Tenth Amendment Center: Gold Payment Systems Provide an Alternative to Government Money

From Tenth Amendment Center

...from Tenth Amendment Center

The federal government tries to maintain a monopoly on money, but you don’t have to use it. You can use an alternative. It’s just like the US Post Office. You don’t have to use the government option. You can ship a package with FedEx or UPS. In the same way, you can use an alternative to government money – you can use gold or silver.

Last week, the Texas Bullion Depository opened for business. The facility will not only provide a secure place for individuals, business, cities, counties, government agencies and even other countries to store gold and other precious metals, the law also creates a mechanism to facilitate the everyday use of gold and silver in transactions. In short, a person will eventually be able to deposit gold or silver – and pay other people through electronic means or checks – in sound money.

Some private companies already offer this option, including Utah-based United Precious Metals Association and a Canadian company called Goldmoney.

Goldmoney owns SchiffGold, founded by financial guru Peter Schiff. Peter recently talked about the benefits of using gold and silver in everyday transactions during a speech at the International Mining Investment Conference, in Vancouver, B.C.

As Peter pointed out, gold wasn’t always money. At first, people bartered. They traded apples for eggs, or chairs for belts. Over time, they realized they could just trade in one commodity and money began to evolve.

“There was a lot of competition over the years, but metal seemed to be the most efficient form of money and gold was the best metal to use. And gold functioned as money for thousands of years.”

Eventually, governments got involved by issuing paper money. Initially, currency was basically an IOU for gold. You could take your paper money to a bank and exchange it for physical metal.

“Nobody was dumb enough just to accept a piece of paper with a number on it and think it had any value. The reason people would accept a piece of paper was because it was backed by gold.”

But today, fiat money is backed by nothing. Peter said fiat doesn’t really work as money because it is not a reliable long-term store of value. A dollar works as a short-term store of value. It will probably still have value next week. It may even still have value in 10 years. But in 100 years? Who knows.

“One of the reasons that gold works so well as money is because it’s a reliable store of value. If I have an ounce of gold today, 10 years from now, 50 years from now, 100 years from now, it’s an ounce of gold. People can relate prices. You can have loans. You can contract. You can do all sorts of things with gold because it’s a reliable store of value.”

With companies like Goldmoney, you can open an account that is funded in gold. When you buy the metal, it is stored in a vault. But thanks to the evolution of electronic payment systems, your gold is liquid. You have 24/7 access to your gold. That means you can use it as a medium of exchange. With the swipe of a card, you can transfer a portion of your gold to another individual.

“It costs me nothing to transfer a dollar quantity of gold from my Goldmoney account to somebody’s Goldmoney account in Austrailia. So, it makes it very easy for me to move purchasing power to transact for goods and services and effect payment in real money. And more importantly, as a payee, if I want to be paid – if I want to perform a service for somebody in Austrailia and I want to be paid in gold rather than Aussie dollars or Canadian dollars or U.S. dollars – there is a mechanism that allows that payment to be made in gold. So, I can transact. I don’t need government money when I have a more efficient method of transacting and I have a long-term store of value.”

You don’t even have to find somebody who wants to be paid in gold to use Goldmoney. The company has developed an app that works right on your phone, allowing you to transfer a portion of your gold instantly into local currency on a debit card so you can make payment wherever Mastercard is accepted.

Peter said he hopes eventually more and more people will use gold for everyday transactions, undercutting government’s monopoly on money.

“What my hope is ultimately for the future of Goldmoney is that as more and more people discover that gold is better money than the dollar or the euro or the yen – not only is it a better and more reliable store of value, but it is actually easier and cheaper to transact in it, to use it as a medium of exchange, to write contracts in gold, to borrow money in gold, to have bonds that pay in gold, to have insurance policies that pay off in gold, people can start utilizing gold, and merchants and eventually people can start pricing their products in gold … you know, in a global economy, why even use all these currencies? Everybody knows what gold is. Instead of having to worry about what currecny you’re going to price a product in, just price it in real money.”

Payment systems like Goldmoney, United Precious Metals Association and the one soon to be developed by the Texas Bullion Depository have the potential to break the Fed’s monopoly on money. Gold payment systems create an alternative to government money and provide a practical way you can engage in an individual act of nullification. If enough people start using gold and silver as money instead of Federal Reserve notes, the Fed could become effectively irrelevant.

Watch the full presentation here:

Mike Maharrey
June 15, 2018 at 07:41AM