Daily Archives: January 7, 2008

Toward an Independent Money System – The Role of Gold and Silver

For several reasons which I’ve explained before, I don’t see silver or gold as viable exchange media, but I DO see them as:

1. a useful store of value and inflation hedge, and

2. possibly serving as non-political, concrete measures of value and units of account. I would prefer a “market basket” of commodities for that purpose but, as I told the Gold Dinar conference in Malaysia in July 2007 (http://www.reinventingmoney.com/documents/Malaysia+sound.pps), precious metals might serve as interim standards.

When the global financial crisis reaches the acute stage, we can be sure that the international banking establishment will come forward to offer their own “solution,” which in reality will effect a further tightening of the chains upon the people. At that point, we need to be ready with a real solution.

That real solution, in my opinion, will be an extensive (eventually, global) network of locally controlled credit clearing exchanges that will be using an independent unit of account. That unit could perhaps be a specified weight of silver, and what better weight specification than the silver content of the U.S. dollar as specified in the original coinage act of the U.S. Congress, i.e., 371.25 grains of fine silver. That unit should appeal to widely diverse political and economic viewpoints in the U.S., as well as internationally.

A silver coin minted to that specification would be useful in establishing that standard. It need not be used in daily commerce, but it will be traded sufficiently to establish its value on a daily basis relative to political currencies like the Federal Reserve dollar, the euro, the yen, etc.

In retrospect, the issuers of the private “Silver Liberty” might have been more effective in achieving their basic objective, and encountered less harassment by the Federal government, if:

  1. their silver coins had been designed to look less like the silver coins historically issued by the United States Mint, and
  2. they had avoided using the word “dollar,” and the dollar sign ($) on the coins, and
  3. they had called the coin by a different name and denominated it in some other unique unit, say a “liber.”

So this is, I believe, an approach worth implementing. Who would be willing to undertake it?