Spot the Thief

It’s no doubt a coincidence that the criminal charges will be handed up today in respect of Samuel Bankman-Fried just as the latest numbers will be handed up in respect of inflation. Let us mark the moment nonetheless. For we just can’t shake the notion that it’s not a coincidence that the phenomenon of block-chain currency is emerging in the age of fiat money — meaning the age when the dollar is not defined in American law.This has been the case since the collapse, in the mid-1970s, of the monetary system created by Bretton Woods. That is the treaty, struck at the end of World War II, under which America bound itself to redeem at a 35th of an ounce of gold dollars presented to it by foreign governments. Our Constitution marks three kinds of law — the Constitution itself, all laws made under it, and all treaties — as the “supreme law of the land.”Which is what, therefore, the gold exchange standard was — part of the supreme law of the land. So it was until we defaulted. There are those who will dispute that the so-called “Nixon shock” was a default. That, however, is how we think of it here. It wasn’t only, or even primarily, Nixon. America had been over-spending on guns and butter — and showing an outflow of gold — for years, and that goes back to the Congress.We keep pressing this point because of its constitutional importance. It is to Congress that the Constitution grants between 99 percent and 101 percent of the monetary powers granted to our government. The word “dollars” appears twice in the Constitution, but the parchment does not define it. That’s because it was so crystal clear at the time to what the Framers were referring — 416 grains of standard silver, or 371 1/4 grains pure silver, or the equivalent in gold. That is the same as in a coin then current known as the Spanish milled dollar. We know that’s to what the Framers were referring because the definition was enacted into American statute by the Continental Congress in 1775. After the Constitution framed at Philadelphia granted Congress the power to coin money and regulate its value and the value of foreign coin, Congress passed the Coinage Act of 1792, which maintained the definition in law.We reprise all this just now because a new Congress is about to be seated in the capital district named for the signer of the Coinage Act. The numbers handed up today are expected to show that the dollar is still being inflated at a shocking rate, while the value of the dollar in terms of constitutional specie stands at barely better than an 1,800th of an ounce of gold. That is down something like 98 percent since the end of Bretton Woods.We carry no more of a brief for Mr. Bankman-Fried than we do for any other American who must be presumed innocent until proven guilty. The Sun is in favor of the full enforcement of the law. The moment, though, finds us thinking of the adage that sometimes the scandal is found less in what’s illegal than in what’s legal. And that the United States Congress needs to be brought before the bar of truth for its own collaboration with the Great Thief of Inflation.

Spot the Thief

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