Washington has been quite the circus lately. Bret Kavanaugh’s appearance in front of the Senate Judiciary Committee prompted dozens of interruptions from Democrats and numerous protests from leftists. During Twitter CEO Jack Dorsey’s testimony to the House Commerce Committee, journalist Laura Loomer demanded to be verified on the social media platform, and Representative Billy Long (R-MO) held an auction. Alex Jones tried to fight Senator Marco Rubio, a has-been actress got escorted from the premise, and CNN’s Oliver Darcy was on the brink of tears.
What a time it was on Capitol Hill.
But as the crazies enveloped these events, a more subdued and mundane hearing occurred at the same time. Entitled “The Future of Money: Coins and Banknotes,” the House Subcommittee on Monetary Policy and Trade discussed cryptocurrencies, counterfeit currency, intellectual property, and the U.S. Mint’s security developments.
One distinguished GOP representative took the opportunity to home in on two issues important to libertarians, constitutionalists, and sound money advocates: the gold standard and the Federal Reserve.
Representative Alex Mooney (R-WV), who has ostensibly continued where former Representative Ron Paul (R-TX) left off, alluded to the Fed’s inflationary policies, taxing legal tender under the Constitution, and his bill that returns the nation to money backed by the yellow metal.
Securing Precious Metals
In recent years, one of the biggest exports coming out of China has been counterfeit gold.
Reportedly, unscrupulous individuals have been minting fake coins that are produced with inexpensive alloys, such as lead, tungsten, and zinc, and contain a minuscule amount of gold for its color. It has become a huge problem for buyers and sellers of gold because the average person would be unable to spot the difference – they may be able to find something suspicious when they discover a $1,200 American Eagle coin selling for a quarter of the price.
The two-term congressman informed Leonard Oljiar, director of the Bureau of Engraving and Printing, and David Ryder, director of the U.S. Mint, of his concerns that an abundance of fraudulent metals are entering the U.S. from the world’s second-largest economy.
He added that he has spoken with the Secret Service, revealing that they are frustrated about the paucity of support from the Mint “when it comes to investigating and curtailing the growing counterfeiting” scheme. According to Mooney, the Secret Service has been probing 15 major cases over the past two years.
Gold and Silver as Money
Under Article 1 Section 10 of the U.S. Constitution, gold and silver are considered legal tender:
“The Congress shall have the power to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures; No state shall make anything but gold and silver coin a tender in payment of debts.”
Without delving too much into this point, Mooney made an interesting but brief comment about what he thinks is sound money.
“It’s important that we secure U.S. coins minted of gold, silver, platinum, and palladium which happens to be the only sound money currency minted in the United States,” he said.
He later noted that it is important officials discuss “how we can ensure a strong and stable currency,” something that could include a legitimate conversation on “returning to the gold standard.”
For the first time in many years, a politician has uttered the crucial point that gold and silver are the only forms of sound money and that a potential way of ensuring a strong and stable currency is to reintroduce the gold standard – the U.S. officially abandoned gold in 1971.
Abolishing Taxes on Money
Across the country, there have been movements to abolish taxes on gold and silver and to legalize precious metals as currency. Arizona was successful in this pursuit in 2017, causing other states to follow suit, including Utah, Wisconsin, Texas, and Louisiana.
The Internal Revenue Service (IRS) has deemed that American Eagle coins are collectibles, which means they are taxed as such, even though the constitution classifies gold and silver as legal tender.
When questioned by Mooney, the attendees were unable to answer why this is the policy.
But it is a reasonable objection to tax policy, especially when you’re trying to protect the fruits of your labor from the Fed’s inflationary policies.
You only need to look at gold Eagles to see how inflation has worked over multiple decades. Mooney noted that gold Eagles have a face value of $50, but inflation has caused the market value of that coin to be $1,200. That’s a massive jump.
Mooney Makes His Mark
If you have been following Representative Mooney, his performance shouldn’t be too surprising.
In April 2018, Congressman Mooney introduced legislation “to define the dollar as a fixed weight of gold.” Agitating the swamp, he argued in the bill that the greenback has lost much of its purchasing power, adding that the gold standard would take the power away from the central bank and return it to the market.
“The United States dollar has lost 30 percent of its purchasing power since 2000, and 96 percent of its purchasing power since the end of the gold standard in 1913. Under the Federal Reserve’s two percent inflation objective, the dollar loses half of its purchasing power every generation, or 35 years.
The gold standard puts control of the money supply with the market instead of the Federal Reserve. The gold standard means legal tender defined by and convertible into a certain quantity of gold. Under the gold standard through 1913, the United States economy grew at an annual average of four percent, one-third larger than the growth rate since then and twice the level since 2000.”
Weeks later, he penned a letter to Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin, writing “I wish to learn more about the activities of the Federal Reserve and the U.S. Treasury involving gold.” He wanted to know what the currency policy is towards gold, if the government transacts in gold, and if Washington performs transactions or gold derivatives through the Bank of International Settlements (BIS) or other central banks and governments.
Mooney is certainly no lightweight. He might be flying under the radar right now, but this former Maryland State Senator could potentially either climb the ranks of the Republican Party or create his own wing in the party, much in the same way Senator Rand Paul (R-KY) is doing. His legislative objectives may not go very far, and his philosophical views might be ignored, but Mooney is inevitably going to be one of the most important Republican congressmen in Washington.
What are your views on the gold standard, the Federal Reserve, and sound money? Let us know in the comments section!