Less than two and a half years ago, the very idea that the world would ever return to a Gold Standard was regarded as absurd, even by the vast majority of the gold community. In 2011 it is evident to most thinking people that this is precisely what is going to happen; in fact it has now come to seem rather obvious. Not only did The Gold Standard Institute begin that formal debate in January of 2009, but that debate has now progressed into a discussion on what form of a Gold Standard will eventuate. My, how times have changed.
That the subject has moved from the outermost fringe of the Internet to the mainstream press in such a sudden manner should not startle anyone. It is not in the nature of monetary change to stealthily and discreetly creep into existence over a generation or two. When degraded monies collapse it is always a relatively ‘overnight’ experience.
“Over the course of 600 years, five dynasties had implemented paper money and all five made frequent use of the printing press to solve problems. Economic catastrophe and political chaos inevitably followed. Time and again officials looked to paper money for instant liquidity and the immediate transfer of wealth. But its ostensible virtue could not withstand its tragic legacy: those who held it as a store of value found that in time all they held were worthless pieces of paper.” Fiat Paper Money – The History and Evolution of our Currency by Ralph T. Foster (referring to the first five paper currencies of the world in China)
The inevitability of a return to the use of gold as money was never a matter of conjecture, it simply required an awareness of historical precedent. When governments have degraded their money beyond redemption, as they never fail to do, a nation has two choices: either return to real money that holds its value over time, or continue on the same sorry path to the result of personal, social and geo-political disaster, quite possibly accompanied by a complete or partial loss of national sovereignty. It’s not a hard choice really. Those who hold such commanding and seemingly invulnerable positions in the current order will be ignominiously cast into oblivion like old roosters, along with their thoroughly discredited theories.
In January of 2009 there was not a single organization in the world with the goal of promoting a Gold Standard. That we were the first to blaze this trail should be a source of pride to all of our members. That we have inspired others to begin similar organizations is a most rewarding development. Our Purpose was and remains “the dissemination of the virtues of the Gold Standard so that they become widely understood and appreciated”; this Purpose is greatly helped by the formation of other organizations all over the world with the same goal.
The two key points that must remain foremost in the minds of those seeking the instatement of a Gold Standard are:
- Any paper representations of money must be fully redeemable,
- Real Bills must be allowed to re-emerge to perform their integral role.
Without Real Bills even the mighty Gold Standard will fail. A Gold Standard without Real Bills is like a high performance, internal combustion engine without oil.
Any monetary system that lacks full redeemability (100% gold or Real Bills backing) is only referred to as a Gold Standard by those who are intent upon mischief. In its effect, any fiduciary component means that gold is no longer the measure, but the measured. A fiduciary component determines that such a monetary system is merely another paper standard masquerading as the Gold Standard.
There is no shortage of people who would love to see the return and subsequent failure of a gold based monetary system. This they could then blame on the ‘Gold Standard’. Those who argue against full redeemability and/or Real Bills are in this category. They are the witting or unwitting stooges of the paper money paradigm that bleeds honest producers in order to keep champagne flowing to the non-productive politicians and bankers.
If you have any sort of an organizational bent and a desire to hand over to your children and grandchildren a world that is more honest and decent than the one that we currently inhabit, this is your chance. Never has the need been greater for people of integrity to roll up their sleeves and actually start DOING something. There are many who will endlessly speak in praise of the Gold Standard, but far too few who will actually spend a couple of hours a week doing anything to achieve it. Talk is cheap, but ‘doing’ is pretty cheap also and far more rewarding. Not only are you working for the achievement of something worthwhile and feeling pretty good about it, but you can look your children and grandchildren in the face.
What about you? Are you a doer, or just a talker? Email me if you are in the former category. Maybe we can help to get you started in doing your part in the achievement of that better world. I have all the time in the world to help anyone who is in favour of a bona fide Gold Standard and who is looking to establish something in their own area. Please don’t email me if you just wish to talk about it though. My in-box is daunting enough already.
President – The Gold Standard Institute