Recently, we covered the efforts of economist Keith Weiner to work with the State of Nevada on a bill that would allow that state to issue gold and silver bonds. While researching this news, Keith introduced me to his proposal for what he calls an "Unadulterated Gold Standard". He explained that this proposal differs from the classical gold standard used in the past. Keith has this to say about it near the conclusion of Part V of his five part series of articles:
"To conclude this entire series on the Unadulterated Gold Standard, it is fitting to provide the formal definition now that the reader has sufficient understanding of the concepts and ideas.
The unadulterated gold standard is a free market in money, credit, interest, and discount based on the right of the people to hold and use gold coins, and which includes Real Bills and bonds."
One of our goals here is to make readers aware of various proposals for monetary system reforms that we find so that readers can learn more about them. As you can see from the excerpt above, Keith lays out a full detailed explanation in a five part series that walks the reader through an understanding of his concept of a new kind of gold standard. Below are a few excerpts from the five part series followed by some questions I sent to Keith and his replies by email.
--------------------------------------------------------------------------------------------------------------------From Part I
"The choice of the word “unadulterated” is not accidental. There were many different kinds of gold standard, including what we now call the Classical Gold Standard, the Gold Bullion Standard, and the Gold Exchange Standard. Each contained flaws; each was adulterated."
From Part II
"Despite some government interference, the Classical Gold Standard enabled a Golden Age of prosperity and full employment that is totally out of reach today (not to be confused with the rapid development of technology). This is not to say there were not business failures, bank failures and panics – what were later called depressions and now recessions. A free market does not attempt to guarantee that no one can ever lose money. It is merely an environment in which no one is forced to subsidize someone else’s risks or losses."
From Part III
"If the government had fixed a mandatory computer standard in the early 1980’s (some governments considered it at the time), we would still be using floppy disks, we would not have folders, and most of us would not be using any kind of computer at all, as they were not user friendly. When something is fixed in law, it is no longer possible to innovate. Instead, companies lobby the government for changes in the law to benefit them at the expense of everyone else. No good ever comes of this."
From Part IV
"In Part IV, we discuss the problem of clearing. The problem of clearing arises when merchants deal in large gross amounts, on which they earn small net profits. They would not typically have the gold coin to pay for the gross value of the goods they purchase. This is an intractable problem in a strict gold-coin-only system and it only grows if specialized enterprises are added. We considered the mechanics of Real Bills. It is interesting that goods flow from raw material producer to the consumer but the money flows from consumer to raw material producer. Without government involvement, and without banks, Real Bills circulate spontaneously."
From Part V
"The unadulterated gold standard is a free market in money, credit, interest, and discount based on the right of the people to hold and use gold coins, and which includes Real Bills and bonds."
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My added comments: In this series, Keith Weiner talks about a new and different type of gold standard that operates completely free from government and central bank intervention. It is even different than the kind of gold standard that was once used in the United States.
The first questions that entered my mind after reading the proposal was how likely is it that a gold standard like this might emerge in the future and what evidence is there that public demand for such a system may exist. Keith addressed those questions by email with permission to publish here for readers as follows:
Hi Larry,
Realistic is an interesting question. Are the American people agitating to bring Uber under the taxi regulations? Would they protest that gold 2.0 companies aren't controlled by the government? I don't know, but I think there are two trends right now which contradict one another. One is growing distrust of government. The other is a desire for regulation of business.
What I do know is that government interference in money, currency, banking, and finance have caused immeasurable hardship to Americans who suffer the consequences. This has been happening since the Founding. We have to fight for a better way, for free markets and freedom.
As to evidence, none direct, but several indirect cases. Americans have done the right thing, and ended several bad legal institutions. They did this, despite entrenched special interest groups who were profiteering on it. And despite moralizers who gave it a veneer of goodness. I refer to slavery, Prohibition, and Jim Crow. Now it appears to be happening with right-to-try and marijuana. And behind those movements, gold legal tender is making its way through a growing number of states.
The fact is that the irredeemable dollar is not serving many people. More and more people realize it. With zero interest, it's impossible to save for retirement and it's impossible to live on one's savings in retirement.
I can offer no guarantees, but I can offer some hope. As with Uber, people are excited by what we are offering at Monetary Metals--a yield on gold, paid in gold(R).
Best Regards,
Keith
(comments received 7-8-18)
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