Coming up we’ll hear the conclusion of our fascinating interview with monetary and constitutional expert Edwin Vieira. Edwin continues breaks down some of the fascinating history of money and central banks in the United States. So, stick around for the second half of Mike Maharrey’s recent interview, coming up right after this week’s Market Wrap.
Precious metals markets enter trading for March with gold bulls wondering whether the monetary metal is finally ready to march up to new highs.
Gold spent the first two months of the year locked in a trading range between $2,000 and just under $2,100 per ounce. For now, it continues to be overshadowed by new stock market records. The metals space is also being stifled by the Federal Reserve’s unwillingness to commit to rate cuts.
As of this Friday recording, gold comes in at $2,062 an ounce – up 0.8% for the week. Silver shows a weekly loss of 1.2% to bring spot prices to $22.87 per ounce. Platinum is off 4.4% to trade at $883. And finally, palladium is dipping 2.4% this week to check in at $984 per ounce as of this Friday morning recording.
With price inflation coming down in recent months and the economy holding up according to official government statistics, many Wall Street analysts are heaping praise upon the Federal Reserve.
The Fed has supposedly tamed the very inflation it generated without sending the economy into recession – at least as of yet.
But central bankers are also fueling a dangerous bubble in government debt – one that they are doing nothing to tame.
This year the debt to GDP ratio will exceed 130%. That's a level rarely seen in developed countries except in times of war or other crisis.
The consequences of excessive debt, excessive currency creation, and overbearing government can include hyperinflation and widespread poverty. These consequences have been felt by the people of third world countries in Africa and Latin America.
Hyperinflation ruined the economies of Zimbabwe and Argentina, for example. But now Zimbabwe is considering backing its currency with gold. And Argentina recently elected a free-market economist as president who is working to end the reckless fiscal policies that dragged down the once prosperous country.
El Salvador of all places is rapidly emerging from one of the most troubled countries in the world to one of the most promising.
Last week Salvadoran President Nayib Bukele traveled to Washington DC to give a speech to the Conservative Political Action Conference.
Bukele warned Americans of the dangers posed by globalist elites. He specifically called out left-wing financier George Soros. He also warned that the U.S. dollar is at risk of going down.
Nayib Bukele: Not even those high taxes, higher than a lot of places in the world, not even those taxes are really funding the government. So, who's financing the government? Government is financed by Treasury Bonds, paper. And who buys the treasury bonds? Mostly the Fed. And how does the Fed buy them? By printing money. But what backing does the Fed have for that money being printed? The treasury bonds themselves. So basically, you finance the government by printing money out of thin air. Paper backed with paper. A bubble that will inevitably burst. The situation is even worse than it seems because if most Americans and the rest of the world were to become aware of this farce, confidence in your currency would be lost.
Bukele has irked the Biden administration by promoting Bitcoin as an alternative to U.S. dollar hegemony. El Salvador holds Bitcoin in official reserves and has declared it legal tender in the country.
The cryptocurrency surged above $60,000 this week, helping to boost the value of El Salvador’s bonds.
Bitcoin is an asset class that isn't controlled by governments or global financial elites. But its market value is volatile and the future utility of the digital blockchain is uncertain.
What is certain is that over time, gold will retain purchasing power better than inflationary fiat currency. Precious metals may seem boring compared to Bitcoin at the moment. But physical gold and silver have attributes that no digital asset can replicate. A bullion coin is money in tangible form, and its value does not depend on the internet.
Precious metals are an asset class that governments, central banks, pension funds, and individual investors alike can hold to protect themselves against the ongoing depreciation of the U.S. fiat dollar.
Well now, without further delay, let’s get to the conclusion of Mike Maharrey’s interview with sound money and constitutional expert Edwin Vieira.
Mike Maharrey: This is Mike Maharrey. I'm an analyst and reporter for Money Metals, and this is part two of my interview with Dr. Edwin Vieira. Dr. Vieira is a constitutional lawyer and an expert on sound money. And on last week's weekly market wrap, we talked about the problems with America's fiat money system. This week we're going to discuss the solutions to those problems. So here is Dr. Vieira answering the question, what do we do about this unconstitutional system that we're now operating under?
Dr. Edwin Vieira: You can come up with all sorts of schemes and people have for, what should I say, salvaging the Federal Reserve System.
Mike Maharrey: Right.
Dr. Edwin Vieira: I'll leave that aside. This is something that came out of that whole era that resulted in cartelization and no, no, I think that's impossible. Mainly because if you look at these various plans, they're all kind of a top down change.
Mike Maharrey: Right.
Dr. Edwin Vieira: But central bank digital currency, we can get to that later, right?
Mike Maharrey: Right.
Dr. Edwin Vieira: Have a top down change. And no one really knows how this is going to affect the economy or the political system. I'm looking at this from a different point of view because I think what we need to do is to create a competitive system that is actually tied to, involved with sound money. Now, I don't believe that Congress will ever come around to that by itself. It might be forced to that, but not by itself. And we certainly don't want to have some kind of international involvement with the UN or some other kind of global institution giving us some new global currency.
Mike Maharrey: No, definitely not.
Dr. Edwin Vieira: No. I think the solution is Article one, section 10, clause one, "No states shall make anything but gold and silver coin a tender in payment of debts." Well, what does that say? I'm reading it backwards as it were. That states may or shall make gold and silver coin of tender of payment debts. So the states have this residual power and a residual power like that in the Constitution expressly laid out is immune from congressional interference because a statute of Congress cannot overturn or interfere with a constitutional power. So we're not talking about the 10th amendment here,-
Mike Maharrey: Right.
Dr. Edwin Vieira: Which is somewhat vague in exactly what powers the states may have.
Mike Maharrey: Sure.
Dr. Edwin Vieira: We're talking about a specific power in the Constitution that has been reserved to the states right there.
Mike Maharrey: In states. Right.
Dr. Edwin Vieira: So what can the states do? Well, they can't coin their own money. Fine, however, they don't need to do that. Let's take the example of Texas. Texas has a state depository for gold and silver. All one has to do is to add to that, and it's basically an accounting system and a storage system, the gold and silver and the vault, and there's an account, set of accounts that says who owns how much or who owns which coins or whatever. So we treat all of that as quote, unquote bullion. [inaudible 00:03:12] not treat specifically to how much gold is there, whether it's in the form of coinage or bullion. And the bullion has been certified by somebody, otherwise no one would accept it. Right.
Mike Maharrey: Right.
Dr. Edwin Vieira: It's the same as the coinage, practically speaking. Now we have an accounting system. We know all the people who own how much weight of gold, how much weight of silver.
Mike Maharrey: Right.
Dr. Edwin Vieira: So we append to that a transfer system so that I who may own some gold and someone else who is a member of this depository system can interact with each other in business.
Mike Maharrey: Right.
Dr. Edwin Vieira: And I make a transaction. I order the depository to transfer some amount of gold from my account to his account. Perfect. All right. Now, the beauty of this electronic system is now we are not limited by the problem that existed during the coinage era.
Mike Maharrey: Correct.
Dr. Edwin Vieira: We are not stuck with relatively large coins, which we cannot reduce in some way to smaller amounts. The interesting thing is we go back to the colonial period. The US dollar was based on the Spanish mill dollar and the Spanish mill, they didn't have coinage then. That was in small amounts generally speaking. What people did was they cut the Spanish mill dollar into pieces.
Mike Maharrey: Right.
Dr. Edwin Vieira: And they were called bits. There were eight bits in a Spanish mill dollar. And that's where we got the idea of the two bits, the four bits, people talking about a quarter too, and about a half dollar. And that's why the stock exchange for many, many years till a few years ago, stocks were valued in one eights.
Mike Maharrey: Right. I remember that.
Dr. Edwin Vieira: One eight because that goes back to the Spanish mill [inaudible 00:05:03]. So anyway, today we don't have to worry about that because the computers do not care how many zeros we put to the right of the decimal point.
Mike Maharrey: Right.
Dr. Edwin Vieira: Our computer can pay an ounce of gold, it can pay a millionth or a trillionth of an ounce of gold. It doesn't matter. All right. Electronically, we can make all these transactions. The gold and the silver never leaves the depository unless someone wants to retrieve it for whatever reason. Right. The transactions go on electronically and we don't have to worry about the problem of making small change anymore. Plus we really don't have to worry about the US Treasury. The US Treasury can say whatever they want about their valuation of gold.
Mike Maharrey: Right.
Dr. Edwin Vieira: That has nothing to do with me when I'm making a private transaction with another party and saying I'm going to pay him what, a 10th of a Troy ounce or a 10th of a whatever, a 10th of a grain, 10th of a Troy grain, let's say for a loaf of bread. Right. Doesn't make any difference. So once we set this thing up, it becomes separate from the machinations of Congress and the Treasury. It becomes capable of paying any transaction in which both parties will agree to what the substance of the transaction will be, gold or silver. The state treasuries can obviously engage in this collecting taxes, paying state creditors.
So you can have the state governments involved in it. The only one that would be left out would be the national government, Congress, the US Treasury. And now I would think that it wouldn't take very long if enough states did this for there to be significant pressure on Congress and the Treasury become a participant in the system.
Mike Maharrey: Right.
Dr. Edwin Vieira: And now we have this system, this new system, which is by the way, entirely scientific. It's based upon weights of pure gold or pure silver delivered by this electronic accounting mechanism.
Mike Maharrey: Right.
Dr. Edwin Vieira: Once we have that set up, one would think that the market is going to move more and more in the direction of using sound money.
Mike Maharrey: Absolutely.
Dr. Edwin Vieira: Because at least one of the parties to various transactions will demand it. So you'll have an economic pressure and then it'll come political pressure first on the state governments to have more and more of their transactions denominated in the sound money through their own depositories. And by the way, if you had just a Texas depository, there'd be no reason why Nebraska or Wyoming or whatever people there couldn't use that depository. Anybody could be a customer. Right.
Mike Maharrey: Yeah, it was actually, there's a bill now, I think it was in Oklahoma that would partner with the Texas Bullion Depository.
Dr. Edwin Vieira: Yeah. So you can see,-
Mike Maharrey: But that's already kind of in the works.
Dr. Edwin Vieira: Yeah. You can see how this would happen. And there would be terrific pressure eventually on Congress and the US Treasury to participate in some way in this. All right, so now you have a sound currency scientifically measured and transferred in transactions versus a rotting vegetable currency called the Federal Reserve Note. All right. Or the junk coinage, US junk coinage.
Mike Maharrey: Right.
Dr. Edwin Vieira: And all of the gold and silver coinage that was produced by the US Treasury could be, probably would be taken by the possessors of it and put into the Texas Depository, whatever depository we're talking about.
Mike Maharrey: Absolutely.
Dr. Edwin Vieira: So the whole system starts moving away from the Federal Reserve System without necessarily trying to do anything to change or ameliorate the workings of the Federal Reserve System.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: We simply let it die. We simply let it disappear.
Mike Maharrey: Yeah, let it rot on the vine.
Dr. Edwin Vieira: Yeah, just goes. Now the real problem we have of course is there are powerful interests, economic and political in the United States and elsewhere outside of the United States that are moving in the direction or trying to move in the direction of taking the system to the next level. And you go back in American history, what were your banks originally? Well, they were local banks and then the government, national government set up the first and second bank of the United States to try and get at a higher level, control over the local banks. But that didn't work because the states were also creating their own banks.
So during the Civil War, the National Banking Act tried to create a cartel structure to have the big city banks control the local banks basically, the small city banks and local banks. And what they also did was they put a tax on state bank notes and drove the state banks basically out of existence with respect to the creation of state bank notes. So now they were centralizing this at a higher level. That still wasn't high enough. So they went to the national level, complete national level of the Federal Reserve System. Well, the Federal Reserve System's failing. So you look at history, well, the next step is the international,-
Mike Maharrey: International.
Dr. Edwin Vieira: Step. Right. And that's a central bank digital currency.
Mike Maharrey: Right.
Dr. Edwin Vieira: Now, the real problem with this is besides it's not going to work, right, it's a political boondoggle and a control mechanism, is the statutory structure of the monetary and banking system in the United States does not provide for this thing.
Mike Maharrey: Right.
Dr. Edwin Vieira: There would have to be a complete overhaul of our own statutes in order to have this central bank digital currency come into play. The Federal Reserve can't simply create it out of nothing.
Mike Maharrey: Right.
Dr. Edwin Vieira: The Treasury can't simply say tomorrow there's going to be a federal bank digital currency and it will have this value or that value. Where's the statute that allows this to be done?
Mike Maharrey: Right.
Dr. Edwin Vieira: It's not there. So Congress has to do it. So on the one hand, if there's enough resistance in Congress to giving the Treasury and the Federal Reserve the ability to participate in this new global system, while at the same time there is tremendous economic and political pressure being brought to bear on the whole country by the use of more and more people in a system based on what we'd call the Texas Depository model, which way is this system going to have to go? Well, ultimately the market always wins.
Mike Maharrey: Absolutely.
Dr. Edwin Vieira: Right. Politically, they can try and suppress this or that for a period of time. But if you're talking about tremendous economic pressure, the politicians eventually have to throw up their hands and surrender.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: There's no way out. So I look at this as, and I've been saying this for years before they had a Texas Depository, that this was the mechanism because there were private companies. I think of Goldmoney. You know that company? I think they're still in existence.
Mike Maharrey: Yeah, they are.
Dr. Edwin Vieira: Yeah. And for a while they were doing exactly what I was promoting now today as for the Texas Depository action. But I think what happened with them was they had so many regulatory problems,
Mike Maharrey: Yeah.
Dr. Edwin Vieira: That they had to get out of that business of being the transfer agent. Well, if this is done through a state depository, the regulatory problems disappear because no state shall make anything but gold and silver coin a tender in payment of debts.
Mike Maharrey: Right.
Dr. Edwin Vieira: And so when you set up a state depository, that's what they're doing.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: The state depository say when somebody comes in here and makes a transfer under our laws, the legal tender will be the gold of silver that's denominated in the instrument going to the other party. Ah. So now the state has a reserve power to perform this function. So Congress and the Treasury can do nothing about it.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: Ah. So now we have completely changed, as it were, the game, the games, the game changer, as they like to say, right,-
Mike Maharrey: Yes.
Dr. Edwin Vieira: On the internet. Everything will be different after the game changer. Well, it is the game changer because right within the Constitution, and I don't know whether the founding fathers foresaw this particular problem, but they were pretty wise to say that the states would always have the ability to make gold and silver coin a tender in payment of debts.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: They were very suspicious of everything in centralized government.
Mike Maharrey: Yeah, for sure.
Dr. Edwin Vieira: And so that's what this looks like. It looks like kind of a sotto voce, low voice, kind of silent way of saying, we don't trust this national Treasury that we're setting up. So we're always going to leave the states with this reserve power to have sound money. Beautiful. So that's now what we have. Reserve constitutional power outside of the power of Congress, outside of the power of the Treasury to manipulate, control, suppress, whatever word you want to use, the physical ability of the states to do it. And for the first time in world history, this accounting device, the computers,-
Mike Maharrey: Right.
Dr. Edwin Vieira: Which allow us to avoid all the problems that previously existed with the use of species, gold and silver whether in the form of coinage or whether in the form of bullion.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: Now we can actually make this thing work. And interesting enough, it comes at the perfect time because we have finally realized, I hope that the central banking fractional reserve irredeemable paper currency system is not only unworkable, but it is devastatingly dangerous.
Mike Maharrey: Yeah. Well, I love it.
Dr. Edwin Vieira: Yeah. Now all you need is the political will. First people have to know something about it, then they have to political and economic will to simply start doing it.
Mike Maharrey: Right. Well, and the good news is I think you're starting to see that at the state level, maybe not always getting right, but at least that discussion is going on at the state level in a number of states. And so that's a good starting place.
Dr. Edwin Vieira: Yeah. Well, it happened very slowly. I think Utah was the first state that passed the state statute.
Mike Maharrey: Right.
Dr. Edwin Vieira: They recognized United States coinage as, United States gold and silver coins as legal tender. They didn't need to do that. That's already the law.
Mike Maharrey: Sure.
Dr. Edwin Vieira: But they were trying to have that coinage used for normal economic purposes within the state of Utah.
Mike Maharrey: Right.
Dr. Edwin Vieira: And other states, a couple of other states picked up on that as well. I always thought the difficulty with those statutes was not the recognition of gold and silver as legal tender, but they needed to tell the state courts exactly how to handle gold and silver clause contracts, that contracts that were payable in gold and silver because the courts in general, let me be blunt about this, they don't understand this at all.
Mike Maharrey: Right.
Dr. Edwin Vieira: And I think they have hostility to the whole concept of the use of gold and silver as every day monetary,-
Mike Maharrey: Right. It's been turned into a boogeyman.
Dr. Edwin Vieira: Yeah. So what you needed to have in the state statutes was specific directions to the courts as to how they would rule when certain kinds of contracts came before them for enforcement. That is if you had a contract that was payable in gold, you could not give a judgment payable in Federal Reserve Notes.
Mike Maharrey: Right.
Dr. Edwin Vieira: The judgment had to be specific performance payable in gold. Now, that's nothing new. The Supreme Court had many, many cases after the Civil War that raised this problem, that there were gold causes or sometimes silver clauses, and there was irredeemable legal tender paper currency circulating. And the argument was made. Well, these clauses could be paid in irredeemable paper currency, and the Supreme Court in one case after another said, no, no, no, no, no.
Mike Maharrey: Right.
Dr. Edwin Vieira: We have two kinds of currencies circulating, the gold and silver in one hand, the paper currency in the other. They are essentially different. If a contract is made in one as opposed to the other, it has to be paid in the medium that is specified in the contract. And it's essentially specific performance. You have to come up with the gold, you have to come up with the silver. There's no way out of it. This is how it has to be done. All right. And those cases, I'm a lawyer, I've talked to a lot of lawyers about this who have told me, "Oh, you can't even make a contract payable in gold in this country." Which of course is not true.
Mike Maharrey: Right.
Dr. Edwin Vieira: Private contracts. Government won't make a contract with you payable in gold,-
Mike Maharrey: Sure.
Dr. Edwin Vieira: But you can make one. So they don't know that. And of course they don't know anything of the history of this problem post Civil War. So there's some education to be done even in the legal community, if you will. But on the other hand, it's very interesting because if you're talking about a currency that is collapsing, the Confederate currency collapsed certainly in 1865 when the Confederacy was dissolved, surrendered. Right.
Mike Maharrey: Right.
Dr. Edwin Vieira: We surrendered and the Confederacy was gone. But during the period of the Civil War, the Confederate currency was actually being used as a medium exchange within the Confederacy. So what happened there was a number of people had made private contracts that were not in support of the Confederate War effort. They weren't buying Confederate bonds, they weren't buying and selling arms or whatever. They were just contracts that people had to make in the course of their normal existence. And they had to make them in Confederate currency because there was no other currency in the Confederacy. So the question became at the end of the war, well, what do we do with the contract in which the payment is $200 in Confederate money?
Mike Maharrey: Yeah.
Dr. Edwin Vieira: This money's not here anymore. And the Supreme Court looked at that, and this is the extreme case of what we're looking at today with the depreciation of real value of currency. The Supreme Court looked at that and said, well, there was always a market in Canada for Confederate money versus United States money and probably also the British money. And so we can look at these tables of value, and at the time of a particular contract in the South in the Confederacy, we can see that Confederate money was exchanging at such and such a rate with the United States money and therefore we can attribute that value of the United States money to that contract and we can make that contract payable in the United States money today,-
Mike Maharrey: Right.
Dr. Edwin Vieira: So that we won't have these people be essentially cheated out of the value of these normal contracts simply because they were forced to use Confederate currency.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: Supreme Court's has already provided us with a template if you will, for solving the problem on the other side of what we're talking about, which is the sudden and complete perhaps depreciation of Federal Reserve, hyperinflation.
Mike Maharrey: Right.
Dr. Edwin Vieira: Right. Well, we didn't have a way to solve that problem legally. It was Supreme Court decisions that did it. On the other hand, who are Supreme Court decisions that dealt with gold and silver as the medium exchange? So on the one hand, we can support this new approach, both from a constitutional perspective because of the provisions of the Constitution and because we have Supreme Court opinions. Everyone likes to look at Supreme Court opinions as if that was the Constitution, but there they are. On the other hand, if we're talking about hyperinflationary depreciation of the value of currency, well we also have Supreme Court opinions tell us how to do that too.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: So there's no way that this problem can't be solved if we simply get off this runaway train of central banking and irredeemable pay with currency and the incestuous relationship between the Treasury and the central banking system.
Mike Maharrey: Right.
Dr. Edwin Vieira: If you look at this, and funny thing, I'm obviously not a irredeemable currency man because the Constitution doesn't allow it.
Mike Maharrey: Right.
Dr. Edwin Vieira: But you ask the obvious question. Congress borrows a trillion dollars, they owe the Federal Reserve System, they borrow a trillion dollars and they pay interest or they sell bonds in the marketplace and they pay interest.
Mike Maharrey: Right.
Dr. Edwin Vieira: So instead of a trillion dollars, it's a trillion, $200 million,-
Mike Maharrey: Right.
Dr. Edwin Vieira: That they owe. And then the Federal Reserve System creates deposits which can turn out to be Federal Reserve Notes if you want to turn that deposit into Federal Reserve Notes. So they create Federal Reserve Notes. Why couldn't the Treasury based on what is still the Supreme Court leading case, Juilliard v. Greenman 1884 case, why can't the Treasury simply emit irredeemable paper currency and save the interest payment?
That's the Supreme Court rule the end of the Civil War. Oh, yes. It's irredeemable paper currency. They could redeem if they want to, but they can emit at any time they want. Congress has the total authority to emit this irredeemable paper currency.
Mike Maharrey: Right.
Dr. Edwin Vieira: That's still the highest decision of the Supreme Court at the latest, 1884.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: So there's no question that there is no necessity according to the Supreme Court for having paper money be redeemable. And there is no limit to what the Treasury can emit if they're given the authority by Congress. I mean, obviously Congress tell them how much. Right. But there's no limit. So when Congress is passing these spending bills, they could simply have as Section 10 or whatever, Section 500, because the bills is so long, a provision that says to pay for all of this, we're authorizing the Treasury to emit $1,000,250 worth of irredeemable Treasury notes.
Mike Maharrey: Right.
Dr. Edwin Vieira: End of discussion.
Mike Maharrey: Well, isn't that kind of the same concept as the platinum coin that they were floating, the trillion dollar coin that they were going to mint and deposit at the Fed?
Dr. Edwin Vieira: Well, I think that the platinum coin runs into the problem is how do you divide it now?
Mike Maharrey: Right. Well, they deposited it at the Fed and then they just issue it.
Dr. Edwin Vieira: Well, then they issue, yeah, they issue bank credits. I'm just saying, you get around the whole problem with the banks. We don't need the banks.
Mike Maharrey: Just fire up the printing press.
Dr. Edwin Vieira: Yeah, printing press. Here it is. All right. Now that's obviously, that's a primitive way of doing it, but that's what was done in the Civil War by both sides. And that was what was upheld after the Civil War by the Supreme Court. And the Supreme Court never questioned that opinion up to this very moment. So if one were a real, what they used to call them, the Greenback people, the Greenback party, and this was their idea, they said, why are we getting involved in debt? Why do we need banks intermingling with our Treasury? If the Treasury can print a bond, it can print an irredeemable Treasury note.
Mike Maharrey: Right.
Dr. Edwin Vieira: All right. And that was the struggle that went on at that point in time. The Supreme Court actually came on the side of the Greenback people by saying, oh yes, Congress has this. I don't know whether they found it. I mean, that decision's wrong with a capital W.
Mike Maharrey: Right.
Dr. Edwin Vieira: But nonetheless it's there,-
Mike Maharrey: It is there.
Dr. Edwin Vieira: With a capital T.
Mike Maharrey: Yeah. Right.
Dr. Edwin Vieira: It is there. So looking at this, one would say, wait a minute, we're now burdened with this highly complicated and unsatisfactory central banking system. Why doesn't the Treasury simply start paying off its debts in paper money? Oh, and by the way, the Treasury could say, we're now going to start buying gold at whatever, $20,000 an ounce, pick whatever number you want. Right. And put it in here and this is going to be our asset and you can buy it from us at $20,000 an ounce, whatever. But this is going to be, we're going to revalue gold. Roosevelt did that.
Mike Maharrey: Sure.
Dr. Edwin Vieira: Right. So if we look at what Roosevelt did, which was never challenged in the Supreme Court, I guess they accepted that could be done because Congress gave him the authority. You have the power to revalue gold. And so the gold stock of the United States, assuming it's all there, could be taken from 11 billion something dollars, which is the statutory valuation to whatever you want to do,-
Mike Maharrey: Sure.
Dr. Edwin Vieira: Whatever Congress wants to do.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: And then the Treasury could issue irredeemable paper money to whatever extent Congress would allow. And the Federal Reserve system would become, I don't know, a dinosaur of some kind. We put in the Smithsonian.
Mike Maharrey: Right.
Dr. Edwin Vieira: And if we were really smart, I'm not proposing that because I think that would derange the economy.
Mike Maharrey: Right. Absolutely. Yeah. There's economic range,-
Dr. Edwin Vieira: You look at it legally speaking, for quote, unquote legally speaking, it would be an option.
Mike Maharrey: Sure.
Dr. Edwin Vieira: And it would certainly raise the question, why are we paying interest to the Federal Reserve System or anybody? Why are we doing that? The alternative that solves the chaos situation is the one we were earlier talking about. We set up these, one or more of these depository institutions using gold and silver for these transactions controlled by the states as a competitive currency. Right. We compete with different kinds of phones, electric phones, there's iPhone, I don't even know how many are there out there.
Mike Maharrey: Oh yeah, zillions.
Dr. Edwin Vieira: Yeah. This is the market principle.
Mike Maharrey: Right.
Dr. Edwin Vieira: Well, money is simply the most liquid of all marketable goods.
Mike Maharrey: Right.
Dr. Edwin Vieira: That's the definition. All right. And it's supposed to have certain properties, but it's the most marketable of all economic goods. So if you have competitions among different kinds of money, what will happen? The best money will be,-
Mike Maharrey: Best one will win.
Dr. Edwin Vieira: By the economy.
Mike Maharrey: Yep.
Dr. Edwin Vieira: And then the politicians will have to follow along with that because they will have no choice.
Mike Maharrey: Right.
Dr. Edwin Vieira: The economy is just too powerful for them in the long run. So if we set this kind of system up, the worst that happens is that I'm wrong, the Texas Depository people are wrong, the ones who are promoting this in various ways, we're all wrong. It doesn't go anywhere.
Mike Maharrey: Right. Yeah.
Dr. Edwin Vieira: People don't use it. It sits there and it becomes the dinosaur.
Mike Maharrey: Right. Like the crappy cell phone.
Dr. Edwin Vieira: Yeah. And we put that in the, well, you can think of all sorts of products that had that fate.
Mike Maharrey: Sure, absolutely.
Dr. Edwin Vieira: Okay. And we put that idea in the Smithsonian and people can laugh at it for the next 200 years.
Mike Maharrey: Right.
Dr. Edwin Vieira: On the other hand, if it actually is workable, especially given the unworkability of the system we have now, we will see that idea expand and expand and expand. And the only worry that I would ever have, anyone ever have is, well, wait a minute, when that starts competing successfully against the Federal Reserve System, the Treasury, or I don't know, Department of Homeland Security, you pick your agency, Environmental Protection, whatever, we'll come in and try to stop it.
Mike Maharrey: Right.
Dr. Edwin Vieira: Okay. And then we come back to the Constitution which says, well, you can't stop it. And so we might end up getting a constitutional crisis. We might end up getting something that's the equivalent of what this business with Mr. Trump not being allowed to be on the ballots because of the so-called insurrection, right, which could derange everything. And then what are we stuck with? Well, we're going to be stuck with going to the Supreme Court of the United States. All right. So there is a downside to this. Yes, the market could take over, at least in moving in the right direction, the politicians could play the suppression card and come in with some kind of Treasury order or whatever saying you can't do this. And then we would have a state, because of state depository, we would have a state versus federal direct clash.
Mike Maharrey: Right.
Dr. Edwin Vieira: And that could only be resolved either through changing the composition of Congress. I mean, you might have that. The electorate would revolt at this or the Treasury comes in with some order to the state depository. You can't do this. That's taken to the courts. It goes up to the Supreme Court and those nine people make a decision.
Mike Maharrey: Right.
Dr. Edwin Vieira: And that's the only thing that worries me.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: Because in my experience, other than the gold clauses where they said the right thing on how gold clauses had to be applied, they have never gotten it right on monetary law. Never. They have always done things that were consistent with what the political class and the banking class wanted to do, not with the Constitution.
Mike Maharrey: Well, we'll take it one step at a time.
Dr. Edwin Vieira: Yeah, that's right. We worry about the Supreme Court when the Supreme Court becomes involved.
Mike Maharrey: Right.
Dr. Edwin Vieira: We don't even get to that until we take the first step of creating the depositories with the ability to transfer the gold and silver electronically between or among whoever are the participants in the system and the state being a participant in the system. So now we have the state. We have to have the state protection. This is no good if it's a private company that does it.
Mike Maharrey: Yeah. Agreed.
Dr. Edwin Vieira: Because the Treasury can jump in and say, well, you're doing this wrong, you're doing that wrong. We have this regulation or whatever. No, no, no, you can't do it. If the state is doing it, then you have the reserve constitutional power. And as far, I mean if I were the state governor, I would say, well go whistle.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: Insane Treasury. You don't have any authority to tell our state of Bosnia what to do.
Mike Maharrey: Right.
Dr. Edwin Vieira: At that point, we get into the legal weeds, the Amazon jungle of the legal system. Right.
Mike Maharrey: Yes.
Dr. Edwin Vieira: But it might very well be that the Treasury people, congressional people would not want to open that can of worms.
Mike Maharrey: Sure.
Dr. Edwin Vieira: Because out of that kind of a case could come statements about the questionable constitutionality of the 42 and two ninths dollars per ounce, which the Secretary of Treasury is not doing of the Federal Reserve Note not being redeemable in gold.
Mike Maharrey: Right.
Dr. Edwin Vieira: Just think of all these questions that might be brought,-
Mike Maharrey: A big can of worms.
Dr. Edwin Vieira: Into that kind of a case.
Mike Maharrey: Right.
Dr. Edwin Vieira: Right. And heaven knows how the Supreme, well, I mean, 42 and two ninths dollars an ounce, there's no question that the Secretary of the Treasury is violating his constitutional and statute responsibility to maintain that exchange rate. Because they're in the statute.
Mike Maharrey: Right.
Dr. Edwin Vieira: You can't go and get an ounce of gold for 42 and two ninths dollars anywhere in the world.
Mike Maharrey: No.
Dr. Edwin Vieira: Right. So he's obviously violating his [inaudible 00:30:55]. See when you start off with that one as the kind of counterattack against anything that the Treasury would bring against the state depository, that's a pretty good place to start because he has no answer to that question. And they have also no answer to the question of why aren't you redeeming United States currency in gold or silver? Because the statute says the Treasury can't do that.
Mike Maharrey: Right.
Dr. Edwin Vieira: Why if gold and silver are mentioned in the Constitution, you keeping it away, the Treasury keeping it away from the average American, the Federal Reserve not redeeming in gold or silver. Federal Reserve supposed to be redeemed in lawful money. Well, part of the lawful money of our system, are the gold and silver coins. They're lawful money. They're put out by Congress. But there's a statute that says that the Treasury won't pay those out. Ah. There's another question. So I look at this, this could become very, very, as the Chinese would say, interesting.
Mike Maharrey: Yes.
Dr. Edwin Vieira: Hope you live in interesting times. This could be very, from a Chinese point of view, very interesting if you got into the legal back and forth.
Mike Maharrey: Right.
Dr. Edwin Vieira: But you never get into the legal back and forth until you set up the economic alternative and it starts working.
Mike Maharrey: Right.
Dr. Edwin Vieira: And then I have a feeling that if it started working, the working would be so fast and so extensive that even the people we have in the Treasury today would think twice or three times about trying to intervene against it.
Mike Maharrey: Right, right. Well, with that, I'm going to wrap this up, but fascinating, fascinating stuff and your breadth of knowledge on the subject is astounding. And I really do appreciate you sharing with the audience.
Dr. Edwin Vieira: I did go to Harvard Law School, but I can tell you one thing.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: They didn't teach any of this in Harvard Law School.
Mike Maharrey: I suspected that was probably true.
Dr. Edwin Vieira: Yeah, I think that's a fascinating point.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: One of the most important things in our society as a whole is our monetary system.
Mike Maharrey: Right.
Dr. Edwin Vieira: Everything in the economy is run on a monetary basis.
Mike Maharrey: Right.
Dr. Edwin Vieira: And so one would think that decisions of the Supreme Court or constitutional provisions or both, that have to do with this fundamental aspect of our social existence would be one of the most important things that was taught in a law class on constitutional law.
Mike Maharrey: Yeah.
Dr. Edwin Vieira: And it wasn't.
Mike Maharrey: Not at all.
Dr. Edwin Vieira: No.
Mike Maharrey: Well, that's a shame, but thank goodness we have you to help educate people.
Dr. Edwin Vieira: Well, I thank you for giving me an opportunity to talk to you.
Mike Maharrey: Alrighty. Well, thanks again.
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