Massive blow to Federal Reserve

by Claire Bernish

A bill recently introduced in Texas seeks to obliterate the Federal Reserve’s much-maligned monopoly on currency by establishing gold and silver as legal tender — but the groundbreaking legislation, if passed, would also prohibit those precious metals from being seized by State authorities.

If passed, Texans would secure stability by reclaiming their purchasing power — without being subject to the whims of The Fed — an institution widely regarded as a devious manipulator of currencies and markets.

Senator Bob Hall introduced the bill last month, which, the Tenth Amendment Center explains, “declares specifically that certain gold and silver coins are legal tender, and prohibits any tax, charge, assessment, fee, or penalty on any exchange of Federal Reserve notes (dollars) for gold or silver. The bill authorizes the payment of taxes and fees in gold & silver in certain circumstances. It would also prohibit the seizure of gold or silver by state authorities.”

Further subverting the current economy’s fealty to Dr. Ron Paul’s Enemy Number One, SB 2097, as the legislation is better known, would prevent any contracts explicitly to be paid in silver or gold to be instead paid with Federal Reserve notes — if you agree to pay in precious coins, you cannot then proffer payment in dollars.

Enforcing such contracts legally, the Tenth Amendment Center notes, would encourage their proliferation — and that of gold and silver coinage.

Constitutional tender expert, William Greene, agrees. He explained:
“Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a ‘reverse Gresham’s Law’ effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes). As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state – as people in other states carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve notes for any transactions.”

Texas law currently mandates all debts and taxes be paid in Federal Reserve Notes and coins issued by the Treasury — ironic, considering Article I, Section 10 of the U.S. Constitution states:

“No State shall … make any Thing but gold and silver Coin a Tender in Payment of Debts.”

It wasn’t until 1913, with the passage of the Federal Reserve Act — which only came after a concerted, covert campaign by U.S. banking magnates — that the loosely hybrid system placed massive control of money in the hands of Big Banks with little oversight from the government. But the ‘central banking’ system has failed to prevent further financial crises — and has been given even a greater chokehold and increased authority as compensation.

Additionally, fiat currency has become a monster issue — once gold no longer backed U.S. dollars beginning in 1971, excuses to just print more bills naturally multiplied.

Where the public has no voice in the value of Federal Reserve Notes, Texans — and any states to follow its lead — could theoretically eschew using dollars, altogether, in favor of payment in gold and silver coins.

As it stands, officials of the Federal Reserve — a private institution — make decisions behind closed doors, where collusion and corruption can easily sway opinion away from the public’s, if not world’s, best interests.

Notably, the most efficacious watchdog against such practices in any given industry — an independent audit — has never been required of The Fed.
much of recorded history.

Last June, Texas paved the way for this new bill by establishing the first state-level gold depository, where an “account holder may transfer any portion of the balance of the holder’s depository account by check, draft, or digital electronic instruction to another depository account holder or to a person who at the time the transfer is initiated is not a depository account holder.”

Should lawmakers side with the financial interests of Texans and pass this legislation, Texas would join Utah, which began recognizing gold and silver coins issued by the United States as legal tender in 2011.

“While the debasement of the currency is the result of federal policy and banker collusion, the effect is broad and deep,” Tenth Amendment Center explains. “While there has been talk about reform, or at least an audit of the Fed, it is virtually a certainty that the federal government will never relinquish the power it enjoys through control of the monetary system.  That said, there are practical steps that can be taken at the state level to promote the use and acceptance of sound money and undermine the Fed’s monopoly on money.”

by Pat Nolan David Safavian

The owner of the resort didn’t ask his guests why they were there. He offered plush accommodations to those seeking to get away.

Sometimes, guests would come to play golf at the private and very exclusive country club. Other times, they used the fabulous spa services down the road. Still others wanted to simply enjoy the nearby beach.

But people came and stayed at the resort, and it was profitable. Some would call it a huge success.
But not all of the guests were good people. A few brought their drug habits with them. And in 30 instances (over a period of 17 years in which the owner and his wife rented out rooms to guests 125,000 times), law enforcement got involved.

The local police knew that the owner wasn’t involved in drugs. He and his wife were model citizens who took pride in their establishment. They even cooperated with law enforcement when something suspicious was going on with their guests.

But the police also knew that the resort was valuable, and that its millions in worth could add to the police department’s budget under forfeiture law. But under state law, the local cops didn’t have enough evidence of crimes to institute state forfeiture proceedings.

Undeterred by limits imposed by the Massachusetts Legislature, the police utilized a workaround. Federal law provided a lower threshold for seizing assets. The local police could circumvent state rules on forfeiture by turning the case over to the feds.

Using a program called Equitable Sharing, if local law enforcement could convince the Justice Department to institute forfeiture proceedings, the locals would get a cut.

So the police went to the Drug Enforcement Administration and convinced it that the resort should be forfeited. The Drug Enforcement Administration then convinced the Justice Department, which authorized the seizure.

Served with a federal notice of civil forfeiture, the resort owner was told that he had to prove he was innocent in all this. If he failed to do so, Uncle Sam could take the property, auction it off, and keep the proceeds—most of which would end up in the coffers of the local police department.

The owner and his wife, who built the business, would end up with nothing, despite not having been charged with any crime, let alone convicted of anything.

This property is not Mar-a-Lago, and the owner is not Donald Trump. But this is a real case involving the Caswell Inn in Tewksbury, Massachusetts, in 2009.

The owner was baffled by the seizure of his hotel because he had always had a good relationship with the local police department. He asked a police official why they targeted him rather than a nearby motel that was notorious for prostitution and drug dealing. The officer explained that they had looked up the other motel’s assessed value and found that it was heavily mortgaged.

The police would have gotten very little money if they seized that one. But seizing the unmortgaged Caswell Inn would net them millions of dollars.

This process is a clear conflict of interest. The local police department profits from these seizures, even if there is no conviction of a crime. The more that is seized, the more money goes back to the police for things like new equipment and retirement programs.

Civil asset forfeiture has turned many law enforcement agencies into modern “Sheriffs of Nottingham,” robbing from the so-called rich to give to the poor local police departments. Outraged citizens have taken to calling this nefarious process “policing for profit.”

Unfortunately, it’s not out of the ordinary. According to The Washington Post, more assets were seized under civil forfeiture proceedings than were stolen in all of the burglaries that took place in the United States in 2014.

The owner of the Tewksbury hotel was very fortunate. The Institute for Justice learned of his case, and undertook the legal fight to get his hotel back. They won.
But it is worth noting that there is no way that the owner could have paid for such top-notch lawyers out his own pocket. Few others can afford to fight the government.

Prosecutors argue that forfeiture is an important weapon in the war on drugs. That may be true, but only if it is tied to a crime for which there is an actual conviction.

Without a conviction, the current system turns our legal rights upside down. When assets are seized, the owners are presumed guilty until proven innocent. They have the burden of showing that their ownership of the asset was not the result of criminal activity. Otherwise, the government gets to keep the money.

Proving the negative is very hard to do, particularly when the government has seized all your assets and you have no funds to hire a lawyer. That isn’t just unfair.
It’s un-American.

The abuse of asset forfeiture has prompted a growing number of states to restrict its use to when someone has been convicted of a crime.

To get around these restrictions, the federal government uses an equitable sharing law, which allows federal agencies to seize and launder proceeds, and then cut the local police in on the back end. It’s a pretty nifty way for the Justice Department and local police to conspire and get around limits imposed by state legislatures.

This issue arose just last month when Trump met with local law enforcement officials. During the meeting, a Texas sheriff complained that proposed reforms to civil asset forfeiture in the Lone Star State would hurt his ability to fight drug traffickers.

Without anyone to explain to him the unfairness of civil asset forfeiture, the president seemed to side with the sheriff and against state efforts to reform it.
Trump won his election by fighting for the “little guy” against an overbearing and dishonest government. Civil asset forfeiture is a prime example of just how overbearing and dishonest the government can be.

The next time asset forfeiture comes up, the president should remember the case of the hotel in Tewksbury. Under current law, his prized resorts are just one Hollywood star with a coke habit away from being seized.