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100 sats \ 0 replies \ @Brunswick 18 Oct 2022 \ on: Is a national bank constitutional? bitcoin
Here's the realization that will make your head explode:
The government doesn't create dollars (silver coins) anymore, the bank creates dollar bills (paper). The dollar bills we have aren't minted by a mint, they are bank notes printed by a bank. Some of the notes are printed on junk metal, that is what we call coins. These junk metal debt notes are also created by the bank.
The note says "you can pay X amount of debt at any of our banks with this note", which happens to be all the banks because its centralized.
We have bank notes, not treasury notes. The bank no longer deals in metals, only in debts.
That's why the dollar says "This note is legal tender for all debts public and private".
The dollar is a "Bank Note" that you can legally "tender" for a debt (to pay a loan).
When you agree to purchase something, you technically are creating a debt. You stand there with all your groceries, the clerk scans all of them and says "how would you like to pay your bill" (implicitly). You have taken receipt of the groceries, and now its time to pay for them. When you give the store dollars, you are "tendering" a bank note for this debt.
The constitution intended for the country to use actual money, but it was written before the legal justification for fractional reserve banking was made in England.
Banks are debt mines. Debts are easier to move around than metals, all you need is an agreement (preferably written down, so the judge can have something to look at) and somewhere to write it down (a bank ledger). Then you use the government (judges and sheriffs) to enforce the agreements to settle the debts.