Sovereign Citizen Crackpot Theories

The US is Bankrupt; Currency is Not Legal Money; and the UCC is Ultimate Law? Sorry, No Sale.

Shortlink to this blog:

Note: The “claim(s)” shown are those attributed to many adherents to a variety of theories, especially those who call themselves sovereign citizens. This blog is one of several used to address specific claims in detail, and the background and organization of my response to the movement begins at this link:

Claimed: The US Became Bankrupt (Usually in 1933) and Lost Sovereignty
Claimed: US Federal Reserve Notes are Not Legal Currency

Here is the TL;DR:

The assertion is made that the US
(1) Is bankrupt; therefore
(2) Somehow the states are not states with sovereign power in their own sphere…
and also that
(3) The U.S. Federal Government lost its sovereignty; and therefore
(4) Became a corporation (or already was a corporation, which is also not sovereign…its confusing!)
(5) Because government is a corporation, your relationship with it is contractual only.
(6) So the Uniform Commercial Code (UCC) controls it all.

However the US is not and has never been bankrupt; it has not lost its sovereignty (even had it become bankrupt it would/could not) and nothing would THEN make it a corporation, which it is not (nor did it make any attempts or changes that indicate any intent to incorporate); nor are our dealings as citizens with our government or when subject to its legal authority contractual. The UCC is simply a state law which sets uniform rules for resolving issues of contractual relationships between businesses in other states. IF the states are not sovereign they cannot enact laws so it wouldn’t exist legally; it is not the law in every state so it can hardly be ultimate law… It has minimal applicability to government and none at all to criminal cases. 

The courts have utterly dismissed all these claims.

Let us begin then to explore these ideas and see how they stand up to examination.

Later in this document I provide a detailed exposition from former Congressman/Felon  James Traficant, that outlines the theory in some greater detail but we can start with this fairly clear and straightforward explanation of the claim.

When a government goes bankrupt, it looses [sic] its sovereignty. In 1933 the U.S. declared bankruptcy, as expressed in Roosevelt’s Executive Orders 6073, 6102, 6111, and 6260, House Joint Resolution 192 of June 5, 1933 confirmed in Perry v. U.S. (1935) 294 U.S. 330-381, 79 LEd 912, as well as 31 United States Code (USC) 5112, 5119 and 12 USC 95a.

The bankrupt U.S. went into receivership, reorganized in favor of its creditors and new owners. 1913 [sic] turned over America lock, stock, and barrel to a handful of criminals whose avowed intent from the beginning was to plunder, bankrupt, conquer, and enslave the people of the United States of America and eliminate the nation from the face of the earth. The goal was, and is, to absorb America into a one-world private commercial government, a “New World Order.”
The American Patriot Friends Network (APFN).

There’s a rather large problem or two with that statement.

There is no constitutional provision, law, nor international principle of sovereignty that suggests debt or bankruptcy terminates sovereignty. Some nations have actually declared insolvency in the past but are still sovereign today, notably Spain.

So the claim is made but there’s no truth to it. You will never find a real citation to support that consequence. There’s no precedent or law that the U.S. can use to incorporate itself, other than the laws of the U.S. which would simply be circular effect nonsense. The U.S. as a sovereign turned itself into a non-sovereign corporation by exercising its sovereign power to make laws.

I might add that it is a complete mystery to me how the assertion that the U.S. lost its sovereignty would then make the states and the people (the source of sovereignty) also lose theirs…

Add to that the U.S. is not Bankrupt and it has never been so. In fact the changes they cite for losing sovereignty are in fact clear exercises of sovereignty as the courts noted shortly thereafter.

As a persuasive technique a lot of citations are provided. Though they make the claim seem legitimate the reliance is mostly on people never actually checking the citations, reading the underlying documents, or placing the arguments in real contexts; I have included the links in the paragraph above and again below.

    • Executive Order 6073, required the reopening of all banks;
    • Executive Order 6102, required the retirement and surrender of all gold coinage and gold certificates and bonds, to the government, to be replaced with Federal Reserve Notes;
    • Executive Order 6111, prohibited the use of gold, gold certificates, or gold bonds, in payment of any debt to a foreign entity;
    • Executive Order 6260, Made it illegal to hoard gold;
    • 31 United States Code (USC) 5112, 5119 and 12 USC 95a are a series of laws that put into effect the same changes as to coins and exchangability of gold, gold certificates, etc.
    • Ironically, as we shall see their cited case, Perry v U.S., proves the exact opposite.

They have nothing to do with bankruptcy. Ending the use of gold for currency is not declaring bankruptcy and does not make a nation bankrupt.

While they make a big deal of all this, it is all entirely consistent with the Constitution, which gives this power to Congress, the power to determine what is money…

“Congress has the power…
To borrow money on the credit of the United States; …
To coin money, regulate the value thereof, and of foreign coin…”
Article I Section 8  U.S. Constitution

“Congress is authorized to establish a national currency, either in coin or in paper, and to make that currency lawful money for all purposes, as regards the national government or private individuals.”
Juilliard v. Greenman, 110 U.S. 421, 448 (1884

And what’s more every nation on earth save Lebanon has followed suit.

So there are no nations at all I guess? 
The entire theory is trumped up nonsense.

Let’s define  key terms.

I have explored sovereignty at some length in another blog. This will be a simpler version of the same information

Sovereignty, in political theory, the ultimate overseer, or authority, in the decision-making process of the state and in the maintenance of order. The concept of sovereignty… is closely related to the difficult concepts of state and government and of independence and democracy. Derived from the Latin term superanus … sovereignty was … meant to be the equivalent of supreme power…
Sovereignty,  Encyclopedia Brittanica

For this blog I will use these definitions

I observe that whether there is effective control can obviously include consideration of whether a sovereign entity has the resources needed (financial or other) to exercise and maintain such control. I also am not here exploring all the various kinds of control, powers, and indeed international obligations that are associated with sovereignty either in US or International Law. That would add much length to this blog but not make the points any more clear.

  • bankrupt, bankruptcy
    • adj. (of a person or organization) declared in law unable to pay outstanding debts.
    • noun  1. Law. a person who upon his or her own petition or that of his or her creditors is adjudged insolvent by a court and whose property is administered for and divided among his or her creditors under a bankruptcy law.
 That’s a common dictionary definition.

Legally the US is Not Bankrupt

Bankrupt is a legal status that can only apply after a court applies it. As it is a legal status it is must be done under some specific law that applies to the bankrupt entity and that entity must be subject to the jurisdiction of those laws.

Under the law of the U.S. you or a creditor must go to court and file an action to declare bankruptcy or you are not bankrupt.

Bankrupt is not the same as having a negative net worth. That’s just saying you have more debt than assets. That is not uncommon. Bankruptcy coincides with but is not insolvency, a lack of liquid assets. If you are unable to pay today’s obligations as they come due you are insolvent, not bankrupt. You may be able to pay them off in time. When you fail to pay you are in default of some debt but not bankrupt.

Until a court acts you are not bankrupt.

So as to the nation, only if the U.S. was judged bankrupt upon petition in a Court having jurisdiction could it be bankrupt.

But as a sovereign nation, the U.S. cannot be sued, is not subject to the bankruptcy laws at all unless it consents. No Court has jurisdiction to hear such a case. The U.S. has moral and practical obligations to pay its debts, and a Constitutional mandate to pay; but it cannot be sued.

As a fact the sovereign United States of America has not defaulted on its debts; has not become insolvent; has not been judged bankrupt anywhere at any time.  It simply did not happen.

All it did was say that gold was no longer the backing for legal tender. It would no longer pay its debts in gold.

Even so, assuming a sovereign nation was bankrupt somehow what effect does it have on sovereignty? If it can be declared bankrupt; as I’ve shown, it cannot be sovereign in the first place. And the assertion that a nation if bankrupt is no longer sovereign is palpable nonsense.  There is no law, constitutional provision, historical treatise, or precedent. It has never happened.

There have been many nations which have gone into debt; in fact ALL of them; and quite a few who have become insolvent; and even defaulted on debt; yet they have continued to exist and function as sovereign nations.

A failure of a nation to meet bond repayments has been seen on many occasions. Philip II of Spain had to declare four state bankruptcies in 1557, 1560, 1575 and 1596. According to Kenneth S. Rogoff, “Although the development of international capital markets was quite limited prior to 1800, we nevertheless catalog the various defaults of France, Portugal, Prussia, Spain, and the early Italian city-states. At the edge of Europe, Egypt, Russia, and Turkey have histories of chronic default as well.”

(Reinhart, Carmen M. , Rogoff Kenneth S.; This Time Is Different: Eight Centuries of Financial Folly Princeton University Press, p. 30, Sep 11, 2009 as quoted at Wikipedia article “Bankruptcy” downloaded April 16, 2017)

Now it is true that Britain and the U.S. have invaded countries due to their defaults. If the invasion is successful then sovereignty, by definition, is lost over that territory at least temporarily. But current International Law prohibits invading another country for debt collection. And certainly even these proponents don’t suggest that we were invaded by another nation and thereby lost control of our entire country.

Here is a excerpt of a brief article on “sovereign default.”

Sovereign debt is different from private debt because creditors do not have a well defined claim on the sovereign’s assets. The lack of a procedure for enforcing sovereign debt contracts is partly due to the principle of sovereign immunity. However it also relates to the fact that, even if creditors obtain a favorable ruling, they cannot attach assets which are located within the borders of the defaulting country, and in fact have had limited success in going after assets located abroad.

Since contracts cannot be enforced, why do sovereigns repay and why do lenders lend?  The economist’s natural answer is that it must be the case that repaying is cheaper than defaulting. But what are the costs of default? In a seminal paper that kick-started the sovereign debt literature, Eaton and Gersovitz (1981) focused on reputational costs and showed that, under certain conditions, the threat of permanent exclusion from financial markets is a sufficient condition for repaying. Successive work by Bulow and Rogoff (1989) emphasized the possibility of trade sanctions. Cole and Kehoe (1998) showed that positive lending can be sustained even if creditors cannot punish defaulting countries. In this class of theoretical models incentives to pay come from the fact that a default would reveal negative information about the government to other parties that are engaging in transactions with the defaulting government.
Borensztein, Eduardo (Inter-American Development Bank) and Panizza, Ugo (UNCTAD -HEID)
The Costs of Sovereign Default: Theory and Reality

Note that nothing begins to suggest that loss of sovereignty is even a theoretical consequence of default. The term used in fact is sovereign default, not bankruptcy. There simply is no relationship and certainly nothing in the law, domestic or international, that terminates sovereignty based on debt, insolvency, default, or bankruptcy. Or leaving the Gold standard which over 250 nations have done.

So the assertion is boldly made, but unfortunately for the author the U.S. never became bankrupt, nor did it ever lose sovereignty. It is not even insolvent, nor was it in 1933.  And that should be the ultimate end of this.

But I will explore the basis on which they make these claims; not because it will make it so, but so we can show that it isn’t so even on the grounds they claim.

The cited Executive Orders and other references in fact relate to the Gold Standard. The U.S. no longer backed its currency with gold. And as noted previously that is well within the power of the Congress per the Constitution.

The idea that because we — like every other nation on Earth — no longer use gold to back our currency have lost our sovereignty and our government is being run by “the banks” is just not true. It’s a theory spun of dross to manufacture a basis to challenge the reality of our government’s sovereignty and it is fatally flawed.

The Courts on the Issue

Not surprisingly the courts dismiss this idea outright; they call these claims “irrational.”

“Congress is authorized to establish a national currency, either in coin or in paper, and to make that currency lawful money for all purposes, as regards the national government or private individuals.”
Juilliard v. Greenman, 110 U.S. 421, 448 (1884) 

As justification for that holding, Justice Gray relied upon the power of Congress to borrow money and on examination of the sovereign powers of (European) governments.

Sovereignty includes the power to borrow and certainly cannot be lost thereby.”
Juilliard v. Greenman, 110 U.S. 421, 448 (1884) 

And that was in 1884 when virtually all nations were on the gold standard.

But there is a 1935 case that completely refutes the arguments, and ironically the APFN quote above cites it as proof of the proposition.

“In the United States, sovereignty resides in the people who act through the organs established by the Constitution.

“The Congress as the instrumentality of sovereignty is endowed with certain powers to be exerted on behalf of the people in the manner and with the effect the Constitution ordains…

“The Constitution gives to the Congress the power to borrow money on the credit of the United States, an unqualified power, a power vital to the government, upon which in an extremity its very life may depend…

“The fact that the United States may not be sued without its consent is a matter of procedure which does not affect the legal and binding character of its contracts.

“While the Congress is under no duty to provide remedies through the courts, the contractual obligation still exists, and, despite infirmities of procedure, remains binding upon the conscience of the sovereign.”
Perry v. US (1935) 294 U.S. 330-381, 79LEd 912

Perry clearly says the U.S. is in fact sovereign, two years after the gold standard was abandoned; that the Congress has the absolute power to determine what is legal tender; and that in doing so Congress was in fact engaged in an exercise of sovereignty.

Going forward in this blog, when quoting others, my responses or interjections may be in Blue.

In more recent opinions:

Perhaps the most bizarre basis for Greenstreet’s position rests on the theory that the American system of currency is illegal and unconstitutional…Greenstreet apparently believes that he has never been provided with funding (i.e. “lawful money”) from the FmHA, under their contract, because it failed to give him money in silver or gold…Greenstreet contends that federal reserve notes are not legal tender, because they violate Article 1, Section 10, of the United States Constitution.

Defendant Greenstreet’s argument centers around his view that “the Congress of the United States of America declared a partial NATIONAL BANKRUPTCY on June 5, 1933, under H.J.R. 192 which abrogated the gold clause and deprived the American Citizens of their Constitutional Article 1, Section 10, lawful money” and that the “COINAGE ACT OF 1965 deprived the American Citizens of their required and mandated…silver coinage.” Thus, Greenstreet extrapolates, until he is given funds in silver or gold, he will not consider any past payment to have been acceptable or satisfactory.

But I bet Mr. Greenstreet used those “worthless non-money” Federal Reserve Notes to get valuable things from other people. What a neat way to steal from people. Borrow some “worthless” Federal Reserve Notes, buy things, and then refuse to repay on the claim that you didn’t borrow anything of value. By this you are either stealing from the people you got the notes from, or stealing from the people you gave them to. Or both.

The cited provision includes this:

“No State shall … coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts.”
Article I Sec 10

This explicitly applies to the States, not to the United States. The United States has made Federal Reserve notes legal tender, thereby regulating the value of coin using Article I Section 8 quoted above.

So this alone fatally wounds the oft-repeated contention. There is nothing in law that says the Federal government must use bullion, or that the national government is supplanted in some fashion if it doesn’t; going back to 1884 we have the courts recognizing the government can use paper money backed by nothing as legal tender for all debt. How well that works is a policy question for Congress and the Executive to resolve.  Or the voters by replacing those officials. And of course the fact that only Lebanon uses gold to back its currency now.

The Greenstreet court continues:

Attacking the legitimacy of federal reserve notes is not a novel argument. Others have asserted such claims; however, they have been summarily rejected. See, e.g.,Rothacker v. Rockwall County Central Appraisal District, 703 S.W.2d 235 (Tex.App.-Dallas 1985, writ ref’d n.r.e.) (citing state and federal authority declaring federal reserve notes to be legal tender). This Court will also reject Mr. Greenstreet’s coinage arguments… Defendant’s position is simply irrational.
United States v. Greenstreet, 912 F. Supp. 224, 229 (N.D.Tex. 1996)

The idea is rejected as irrational by the part of our government charged with evaluating such claims.

In a different case, by a Texas court:

Appellant’s reasoning … is that the appraisal of his property in dollars violates U.S. Const. art. I, § 10, cl. 1 which provides that “[n]o State shall . . . make any thing but gold and silver Coin a Tender in Payments of Debts.” Rothacker’s contention is without merit. U.S. Const. art. I, § 8, cl. 5 has long been recognized as providing Congress with the power to establish a uniform legal tender for the payments of debts. We agree with the reasoning of the Supreme Court of South Dakota that the mere utilization of a standard of tender prescribed by Congress is not state action as prohibited by U.S. Const. art. I, § 10, cl. 1. First National Bank v. Treadway, 339 N.W.2d 119, 120 (S.D. 1983). Article I, § 10 was intended to inhibit the ability of the states to create a form of legal tender and was not meant to preclude the payment of debts in any form of legal tender authorized by the federal government. See Richardson v. Richardson, 122 Mich. App. 531, 332 N.W.2d 524, 525 (1983).
Rothacker v. Rockwall County Central Appraisal Dist.703 S.W.2d 235, 236 (Tex. App. 1986)


The Traficant “Speech”

My objective in writing this and my other blogs is basically to examine the claims of sovereign citizens and others who make similar claims, and one hopes to show those making the claims that they are wrong and will lead to ruin. But more importantly I try to provide the truth to those who may be seduced by these ideas, so that they can benefit from hearing the real facts, the rebuttal to these outright irrational ideas, before they get into legal trouble. Following these theories can result in fines, seizure of your property, and jail or prison.  And James Traficant has been in Congress and in prison; and his protion of these theories is widely cited by the purveyors of these irrational legal concepts.

So I provide a comprehensive statement of this theory, contained in this “speech” from former Congressman Jim Traficant of Ohio; but I do so in order to show it is discredited.

I have not been to a major library to get access to The Congressional Record, and have only found this speech so far at sites that support these theories. In my experience that is a red flag because frequently it turns out the authority cited is not real or is at the least, misquoted. If it turns out to be fake or misquoted, that doesn’t affect my challenge to what is said; instead it would go to a lack of credibility of those who make these arguments.

Nevertheless this is a pretty clear and complete articulation of this Federal Reserve/Bankruptcy theory, so I offer it to show why it is not true.

Being in The Congressional Record does not mean it was spoken on the floor of the House (it was not, he asked to have it inserted into the Record); nor by any long shot does that guarantee that it is “true nor lend it any official or legal authority at all. It has two effects. One, Traficant is immune to being sued for saying it in this manner. It is what Traficant wanted in the record, however. The other is, it is easier to distribute and to fool people into buying into it as authoritative.

Traficant was eventually kicked out of the House and sent to prison being convicted for accepting bribes, filing false tax returns, racketeering and forcing his Congressional aides to work on his farm and boat… he was sentenced to eight years and served seven from 2002-2009; he died in Sep 2014.

Oh yes, of course “he was framed up.” How did I not know that? No way the cabal are about to allow him to speak the truth. But in the end either the argument stands or falls without regard to his convictions for crimes.

[See ]

The following was presented to the House of Representatives by Rep. James Traficant (D-Ohio) March 17,1993 and is part of the Congressional Record. (United States Congressional Record, March 17, 1993 Vol. 33, page H-1303)

Mr. Speaker, we are now in Chapter 11. Members of Congress are official trustees presiding over the greatest reorganization of any bankrupt entity in world history, the U.S. Government. We are setting forth, hopefully a blueprint for our future. There are some who say it is a coroner’s report that will lead to our demise.

No, You have to actually file for Chapter 11 Bankruptcy and the government has not done that. But I will accord Traficant the benefit of a doubt that he meant it metaphorically, rather than literally.

It is an established fact that the United States Federal Government has been dissolved by the Emergency Banking Act, March 9, 1933, 48 Stat. 1, Public Law 89-719 [sic]; declared by President Roosevelt, being bankrupt and insolvent. HJR 192, 73rd Congress session of June 5, 1933 – Joint Resolution to Suspend the Gold Standard and Abrogate the Gold Clause dissolved the Sovereign Authority of the United States and the official capacities of all United States governmental offices and departments and is further evidence that the United States Government exists today in name only.

I am not sure what he thinks the meaning of ‘established fact’ to be; this is more accurately called a ‘bald assertion not supported by the facts.’ (alt-fact?) 

PL 89-719 is an incorrect cite. The Banking Act of 1933 (Pub.L. 73–66, 48 Stat. 162,) was enacted June 16, 1933.  The act regulated banking to ensure that banks that were not solvent were not in business, and were taken over. It basically restricted banks from speculation in the investments market, insured deposits in credit worthy banks, and is credited with bringing unprecedented stability to banking for many decades. But if someone can point to the clause therein that dissolves the Federal Government…?

I have not been able to find any link to or reference to the  “EMERGENCY act,” which may have abrogated the gold standard, but that is not a violation of the Constitution as noted above; nor does it affect sovereignty under any international or domestic law, history, or tradition. And if this is not true, the rest of his argument is not true!

The receivers of the United States bankruptcy are the International Bankers, via the United Nations, the World Bank and the International Monetary Fund. All United States offices, officials and departments are now operating within a de facto status in name only under Emergency War Powers. With the constitutional Republican form of government now dissolved, the receivers of the bankruptcy have adopted a new form of government for the United States. This new form of government is known as a Democracy, being an established Socialist/Communist order under a new governor for America. This act was instituted and established by transferring and/or placing the Office of the Secretary of the Treasury to that of the Governor of the international Monetary Fund. Public Law 94-564, page 8, Section 13955 reads in part: “The U.S. Secretary of Treasury receives no compensation for representing the United States.”

Facts are so pesky. Let’s find some more. First, the Secretary is A Governor not THE Governor. He doesn’t run the IMF; he doesn’t run the U.S.A. either. Herewith some more facts”

The Board of Governors, the highest decision-making body of the IMF, consists of one governor and one alternate governor for [from] each member country. The governor is appointed by the member country and is usually the minister of finance or the governor of the central bank. All powers of the IMF are vested in the Board of Governors.

So he claims the Secretary of Treasury is no more, it is a hollow office whose occupant is instead the Governor of the IMF.

But he is appointed by the President and confirmed by the Senate. And he is one of over 100 Governors and they usually meet once a year. The Secretary of the Treasury is the “Governor for the United States” meaning only that he represents the US interests at the IMF. There is no law that makes him the “Governor OF the United States” nor could there be! The IMF is not superior to the U.S. Federal Government. It is not sovereign.

Second, what the law actually says is, “No person shall be entitled to receive any salary or other compensation from the United States for services as Governor, executive director, councillor, alternate, or associate.”

So the Secretary is paid to be Secretary of the Treasury and he is ex officio one of the Governors of the IMF so of course he doesn’t get paid separately for that…at any rate without a bankruptcy there is no receivership, receivers, etc…

Um. Oh I suppose it is minor point but in 1933 the United Nations did not exist.

Gold and silver were such a powerful money during the founding of the United States of America that the Founding Fathers declared that only gold and silver coins can be “money” in America. Since gold and silver coinage were heavy and inconvenient for a lot of transactions, they were stored in banks and a claim check was issued as a money substitute. People traded their coupons as money, or “currency.”

Currency is not money, but a money substitute. Redeemable currency must promise to pay a dollar equivalent in gold or silver money. Federal Reserve Notes (FRNs) make no such promises and are not “money.” A Federal Reserve Note is a debt obligation of the federal United States government, not “money.”

The federal United States government and the U.S. Congress were not and never have been authorized by the Constitution for the United States of America to issue currency of any kind, but only lawful money – gold and silver coin. Congress shall have the power …To coin money, regulate the value thereof, and of foreign coin

Actually NO; as noted above the Constitution says the STATES cannot make anything but gold or silver lawful tender; and the Court cases above unmistakably say so and that the Federal Government can make paper currency legal tender.

“Congress is authorized to establish a national currency, either in coin or in paper, and to make that currency lawful money for all purposes, as regards the national government or private individuals.”
Juilliard v. Greenman, 110 U.S. 421, 448 (1884) 

One can argue semantics over words such as money or currency, but legal tender is legal tender. It is what Traficant and those who cite him fervently wish to believe; but the Supreme Court decides what the Constitution means and this issue was decided more than 135 years ago.

Traficant continues:

It is essential that we comprehend the distinction between real money and paper money substitute. One cannot get rich by accumulating money substitutes, one can only get deeper into debt. We the People no longer have any “money.” Most Americans have not been paid any “money” for a very long time, perhaps not in their entire life. Now do you comprehend why you feel broke? Now, do you understand why you are “bankrupt,” along with the rest of the country?

Federal Reserve Notes (FRNs) are unsigned checks written on a closed account. FRNs are an inflatable paper system designed to create debt through inflation (devaluation of currency). when ever there is an increase of the supply of a money substitute in the economy without a corresponding increase in the gold and silver backing, inflation occurs.

Inflation is an invisible form of taxation that irresponsible governments inflict on their citizens. The Federal Reserve Bank who controls the supply and movement of FRNs has everybody fooled. They have access to an unlimited supply of FRNs, paying only for the printing costs of what they need. FRNs are nothing more than promissory notes for U.S. Treasury securities (T-Bills) – a promise to pay the debt to the Federal Reserve Bank.

There is a fundamental difference between “paying” and “discharging” a debt. To pay a debt, you must pay with value or substance (i.e. gold, silver, barter or a commodity). With FRNs, you can only discharge a debt. You cannot pay a debt with a debt currency system. You cannot service a debt with a currency that has no backing in value or substance. No contract in Common law is valid unless it involves an exchange of “good & valuable consideration.” Un-payable debt transfers power and control to the sovereign power structure that has no interest in money, law, equity or justice because they have so much wealth already.

The preceding  paragraphs are basically a lot of opinion, but in fact the whole world these days works on paper ‘money’ or even ‘virtual money,’ indeed not even currency, based on the assumption that the paper will be honored as having value. Oh, and Federal Reserve Notes are signed, by the way.

There are risks to that, but the alternative is to limit the supply of money to run a society of 7 billion people to the supply of metals, gold and silver. And there is nothing intrinsically valuable about gold or silver — land, wheat, corn, iron, electronics, even ideas, are also items of real value. If you buy a car it is valuable intrinsically, what does it matter whether you exchanged paper for it or gold; neither of them can be used to drive you someplace!

It is mere tradition that these metals are prized and valuable, largely based on the difficulty of counterfeiting and the utility plus significantly, the limited supply. Diamonds are valuable too, why are they not acceptable to back currency? Tradition.

Back to Traficant:

Their lust is for power and control. Since the inception of central banking, they have controlled the fates of nations.

To the sovereign citizens, banks are always bad. And they are always in control. Well maybe that’s actually true who knows, but…gold and silver don’t change that. However this can be seen to be a veiled opening of the door to anti-Semitism, because of the stereotype that Jews run all the banks, which, along with racism are frequent companions to the sovereign movement. Of course I cannot generalize as to particular people so I am not calling any organization or individual Anti-Semitic… the idea is anti-Semitic.

The Federal Reserve System is based on the Canon law and the principles of sovereignty protected in the Constitution and the Bill of Rights. In fact, the international bankers used a “Canon Law Trust” as their model, adding stock and naming it a “Joint Stock Trust.” The U.S. Congress had passed a law making it illegal for any legal “person” to duplicate a “Joint Stock Trust” in 1873. The Federal Reserve Act was legislated post-facto (to 1870), although post-facto laws are strictly forbidden by the Constitution. [1:9:3]

Canon Law is religious law. The Ex Post Facto prohibition in the Constitution applies to criminal offenses — you cannot retroactively make something criminal; and this is a lot of nonsense anyway. The prohibition referenced is an anti-forgery anti-counterfeiting provision.  It prohibited people from counterfeiting previously issued notes. If it is indeed ex post facto then no event before 1873 can be charged as a crime. But it seems to me he may be conflating at least two different laws. In any event, So What?

Traficant continues:

The Federal Reserve System is a sovereign power structure separate and distinct from the federal United States government. The Federal Reserve is a maritime lender, and/or maritime insurance underwriter to the federal United States operating exclusively under Admiralty/Maritime law. The lender or underwriter bears the risks, and the Maritime law compelling specific performance in paying the interest, or premiums are the same.

So now through many unsupported fictions we arrive at Admiralty Courts . The Federal Reserve is not sovereign it is completely a creation of U.S. Law and can be changed or eliminated by Congress. It is not a maritime enterprise, why would it be? How is that so? Because they use water in the restrooms at the Fed?

See the exploration of Admiralty Law to see how ridiculous this assertion is.

Back again to Traficant:

Assets of the debtor can also be hypothecated (to pledge something as a security without taking possession of it.) as security by the lender or underwriter. The Federal Reserve Act stipulated that the interest on the debt was to be paid in gold. There was no stipulation in the Federal Reserve Act for ever paying the principle.

Prior to 1913, most Americans owned clear, allodial title to property, free and clear of any liens or mortgages until the Federal Reserve Act (1913) “Hypothecated” all property within the federal United States to the Board of Governors of the Federal Reserve, -in which the Trustees (stockholders) held legal title. The U.S. citizen (tenant, franchisee) was registered as a “beneficiary” of the trust via his/her birth certificate. In 1933, the federal United States hypothecated all of the present and future properties, assets and labor of their “subjects,” the 14th Amendment U.S. citizen, to the Federal Reserve System.

In return, the Federal Reserve System agreed to extend the federal United States corporation all the credit “money substitute” it needed. Like any other debtor, the federal United States government had to assign collateral and security to their creditors as a condition of the loan. Since the federal United States didn’t have any assets, they assigned the private property of their “economic slaves”, the U.S. citizens as collateral against the un-payable federal debt. They also pledged the unincorporated federal territories, national parks forests, birth certificates, and nonprofit organizations, as collateral against the federal debt. All has already been transferred as payment to the international bankers.

Much paranoid fantasy here. Very few other than sovereign governments have or ever had ‘allodial’ title, which among other things means, property not subject to taxation. In English Common Law all land is held in fee simple, and that’s always been the case, long before the Fed came into being. Your birth certificate makes a legal record of your birth and nothing more, it is not a stock certificate nor a pledge of any kind (though in many cases it is proof that you are a citizen of the U.S. even if you would rather not be. You can renounce by leaving the country and declaring so at a consulate).

Read the ‘terms’ printed on your Birth Certificate, does it say it’s a contract, a promissory note, or anything of the sort? NO!

“Neither Birth Certificates nor social security numbers recognize or impose contractual rights, obligations, or duties

Brandon Shane Gravatt v The United States (pdf only) United States Court of Federal Claims No. 11-592C (Filed: September 27, 2011)  also reported in the press

No one holds title to your person. That is just paranoid fantasy.

“The full faith and credit of the United States” backs its debts so indeed, we can be taxed to pay off that debt (after all it’s our government that borrowed it), but we get many things of value for the debt. And we get to vote in or out the people who spend the money and tell our new elected representatives to do something different.

And as long as we are looking at absurd extensions of theory as a sovereign nation the U.S. could simply refuse to pay its debt, though it will never happen it’s certainly no more wild a theory than that your house is owned by the international banking cabal or the Federal Reserve…but not to Traficant:

Unwittingly, America has returned to its pre-American Revolution, feudal roots whereby all land is held by a sovereign and the common people had no rights to hold allodial title to property. Once again, We the People are the tenants and sharecroppers renting our own property from a Sovereign in the guise of the Federal Reserve Bank. We the people have exchanged one master for another.

This has been going on for over eighty years without the “informed knowledge” of the American people, without a voice protesting loud enough. Now it’s easy to grasp why America is fundamentally bankrupt.

Why don’t more people own their properties outright? Why are 90% of Americans mortgaged to the hilt and have little or no assets after all debts and liabilities have been paid? Why does it feel like you are working harder and harder and getting less and less?

As to that last paragraph, could it be personal choice? Inequitable distribution of income? The fact that taxes have shifted so that the average individual and the less wealthy are carrying a far higher percentage of the load than in the past? Globalization of the economy? Decisions of corporations to relocate production to cheap labor pools? Perhaps the application of governmental power is too light rather than too heavy? Perhaps we have let things get out of hand, indeed we have transferred vast wealth to a very few people in the past 3 decades… but mostly those are our choices and we can change them. We are not slaves, if we vote we control outcomes, if we just showed up at the polls we would change things…what is certain is that it is not the result of slavery or ownership of the people nor their personal assets by the cabal…

Traficant continues:

We are reaping what has been sown, and the results of our harvest is a painful bankruptcy, and a foreclosure on American property, precious liberties, and a way of life. Few of our elected representatives in Washington, D.C. have dared to tell the truth. The federal United States is bankrupt. Our children will inherit this un-payable debt, and the tyranny to enforce paying it.

America has become completely bankrupt in world leadership, financial credit and its reputation for courage, vision and human rights. This is an undeclared economic war, bankruptcy, and economic slavery of the most corrupt order! Wake up America! Take back your Country.”

Thus concludes the ranting attributed to Jim Traficant, disgraced ex-Congressman and Federal felon.

And there is no support for the propositions that the US is bankrupt, nor for the illogical consequence of loss of sovereignty were it to be so.

Claimed: The Uniform Commercial Code (UCC) Governs All Court Cases

Sovereigns have hawked the UCC aggressively and misused it to file liens on the property of police, prosecutors, judges, and just anyone they have a grudge against. They claim that as sovereigns they are immune to police or courts and charge them fees per minute or hour for talking to cops, or being in court, then file liens on their property to “collect” those fees.

So let’s debunk the myth that Congress enacted the UCC into law and it somehow makes all law commercial in nature because it does nothing of the sort; or that because they claim the US Is Bankrupt the courts can only hear commercial issues due to that alleged bankruptcy. The US is not bankrupt, and contrary to their claims, all court cases are not ‘governed by the bankruptcy’ whatever that means.

And they say the government is actually a corporation (it’s not) so they presume you can only relate via contract (because they think a corporation and thus the UCC defines everything in your relationship with the government.

What is the UCC?

“The Uniform Commercial Code (UCC), first published in 1952, is one of a number of uniform acts that have been put into law with the goal of harmonizing the law of sales and other commercial transactions across the United States through UCC adoption by all 50 states, the District of Columbia, and the U.S. Territories. While largely successful at achieving this ambitious goal, some U.S. jurisdictions (e.g., Louisiana and Puerto Rico) have not adopted all of the articles contained in the UCC, while other U.S. jurisdictions (e.g., American Samoa) have not adopted any articles in the UCC. Also, adoption of the UCC often varies, although to different degrees, from one U.S. jurisdiction to another. Sometimes this variation is due to alternative language found in the official UCC itself. At other times, adoption of different revisions to the official UCC contributes to further variation. Additionally, some jurisdictions deviate from the official UCC by tailoring the language to meet their unique needs and preferences. Lastly, even identical language adopted by any two U.S. jurisdictions may nonetheless be subject to different statutory interpretation by each jurisdiction’s courts.

“The goal of harmonizing state law is important because of the prevalence of commercial transactions that extend beyond one state. For example, goods may be manufactured in State A, warehoused in State B, sold from State C and delivered in State D. The UCC therefore achieved the goal of substantial uniformity in commercial laws and, at the same time, allowed the states the flexibility to meet local circumstances by modifying the UCC’s text as enacted in each state. The UCC deals primarily with transactions involving personal  (movable property), not real property (immovable property).

“Other goals of the UCC were to modernize contract law and to allow for exceptions from the common law in contracts between merchants.”

Wikipedia, Uniform Commercial Code

(There is a timeline for the UCC just check the link.)

The Truth About Common Misconceptions of the UCC

  1. It is not a Federal law;
  2. It is not a treaty of any kind;
  3. It is not a contract;
  4. Each State chooses to adopt it or not, making it a State statute (law) and many States have made modifications to it, so it is not actually “uniform”.
     (Note that many of the very same people who claim it becomes the only applicable law also argue that statutes are not laws –they are. )
  5. It applies only to businesses and commercial transactions. No that does not mean that your relationship to government is a contract. But that is what they usually claim,  making every law and every court all about the UCC, Because otherwise how could UCC possibly apply? It isn’t and it doesn’t and unless you are litigating a commercial transaction under the UCC it doesn’t apply to court proceedings.
  6. UCC is incompatible with maritime law, most of which is a different set of rules for resolving commercial issues for transactions involving navigable waterways  and cargo shipped on the seas. If you are in a court of Admiralty you cannot apply UCC any more than you can use Admiralty law outside an admiralty court.
  7. The idea that it is related to the “bankruptcy” of 1933, or the 1915 establishment of the Federal Reserve, or something from 1789; or 1791; or whatever other mythology the speaker claims, is simply nonsense; because  the UCC was first proposed in 1952 (and because there was no bankruptcy).
  8.  The US is still a sovereign nation and the States are still sovereign. Nothing in UCC nor in any of the alleged events cited have or could have changed that.

So the claim that the UCC is the basis of the laws making driver licenses, for example, to be contractual, becomes impossible to swallow. The Courts are not having it, and do not apply contract law to your relationship to the government. If government is a corporation it doesn’t mean it’s a business (and States and the US are not corporations) so that just doesn’t find acceptance in the courts.

Here’s what one (Texas) court said:

Appellant alleges that the trial court erred in failing to apply the TEX.BUS. COM.CODE ANN. (hereinafter “UCC”) specifically section 1.103 to the instant case. According to Appellant, common law provides that there can be no criminal act unless there is damage. She then argues that since the UCC requires that contract law be in harmony with common law, and the State is assuming jurisdiction under a treaty which is a form of contract, the State is bound by the UCC. Appellant then concludes that because there was no damage as a result of the alleged speeding violation, she has committed no crime under Texas law.  We find this point without merit.

First, the UCC is not applicable to criminal proceedings; it applies to commercial transactions. See TEX.BUS. COM.CODE ANN. Sec. 1.102 (Vernon 1968).

Moreover, the regulation of speed limits is specifically authorized under the UNIFORM ACT REGULATING TRAFFIC ON HIGHWAYS, TEX.REV.CIV.STAT.ANN. art. 6701d (Vernon 1977). Section 22 of that act provides that “It is unlawful and unless otherwise declared in this Act with respect to particular offenses, it is a misdemeanor for any person to do any act forbidden or fail to perform any act required in this Act.”
Barcroft v. State 881 S.W.2d 838, 840 (Tex. App. 1994)


The US is not bankrupt, the use of gold and silver in currency or coins is not a Constitutional mandate, the debts of the United States are valid and backed by our nation, the US did not lose sovereignty when it didn’t declare bankruptcy, nor would it for that reason. The courts find the notions “simply irrational” and are not secretly bound to send your money or person or living man to the King (nor anyone else) in payment for our debt. Your birth certificate is not a stock certificate that someone can buy. What absurd ideas!

And the UCC is irrelevant, not a federal law, and has no applicability to criminal issues. You can make UCC demand notices, use all the magic phrases you like and tell the judge he has no UCC authority since you haven’t signed a contract; and you will still end up in jail. (And no access to the Floo Network there either; your magik ideas and words will not save you.)

There is no contract, the US and each State is sovereign; each exercises jurisdiction over everyone in its borders; and no matter how much you believe I am wrong, unless the courts recognize your arguments you will lose. 

=                                       More Blogs by Philipem 1000                                       =

Sovereign Citizens and Fellow Travelers

=                                                          The Law                                                          =
Sources Of Law and Authority

Are Statutes Laws?  What About Regulations ?

Strawman Theory and CAPITAL Letters

A collection of court cases
  quoted regularly in response to sovereign citizen
ideas and challenges to the driver license laws.

=                                                  The US and the States                                                =

Do You Need a License to Drive ?

The United States Is A Corporation

(Or If You Prefer, It Can Be An Elephant )

The US Became Bankrupt in 1933 &

Federal Reserve Notes are Not Legal Currency

The United States is still a British Colony

There are Three United States

=                                                 The Courts                                                     =

A Lost 13th Amendment
Removes all Legitimacy from Courts

All US Courts hear only Admiralty Cases

US Courts are Administrative, Not Judicial

All Lawyers take a Secret Oath to Hide ‘The TRUTH


1 thought on “The US is Bankrupt; Currency is Not Legal Money; and the UCC is Ultimate Law? Sorry, No Sale.”

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