To clarify: all of what I'm about to say is leaving my personal opinion out of it while trying to answer from an objective viewpoint, so don't take what I say as being for or against anything specific.
Just been reading about the Liberty Dollar - an alternative currency from about 10 years ago, based on warehouse bills, equivalent to bank notes, that could be exchanged for silver. The person who set it up was dragged through the courts by the US government claiming he was forging currency.
The FBI claimed that his currency bore too strong a resemblance to current US currency.
I subsequently read that in the US constitution that article I, section 8, clause 5 states that money cannot be freely printed and must be based on transactions of Gold and Silver...
I think you have a mix up of clauses. Article I, Section 8 states that "all duties ... shall be uniform throughout the United States":
- To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures
Your source may have mixed that up with Article I, section 10, where it says:
- No State shall ... coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts
The reason for this clarification was to prevent individual states from printing their own currency against the currency issued by congress. It may have been a cautionary effort brought on by worries of the early colonial paper dollars in the late 1600s and early 1700s. Many states issued their own bills of credit that quickly inflated. They may have also had concerns about the continentals that quickly devalued as well. Either way, this was a ruling against the states, not the congress.
Have I understood this correctly and if so why does the US have fiat currency?
Congress' explanation for fiat currency is based on the same section of Article I you mentioned earlier.
Again from Article I, Section 8:
- ... to borrow Money on the credit of the United States
A US dollar is a legal liability of the United States. Put simply: it is an obligation of the US to pay the holder "lawful money" on demand, which can be any handful of assets held by the Federal Reserve but nowadays is usually some form of a treasury security.
Am I also correct in thinking subsequent governments can add to the constitution but not remove from it?
A new law can be added to the constitution through an amendment. Old laws are not "removed" from the constitution as much as they are "overwritten", so to speak. For example: Section 1 of Article II explained the election process for the President and Vice President. Put simple, whoever came in second place would become the VP. Terrible system. So congress passed the 12th amendment in 1803 that gave a new system for electing the President and Vice President. This amendment didn't "erase" the old law, but just superseded it.
The closest thing to an amendment being "removed" is the 18th amendment, which was simply repealed by the 21st amendment.
At any rate, yes: the government can add to the constitution through an amendment that passes through congress, but they can also "overwrite" old parts of the constitution if needed with an amendment as well. The "problem" with this is the difficulty in getting
anything passed through congress these days, let alone anything as big as a constitutional amendment.
Bringing an opinion into things here: today we see most politicians essentially "interpreting" the constitution differently to suit their needs in order to avoid the amendment process.
