"Redeeming Lawful Money"

[Pottapaug1938]

Germans have a term in their language which I wish existed in English. A "fachidiot" is someone who is absolutely brilliant in one subject, but is helplessly clueless in everything else....

[jcolvin2]

Germans have a term in their language which I wish existed in English. A "fachidiot" is someone who is absolutely brilliant in one subject, but is helplessly clueless in everything else....

Idiot savant?

[fortinbras]

The ones I run into cannot claim to be brilliant in anything.

[nosodumbdown]

Using Fiat (backed by nothing) currency creates a tax liability. Redeeming doesn't only apply for redeeming gold. Question, When the gold was taken and made illegal to hold, what was the trade off? If you pay with a debt instrument, you add to the national debt. If USC 12 sec.411 doesn't apply to today, then why is it used in case law for a defense?

[NYGman]

Using Fiat (backed by nothing) currency creates a tax liability. Redeeming doesn't only apply for redeeming gold. Question, When the gold was taken and made illegal to hold, what was the trade off? If you pay with a debt instrument, you add to the national debt. If USC 12 sec.411 doesn't apply to today, then why is it used in case law for a defense?

More importantly, why does it matter? The bills in your wallet are only a physical manifestation of value, which we as society have assigned to those greenbacks. The fact that you can take those bills to anywhere in the world, and receive goods of equivalent value, means that the receipt for services will result in income tax. Who cares if they are Loans, IOUs, FRNs, the form is not relevant. In fact, you no longer even need to receive value physically. Continued to focus on this, misses the bigger picture, unless of course that is your intent.

[wserra]

Using Fiat (backed by nothing) currency creates a tax liability.

Using anything that results in income entails a tax liability. Sea shells. Stained glass windows. Sneaker laces. Your own labor. Anything. What's your point?

Redeeming doesn't only apply for redeeming gold.

True. You can redeem those little pieces of paper that come out of games at arcades. What's your point?

Question, When the gold was taken and made illegal to hold, what was the trade off?

You don't hoard gold, you don't go to jail. That's the tradeoff. What's your point?

If you pay with a debt instrument, you add to the national debt.

When I pay with a credit card, I don't just add to my own debt, but to the national debt as well? Perhaps you could explain how that happens.

If USC 12 sec.411 doesn't apply to today, then why is it used in case law for a defense?

It's actually 12 USC sec. 411.

One can use anything one wants "for a defense". Sea shells. Stained glass windows. Sneaker laces. Your own labor. Anything.

Oh, you mean use it for a successful defense. Well, you can't. Disagree, cite something.

I'll wait.

[JohnPCapitalist]

Using Fiat (backed by nothing) currency creates a tax liability. Redeeming doesn't only apply for redeeming gold. Question, When the gold was taken and made illegal to hold, what was the trade off? If you pay with a debt instrument, you add to the national debt. If USC 12 sec.411 doesn't apply to today, then why is it used in case law for a defense?

These are words of English arranged by parts of speech into syntactically correct sentences. However, nothing said here makes any sense to anyone who has passed a first year college econ course.

Trying to educate anyone who could write a statement like this will never work. I'd rather argue with a flat earther. So I'll pass.

[noblepa]

Using Fiat (backed by nothing) currency creates a tax liability. Redeeming doesn't only apply for redeeming gold. Question, When the gold was taken and made illegal to hold, what was the trade off? If you pay with a debt instrument, you add to the national debt. If USC 12 sec.411 doesn't apply to today, then why is it used in case law for a defense?

These are words of English arranged by parts of speech into syntactically correct sentences. However, nothing said here makes any sense to anyone who has passed a first year college econ course.

Trying to educate anyone who could write a statement like this will never work. I'd rather argue with a flat earther. So I'll pass.

First of all, it is no longer illegal to own gold bullion.

If your employer paid you in gold, there would still be a tax liability. It would also be wildly impractical. One doesn't just keep gold in a desk drawer (unless one is unbelievably stupid). It must be kept and handled in a secure facility, which costs money. Do you want to be carrying a couple of thousand dollars worth of gold in your pocket every payday?

How about checks? Credit cards? How does one write a check for gold?

Money, whether gold, FRN's or, to use your word, fiat currency, is simply a way of carrying the fruits of my labor around in a convenient form. I work a few minutes a day to earn enough to buy a loaf of bread. It is not the currency that I want, it is the bread. It matters not whether my employer gives me a check, a green piece of paper or a gold coin. I simply take the payment, in whatever form, to the grocery store and in return, they give me a loaf of bread.

[NYGman]

I think nosodumbdown problem stems from their misunderstanding of the whole redemption mythology. It seems certain Guru's out there actually believe there is something magical about redeeming FRN's. What they all seem to gloss over, is that the only thing you will get from redeeming US Dollars today is more FRN's that are no different from the one that are turned in. You may get 5 Twenties for 1 One Hundred dollar bill, but you still have $100. The exchanging party will get back exactly the same value that was given in for exchange. The process does nothing to the value, and thus has no impact on earnings or tax. Further, I will also posit that if a believer in this redemption theory doesn't get the same value back from an exchange, then the exchange will not be made, because the person exchanging expects to get a certain value, for which they worked hard to get, and they would be hard pressed to justify giving some of that value away for free.

As has been pointed out before, and above, the form of payment (FRN, GOLD, SILVER, Sea Shells, food, etc) isn't what is being taxed, it is the value you are getting that is represented by the payment received. Dollars is an easy, portable, accepted way to transfer value between people, but certainly not the only way. All can be treated as income.

[wserra]

What they all seem to gloss over, is that the only thing you will get from redeeming US Dollars today is more FRN's that are no different from the one that are turned in.

Yep. And nothing has changed in the six years since I wrote the blog entry detailing all the success Van Pelt and company have had "redeeming lawful money".

[fortinbras]

Arguably you could exchange FRNs for coins - lots and lots of coins. And the coins can be re-converted back to FRNs.

[Pottapaug1938]

As I recall, Van Pelt claimed that making a demand to "redeem lawful money" changed those awful FRNs into USNs (United States Notes), which were quite untaxable. He even found a way to transform the Riegle Rule (eliminating the need to keep any actual, red-seal USNs on hand) into a way to support his delusions.

[notorial dissent]

As I recall, Van Pelt claimed that making a demand to "redeem lawful money" changed those awful FRNs into USNs (United States Notes), which were quite untaxable. He even found a way to transform the Riegle Rule (eliminating the need to keep any actual, red-seal USNs on han into a way to support his delusions.

Doesn't that also require a speckled orange rooster swung repeatedly above your head all the while shouting a the top of your lungs "I'm kookoo for kookoopuffs" three times all the while standing on one foot? Seriously, it makes every bit as much sense and has every bit as much effect. Which is EXACTLY zip.

[Dr. Caligari]

As I recall, Van Pelt claimed that making a demand to "redeem lawful money" changed those awful FRNs into USNs (United States Notes), which were quite untaxable.

There actually is obsolete language in a should-have-been-but-hasn't repealed statute saying that FRNs can be "redeemed," so the first half of Van Pelt's fantasy has some (minimal) basis. The problem is with the second half of his argument: income received in the form of US notes was always, and continues to be, taxable.

[notorial dissent]

As I recall, Van Pelt claimed that making a demand to "redeem lawful money" changed those awful FRNs into USNs (United States Notes), which were quite untaxable.

There actually is obsolete language in a should-have-been-but-hasn't repealed statute saying that FRNs can be "redeemed," so the first half of Van Pelt's fantasy has some (minimal) basis. The problem is with the second half of his argument: income received in the form of US notes was always, and continues to be, taxable.

Quite true. 12 USC 411 ceased to have ANY legal standing, significance, or value when Congress declared, by statute, and I'm not going to look up which one, that FRN's were from that point on "lawful/legal tender" "for ALL debts public and private" previous to which they had NOT been. They (large denom FRN's) were largely used for (Federal Reserve member) bank to bank transfers. The used to move REAL paper money around for bank to bank transfers, NOW it is all done electronically.

[Pottapaug1938]

I'm old enough to remember when you could actually get, and spend, red seal $2 and $5 USNs. I also recall Van Pelt's acolytes talk about trying to get their hands on some, only to realize that, except for the worst examples, every USN now had numismatic value, which would be destroyed if you spent them.

As for the FRNs above $100, they were last printed in 1945. As notorial dissent points out, there is no need for them today (except by people who might want to move large amounts of illegal money around).

[noblepa]

I'm old enough to remember when you could actually get, and spend, red seal $2 and $5 USNs. I also recall Van Pelt's acolytes talk about trying to get their hands on some, only to realize that, except for the worst examples, every USN now had numismatic value, which would be destroyed if you spent them.

As for the FRNs above $100, they were last printed in 1945. As notorial dissent points out, there is no need for them today (except by people who might want to move large amounts of illegal money around).

A bit of trivia: The largest-denomination FRN ever printed was $100,000 and bore the picture of Woodrow Wilson. As has been pointed out, they were used only to transfer large sums between one Federal Reserve Bank and another.

I believe that the largest ever circulated was the $1,000. Come to think of it, this was probably a Silver Certificate, not a FRN.

[Cpt Banjo]

I believe that the largest ever circulated was the $1,000. Come to think of it, this was probably a Silver Certificate, not a FRN.

The largest in circulation were the $10,000 bills depicting Salmon P. Chase. They were issued as FRN's, U.S. Notes, and gold certificates. See https://en.wikipedia.org/wiki/Large_den ... s_currency

Binion's Casino in Las Vegas used to have $1 million in $10,000 bills on display behind glass or plexiglass. I guess they figured the foregone interest was less than the money they got from the foot traffic that came to see it and stayed around to lose money at the tables.

[Dr. Caligari]

less than the money they got from the foot traffic that came to see it and stayed around to lose money at the tables.

The basic business model of Las Vegas casinos. I once had to travel to Las Vegas on business (I had a case in the U.S. District Court for the District of Nevada), and was amazed to find that hotel rooms downtown near the courthouse were so cheap. When the cab dropped me off at the hotel, I went looking for the check-in desk, and found that I had to walk through five or six large halls of slot machines and gaming tables to find it.

[Pottapaug1938]

I'm old enough to remember when you could actually get, and spend, red seal $2 and $5 USNs. I also recall Van Pelt's acolytes talk about trying to get their hands on some, only to realize that, except for the worst examples, every USN now had numismatic value, which would be destroyed if you spent them.

As for the FRNs above $100, they were last printed in 1945. As notorial dissent points out, there is no need for them today (except by people who might want to move large amounts of illegal money around).

A bit of trivia: The largest-denomination FRN ever printed was $100,000 and bore the picture of Woodrow Wilson. As has been pointed out, they were used only to transfer large sums between one Federal Reserve Bank and another.

I believe that the largest ever circulated was the $1,000. Come to think of it, this was probably a Silver Certificate, not a FRN.

Every piece of US currency greater than the $100 bill was either a gold certificate or a FRN, at least after the advent of small size currency in 1929. No silver certificate, in the smaller size, was printed for any denomination greater than $10, although plates were prepared for at least the $20 and the $100 notes.