Tuesday, May 17, 2011

A Viable Monetary System With Gold, Silver And Trust As Its Foundations

1) Gold and silver circulating as two independent forms of money without fixed, but (truly free) market-determined ratios to each other.  Plus;

2) Currency redeemable in gold and silver at non-fixed fluctuating rates, circulating alongside, and competing with, precious metal money.

3) A nonprofit national bank that issues gold- and silver-backed currency only, but NOT debt- or credit-generated money.

4) A private for-profit banking sector that can issue loans for productive enterprise or sensible purchases or even speculation purposes. NO reserve requirements and FRACTIONAL banking is permitted.  But; credit, scrip, funds or capital based on, or generated through, these loans are not legal tender nor payment in full for any good or service.  Any such loans must be repaid in gold-backed legal tender, or gold, or actual material items or valuable services or intellectual property, as specified in the contract between lender and borrower.  This ensures that the banker is only somebody trustworthy who is actually capable of providing a valuable service to the community by virtue of introducing business partners to each other and facilitating their business with liquidity or credit, in the form of loans that people have confidence in.  Essentially, the private banker's capital is his reputation and the trust that people place in him.

However, NO FDIC, i.e., NO arrangements or institutions that permit the socialization of losses and the privatization of profits. The National Bank does not guarantee private currency, scrip, funds, nor private loans.  You gamble, you may lose. The banker gambles, he can lose. The banker cheats, he faces justice.

This monetary system represents the best compromise between individual freedom and justice, and a viable foundation for our civilization.


  1. If you are afraid that your gold reserves will be drained by foreigners - who must exchange their goods and services which are ANOTHER form of wealth to begin with, against your gold reserves - you could make your currency convertible to gold and silver ONLY for individual citizens who would be free to redeem currency for gold and silver at any quantity but NOT take the gold out of the country beyond a nationally-agreed-upon limit through popular referendum.

  2. Str8Talk | Feb 8, 2012 11:37 AM ET

    The FED should be nationalized not abolished.

    Jay070 | Feb 8, 2012 11:38 AM ET
    Typical mainstream press article that glosses over the real problem - banks creating all our currency as interest-bearing debt owed to them.

    The government should be creating our currency and spending it into circulation debt-free. The value would be backed up by the labor and wealth of the nation. Bankers wouldn't then be unjustly enriching themselves and putting the rest in debt.

    The Federal Reserve System was a lie from the beginning. It allows government to spend freely without taxing the people but also enriches the banking class unjustly in the process.
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    Jay070 | Feb 8, 2012 11:40 AM ET
    Also banks should only be allowed to loan money they actually have. Anything else is fraud and theft.

  3. Art

    I have a few questions for you.

    1) How old are you?

    2) What is the difference between the Action you advocate, and that advocated by freegold?

  4. My age is irrelevant.

    Freegold argues for EXCLUSIVE usage of "worthless tokens" or fiat currencies as money. I'm against this "exorbitant privilege" granted to fiat currencies by Freegold and its advocates. Gold and silver and also gold-backed hard currencies must be used as money in parallel with fiat or "worthless tokens" and sovereign IOUs. This is the only way to take unwarranted power away from the bankers - which is the ultimate goal of monetary reform - because the market will not allow them to steal through inflation by redeeming their "worthless tokens" for gold and silver when the bankers attempt to screw us by creating money out of thin air.

    1. You did not answer either of my questions.

      I know your age is mostly irrelevant, but I am curious.

      My second question also stands. What Actions are advocated by each school? And how do these differ?

  5. Just because you claim that I did not answer your question(s) doesn't prove that I did not in fact answer your questions.

    One last time then, and NOT for your sake, as I don't believe that you're acting in good faith.

    Freegold says use ONLY "worthless tokens" as money.

    I say, NO, use gold as money as well because it levels the playing field. We can't print "worthless tokens" but the bankers CAN. On the other hand, neither bankers nor we can print gold into existence.

    If only fiat is money, then the bankers can issue "money" and buy everything's that's for sale. But we, regular folk, CAN'T. Why bankers, who have proven themselves to be crooks and incompetent, should be given a charter to write themselves checks when, if we did the same thing, we'd go to jail?

    Freegold says empower the bankers to continue to commit crimes in all legality by having the MONOPOLY to issue money. I say, NO, no monetary monopoly is to be granted to ANYONE.

    If you will still PRETEND to not understand after all these explanations, then we'll have the proof that you're not acting in good faith for my argument is based on fact and not belief.

    Why give a knife (monopoly to issue money) to a serial killer (the bankers) or let the fox guard the hen house? Simply holding gold as FOFOA disingenuously suggests, will not stop the bankers from committing fraud and causing mischief with the fiat money they're allowed to print.

    If gold is not money, then, by definition, it's a commodity whose value will be determined by the "worthless tokens" that the bankers wield. In that case, holding gold would be as useless for financial protection as wearing a life jacket in the midst of an inferno.

  6. Art

    Perhaps the fault is mine for not being clear enough.

    You are answering about perceived thoughts not actions. Without action, thought is simply mental masturbation.

    So let me restate one more time. What ACTION is recommended by freegolders to average joe Today? What action do you recommend? How do these differ?

    I'm sorry, I thought my question was clear.

  7. Freegolders say buy gold to protect yourself and do nothing else to change the status quo. Even assuming that some of you recommend this course of (non)action in good faith, it is at best burying your head in the sand and hoping for the best.

    I say buy gold, yes. But don't lie to yourself, don't preserve the status quo and do whatever you're willing to do, and are capable of doing, to enact peaceful change. Concretely speaking, the least you CAN do is to not vote Democrat or Republican. Vote for a third party ALWAYS. Educate your friends and family about the corruption and unsustainability of our political and economic sytem. If you're a manager, hire workers who understand this and promote them. If you're rich, tell your rich friends that it is better to have two Rolls Royces instead of 10 BUT be able to drive them with peace of mind - which is only possible in a world where the rich do not always get richer and the poor, poorer. If you're a politician but somehow a decent person, skillfully navigate the system to enact legislation that's reformative. If you're the President, then uphold the Constitution you swore to protect and enforce the law of the land which says that precious metals are MONEY.

  8. As a concrete application of the philosophy expounded above,

    I went shopping for groceries yesterday and saw a black kid in the parking lot soliciting donations for children. Looked legit. Now most people just walk by, a few give something. I approached this young man and told him, We are supposed to be living in the richest country of the world; and we spend billions and trillions to bring death and destruction to millions of human beings elsewhere, in the name of bringing democracy and freedom to them. But HE has to beg people in the street for a few bucks for the sake of OUR children? Make people THINK. FOFOA wants you to do the opposite. FOFOA wants to sterilize and isolate gold out of the system in order to preserve the status quo. Don't forget to read the above as well.

  9. Alright, so your problem with our general philosophy then is that we do not attempt to fight Leviathan, inasmuch as we only hurt it where it hurts most by taking our savings outside its jurisdiction.

    Philosophically I can tell you that we do not differ much in what we think would be best for everyone.

    The difference though is through our understanding we have come to understand that what we want, the justice you yourself are fighting for, will come to pass whether we take action, or don't take action, because the current system is unsustainable.

    For myself, I try and starve the beast as much as possible, having a strong background in objectivist philosophy. This is however not central to the freegold paradigm, although you will find that nearly all of us share a similar mindset, and do what we can to protect ourselves and our loved ones from what is coming, and strive to be independent.

    I do not understand why you have so much hate, or I do in a sense, but I do not understand why you direct it at people who take essentially the same action as you do, and hold essentially the same beliefs, but are taking a different though similar path to achieve the same goals.

    We are not enemies, though you treat us as such.

  10. Look,

    Not voting Democrat nor Republican IS NOT 'fighting Leviathan.' It's perfectly legal - just as giving somebody else a piece of your mind is. So, right there, you are in fact lying.

    Calling a spade a spade, in other words, being truthful, is not an act of hate either. By saying that it is so, you are lying again.

    You call yourself an objectivist philosopher. The above statements are as equally irrefutable as 2+2=4. So, have a nice day.

  11. I would say in some small measure it is, as they are the status quo. Who is being disingenuous now?

    Not that it matters much to me, in case you forget I am a South African national.

    Fact is, you have amply demonstrated that you do not understand freegold.

    I have tried to simplify matters ito practicality. Practically we do the same things and we want the same things, but go about it differently, and this justifies in your mind you coming onto our blog and constantly spewing insults and swearing at us. And you do not think this is hateful???

    You, brother, need to consider whether you are in fact deluding yourself.

  12. Who started insulting who and how?

    If you are afraid to vote anonymously for a legal political party, then don't try crossing the street either, OK? The leviathan will crush you. Seriously, you don't think that even talking about gold is "in some small measure" taking on the Man behind the curtain? You should be afraid, very afraid...

    "Fact is, you have amply demonstrated that you do not understand freegold."


    Prove it, Mr. objectivist philosopher.

  13. Whatever man.

    You seem to be unable to channel your rational anger in constructive ways, and instead attack natural allies due to a slight difference in philosophy.

    Hell, I would hate to see you go at keynesian voodoo high priests... but wait, you don't. Instead you spend all your time attacked fellow gold advocates.

    Just... whatever.

  14. Freegolders are more harmful than "Keynesian voodoo priests" because they claim to be gold's friend. They are not, hence the deviousness and danger. Everybody knows Keynesians are wrong, even about Keynes himself. No challenge there.

  15. **Since none of you can issue your own (national) currencies, none of you are citizens of sovereign countries, that is, none of you are free peoples. You are all the bankers' willing slaves. The manipulation of gold's price lower, is the principal method used by the bankers to hide this fact in plain sight. If gold is not money (alongside whatever else) than you are a slave, period. Read on.**

    Worse than the bankers rigging gold and silver prices and not having the gold they sold you (or selling gold that they don't have via fraudulent COMEX Futures contracts), is the fact that we don't even have MONEY today. Therefore all financial transactions and economic numbers predicated on the existence of money are FRAUD and FORGERIES currently.

    Electronic digits and paper fiat currencies in use today are NOT money, according to the law of the country that issues the reserve currency of the world, the US Dollar (Article 1, Section 10 of the US Constitution); or by the tenets of the science of Economics (i.e., fiat currencies are not money because they are not a store of value nor a unit of account due to the fact that NOT ONE fiat currency's value is determined or stipulated in concrete legal terms). Dollars and Euros and Yens are not even lawfully DEFINED as to what they are, what their economic worth and transactional value is, hence they cannot constitute the legal foundation of any lawful contract!

    (Also, there cannot be either inflation nor deflation in the ABSENCE of money. Both inflation and deflation are monetary events hence cannot take place where there is literally no money.)

    What we have today is massive GLOBAL FRAUD mascarading as a monetary system based on the (fraudulent) US dollar -- all fiat currencies are basically a derivative of the US dollar, including the Euro, the Yen, the Yuan, the Rouble, the Shekel and the Riyal.


    Why do a few people get the right to print fake fiat money out of nothing and buy your goods and services with it, whereas you have to WORK to obtain the same worthless money created out of nothing?

    THAT is the question at the heart of the matter. That the bankers manipulate interest rates or the price of gold via fraudulent Futures trading (by selling gold that they don't have) with fiat money is a moot point.

    To put it differently: why do the bankers get to have anything that they want without working for it and you, you don't?

    All this talk about market rigging, monetary theory and fraudulent (paper) gold trading is a cover-up for INJUSTICE.

    The US Constitution FORBIDS the use of debt as money; the US Constitution proscribes (debt) notes which is what the US dollar is presently. Think, all other currencies are just another name for the US Dollar.

    What passes for money today is a CRIME, no more no less.


    you are all aiding and abetting this crime every time you buy, sell or get paid.

    And then you ask, Why our leaders, the politicians, the bankers, and our military men and women are EVIL?

    The answer is, because YOU are the enemy!

    The only difference between YOU and the bankers is your bank account.

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  17. Bravo. Complicity, moral cover, and the nature of money. Essential yet unknown concepts to those who think they are free.