Banking for Muggles 101: The Par Value of a US Dollar

By Jeffrey E. Mandalis
Greetings and salutations to all! This is my first post on what I consider to be one of the best forums on the internet, read it carefully to be sure to understand it! Like many posters in this thread, for years I struggled to understand what was happening with loans and how it all worked before discovering the keystone concept to it all... Many here talk about "acceptance for value" but do they understand what "value" is at all, or more importantly, how "value" is denominated? Ask yourself: What is the "value" of a dollar? If you answered "a dollar" you are correct but still no closer to understanding the par value of a dollar. The first clue I discovered was found in the footnotes on the website of the Federal Reserve where gold reserves are accounted for when I was trying to determine how much actual gold there was at the Federal Reserve banks, here: http://www.federalreserve.gov/releases/bulletin/1107assets.htm In the Statistical Supplement to the Federal Reserve Bulletin, the official gold stock of the United States is $11,041,000,000.00 and official gold stock held on behalf of foreign central banks is $8,967,000,000, which is valued at $42.2222 per ounce!!!!!!! So, $11,041,000,000.00 / 42.2222 equals 261,497,506 ounces of gold on the Federal Reserve balance sheet, which has a current market price of $209,198,004,841.00. How can something valued at eleven billion trade at a price of over two hundred billion? (If you really understand the UCC and 3-303 Title, Value, and Consideration then the horrible truth should be dawning on you.) Why would the Federal Reserve undervalue gold so dramatically on their balance sheet? (At the time, gold was trading around $420 per ounce and has recently traded above $840 per ounce.) What reason does the central bank have for valuing gold for less than 1/10 or 1/20 it's current market price? The answer is because they have to since $42.2222 per ounce of gold is the par value of the dollar. The par value of gold is defined by the government at 31 USC 5117, Transferring gold and gold certificates. http://frwebgate.access.gpo.gov/...Cite:+31USC5117

The par value of silver is $1.292929292 (gold dollars) in accordance with 31 USC 5116 which is actually a higher value than the normal market ratio where gold usually trades over fifty times it's weight in silver.

This is a dollar

This is a token for a dollar tax credit

This is a note for a dollar tax credit

The little green stamp means that the government swears they will accept it instead of gold or silver. However, if you want to pay taxes with gold and silver United States coins they will happily accept them. To explain this in a more simple way... let's say that you owe a bartender a bar tab of $42.22... the value you owe to that bartender is one ounce of gold! If the bartender accepts Federal Reserve notes, then the bartender is getting ripped off for over ninety some cents on the dollar. If the bartender has a license on the wall obtained with a taxpayer identification number (valuable consideration) from a municipality incorporated in one of the United States then the bartender is required by law to accept the Federal Reserve notes for value as if they were worth gold at $42.2222 per ounce! Why do you think they call it "negotiation" when you cash checks at your banks? Do you realize that your bank teller is ripping you off? They owe you value [but] they give you notes worth less than that value. However, did you not agree to this with a valid contract under the law of admiralty (re-insured by the Federal Reserve) when you gave them the valuable consideration of your taxpayer identification number on your application for the valuable consideration of a deposit and transaction account number? Even if you do not have an account at the bank where you cash your check, did you not swear and testify (as evidenced by the endorsement of your signature) that you received "value" from the bank teller? Why would you endorse checks that way when you should endorse them: EXCHANGE FOR CREDIT ONLY OR FEDERAL RESERVE NOTES NON-NEGOTIABLE AT PAR VALUE? Even today, only gold and silver are lawful money despite many misconceptions. Read any Federal Reserve publication or press release about open market operations and you will never see anywhere that the Federal Reserve creates "money" because they cannot. They create credit! Banks do not loan money they only loan credit! The Federal Reserve understands exactly how they rip everyone off; hence they do not create "money" and only create "reserves" which your government accepts instead of money. So if you owe someone $42,222.20 what you really owe them is one thousand ounces of gold!

Federal Reserve notes and United States treasury base metal token coins (including silver) circulate so you may discharge your debts because neither you nor your government can afford to pay debts in gold anymore! In 1913 the banks were not willing to continue extending credit to the United States government without a monopoly on tax credits. Thus, the United States government (or any entity incorporated under their authority with a taxpayer identification number) must accept for value the credits of the Federal Reserve banks instead of gold! This was when the United States government officially went into bankruptcy with the Federal Reserve as the receiver on behalf of its member banks. When the new bonds came due twenty years later, the United States government went into liquidation in 1933. Although, while people could not longer redeem credit at Federal Reserve banks and get gold coins, the Federal Reserve could no longer get gold from the government. Also, the revaluation of gold from $20 per ounce to $35 per ounce caused every foreigner holding gold to send it to the United States for $35 shiny new silver dollars and the gold reserves of the United States increased dramatically to become larger than any gold hoard in history. Effectively, silver had been remonetized for the first time since the "Crime of 1873" which demonetized silver in favor of a gold standard, which is a fascinating tangent that may be further researched at http://coinschool.blogspot.com yet irrelevant to the current thread about the negotiability of promissory notes and other negotiable instruments. The holder in due course of the note is irrelevant. If I am a lender in London for a real estate project in Chicago it does not matter if I have an attorney in Chicago collect the payments for me or enforce the note if the borrower goes into default. Very few banks today actually make loans to customers and just broker them. As the servicer of the loan the bank is perfectly entitled (pun intended) to enforce it on behalf of Sallie, Fannie, Freddie, Ginnie or any other holder of due course that they sold it to. The lender is perfectly entitled to endorse the negotiable instrument in due course to whomsoever may give them "valuable" consideration. If your neighbor sells you a farm and holds the note, he does not lend you your note or your own credit, as the farm is the valuable consideration. Your own credit is unlimited and cannot be taken away from you. However the United States government does not have to accept your credit for value as lawful consideration in payment of taxes the way they have to accept the credits of the Federal Reserve banks!!!!!!!!! This is why people who say that their credit is acceptable for value by the United States government run into problems. If you have ever sent a Bill of Exchange or other such nonsense to the United States treasury or offered it as good for the payment of taxes you have committed fraud. Banks do not lend money; they only lend credit as valuable consideration for your credit. You do not sign a note and get a house; you get credit, which the seller of the house then accepts for "value" in lawful exchange for the property in turn. The promissory note is not collateral for the credit they create. Their credit, which is good for the payment of taxes unlike yours, is created by virtue of their charter (think charter under admiralty) and exchanged as valuable consideration for the promissory note.

This creates two problems for the bank. The first is that you gave your word/credit/equity that you would repay the loan at par value, hence if you signed a $42,222.20 note you then owe one thousand ounces of gold and the bank accepted it for gold value of their own free will and accord without any equivocation, hesitation, or reservation whatever. Since neither banks nor any other creditor can demand lawful money (gold) in repayment of an obligation, then how can they refuse to accept your credit for value again when they already did it once before? For example, if you owe a note for $42,222.20 to a bank, what is to prevent you from taking a piece of paper and writing on it "CREDIT ONLY $42,222.20 WITHOUT DEBIT TO ORDER" then signing it and sending it to your creditor? They already accepted your credit once for value, what legal right do they have to refuse it now? The only thing is that if the bank (or anyone else they sell it to) owes you a debt of lawful golden money and gives you back your own paper credits, then you have to accept it for value because your signature evidences your word/credit/equity that you would. Do you get it yet? Credit for credit on the level as value for value. In order to be negotiated, an instrument must be negotiated for value. For example, compare the creditor/debtor relationship of the Federal Reserve and the United States with that of you and your electric company. First, the United States credits the Federal Reserve by giving treasury securities to them (runs the meter) and the Federal Reserve accepts them for value by crediting (giving juice) to the United States. Can the Federal Reserve then demand gold dollars or must they only accept more gold dollar denominated treasury securities that the United States government must then accept in due course? Can your electric company demand Federal Reserve credits, United States government credits, Starbucks credits, Disney credits or any other credits other than yours when they already accepted your credit for value when they accrued the income? Not since 1933. Do you still think Roosevelt was wrong? However, don't forget that your electric company is under no obligation to keep your lights on and continue accepting your credits instead of the Federal Reserve credits that they really want. The second problem is that the banks loaned you their credit for value when they knew it was not worth value. In case you haven't noticed, the price of gold has not been $42.2222 per ounce in quite some time. The banks know this too however they pretend otherwise every time they make a loan. In order for a negotiable instrument to be negotiable (enforceable) it must be exchanged for value. When you signed a note for $42,222.20 you gave your word you would pay back the thousand ounces of gold, however they gave you credit that they knew was not negotiable for value and that is fraudulent. Nevertheless, once you have accepted their consideration (credits) for value, or driven the car off the lot so to speak, then their fraud becomes legal. However, if during your foreclosure you demand that they testify as to what the value was that they gave you they will not show up in court just like what happened in METRIS VS. EDWARDS, which can be found at:

http://www.citizensoftheamericanconstitution.org EDWARDS achieved a victory without understanding the why of how. The real answer is because the par value of a dollar is 0.02368422299169631141911127321646 ounces of gold and METRIS did not want to go on record that what they loaned was not the same value. Additionally, the par value of a dollar is why the 'liberty dollar' people are going to jail. When silver was under $10 they used to pawn off an ounce of silver for $10, way above the market price. Now that silver is well over $10 do they still put a ten-dollar denomination on an ounce of silver or do they try to swindle more? Who do they think they are, the Federal Reserve? I think it's no less crooked. They think they can get people to use "liberty dollars" for more than the price of the metal. The current denomination of the silver liberty "dollar" is $20 while silver is trading around $14... I can buy a nice new shiny silver dollar with the attestation of weight and purity from a sovereign government for less than $20, why would anyone buy a "liberty dollar" from a brand new mint nobody has ever heard of for such a premium? But their real problem is because they issue a one ounce gold coin with a face value of $1000 when they have no lawful authority to do so since the government does not have to accept the one-ounce gold 1000 liberty "dollar" coin for payment of $1000 in taxes. Additionally, the United States government does not certify that the VALUE of the coin contains $1000 worth of gold which is over 23 ounces (1000/42.2222) par value. This is what is really getting them in trouble. If they had minted coins or bars and did not represent them as dollars just like Credit Suisse, Johnson Mathey, Englehard or anyone in that business does then they would not have had a problem. The sad thing is that they had a good business plan but were too ignorant to carry it out since Credit Suisse will not let me spend my warehouse receipts with other members on the website and will only buy them from me with government money. If they minted a one ounce gold coin and called it "1000 liberties" or anything else besides dollars then they would not have had any problems. This concludes Banking for Muggles 101 and I hope that you enjoyed it. As you are now aware, no matter what you think you understand about commerce, finance, law, banking, or trade it amounts to nothing if you don't understand the par value of a dollar in gold. Good luck!