Lawful money itself cannot be used for reserves. And gold is not used for reserves these days, as the Fed has had to 'lease' its gold (used to be the people's gold, before FDR confiscated it and gave it to the Federal Reserve) to suppress the price of gold, so the sheeple will not snap to the fact that the 'money' they use is actually debt. The banks all use commercial paper, mortgages, other supposedly 'good' evidences of debt for their reserves at the Regional banks, and the Regional banks all use US Treasury bonds as reserves. But as mikecz noted, the idea of 'reserves' is now passe; banks create new 'money' (which is just numbers in a computer) whenever they create a new loan, and the reserve requirements are so trivial that they can be ignored. This is the definition of easy credit, but it still fails if no one will borrow any new money into creation. This is why the corporate government continues to run up new increased spending programs every year, so they can borrow the money directly and place it into circulation via welfare and warfare programs. The Fed wants inflation, as this increases tax revenue while decreasing the buying power of the sheeple, thus indirectly transferring more of the gross national product into the control of the kleptocrats. It's all about money and power.

The real key to lawful money is that it is foreign currency per 12 USC 95 a. Because it discharges debt, it can be used to remove assets from the social security trust ponzi. US citizens have no rights inside the trust except naked use; the states hold the legal title to assets held in the NAME account, and the corporate federal government holds the equitable title. This is the same as a serf living on the local lord's land: he cannot own anything, but he has the use of the land, and the crops he can get it to produce through his labor. But suppose he builds a wheel barrow out of local materials. Legally the barrow belongs to the lord; the serf can only use it. But now suppose the miller comes by from the local town and trades the serf some milling services for the barrow. It leaves the lord's lands, redeemed in foreign currency. Thus by using lawful money, which the corporate government cannot tax, assets can be redeemed from the trust by discharging the debt that is attached to the title by the security agreement which the federal government has executed in favor of the IMF. The only way to get assets out of the usufruct trust is to buy them in your own name. This is the activity which 12 USC 95 a gives the president the power to prohibit, as those assets (bank accounts, houses, cars, which you thought were yours), are claimed by the government and pledged to the bankers as collateral for the debt, which can never be repaid, and can be foreclosed by the bankers whenever they choose... But when held in your own name, the assets are only taxable per the methods allowed by the Constitution: income from labor, not taxable at all, property only by allocation to the states by population.

The tax benefit of lawful money arises from its issuance by the US Treasury, per the Constitution. Thus the Constitution determines how it can be taxed. The federal government corporation can only tax FRN's. The tax is on the privilege of being a card-carrying socialist member of the social security 'trust,' and thus a voluntary debt slave who agrees to submit to taxes on all the things which used to be unalienable rights, such as your labor and property, which you agree to give to the government, in exchange for all the benefits of socialism. Your social security number marks you (mark of the beast) as a US citizen, and everyone is trained through endless propaganda programs to treat you as property as soon as you admit to having a social security number. Refusal to use the NAME and SS# should allow you to operate as an American Citizen, with Constitutional rights, or at least unalienable rights, but the system is now set up to exclude you from operating within society while not agreeing to be a socialist, so there will be a lot of pushback from public agencies, banks, corporations, police, etc when you decide to start being free of the oppressive skein of man-made laws.

Freed