California Prints Its Own Currency - A Satire?

Real Clear Markets ^ | 7/6/2009 | Bill Frezza

[relictele]

What is the Constitutionality of any state or entity other than the Fed issuing currency, IOUs etc.?

[Ancient Drive]

Is this a satire?

[PGalt]

Outstanding satire! Thanks for posting.

[Hugin]

Yes, but can you trade CalBucks for carbon credits?

[2001convSVT]

The I.O.U. s being printed and issued by the state are a defacto currency! Are banks accepting it? yes, Are businesses accepting it? some are. Defacto currency.

[ovrtaxt]

The Fed issuing currency is actually unconstitutional.

[Congressman Billybob]

You hit the tight question. Under Article I of the Constitution only the federal government has the power to "mint money." What California is doing is clatly unconstitutional.

Congressman Billybob

[OneWingedShark]

What’s the Constitutionality of the Fed issuing currency?

[OneWingedShark]

However, the Federal Reserve is not an entity of the federal government; it is a private bank.

Further, the Constitution mentions gold and silver as possible exchange media... not papers that the government pays a private entity to print and then says are worth something.

[Publius Valerius]

Printing scrip is not unconstitutional.

[CPOSharky]

Perhaps if the citizens of the US started paying their taxes with self made script the government would get a hint.

Call a personal stimulus program.

[Caipirabob]

The U.S. Constitution, ratified by the states and adopted by Congress in 1789, forbade states from issuing their own currency, a practice in which the states had engaged for many decades. Exchange rate and price evidence from 1748 through 1811 indicates that this transition did not improve monetary performance, nor is this evidence consistent with the anti-state-currency rhetoric presented at the Constitutional Convention. Offered as a solution to economic ills that were known to be phantoms, this constitutionally created U.S. dollar currency union was a usurpation of state sovereignty by merchant-bankers for personal gain.

[The Great RJ]

Any fiat money issued by states even if it were to be legal would be pretty worthless little different than our US currency is becoming. However, if states issued gold or silver coinage containing its actual value in precious metal that might be interesting.

[wastoute]

Thank you! I haven't had a good laugh in days. Wiping the tears out of my eyes ROTFLMAO.

Μολὼν λάβε

[Gvl_M3]

If I was in Cali, I would pay all Fed Taxes with the Cali IOU’s.

Oh, and all Cali Taxes with Cali IOU’s.

Wouldn’t that be a hoot!

[Congressman Billybob]

If it is used the same as currency in general circulation, yes, it is unconstitutional. Rhode Island was issuing its own currency as of 1776, with disastrous results. That is why that clause is in the Constitution.

Congressman Billybob

[Cboldt]

-- Is this a satire? --

Yes.

[Cboldt]

-- The I.O.U. s being printed and issued by the state are a defacto currency! Are banks accepting it? yes, Are businesses accepting it? some are. Defacto currency. --

No. Defacto evidence of debt. Similar to gift certificates (currency? No.), and very much like a "promise to pay" note or a judgement from a court.

[upchuck]

I’ll go on record as saying this is a bad, bad thing. It will bring misery to many and further destroy our country.

FWIW, I said pretty much the same thing when lenders started doing sub-prime mortgages.