In 2011, then Congressman Ron Paul had a chance to square off with then Federal Reserve Chairman Ben Bernanke in a U.S. House Financial Services Committee meeting.
Paul: “You know the price of gold today is $1,580. The dollar, during these last three years, was devalued almost 50%. When you wake up in the morning, do you care about the price of gold?”
Bernanke: “Well, I pay attention to the price of gold, but I think it reflects a lot of things. It reflects global uncertainties. I think the reason people hold gold is as a protection against what we call tail risk or really, really bad outcomes, and to the extent that the last few years have made people more worried about potential of a major crisis than they have gold as a protection.”
Paul: “Do you think gold is money?”
Bernanke: “No, it’s a precious metal.”
Paul: “It’s not money even if it had been money for 6,000 years, somebody reversed that and eliminated that economic law?”
Bernanke: “Well, you know, it’s an asset. I mean, would you say treasury bills are money? I don’t think they’re money either, but they’re financial assets.”
Paul: “Why do central banks hold (gold) if it’s not money?”
Bernanke: “Well, it’s a form of reserves.”
Paul: “Why don’t they hold diamonds?”
Bernanke: “Well, it’s tradition, long term tradition.”
Paul: “Well, some people still think it’s money.”
For those of you who understand economic laws and principles, you understand the absurdity of Bernanke’s statements. That is the hubris that is created by a central bank system, one that puts man in charge of creating money out of thin air with no accountability.
The results of the Federal Reserve system is an American society addicted to the drug that is easy money which has created an entitlement state and welfare state in which politicians, Democrat and Republican alike, offer bribes for votes rather than working to maintain liberty for the people.
It’s also resulted in an ever-increasing price inflation rate, now at 9.1% according to the government’s June statistics. Of course, the government’s statistics do not reflect reality with the rate closer to 18%, according to Shadow Stats, if the pre-1990 standards were used to measure it.
Well, the Utah-based company Goldback is providing an alternative that just might help individuals combat the criminal activities of the Federal Reserve and the politicians.
Goldback describes its notes “the world’s first physical, interchangeable, gold money, that is designed to accommodate even small transactions” with denominations of 1, 5, 10, 25 and 50. The notes are designed to be infused with small amounts of gold, varying based on denomination, allowing it to be used as money as it’s hard to make small purchases with physical gold which is around $1,700 an ounce today.
Dr. Mark Voelker, United Precious Metals Association board member, said: “The Goldback solves a 2,600-year-old problem in that gold can be spent in small, interchangeable increments.”
Goldback began with a Utah series in 2019, then Nevada and New Hampshire series’ came out in 2020. Wyoming will become the fourth state with its own series as Goldback has announced an official release date of Sept. 19. Some retailers, however, will begin presales on Aug. 1.
The popularity of the Goldback has increased with a fifth state, South Dakota, being announced. It has also been recognized by Utah, back in March, as a legal currency in the state.
Goldback is the most accepted alternative currency in Utah which allows citizens to break away from the fiat dollar. It has nearly half a million users and is accepted by hundreds of Utah businesses.
Why is this currency gaining popularity? Two reasons jump to mind. One, gold is money. Two, the Federal Reserve has been doing everything possible for decades to destroy the U.S. dollar.
“Gold does not dissipate into the atmosphere, it does not burst into flames, and it does not poison or irradiate the holder,” wrote Nicholas LePan for Visual Capitalist. “It is rare enough to make it difficult to overproduce and malleable to mint into coins, bars, and bricks. Civilizations have consistently used gold as a material of value.”
LePan added: “Perhaps modern societies would be well-served by looking at the properties of gold, to see why it has served as money for millennia, especially when someone’s wealth could disappear in a click.”
As for the destruction of the dollar, economist Peter Schiff provided a little insight about how bad things actually are in an interview last year when the public finally started to take price inflation seriously.
Schiff has been warning about the problems to come because of the decades of Federal Reserve insanity and the bipartisan cadre of politicians never finding a massive spending increase they didn’t like.
And sorry conservatives, the price inflation we’re facing now is not solely because of Joe Biden. It’s also Donald Trump, it’s also Barrack Obama, it’s also George W. Bush, it’s also… you get the idea.
Schiff reminds us that the economic definition of inflation is an increase in the money supply, not rising prices. Rising prices are the result of inflation. And Schiff believes the current price inflation is the effects of the cheap easy money policies of Bush and Obama. And the price inflation is now a runaway freight train that will get worse and worse thanks to Trump and now Biden continuing the easy money policies.
“Prices are just starting to go up,” Schiff said. “So, they’re going to go a lot higher. And I think even the acceleration is going to pick up, so, you’re going to see bigger gains.”
Schiff added: “The Federal Reserve has been creating a lot of inflation. That’s been their monetary policy. That’s how they responded to the busting of the dot-com bubble, and then the housing bubble, and then COVID — they just printed a lot of money. The more money there is, the more expensive everything is, because each unit of money is diminished as the quantity of money is increased. So, as you have more dollars, each dollar is worth less and now you need more of them to buy stuff.”
As for the Goldback, and other alternative currencies for that matter, it requires a societal education. It requires people who understand that gold is money to convince businesses to accept it in exchange for goods and services.
Gold is a hedge against inflation, and Goldback appears to be in good positions to help citizens fight back against the never ending printing press of the Federal Reserve.