Proof The Dollar is Not Redeemable or Backed by Gold

 

Proof That the Dollar is Not Redeemable or Backed by Gold

I. Introduction

This argument demonstrates the impossibility of redeeming U.S. dollars, particularly Federal Reserve Notes (FRNs), in gold due to the vast disparity between the amount of outstanding debt and the total supply of gold ever mined. This discrepancy highlights the systemic fraud inherent in the current monetary system and exposes the destructive economic effects of fiat currency issuance by central banks, particularly the Federal Reserve.

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II. The Finite Nature of Gold vs. the Infinite Issuance of Dollars

1. Global Gold Supply

   • As of today, approximately 202,000 metric tonnes of gold have been mined globally. This finite supply is a physical limit imposed by nature.

2. Federal Government Debt in Context

   • The current U.S. federal government debt exceeds $36 trillion.
   • If the statutory definition of the dollar (1 oz of gold = $50, as denoted on the American Gold Eagle) were applied to this debt, the required gold would amount to:$$\text{Gold needed}=\frac{\text{Debt}}{\text{Dollar value per ounce of gold}}=\frac{36,000,000,000,000}{50}=720\text{ billion ounces of gold.}$$
   • Converting this to metric tonnes, we find:$$720\text{ billion ounces}\times 0.02835\text{ tonnes per ounce}=20,412,000\text{ tonnes.}$$
   • 20,412,000 tonnes of gold would be required to back the U.S. debt in gold, which is approximately 100x the total gold ever mined.

3. Global Debt in Context

   • The total global debt stands at an estimated $315 trillion. Using the same calculation:$$\text{Gold needed globally}=\frac{315,000,000,000,000}{50}=6,300\text{ billion ounces of gold.}$$ Converting this:$$6,300\text{ billion ounces}\times 0.02835=178,200,000\text{ tonnes.}$$
   • To redeem all global debt in gold, 178.2 million metric tonnes of gold would be required—this is 882x more gold than exists on Earth.

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III. The Implications for Redeemability

1. Redeemability Is Mathematically Impossible

   • The Federal Reserve, as the issuer of FRNs, cannot fulfill any claim of redeemability in gold, as the required gold reserves far exceed the total gold ever mined.
   • The very nature of FRNs, which are fiat currency with no intrinsic backing, makes them irredeemable. This directly contradicts the historical and constitutional definition of the dollar as a weight of precious metal.

2. The Scale of Economic Extraction

   • The Federal Reserve has effectively "lent" value to the U.S. government and other entities far beyond the physical resources of the planet.
   • For the U.S. federal debt alone, the Federal Reserve has extracted 100x the value of the world’s total gold reserves. In this way, they have extracted the equivalent of the entire world’s entire economic output through the American government every year since 1913!
   • For global debt, central banks have extracted 882x the value of the world’s total gold reserves, representing again 882x the world’s entire economic output. 

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IV. The Economic and Moral Consequences

1. Destruction of Productive Labor

   • The issuance of fiat currency transfers wealth from the productive economy (those who create goods and services) to the unproductive economy (those who merely issue currency).
   • This systemic wealth transfer undermines economic productivity and concentrates wealth in the hands of fiat currency issuers, creating global economic instability.

2. Theft by Counterfeiting

   • By issuing currency not redeemable in lawful money (gold or silver), central banks engage in what amounts to counterfeiting on a global scale.
   • This practice is prohibited under 18 USC 471, which criminalizes the production of fraudulent obligations. The Federal Reserve’s issuance of fiat currency labeled as "dollars" constitutes a fraudulent representation of value, as these notes cannot be redeemed for the constitutionally defined dollar.

3. A World Without Fraudulent Fiat Currency

   • If central banks and their fiat currencies were eliminated, wealth extraction through monetary inflation and debt issuance would cease.
   • The productive economy would no longer be burdened by the unproductive extraction of wealth, resulting in economic output nearly 1000x greater than current levels.
   • Despite monumental productivity gains from the Industrial Revolution, advances in modern medicine, the manufacturing revolution, the computer revolution, and now the AI revolution, the quality of goods has diminished while their prices have increased. This paradox arises directly from the systemic counterfeiting of wealth representation by central banks. By inflating the supply of fiat currency, central banks enable those who do not produce real value to extract wealth from the productive economy. Under this system, even as a person becomes twice as productive, they effectively retain only a fraction of their additional output, often as little as 50%. This unjust redistribution of value creates a demoralizing economic environment, where the incentives to enhance quality and innovation are undermined. Instead, producers often resort to lowering quality to preserve margins, perpetuating a cycle of diminishing returns and eroding trust in the economy.
   • No amount of sophistry or rationalization could ever justify theft, suffering, and deception on this grand of a scale. Not only should all contracts created with dollars be nullified, those who have perpetuated this crime should be publicly hanged and have their names stamped out completely from the history books. 

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V. Conclusion

The Federal Reserve’s issuance of irredeemable fiat currency, mislabeled as "dollars," represents a systemic fraud that undermines the constitutional definition of money, the integrity of contracts, and global economic productivity. By issuing currency far in excess of the world's physical gold reserves, central banks have perpetuated a scheme of wealth extraction that impoverishes productive labor and destabilizes economies. Courts and policymakers must recognize this fraud and act to restore monetary standards rooted in constitutional and economic principles.