Money Reform for Canada

[PolyNewbie]

geoffrey:When you get paid, your getting paid with real deal money. Your employer could pay you completely in cash if he so desired, unlikely though, a little bit of a mess.

There is a distinct difference between cash and electronic money just like there is a difference between cash and a can of soup. Cash can be converted to a can of soup but they are not the same thing.

Its amazing that you don't understand these things being educated and all.

[Riverwind]

geoffrey:When you get paid, your getting paid with real deal money. Your employer could pay you completely in cash if he so desired, unlikely though, a little bit of a mess.

There is a distinct difference between cash and electronic money just like there is a difference between cash and a can of soup.

And what would that difference be?

Here are the financial statements from the Canadian Action Party for 2005. http://www.elections.ca/fin/rep/2005/action_2005.pdf

Notice that they have $31,969 is Cash listed as assets. Does that mean they have boxes full of bills stuffed somewhere? I supect their $31,969 is actually stored in a bank account as electronic money. If that is the case then why would they report it as 'cash' when it is really 'electronic money'?

Geoffrey is correct - there is no difference between electronic money and physical currency. They are both considered cash.

[PolyNewbie]

Riverwind:Notice that they have $31,969 is Cash listed as assets. Does that mean they have boxes full of bills stuffed somewhere? I supect their $31,969 is actually stored in a bank account as electronic money. If that is the case then why would they report it as 'cash' when it is really 'electronic money'?

Geoffrey is correct - there is no difference between electronic money and physical currency. They are both considered cash.

Cash is the reserves for our modern banking system. When considering economics and banking cash and electronic money are two very different things in Canada and Britain but not the USA. Cash is created by the government, electronic money is created by private banks in Canada & Britain.

They are the same thing on a balance sheet just like a brick or a can of soup may feel like the same thing if they were to fall on your head.

[dpwozney]

... there are no reserve requirements in Canada.

My understanding, since the mid-1990s, has been that there are no reserve requirements for financial institutions in Canada other than having to meet the demand, of customers with accounts, for Bank of Canada notes and RCM coins.

According to Canadian Nickle, "Well, the law allows them to charge a reasonable fee for any of the services they think people will pay a service fee for. They are required to provide coin in exchange for currency, but not to do it for free, just are they are required to hold cash for anyone legally able to open an account, but not required to do so without a monthly fee".

[dpwozney]

Explain to me what laws prevent citizens from doing business using whatever currency they want?

Bank of Canada notes state: "This note is legal tender". This Bank of Canada webpage provides the following answer for the question, "What is 'legal tender'?":

"A 'tender' is an offer of payment of a debt. In Canada, legal tender consists of coins issued by the Royal Canadian Mint and bank notes issued by the Bank of Canada.

This does not mean that a merchant is obliged to accept bank notes. The method of payment can be whatever is mutually acceptable to both parties - cash, credit card, cheque, etc. Thus, a merchant may refuse to accept bank notes in payment for goods or services, without contravening the law."

Bank of Canada notes are not backed by anything of intrinsic value, unlike secured debt notes which are backed by some form of collateral.

Many Canadians already conduct business in US$ - doesn't the US$ count as a competitive currency?

A "Federal Reserve Note" is not a U.S. dollar. The Coinage Act of 1792 defined the U.S. dollar as containing 371.25 grains (24.06 grams) of pure silver.

A "Federal Reserve Note" makes the claim that "This note is legal tender for all debts, public and private". "No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts; ...", according to Article I, Section 10, Clause 1 of the U.S.A. Constitution.

[White Doors]

A "Federal Reserve Note" is not a U.S. dollar. The Coinage Act of 1792 defined the U.S. dollar as containing 371.25 grains (24.06 grams) of pure silver.

A "Federal Reserve Note" makes the claim that "This note is legal tender for all debts, public and private". "No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts; ...", according to Article I, Section 10, Clause 1 of the U.S.A. Constitution.

And that was changed in 1973 I think when they got rid of the gold standard and allowed the cuurency to 'float' at market levels. That is the truest form of evaluation of a currencies 'worth'.

[Riverwind]

This does not mean that a merchant is obliged to accept bank notes. The method of payment can be whatever is mutually acceptable to both parties - cash, credit card, cheque, etc. Thus, a merchant may refuse to accept bank notes in payment for goods or services, without contravening the law."

A merchant only has to accept Canadian money if it posts prices in Canadian dollars. If a merchant posts prices in US$ or any other currency then it is not obligated to accept Canadian money. There are many web based businesses in Canada that only accept payments in US$ today. There is no law preventing a business from posting prices in Canadian Tire money if they were so inclined.

[dpwozney]

A "Federal Reserve Note" is not a U.S. dollar. The Coinage Act of 1792 defined the U.S. dollar as containing 371.25 grains (24.06 grams) of pure silver.

A "Federal Reserve Note" makes the claim that "This note is legal tender for all debts, public and private". "No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts; ...", according to Article I, Section 10, Clause 1 of the U.S.A. Constitution.

And that was changed in 1973 I think when they got rid of the gold standard and allowed the cuurency to 'float' at market levels.

Do you know of any U.S. law, since 1900, redefining the U.S. dollar as no longer consisting of a fixed mass of gold?

[White Doors]

A "Federal Reserve Note" is not a U.S. dollar. The Coinage Act of 1792 defined the U.S. dollar as containing 371.25 grains (24.06 grams) of pure silver.

A "Federal Reserve Note" makes the claim that "This note is legal tender for all debts, public and private". "No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts; ...", according to Article I, Section 10, Clause 1 of the U.S.A. Constitution.

And that was changed in 1973 I think when they got rid of the gold standard and allowed the cuurency to 'float' at market levels.

Do you know of any U.S. law, since 1900, redefining the U.S. dollar as no longer consisting of a fixed mass of gold?

http://en.wikipedia.org/wiki/Gold_standard

In modern mainstream economic thought, a gold standard is considered undesirable because it is associated with the collapse of the world economy in the late 1920's, and that aggregate supply and demand is a far better means of regulating interest rates, money supply and monetary basis. However, many other theories have been advanced for the turbulent economic conditions that existed at this time. While the gold standard is not currently in use, it has advocates for its resurrection and forms part of a basic theory of monetary policy as a standard for comparison for other monetary systems. Advocates of a variety of gold standards argue that gold is the only universal measure of value, that gold standards prevent inflation by preventing the creation of unlimited money supply in a fiat currency, and that it provides the soundest theoretical basis for a monetary system.

[dpwozney]

http://en.wikipedia.org/wiki/Gold_standard

In modern mainstream economic thought, a gold standard is considered undesirable because it is associated with the collapse of the world economy in the late 1920's, and that aggregate supply and demand is a far better means of regulating interest rates, money supply and monetary basis. However, many other theories have been advanced for the turbulent economic conditions that existed at this time. While the gold standard is not currently in use, it has advocates for its resurrection and forms part of a basic theory of monetary policy as a standard for comparison for other monetary systems. Advocates of a variety of gold standards argue that gold is the only universal measure of value, that gold standards prevent inflation by preventing the creation of unlimited money supply in a fiat currency, and that it provides the soundest theoretical basis for a monetary system.

This above quote from Wikipedia does not contain a reference to a U.S. law, since 1900, redefining the U.S. dollar as no longer consisting of a fixed mass of gold.

[Riverwind]

This above quote from Wikipedia does not contain a reference to a U.S. law, since 1900, redefining the U.S. dollar as no longer consisting of a fixed mass of gold.

Here is what the federal reserve says about the US note:

U.S. notes serve no function that is not already served by Federal Reserve notes. As a result, the Treasury Department stopped issuing U.S. notes, and none have been placed into circulation since January 21, 1971. Those that remain in circulation are obligations of the U.S. government.

So you might be right about the convertibility of US notes - however, they are museum pieces and you can't get any from your bank.

Federal Reserve Notes are a fiat currency and not backed by anything. I am sure the apparent contradiction in the constitution is cleared up by some other law.

[dpwozney]

So you might be right about the convertibility of US notes ...

I do not recall making any claims about the convertibility of U.S. notes.

Do you know of any U.S. law defining U.S. dollars as being the same things as U.S. notes?

[Riverwind]

Do you know of any U.S. law defining U.S. dollars as being the same things as U.S. notes?

You can find all the answers to your questions on the federal reserve site. http://www.federalreserve.gov/generalinfo/faq/faqgs.htm

Is U.S. currency still backed by gold?

No, when the United States stopped selling gold to foreign official holders of dollars at the rate of $35 an ounce in 1971, it brought the gold exchange standard to an end. In 1973, the United States officially ended its adherence to the gold standard. Many other industrialized nations also switched from a system of fixed exchange rates to a system of floating rates. In August 1974, President Ford repealed the prohibition on the public's owning gold or engaging in gold transactions. Today, no country bans private ownership of gold.

It is safe to assume that the federal reserve is not going to put information on their site that contravenes current US law

[dpwozney]

Do you know of any U.S. law defining U.S. dollars as being the same things as U.S. notes?

You can find all the answers to your questions on the federal reserve site. http://www.federalreserve.gov/generalinfo/faq/faqgs.htm

Is U.S. currency still backed by gold?

No, ...

Do you know of any current U.S. law defining U.S. dollars as being current U.S. currency?

...when the United States stopped selling gold to foreign official holders of dollars at the rate of $35 an ounce in 1971, it brought the gold exchange standard to an end. In 1973, the United States officially ended its adherence to the gold standard. Many other industrialized nations also switched from a system of fixed exchange rates to a system of floating rates. In August 1974, President Ford repealed the prohibition on the public's owning gold or engaging in gold transactions. Today, no country bans private ownership of gold.

This does not contain a reference to a U.S. law, since 1900, redefining the U.S. dollar as no longer consisting of a fixed mass of gold.

[Riverwind]

This does not contain a reference to a U.S. law, since 1900, redefining the U.S. dollar as no longer consisting of a fixed mass of gold.

The value of the US$ in gold changes daily - there is no fixed conversion between the US$ and gold - that is an undeniable fact. You can do your own research and figure out what law actually authorized the change.

[dpwozney]

This does not contain a reference to a U.S. law, since 1900, redefining the U.S. dollar as no longer consisting of a fixed mass of gold.

The value of the US$ in gold changes daily...

Privately-owned corporations may be redefining the value of federal reserve notes, not U.S. dollars, in gold every business day. According to Edwin Vieira, Jr.,

"... Most people associate the noun 'dollar' with the Federal Reserve Note ('FRN') 'dollar bill,' engraved with the portrait of President George Washington. This association is mistaken.

No statute defines - or ever has defined - the 'one dollar' FRN as the 'dollar,' or even as a species of 'dollar'.".

[Riverwind]

No statute defines - or ever has defined - the 'one dollar' FRN as the 'dollar,' or even as a species of 'dollar'.".

Whatever point you are trying to make it is quite irrelevant. $US debts are settled with federal reseve notes. End of dicussion.

[dpwozney]

Whatever point you are trying to make it is quite irrelevant. $US debts are settled with federal reseve notes.

A claim made on a paper currency note, which contradicts a country's Constitution, is relevant.

A "Federal Reserve Note" makes the claim that "This note is legal tender for all debts, public and private". "No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts; ...", according to Article I, Section 10, Clause 1 of the U.S.A. Constitution.

The U.S.A. Constitution is claimed to be the "Supreme Law of the land".

Article VI, Section 2 states: "This Constitution, and the laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the authority of the United States, shall be Supreme Law of the land; and the Judges in every state shall be bound thereby, any thing in the Constitution or Laws of any state to the contrary notwithstanding."

Trying to make a law which contradicts the U.S.A. Constitution is not making a law "in pursuance" of the U.S.A. Constitution.

[Riverwind]

Whatever point you are trying to make it is quite irrelevant. $US debts are settled with federal reseve notes.

A claim made on a paper currency note, which contradicts a country's Constitution, is relevant.

It it really contradicted the constitution then it would have been raised as an issue long before now. So I am pretty sure that the current system is legal no matter what out of context quotes you can pull up.

[dpwozney]

Whatever point you are trying to make it is quite irrelevant. $US debts are settled with federal reseve notes.

A claim made on a paper currency note, which contradicts a country's Constitution, is relevant.

It it really contradicted the constitution then it would have been raised as an issue long before now.

Can you prove that this has not been raised as an issue long before now?

So I am pretty sure that the current system is legal no matter what out of context quotes you can pull up.

Are you claiming I have pulled up "out of context quotes"?