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Originally posted by drew1749
reply to post by Old77
Speaking of the fed. I just learned something. Apparently it is privately owned. WTF why did I never know this? I thought our government owned it. Kinda scary. No really scary.
The Constitution forbids the federal government from making decisions regarding legal tender completely, since it is not authorized to do so.
So, how does the Congress "coin" Money in the form of "Federal Reserve Notes"? How does the Federal Reserve System fit within this framework? Only the Congress has the power to "coin Money" and "regulate the Value thereof."
So, to turn to Article I, Section 10:
No State shall...coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts
Since fiat currency (i.e. "Bills of Credit") is not defined as Money to the Constitution, this line implies that the Congress shall not emit Bills of Credit, as well as the States, since the Power to "coin Money" and "regulate the Value thereof" was explicitly addressed in Article I, Section 8. For a similar reason "gold and silver Coin" are the only lawful "Tender in Payment of Debts" --this is a direct inference that Congress shall make only gold and silver Coin, since Congress has the power to coin Money and indeed Money is "Tender in Payment of Debts."