Gold As A Past and Future Money
Gold As A Past and Future Money by Rory – The Daily Coin
Some of the greatest, most productive times in human history unfolded while a nations economic and financial systems were tied to gold and silver. Throughout all of history you can see that societies were at their best, with the highest standard of living and strongest communities ties while their system of commerce operated using silver and gold coins as their primary currency. During an interview with Alasdair Macleod, Head of Research, GoldMoney, he explained that people are seemingly happier when they own they gold. Robert Kioysaki, Rich Dad / Poor Dad, has said that having gold closer to your person naturally attracts wealth. Of course neither of these have been proven “scientifically”, but then again neither has the existence of God, but a lot of us understand and know that God is truth.
The Federal Reserve System has all but destroyed the American economy and made the financial system nothing more than a big wealth transferring machine whose primary business model is fraud. If not, why are JPMorgan/Chase, Bank of America, Wells Fargo, CITI and several other “too big to jail” banks still operating after the 2008 financial implosion?
The situation unfolding with Turkey, a NATO ally, as their currency implodes combined with the forthcoming sanctions against Russia and Iran this is creating a window of opportunity that may open the door to a new gold backed currency or some type of quasi-gold reserve.
As Steve Hanke recently explained:
The weight of sanctions has clearly created great difficulties for the Iranian rial, Russian rouble and Turkish lira. Indeed, even in the best of times, these are all half-baked currencies with long troubled histories. They are all vulnerable to sanctions.
Indeed, their vulnerability should be viewed as threats to national security.
So, how can Iran, Russia, and Turkey escape the sanctions stick? They could make their currencies as good as gold. This would provide an attractive escape.
Gold is already an international currency that holds its purchasing power over time. It is also a currency that is not issued by a sovereign. So, it has no political baggage to carry.
In addition, gold is already widely revered and used in Iran, Russia, and Turkey.
In 1997, Bob Mundell predicted that “Gold will be part of the structure of the international monetary system in the 21st century.” As has often been the case, Mundell’s prediction might just be prescient.
Indeed, Iran, Russia, and Turkey could, and just might, make Mundell’s prediction a reality. One foolproof way to do that is via gold-based currency boards. Currency boards have existed in more than 70 countries, and a number are in operation today.
Countries with such monetary institutions have experienced more fiscal discipline, superior price stability, and higher growth rates than comparable countries with central banks.
A currency board is a monetary institution that only issues notes and coins. These monetary liabilities are freely convertible into a reserve currency (also called the anchor currency) at a fixed rate on demand. The reserve currency is a convertible foreign currency or a commodity chosen for its expected stability.
For reserves, such a currency board holds low-risk, interest-earning securities and other assets payable in the reserve currency.
By law, a currency board is required to maintain a fixed exchange rate with the reserve currency and hold foreign reserves equal to 100 per cent of the monetary base. This prevents the currency board from increasing or decreasing the monetary base at its own discretion. A currency board system is passive and is characterised by automaticity.
Currency boards have existed in some 70 countries. The first was installed in the British Indian Ocean colony of Mauritius in 1849. No currency board has failed.
Yes, no failures. Argentina’s Convertibility system (1991-2001) was not a currency board.
Currency boards’ perfect record includes the National Emission Caisse, established in northern Russia in 1918 during Russia’s Civil War. The Caisse issued “British rouble” notes, backed by pound sterling and convertible into pounds at a fixed rate. The father of the British rouble was none other than John Maynard Keynes, a British Treasury official at the time. Source
This is to say nothing of what Representative Alexander Mooney (R) WV introduced to the House in March 2018 in HR 5404
To define the dollar as a fixed weight of gold.
IN THE HOUSE OF REPRESENTATIVES
March 22, 2018
Mr. Mooney of West Virginia introduced the following bill; which was referred to the Committee on Financial Services
To define the dollar as a fixed weight of gold.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
Congress finds the following:
(1) The United States dollar has lost 30 percent of its purchasing power since 2000, and 96 percent of its purchasing power since the end of the gold standard in 1913.
(2) Under the Federal Reserve’s 2 percent inflation objective, the dollar loses half of its purchasing power every generation, or 35 years.
(3) American families need long-term price stability to meet their household spending needs, save money, and plan for retirement.
(4) The Federal Reserve policy of long-term inflation has made American manufacturing uncompetitive, raising the cost of United States manufactured goods by more than 40 percent since 2000, compared to less than 20 percent in Germany and France.
(5) Between 2000 and 2010, United States manufacturing employment shrunk by one-third after holding steady for 30 years at nearly 20,000,000 jobs.
(6) The American economy needs a stable dollar, fixed exchange rates, and money supply controlled by the market not the government.
(7) The gold standard puts control of the money supply with the market instead of the Federal Reserve.
(8) The gold standard means legal tender defined by and convertible into a certain quantity of gold.
(9) Under the gold standard through 1913 the United States economy grew at an annual average of four percent, one-third larger than the growth rate since then and twice the level since 2000.
(10) The international gold exchange standard from 1914 to 1971 did not provide for a United States dollar convertible into gold, and therefore helped cause the Great Depression and stagflation.
(11) The Federal Reserve’s trickle down policy of expanding the money supply with no demand for it has enriched the owners of financial assets but endangered the jobs, wages, and savings of blue collar workers.
(12) Restoring American middle-class prosperity requires change in monetary policy authorized to Congress in Article I, Section 8, Clause 5 of the Constitution.
SEC. 2. DEFINE THE DOLLAR IN TERMS OF GOLD
Effective 30 months after the date of enactment of this Act—
(1) the Secretary of the Treasury (in this Act referred to as the “Secretary”) shall define the dollar in terms of a fixed weight of gold, based on that day’s closing market price of gold; and<
(2) Federal Reserve Banks shall make Federal Reserve notes exchangeable with gold at the statutory gold definition of the dollar.
SEC. 3. DISCLOSURE OF HOLDING
During the 30-month period following the date of enactment of this Act, the United States Government shall take timely and reasonable steps to disclose all of its holdings of gold, together with a contemporaneous report of any United States governmental purchases or sales, thus enhancing the ability of the market and of market participants to arrive at the fixed dollar-gold parity in an orderly fashion.
One of the most attractive aspects of HR5404 is it’s simplicity. It’s one page, simple easy to understand language and if you understand anything about our current economic and financial systems then you know this Bill could free our economy and bring the Constitution back to our society. The enemy has brought us a series of laws, regulations and changes to our systems that entrap us, gold and a gold backed currency breaks the chains. This Bill could return sanity to our system OR the President could simply enact an Executive Order and wipe the Federal Reserve off the map in the exact same fashion as it was born.
Are we going to return to a gold standard? Not today, but we may have some type of gold standard within the next decade. We feel there will be a slow walk to of monetary change over the next decade and from all indications gold will be part of these coming changes. My biggest fear is gold will be used for global trade but be outlawed or unavailable for the citizens to use.