Why a Private Gold Standard Isn’t the Answer

Recently after the beta release, of my new book The Real Truth About Money a few of the initial readers are displeased with my solution to our currency issue, no surprise there.   Most of them are distressed that my solution isn’t 100% based on gold, the most educated and passionate objectors also want the currency totally privatized.    It is with these folks that I truly disagree.  My book isn’t pro or anti gold at all, it is more gold neutral.  The reader being left to answer what role should gold play in the public currency, with the intellectual ammunition to form an opinion and test that opinion on their own.

About the only thing the book clearly comes down on one side or the other of is that, the national currency (US Dollar) should be a public currency.  Most of the objectors to this seem to be fans of Gary North who I will state right now I highly respect but totally disagree with on this one issue.  Mr. North has written several articles about going to a private gold standard where the banks issue their own gold backed money with “the enforcement of contracts by the government”.  In other words the main role government would play in the currency is to make sure that your bank makes good on your contracts with them, otherwise the banks and the money stay as unregulated as possible.

Mr. North has written a series of pieces on this concept, I invite you to read them, dig into his view and examine it.  If you agree, great but like I always say think like a chess player, keep going, look 5, 10, 25-years down the road not just at the libertarian concept of “the open market is the solution”.  One of Mr. North’s latest pieces is titled, 

How to Defend the Free Market Gold Coin Standard: Stop Defending the Government Counterfeits.

Again please read it and consider deeply the valid points Mr. North makes.  Read the other articles he links to from that one, really examine what he is saying and again if you agree fine, just keep digging and know why you believe what you believe.

Now, however; consider the other side of the coin.  Many people seem to be on this train lately, believing that if we just get the government out of the business of printing money and let the banks control things we will be much better off.  Such people in my view want to snatch their children from the demons and hand them over to Satan himself.   In his article Mr. North says, “Governments lie. They cheat. They steal.”  While I totally agree, the only thing I trust less then a congressman or a president is a banker!  Seriously do the people that want a private monetary system realize that trusting the banking system is what they are advocating?

Yes let us shed ourselves of those dishonest congressmen that sell us out to Bank of America, J.P. Morgan Chase, Goldman Sachs and Citi Group and turn over the currency to the people they sell out to!  I am sorry but I fail to see how this will solve any of our problems, much less not make them worse.  People that advocate such things seem to fail to remember certain things such as…

  • First and foremost the Constitution calls on the congress to control the currency, In Article One, Section 8
  • From the very inception of the Constitution it has been the bankers that tore down all true national currencies
  • It is the bankers that currently control and created the Federal Reserve
  • The bankers are the ones who have manufactured every major financial crisis

So again I ask you how can we take the public trust (our national value) from the hands of the government and expect that the wealthy elite that created our current system will do a better job with zero government control?

There is another thing that goes unsaid with the solution of a private money system, most people that read only the surface won’t think enough ahead to really understand it.  That is such a system means the death of the U.S. Dollar, as in no national currency.  Your “money” would now be a “note for gold” from J.P. Morgan Chase or Bank of America.  This isn’t the concept of a competiting currency with the public currency, no, it is a private currency monopoly.

In short our nation will no longer have it’s own money, notes from The Bank of Hong Kong or The Bank of Japan can have equal footing (based on terms of competition) with any U.S. Bank.  One thing that makes a nation sovereign is having its own money, why do you think the world government types want to replace our dollar with something like an Amero?  Why do you think the Franc and Lira were replaced with the Euro?  Even more troubling why is the Queen of England still on the coins of Canada, New Zealand and Australia?

Next I must ask the advocates of such a private monetary system if they believe in the concept of the “New World Order”.  I am not a conspiracy nut, I do not believe that 12 people control the planet or that one day Black Helicopters will get us all.   I do however, believe most assuredly in the fact that the most powerful people in the world are working for the goal of a one world government and the erosion of sovereignty of individual nations.

If you do not believe this, I invite you to research it further, assuming that you do though, let me ask, is the driving force behind the new world order…

A.  The Government


B.  The Wealthiest Families in the World

Now, anyone who has researched this beyond the tin foil hat nonsense will easily answer that with option B.  The wealthiest families on the planet are the ones pushing for a one world government, we find this to be the case over and over.

So now I ask who are the wealthiest families in the world?

A.  The politicians like the Clinton, Bush and Obama families


B.  The bankers like the Rothschild, Rockefeller and Morgan families

I will admit that the Bushes and Clintons are both doing very well financially but they are nothing compared to the old banking families, clearly the answer is B.  So do you understand that when a person wants to turn the currency over to the banking system 100%, they are advocating turning it over to the very people who wish to destroy our national sovereignty?

If national sovereignty is important to you then you should note that our founders really limited federal power in the constitution.  Next to be sure they were fully understood they took another pass with the 9th and 10th amendments.  Yet the power to coin money was specifically given to the congress, for a reason, a nation must have a currency to be sovereign.   In fact Mayer Amschel Rothschild stated, “give me control of a nation’s money and I care not who makes her laws”.  So when I tell you that the Rothschild family wishes to use your nation’s money to control your nation, take the word of a Rothschild, not mine!

Yet, I agree fully with Mr. North’s words, “Governments lie. They cheat. They steal.”  So the obvious question is if we can’t trust the bankers how can we trust the government to do any better?  The answer is we do not “trust the government”, indeed our founders who wrote our Constitution and Declaration told us not to.  We need to treat the government like what they are, servants, most of whom constantly steal from their masters.  Basically with no insult intended unto a dog, we much treat them like dogs.

Let me ask you, how do you train a dog to not pee in your home?  The uneducated trainer yells, rubs their noses in it, hits the dog with a rolled paper.  This often eventually works but the dog suffers and the process isn’t very effective in reality.  The dog is simply avoiding stress via compliance.  We also unfortunately, can’t whack our congressmen with a rolled paper in the nose, so we must use the methods of the educated dog trainer.  The educated dog trainer doesn’t punish a pup when it fails and goes on the carpet.  In the rare case where it might happen, he just cleans up the mess and goes on with proper training.  The right way to house train a dog is you, never give the dog the opportunity to fail.

You create a system for the dog, he goes out in the yard and you wait for him to relieve himself.  Next you take him inside for say 30 minutes, you then crate him for about an hour or two.  He will begin to learn control in the crate, no creature likes to lie in its own waste.   When you take him out he immediately goes out in the yard.  When you have to leave the house for a few hours or more, you put him outside, then in the crate.  When you return you carry him to the yard and wait for him to do his thing.  One week or more of this and most dogs will never again go in the house unless you leave them for a period of time beyond their physical limitations.    A week into this, the system is in place, the dog knows that he is to do his business outside, going inside would be foreign to the animal.

What does that have to do with government controlled money?  We The People, must determine the system for our government.  We must debate how our money is created, controlled and has its total volume capped.   This is why I advocate a 100% constitutional (public) currency controlled by a valuation formula.   I am not here to say what exactly that formula should look like but I do feel a few things bear consideration in it…

  1. Yes, gold reserves, just not 100% perhaps 5%, perhaps 10%
  2. The total population, perhaps the total working population is better
  3. Our national reserves in raw land, farm land, timber land, oil reserves, etc.

What else goes in there?  What comes out?  I don’t know it is up to the people to decide.  Yet in the end my solution is as follows…

  • A public currency free of debt and interest
  • No central bank period, the banks can loan and invest money the people control and create it
  • The formula is public, and expansion or contraction of the currency must be explained

What I want to end with is what I am not saying or implying.  In such a system we would not have an economic utopia.  You could not just go to the Federal Mint with a bucket and ask for debt free money of your very own.  You would have to work for it, while we would no longer need an income tax; there unfortunately would still be some taxes to be paid.  There would be winners and losers but the field would be level.   The government would still collectively give the people the middle finger at times.  We would still be told by the clowns in congress that all we need is more democrats or more republicans in office and many of the sheep would still believe it.  There would still be some booms and busts, I don’t deny any of this.

What we would no longer have is control of the government by the banking system.  We would no longer have a system were every single dollar of currency equals a dollar of debt plus interest.  Further no matter what objection anyone may raise to this system, we would have above all, a Constitutional Monetary System.   Many of you no doubt wish we would return to actually respecting and following the Constitution of the United States.  I fully agree and simply believe that our money is the best place to start.  If you doubt this I simply again will leave you with the words of Mayer Amschel Rothschild, “give me control of a nation’s money and I care not who makes her laws”.

With that I simply ask if our money isn’t Constitutional, how may our nation ever be so?

5 comments to Why a Private Gold Standard Isn’t the Answer

  • I believe that implicit in your argument for government controlled money is a false choice: that we either have government produced paper notes or we use bank produced paper notes.

    Certainly, people aren’t going to go back to carrying around old fashioned coins. “True believers” will try, but the vast majority of people won’t. But just because one shape of metal is inconvenient doesn’t mean that another form will also be found wanting.

    I believe that by using a more convenient form of precious metal, people can carry around the actual stuff; no longer needing to use representations of metal as if it were money. There is no longer a need to trust a bank note when you can carry around the actual precious metal in a form that is as convenient as paper.

    Please consider the option of Shire Silver.

  • Great essay. I can not find any fault with your arguments. I hope I can provide some insight into why Queen Elizabeth is still on Canadian money. The reasoning is probably the same for all the former colonies as well. Here goes…

    We’re still a colony. We’re still a monarchy. Nothing becomes law without the assent of the Crown. Canada has democratically (sort of) elected officials to represent the people to the Crown. The Crown then decides if our concerns are valid and our wishes met, or not.

    In practice, the Governor General (G.G.) rubber stamps everything that comes out of Parliament or the Senate. However, the law is such that, should the GG so decide, the GG could strike down anything proposed by Parliament or even take executive action.

    Each province also has a Lieutenant Governor General (Lt.GG) who acts in a similar capacity at the provincial or territorial level.

    The cost to support these emissaries of the Crown is about $1.35 CDN per man, woman, and child, per year.

    The citizens of Canada also have no real stake in the resources of Canada. Resources in Canada that are not privately held (notice I didn’t write privately owned) are considered Crown Assets. The real property of the Federal Gov’t, the Armed Forces and the Royal Canadian Mounted Police are also considered Crown Assets.

    Since Canada’s money is supposed to have value based on Crown Assets and the revenue the Crown collects, the bearer of the Crown is featured on the money.

    At least that’s the way I understand it.

  • ModernSurvival

    @CdnGuy, wow that was beautiful! So spot on I have to ask if you have seen this,


    I would be honored if you considered it. Clean that comment up just a little and it could be your first article.

  • cls1973

    Jack, I love your work, but on this topic, I take issue with three of your points:

    1. That private monetary advocates are “trusting the banking system”. No, this is exactly what they are NOT doing. In a private money system, the “powers” are split. The banks write the contracts (create the currency), and the government enforces the contracts (ensures that the note holder receives what the note guarantees.) When Dr. North states that a free market gold coin standard will “develop”, I understand that to mean that the bankers are in the game to make money. They’re not going to write a bunch of bogus contracts and then have the government come along and bankrupt them by enforcing the contracts. No…a bank in a government enforced, private money environment is going to be forced to think long and hard before they fire up the printing presses…something that never happens when one party controls the whole game.

    2. That the currency should be controlled by a “valuation formula”. It would be dangerous to introduce the instability and the opportunity for mischief that would come along with such a formula. By its very nature, it is constantly changing. You have stated often in your writings and podcasts that money is nothing more than an agreement. But it is easy for everyone to agree on gold…for many reasons. NPR’s planet money team recently did a podcast entitled “Why Gold?” They went through every element in the periodic table of elements with a chemistry professor and ended up with Gold. This podcast is only about 20 minutes long. It is worth the time if you’re interested. (http://www.npr.org/blogs/money/2010/11/16/131363098/the-tuesday-podcast-why-gold)

    3. That “one thing that makes a nation sovereign is having its own money.” If it’s fiat money, then you may have a point. But as soon as you start talking about gold-backed money, what difference does it really make? I have a few Krugerrands and a few Maple Leafs. They work the same as the American Eagles. Gold-backed money would also promote free trade…mostly because it would have been born of a free market.

  • atevan1

    Interesting article. The one point I would disagree with is that a private monetary system would end up in the hand of the TBTF banks and banking families. Those bank are only able to exist today because of the aid they receive from the Federal Government and the Federal Reserve. If they were not kept alive by way of government life support, they would not exist. Therefore, if there were actual division between the bank and the Government/Fed Reserve, we would not be entrusting our children to the devil. The monetary system would be run by banks with an interest in keeping solvent. Free competition would keep banks from growing too large and creating a monopoly.


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