The Gov’ment has done a great job on having us think backwards.
The Federal Reserve Note (FRN) may be legal tender, but it has NEVER
been legally named a dollar. You will not find any law anywhere that states this.
The FRN may be denominated in dollars but this makes it no more a dollar than
calling a chicken a duck makes it a fly south in the winter.
The United States Code (12 § 411) provides that FRNs "shall be redeemed in
lawful money on demand at the Treasury Department of the United States or
at any Federal Reserve bank.” Thus, FRNs are not themselves "lawful money"
otherwise, they would not be "redeemable in lawful money.”
Legal Tender Laws make us use something for money even if something else
may be better (like Bitcoin for example). It is a very important point that
Legal Tender Laws are always found where Fiat Money is being used.
In other words, whenever governments have DECLARED that this and
only this can be used as money, they have had to back it up with
penalties for those who may want to use something else.
One way to form an alternative money system and still comply with
the legal tender law would be to use American Eagle’s in place of
Federal Reserve Notes. The best part is it would not require any
new laws be pasted because American Eagle’s are Legal Tender.
I worked this out in 2009 when a bill was considered in the Montana
Legislature is attempting to make uncoined silver or gold bullion legal
tender. Here is what I suggested: http://goo.gl/CvFqv
Now, with the advent of Bitcoin, I see the day coming when former
Bitcoin Miner become "bankers" for BitExchanges. Under such a system
the account holder could be issued a "check book" just like a Bank
does today. The account holder would write out checks to pay bills,
just as we do now, only these checks would be denominated in Bitcoin
and not Federal Reserve Notes (FRN).
Let's say that the cost for a gallon of milk might be $6.25 FRN but the
merchant and I use the same BitExchange, I would then make out a check
for $0.329 BTC. The recipient of my check could go to our local Exchange
(BitBank) and deposit this check into their own account. The 'bank' would
then make the electronic transfer from my wallet to their wallet, or the
recipient could request immediate payment in legal tender (either FRN
or American Eagles). In effect, after selling 10 gallons of milk, the
merchandiser would have earned 1 troy once of silver through the
In this way people could beat the inflation game.
The FED will continue to print more billions of FRN (as they are now doing),
but what would you care? Yes, they loose value on a daily basis, but if you
only hold on them long enough to pay a bill, so what? You're real store of
wealth and value would be in Bitcoins and Silver.