Dear Fellow Patriots,
The integrity of our financial system is at risk both from cyber-attacks on US Banks and the policies of the Federal Reserve. My HJRes 590 which proposes a General Assembly study of these concerns has passed the House of Delegates and is now before the Virginia Senate Rules Committee.
I urge you to contact Senate Rules Committee members in the next day or two in support of HJRes 590. Virginia banks and financial institutions recently sought help from the Pentagon to deal with foreign threats to their computers. In December, 2012 the US Comptroller of the Currency alerted banks nationwide of the possibility of serious commerce-halting cyber attacks on US banks.
The other major threat to American financial stability is a product of the policies of the US Federal Reserve which institution was the 1913 legislative creation of former Virginal Congressman Carter Glass. The Federal Reserve’s easy money policies act as an enabler to Congress’ addiction to runaway federal deficit spending as much as a drug dealer is a corrupter of his clients.
Congress has declined to examine its own deficit spending so they need an “intervention” which only a state government study can provide at this point, hence the need for HJRes 590.
Federal Reserve policy is producing disincentives for self-sacrifice and savings with family bank accounts at near zero interest return. At the same time the Fed is providing perverse incentives for self-indulgence by Wall Street, and runaway spending by Congress.
The Assembly study proposes to examine the consequences of the Fed suppressing interest rates because with Virginian families seeing their net worth decrease in recent years, planning for retirement is difficult with low returns on their savings or investments. Also, state and local governments are also experiencing unanticipated fiscal pressures due to public sector employee pensions earning very low to near-zero returns.
Because of America’s foundational principle of equal worth of all natural persons as affirmed in the Declaration of Independence, no agency or institution established by Congress should play favorites with regard to the soundness of the U.S. money unit; in short, the dollar should work the same way for rich and poor alike. Money should serve all individuals as an honest measure of value; the Fed's current actions do not achieve this goal.
The purpose of our Virginia initiative is NOT to reinvent money. And it is NOT for Virginia to establish gold and silver coins as legal tender as payment for debt even though the Founders provided for that in 1789 (Const., Art 1, Sect. 10).
The main purpose of the HJRes 590 is to examine ways to restore the integrity of America's money and call attention to the need to establish a stable monetary foundation for a self-governing nation devoted to free markets and free people. Our money should provide a reliable unit of account and a dependable store of value, in keeping with the intent of our Founders.
Gold backed money has done that in America’s past with two significant departures, one from democrat President Franklin Roosevelt in 1933 when he: forbade banks to pay out gold or to export it; required persons holding gold coins, bullion and gold certificates in amounts of more than $100 to turn them in to the Federal Reserve for “other money;” convinced Congress to abolish the previous right of creditors to demand payment in Gold as part of business contracts.
The other departure came in 1971 from Republican President Richard Nixon who ended the last link between the dollar and Gold when he announced that the US Treasury would stop converting dollars to gold at the fixed value of $35 per ounce [now $1,667 per ounce].
Before 1933, and certainly 1971, the Fed could not simply order the US Government’s printing presses at the the Bureau of Engraving to circulate more money at the press of a button. Now they can and they do. Yet, Americans of all backgrounds sense the need for real standards. For example, a 2011 Rasmussen survey found that traditional democrat constituencies, blacks and labor unions, favored sound money policies with metallic backing like Gold.
The Federal Reserve’s no questions asked easy money policy in buying federal debt from a Congress which cannot say NO, acts as an enabler for decades of continued Congressional deficits with no end in sight.
This policy cannot be good for America.
While the Obama Administration and its supporting economists claim inflation is low, everyone who buys food, gas, oil or any energy commodity otherwise. The Federal Reserve asserts it “provides the nation with a safe, flexible, and stable monetary and financial system,” as stated on the Fed’s website. Countries that experienced hyper inflation in the late 80's through the mid 90's eventually were able to pull out because there was a back-up currency, the U.S. dollar. In the U.S., there is no back-up currency.
American novelist, Ernest Hemingway, wrote in the September, 1935 edition of Esquire that: “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.” In this post-2008 lackluster recovery, Virginia needs to set up an expert commission to study ways to develop “insurance” against the continued erosion of the US Dollar. Please write your state senator TODAY urging that they pass HJRes 590.
Delegate Bob Marshall