, I expect this solution to quash all future discussions about this issue.

With all due regard and affection,

Your friend
 

Editor’s Note:

To better understand the concept that the currency represents unclaimed wealth, please read Back to Basics—The Nature of Money.

To understand how NESARA restores the national currency to being a true public utility, please read the following portions of the bill:

• Part I. Banking and Monetary Reform, Section 2 Findings
• Part I. Banking and Monetary Reform, Section 3 Congressional Control Of The United States Monetary System

To understand how NESARA establishes honest and moral characteristics for the national currency, please read Part I. Banking and Monetary Reform, Section 4 Provisions For United States Currency (Note: Section 4B, the characteristics necessary for Congress to lawfully define United States Treasury credit-notes).

To understand how NESARA maintains stable purchasing power and maintains a stable exchange value of all currencies in circulation, please read Part I. Banking and Monetary Reform, Section 9 Regulation Of The Exchange Value Of Treasury Credit-Notes.

To understand the implications of restoring the national currency to being a public utility, please visit the What’s In It For Me? section.
 

George Washington