"On Money:" "A Candid Proposal to Change Public Policy" by Paul Andrew Mitchell, B.A., M.S. Counselor at Law, Federal Witness, Private Attorney General, and Candidate for the U.S. House of Representatives July 15, 1998 Assume for the moment that the Congress can be persuaded to face the cruel facts, and to abolish the federal income tax completely (because those tax revenues are not paying for ANY government services whatsoever) and replace it with nothing at all (not even a national sales tax). Where does this action leave us, as a nation and as an economy? The answer is important and also difficult, because of the economic complexities that were introduced by the Federal Reserve System. In the book entitled "The Federal Zone," the IRS and the Federal Reserve Banks are likened to two pumps, working in tandem: the banks pump money and credit INTO the economy, and the IRS pumps (sucks?) money and credit OUT of the economy. The real economic reason for having an IRS, in its present configuration, is to maintain the purchasing power of Federal Reserve Notes. If FRN's were allowed to flood the marketplace, without a counter- balancing force to remove them from the marketplace, we would experience the very same hyper-inflation which plagued Germany after World War I. Thus, it is clear that, to stop this essential connection, the two pumps must be stopped at approximately the same time. Only a very few, quite brave Americans have had enough courage and insight to face a solution which may not be too obvious to those who are less educated about monetary systems, and monetary fraud. This solution is, very simply, that the foreign banks who have extracted immense wealth from America, via the federal income tax, must now "eat" the Treasury Bonds which they purchased with money they created out of thin air, quite literally. Remember, the FRB pays Printing and Engraving less than 3 cents per FRN, REGARDLESS OF THE DENOMINATION on each FRN. Then, FRB obtains a legal lien on collateral equal to the face value of the FRN, PLUS INTEREST. Thus, for a total cost of 3 cents ($0.03), FRB gets to collect about $107.50 from our economy (assuming 7.5% interest on a $100 FRN). This much leverage is obviously unjust enrichment, because the $0.03 "cost" is also created out of thin air. The crucial connection which must be recognized is that FRN's do not get created now, until and unless the debt ceiling is raised. Put in simpler words, FRN's do not get created, until and unless more Treasury Bonds are sold, and FRB gets preferential treatment on the purchase of such bonds. Thus, to break the cycle of monetary fraud, cash must be created without also increasing the federal debt, without also authorizing the issuance and sale of additional Treasury Bonds, and without also increasing inflation. Remember, higher prices are not the "cause" of inflation; higher prices are the "effect" of inflation, which is defined to be a disproportionate increase in the money supply, relative to the amount of goods and services being exchanged. The solution which JFK devised, was to authorize the printing of "U.S. Notes" (the ones with the distinctive "red dot" Treasury emblem). Some believe that it was this action, among others, which cost JFK his life. U.S. Notes were a straightforward solution to eliminating the connection between cash creation and debt ceiling increases. JFK's U.S. Notes were NOT created at the expense of additional debts payable to foreign banks, via the Treasury Bonds which would normally have been sold to those banks. Despite the obvious risks inherent in this solution, it remains a viable one, whether or not those U.S. Notes are actually redeemable. Please defer, for the moment, the question of redemption. The main advantage which U.S. Notes have over Federal Reserve Notes, is that the former have no interest expense attached to them, whereas the latter do have an interest expense attached to them (in addition to the problem of the FRB's huge leverage, discussed above). Another, quite similar solution is to issue "Silver Bonds" which are Treasury Bonds that are only redeemable in silver substance, at their maturity date. A proposal was made last year to issue Silver Bonds with 1-, 2-, and 3-year maturities, and interest rates slightly above market rates. This program would be coupled with an aggressive federal government program to mint large numbers of silver dollars (not the "clad" coins we currently use). Those individuals and companies who had raw silver to sell to the Bureau of Engraving and Printing, would be paid in bank credit, Silver Bonds, or U.S. Notes, but NOT in FRN's. The other aspect of this program would be to recall Federal Reserve Notes on a one-to-one basis with new U.S. Notes, "over- the-counter" (i.e. no bank accounts, cash transaction reports, or SSN's required). FRN's would be treated as "bearer bonds" (for those of you who know the meaning of that term). Once the silver coin production is ramped up, Congress can deliver on its promise to redeem Silver Bonds when they mature. Later, as the supply of FRN's dwindles and the corresponding supply of U.S. Notes increases, Congress would be asked to phase in a redeemable U.S. Note, in a fashion which eases the transition to a redeemable currency. Silver bonds would be very attractive investments for public agencies, like state governments and their political subdivisions. At maturity, of course, Silver Bonds could be used to purchase more Silver Bonds. The quantity of Silver Bonds to be issued, would be controlled by the amount of silver dollars to be minted; clearly, this is the kind of determination which Congress has constitutional authority to make. The major problem which must be solved, under this new national policy, is the massive "skew" which is present in the substantive equivalent of the FRN. One silver "dollar" today buys about seven (7) Federal Reserve Notes. As long as the FRN circulates, and as long as such a skew exists, people will be better off to trade their silver for FRN's, because they get 7 FRN's for each silver dollar. Obviously, if you are buying milk and bread, you are much better off to be holding FRN's, because you have SEVEN TIMES as much purchasing power as you would have by holding silver, in the same "nominal" amounts. ("Nominal" here means "face value".) Forcing people to exchange FRN's for silver, in nominal amounts, results in stealing huge amounts of money from the people who possess those FRN's. That is the major reason why U.S. Notes are printed -- to moderate the FRN's inevitable devaluation to zero. Thus, the withdrawal of FRN's from the entire economy represents a massive, one-time economic adjustment which must occur, if we are to return to constitutional money in America. The proper place for an open and candid discussion of the consequences, would be the committee which conducts hearings on the legislation that must be enacted, for this program to go into effect. Without more study, it is impossible to be exact about the magnitude and distribution of "damages." But, take this one example: John Doe is persuaded to spend $100 FRN's on a silver bond, which matures at, say, 5% in one year. One year later, he gets $105 in silver dollars. He then turns around and exchanges them for $735 in FRN's (because the FRN's are still circulating at 7-to-1). Then, he goes to the counter of his friendly local bank, and exchanges the FRN's for U.S. Notes, one-for-one. Clearly, this is not the kind of "appreciation" which Congress would, or should, intend. Conversely, if the exchanges flow in the opposite direction, Congress should never "force" such a massive devaluation in the common man's purchasing power. The federal income tax has already done enough of that, for the past 85 years!! The new national "policy" is to keep the money in our country. Putting a future "kill" date on the FRN only aggravates the problem I have described above, because people will not be able to "defer" their decisions after that deadline. As of a particular date, the FRN is officially worthless. This "kill" date must also be coordinated with legislation which dishonors the Treasury Bonds which foreign banks now own (i.e. we must shut off both pumps at approximately the same time). Clearly, if the Silver Bond solution is adopted, the maturity dates on these bonds also need to be carefully coordinated with the deadline for total withdrawal of the Federal Reserve Note. FRN's can be used to purchase Silver Bonds; or FRN's can be traded for U.S. Notes, "over the counter" and "one- for-one" at all participating banks (read "all banks" by law). To illustrate, the ramp-up in minting of silver coins should begin BEFORE the first Silver Bond matures, and enough silver dollars must be warehoused to cover all Silver Bonds which may get redeemed. By law, I would require 100% of all Silver Bonds to be redeemable, on demand, as proof of the good faith and credit of the United States (federal government) under this new program. Now, assuming that the U.S. Treasury Dept. can develop bank and consumer regulations which smooth this important transition, what are the real political ramifications? The answer to that question falls squarely on the willingness of wealthy foreign banks to tolerate the huge amount of debt they must eat, as a result of implementing this solution. Dr. Edwin Vieira has confronted this problem, in his essay "Return to Constitutional Money," and concluded that these foreign banks should be given no choice in the matter: either eat the debt, or face criminal racketeering charges. There are many educated Americans who fear that these foreign banks would choose instead to wage an overt war against America, rather than forego all this future revenue. The federal government must face this possibility realistically, and treat any such threats as nothing less than an expression of treasonous intent to invade our shores. A policy of peaceful transition must be clarified by the Congress, and our loyal military must be alerted to the probability of foreign invasion during this period of transition. Indeed, the foreign invasion appears already to have begun, under auspices of U.N. command. The United Nations is controlled by the very same foreign banks who now hold massive numbers of U.S. Treasury Bonds slated for dishonor. I don't want to get too "far out" with a discussion of probable future scenarios. However, it is essential to understand that the foreign banks who presently hold Treasury Bonds, must face a future in which those Bonds are destroyed, because it is the new policy of the United States (federal government) to dishonor bonds which were acquired by means of fraud and racketeering by foreign banks, particularly if the real leverage of their "scheme" is in a ratio of $107.50-to-$0.03! I assume you all have calculators to do your own computation of this ratio. Sincerely yours, /s/ Paul Andrew Mitchell, B.A., M.S. Counselor at Law, Federal Witness, Private Attorney General, and Candidate for the U.S. House of Representatives email: Contact Us website: http://supremelaw.org # # #

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Paul Andrew Mitchell