Category: Business and Free Enterprise

Interview with Anthem Hayek Blanchard on AnthemGold

What is AnthemGold?AnthemGoldLogo

AnthemGold is a cryptocurrency company focused primarily on making gold easy to own and, ultimately, to become a preferred currency. Each ANTHEM (AGLD) is backed by one gram of physical gold, securely vaulted with a nonbank operator and fully insured.

But looking at the bigger picture, our goal is to bring gold and cryptocurrency together to create the world’s most stable form of money… to become a Gold Standard, if you will, in verifying supply chain management when it comes to the transfer and storage of physical, fungible items of value such as precious metals.

Do you see AnthemGold as a service to be primarily used by people to transact in gold, or as a way for people to easily buy gold as a store of wealth?

Ultimately, I think it will be more of the latter – storing gold as a form of wealth – but I believe the reason people will want to buy our form, AnthemGold, is that it will be a superior way of owning gold, allowing digital transferability via peer-to-peer, decentralized networks.

How does an AnthemGold transaction compare to a traditional bank transaction?

A transaction using AnthemGold can be performed for mere cents and executed in seconds, compared to significant dollars and several days of delay for traditional bank transactions. For example, I recently sent several thousand dollars via the traditional banking system. It cost over a hundred dollars in fees and it took several days.

In stark contrast to a bank, AnthemGold provides a fully gold-backed cryptocurrency that is transferable across the Ethereum global computer network. The one gram of physical gold that backs each ANTHEM is securely vaulted at a nonbank vault and is also fully insured. What this means is that not only is each ANTHEM fully backed with gold – the world’s ultimate store of value for 5,000 years – but they are also fully protected from confiscation and from company failure.   

What are the implications of AnthemGold for the banking industry?

The current state of affairs in banking is bizarre due to excessive government control,  regulations and compliance. When you look at the countless hours that financial service companies spend on compliance, it is absurd, and it is getting worse. People who work in financial service companies will confirm this. For example, I know an investment banker who spent the first 7 months of his first job learning all the compliance rules, instead of focusing on strategies to build wealth and value for the company’s clients.

Unfortunately this is the reality, but it is something people don’t understand when they look at cryptocurrencies and marvel at how they are gaining in value. If you add up the cost of banking fees and calculate all the time wasted waiting for bank transactions and banks following compliance rules, then you begin to see the value of a decentralized and low-cost cryptocurrency. Sadly, we have become used to the current archaic government-controlled system, thinking it normal that every bank is directed and constrained by an increasingly authoritarian centralized system.

45 minutes is the average time I have to spend, when I am dealing with a bank, and I probably interact with a bank or financial service institution 25 to 30 times a year. So when you add this up, I am wasting two waking days of my life each year.

But a decentralized cryptocurrency like AnthemGold’s eliminates the need for a lot of this wasteful and time-consuming management. A cryptocurrency is so much more efficient than the current hierarchical structure. It is comparable to what innovative tech companies have done to disrupt their industries with decentralization. Think of Airbnb and Uber.

What could a decentralized cryptocurrency like AnthemGold mean for the future of banking and financial services?

Ethereum cripto currency vector logoThe current model means that almost all payment systems must clear through the centralized banking system. Banks have this special privilege for a host of reasons such as legal tender laws, bank charter laws, the Fed wire system, etc.

Fast forward to the present, and there is no denying that we are well into the digital age, and are now at the dawn of the decentralized age. Bitcoin made it possible for trust to be established in a decentralized world, and that very innovation itself has allowed us to look beyond the current Bitcoin model.

The future is in decentralization and voluntary groups, rather than involuntary compliance and a dominant centralized system. This has major implications. For example, a government today can put a lien or a freeze on an account, but in a decentralized world this couldn’t happen. It completely changes the relationships, enhancing trust, efficiency and security. In short, it changes the whole nature of the game.

Banks traditionally make money through payment services and lending, supported by protectionist government regulations that make it extremely difficult, even impossible, for any other business to duplicate a bank’s services. But although the payment system is still largely controlled by the banks, cryptocurrencies are now offering another option. Once cryptocurrencies start taking the payment business away from banks, the only big advantage that banks will have is their ability to supply credit and their access to tap into the government to monetize debt.

What is the potential market for cryptocurrencies?

The amount of gold above ground is estimated to be around $7 trillion in value, whereas Bitcoin, currently the largest cryptocurrency, is only $30 billion. So it is still early in the day, and there is so much opportunity facing us. There is easily 100x left in the space, maybe even 300x or 400x. In ten years time, the cryptocurrency market could easily be worth a trillion dollars.

Look at it another way. The gold market trades at around $22 trillion a year, which is more than the Dow Jones Industrial Index, the S&P 500 and most of the world’s currencies combined.

What are the implications of negative interest rates on cryptocurrencies?

A great question. Not only do the numbers support the market potential for cryptocurrencies, but the reasoning is there as well in our current environment of negative interest rates. As banks continue to pump out easy money and credit, this creates the demand for more cryptocurrencies because people want a currency that is not continually being debased. So it’s a feedback loop.

Once interest rates go meaningfully below zero, then it is cheaper to keep cash in a vault than to hold cash as excess funds at the central bank. The question then becomes, “How much does the central bank trust the commercial banks?” The central bank might start to enforce penalties for keeping cash reserves in a bank vault rather than with the central bank. As you can imagine, once the central bank starts to demand this cash, the system will start to fall apart. Quickly.

Another way to address this is to limit or even ban cash, a trend we are seeing in other countries. As long as governments can force central banks and financial institutions to hold cash on their ledgers, they can easily apply negative interest rates or taxes. Correct?

Exactly. That’s a big part of it. Restricting or banning cash puts more money into the banking system, to create higher excess reserves.

Many people, especially Americans, are accustomed to pricing everything in U.S. Dollars, seeing the dollar as a reliable measuring stick for valuing goods and services. But where or when do you see the tipping point when people wake up and realize that the dollar – and other fiat currencies – are not the ultimate measuring stick and that alternatives do exist?

When you look at places like Venezuela or Ukraine, the people have already woken up. In Venezuela, you hear of people setting up Bitcoin mining equipment and having to transact in Bitcoin because there is no other way to exchange goods and services, except for simple barter. Ukraine has a lot of Bitcoin activity, even a network of Bitcoin ATMs, which is fascinating given that Ukraine is a relatively undeveloped country, still struggling to break free from the crippling institutions of the Soviet era.

Cryptocurrencies make good sense when you understand how they allow people to transact globally, securely, at high speed and with low costs, and to hold assets safely and independent of government interference.

Since AnthemGold is backed by gold, do you expect the price of ANTHEMs to be more stable than other cryptocurrencies, and do you expect them to track the price of gold?

Yes and Yes. We expect ANTHEMs to track the price of gold, similar to how a one gram ingot tracks the price of gold, with a small premium being attached to it due to its form factor. For example, a one gram ingot would have more utility than a one kilogram bar because it is easier to spend a one gram ingot, due to its small size and divisibility.

What do you hope to achieve with AnthemGold?Virtual Currency Icons Set Flat Style

My hope, and our team’s goal, is to play a material part in protecting people’s wealth and their individual store of value and in particular, guarding against a scenario of civil unrest, such as will occur if inflation takes off. We hope to do this by building up the cryptocurrency infrastructure as quickly as we possibly can. At the end of the day – and without wishing to sound dramatic here – this is a matter of survival because human beings must have ways to transact. But this is still very early days, and the coding language needs to be further developed. After all, Bitcoin is not even ten years old. Like anything in our developing world, it takes a while for technology to advance and then for people to adopt something new until it soon becomes quite commonplace.

Is there anything else you can add?

A brief history lesson, if I may, but an important one concerning gold and the future of money.

My entire career has been spent in the precious metals business, and my father, James U. Blanchard III, spearheaded the movement for Americans to legally own gold once again, a right we lost in 1933 and thankfully regained in 1975, in large part due to my father’s incessant lobbying for legalization.

My parents created James U. Blanchard & Company in 1975, a precious metals and rare coin company that at one time was the world’s largest. Following in their footsteps, even my own three names reflect my aspirations and my heartfelt mission: Anthem (the freedom-seeking hero of Ayn Rand’s novella), Hayek (the Nobel prize-winning economist and philosopher Friedrich Hayek) and Blanchard (continuing the family tradition).  

In conclusion, the coming marriage of gold and cryptocurrency is my heritage, my expertise, my vision and my passion, and it is something that I take very seriously. AnthemGold’s experienced team has created an innovative gold-backed cryptocurrency that simply and securely allows you to acquire, store and spend gold worldwide, with silver and other precious metals soon to be added. This, if I may be so bold, is the future of money.

Where can people find out more about AnthemGold?

One of the best places to go is our AnthemGold page on BnkToTheFuture.com an online investment platform.

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Market Rallies Don’t Always Make Sense

Market Rally FollyStimulate Economy - Red Button

Can government infrastructure spending, or “fiscal stimulus,” create more wealth? The stock market certainly seems to think so. As financial publications have recently opined, the stock market has been hitting record highs (Dow 20,000!), at least partly because investors believe the new Administration will usher in an era of government spending on things like roads, bridges, telecommunications and defense. While this may give some companies a boost, it will be a drag on long-term economic growth.

The Seen Versus the Unseen

The art of economic thinking is always to consider the seen versus the unseen. In the case of infrastructure spending, what is seen is the widening of highways, the new suspension bridges and the faster internet cables being buried underground. It is easy to see how this spending could be a good thing because the wider highways and faster internet probably enhance productivity.

Furthermore, any government spending – even on bridges to nowhere – is seen as beneficial, due to the Keynesian idea of the “multiplier effect.” This theory posits that governmental spending gives the construction workers more income, who then go and spend the income on other goods and services such as restaurants or new cars.

This in turn gives those restaurant staff and car manufacturers more income, which they then promptly spend. Each dollar the government spends is therefore “multiplied” throughout the economy.  

The Unseen Hand

What is missing from this analysis is the unseen. For government to spend any money, it must first get that money from somewhere; taxes are the most direct method and borrowing is another option, but this only means higher taxes in the future to pay for the borrowing.

While the government technically can’t print money directly to finance spending, it can do so through other means, which cause inflation and which are – you guessed it – just another form of tax.

Therefore, since taxes can only be taken from those who are creating wealth (for example taxes on profits or income), or from the existing base of wealth (such as real estate taxes), then by definition, government spending can only be accomplished through the transfer of wealth.

But Isn’t Infrastructure Useful?

Proponents of government spending may agree there is a transfer of wealth occurring, but that wealth is being employed into productive uses, such as infrastructure. After all, the construction and maintenance of roads allows businesses to ship their goods all over the country more easily.

It is true that things like roads, bridges and electrical grids are useful. But the pertinent question is how useful? If money is taxed away from a business to build a road, that business may no longer be able to build another manufacturing plant and provide an increasing number of products at a lower price, employing more workers in the process.

In other words, infrastructure spending faces a calculation problem. While politicians can hazard a guess that a wider highway or a public transportation project has some value, it is impossible to know (or prove) that the project is more valuable than what the private sector would have spent those tax dollars on.

If this calculation problem were enough to give cause for concern, there is also a problem of incentives. Infrastructure projects that are likely to be funded are those that will create the most jobs or please the most constituents, not the ones that make the most economic sense.

This logic means that the Keynesian “multiplier effect” does not exist, because every dollar spent to begin with does not come out of thin air but must instead be redirected from something productive. In fact, some of the latest rigorous academic research has confirmed the government spending multiplier to be negative, not positive (see a nice summary of this research from Dr. Lacy Hunt of Hoisington Management).

Employee IncentiveWhat this Means for the Stock Market

The stock market is always forward-looking, and it is likely making new highs for a host of reasons on which financial journalists can only speculate. It is also true that increased fiscal spending could give select companies a lot of extra business in the short term.

However, valuation levels for broad market indices such as the S&P 500 are currently at some of the highest levels in history, exceeded only during the dot-com bubble and the brief run-up before the Great Depression. At current levels, the stock market would have to decline by anywhere from 40% to 60% just to return to historical norms!

To be clear, valuation tools are not timing indicators, and anything is possible in the short term, including a continued bull market in the months ahead. However, what valuation models of the stock market can reveal is that, over the longer-term (10-12 years), investors should expect very low returns (low single digits annually) if they invest at these elevated levels.

Diversify across All Asset Classes

The best strategy is to stick with a plan of being diversified across asset classes, including hard assets such as precious metals, other commodities and real estate.

And don’t let any infrastructure spending plans fool you into thinking it will be a huge boost for the economy and the stock market!

2017 War on Cash

US dollars and troops2017 War on Cash

Overshadowed by colossal events such as Brexit, the U.S. election and the Dow nudging 20,000, investors may not have noticed an escalating war over the past year: the sinister War on Cash.

We have previously covered the ongoing “currency wars” of central banks that continually try to depreciate their currencies with lower interest rates and quantitative easing. But this goes even further because it is a war on actual, physical, paper cash.

Unprecedented Strikes Against Cash

2016 saw prominent academics and politicians shamelessly writing about the benefits of reducing or even outlawing cash. Former Secretary of the Treasury, Lawrence Summers, called for the U.S. to get rid of the $100 bill.

Former Chief Economist for the IMF and Harvard Professor, Ken Rogoff, published a book entitled The Curse of Cash, followed by numerous op-eds and endorsements by the New York Times and Financial Times endorsing a ban on cash. Australia is currently reviewing whether it will ban its $100 note.

India’s Prime Minister, Narenda Modi, announced without warning on November 8 that all 500 and 1,000 rupee notes would cease to be legal tender. Although claiming these were “high-denomination” notes, they actually equate to approximately US$7.50 and US$15 respectively, and they constitute 86% of the country’s cash currently in circulation!

Banning Cash: Rationale versus Reality

One of the biggest reasons cited for banning cash is to cut down on crime. While it is true that criminals prefer cash for the anonymity and the ease of transactions, there is no reason to believe enterprising criminals will stop their activity because transaction costs will be higher.

Criminals will easily substitute other forms of payment: lower denomination bills, other valuables like silver or gold bullion, diamonds, bitcoin, etc. Even Tide detergent has been found used as a common currency for drug trades.

The popular press surmised Tide was used by drug users because it could be stolen easily and traded for a quick fix. Yet this misses the point of why drug dealers would accept Tide as a currency at all.

The reason Tide became a currency was because it fit most of the properties of what makes a currency viable. It is recognizable (given the brand name), homogenous, easily divisible, and it has a (relatively) high value-to-weight ratio, making it portable. Bottom line: criminals are enterprising enough to surmount all kinds of obstacles inherent in illicit trade, so banning cash will not turn them into law-abiding citizens.

The next reason for banning cash is a little closer to the truth; to curb black and grey market transactions and collect all of the taxes the government is currently missing out on. India’s actions are squarely aimed at this because most Indians make virtually all daily business transactions in cash.

Further, the government will be receiving a report on any Indian citizen who deposits more than 250,000 rupees as a result of trying to rid themselves of the now illegal notes. The intention will then be to assess a tax and penalty on any of this money, if viewed by the government as unreported income.

While this may give a little boost to government coffers in the short-run, it is likely to backfire because the overall effect will be to tamp down economic activity in general, leading to even less wealth creation and less tax revenue.

The Real Reason for a Ban on Cash

The biggest reason for banning cash, especially in developed countries, is for governments to have the ability to enact even more extreme negative interest rates. Rogoff and others are actually quite transparent about this, recognizing that if banks charge an ever larger negative interest rate on deposits, savers have the option of withdrawing their money in cash and stuffing it under a mattress or in a vault, costing them less in relative terms than paying the bank to hold their money.

This highlights the ludicrous position in which central banks have put themselves, yet it is obviously the next logical step in their fallacious reasoning. To a central banker, if zero interest rates have not sufficiently spurred an economic boost with increased borrowing and spending, then the next step is to make interest rates negative, something we are already witnessing on a smaller scale.

But if minimally negative interest rates do not work, then their logic is to remove the next barrier to make interest rates even more negative. Thus the wrong intervention of the first action necessitates further interventions that distort the regular function of banks and interest rates even more.

Savers and Investors

The biggest surprise of the recent currency bans and proposals to ban currency in developed countries has been the lack of protest from citizens. Most people already use credit and debit cards for many transactions anyway and don’t seem to see the problem.Many coin bank of yellow and white metal. Cash closeup.

However, if negative interest rates are imposed on regular bank accounts, and savers have no way to withdraw their money, they will likely become more a lot more interested in what is really going on here. Fortunately, many alternatives exist to regular currency, and while governments may try to curb an exodus to these alternatives, it will likely be hard for them to do so, given the myriad of substitutes available.

For example, gold and silver will remain popular substitutes, as well as other alternative assets like other commodities and real estate; perhaps Tide detergent will even become more widespread as a common currency! Technology will also enable the ownership of these assets to be transferred and verified more readily.

In any case, investors and savers need to stay properly diversified and remain informed…..

Production Spurs The Economy, Not Consumption

Economy

Economy

With Black Friday and Cyber Monday now behind us, economists and investors are hoping people shopped till they dropped in order to give the economy an extra boost. In addition, the latest GDP report on Tuesday came in higher than expected, largely driven by consumer spending. However, buying more flat screen TV’s  isn’t what makes an economy healthy.

Many people believe the fate of the economy relies on retail sales and consumer spending, especially because news outlets continually note that “the consumer sector accounts for two-thirds of the economy.” Unfortunately, this is not only misleading but it is also mistaken economic theory.

What GDP Is – And Is Not

The measure of GDP, or gross domestic product, is simply the value of all goods and services sold within a country. While this seems like a simple enough calculation, the devil diddles in the details.

One problem is that the calculation only accounts for the sale of final goods and services. This is done in an attempt to avoid double counting. For example, if a steel maker produces steel that is then sold to an automaker to build a car, only the final sale of the car will be counted and not the earlier sale of the steel. This is one reason why GDP data is so dependent on consumer spending.

This leads many to believe that consumer demand and spending is what drives an economy forward. This is a notably Keynesian idea where recessions are caused by drops in demand and cautiousness causes consumers to keep their wallets closed. Following this line of thinking, the solution to any stagnant economic growth becomes obvious: get people spending!

True, there is a grain of truth here because the money I spend on a new sofa goes into the hands of the shopkeeper who then has income to spend. In the same manner, if nobody buys my services, I will not have any money to buy that new sofa. The gears of the economy would grind to a halt without spending.

Putting The Cart Before The Horse

Spending money does move the economy, but only to the extent that it is an exchange of goods and services. The critical step everyone seems to forget is that in order to spend money, you must have that money in the first place!

How do you get that money? By producing something of value that someone else wants. Therefore, it is production that drives the economy, not consumption. There is never a problem or a drop in consumer demand because people never tire of wanting new and better things; the problem is maximizing production to fulfill more of those wants and needs.

How is production increased? By increasing productivity. How is productivity increased? By saving, or deferring consumption so new tools can be forged and research undertaken to increase productivity.

A Robinson Crusoe Economy

Imagine you and your friends are stranded on a deserted island, and it takes all day to catch that one fish or harvest those few coconuts that you need just stay alive. Your economy is 100% consumption, correct?

How could you improve your standard of living? Not by consuming more, but by actually consuming less. You and your friends would need to go hungry for a day or two and use your new-found spare time to construct a fishing net, fashion a spear, or create other tools to make procuring food easier.  

This would in turn make you more productive, allowing you to gather more food during the course of a day. With the extra food, you could go back to 100% consumption and live a slightly better life, but to achieve an even better standard of living, you would need to continue to save and continue to defer consumption.

Why This Is Crucial

It is saving and producing that should be the focus in order to grow an economy. Sustainable increases in

Production

Production

consumption are a symptom of an economy that has already grown and produced more, not the cause of prosperity.

GDP is merely a statistic. Although it is not a bad thing per se, what gets measured also gets managed – even manipulated – by governments. Telling the populace that consumer confidence is high and consumer spending is up can make an economy look stronger, inducing governments and central banks to continue to pursue policies that boost spending.

Indeed, not only are central banks continuing to try to keep interest rates low and stock markets high to produce a “wealth effect” of more debt and more spending, but governments are also considering additional spending measures (government spending is also counted in GDP).

Investors need to remember the true causes of wealth creation, and seek to protect their own wealth in the face of a government-managed economic environment.

Gold’s Role In Today’s Modern Investment Portfolio

What Role Should Gold Play In Today’s Portfolios?

To some people, suggesting that gold should be part of a balanced investment portfolio is like suggesting leeches are a way to cure ailments. Many investment advisors consider gold to Investment Managementbe a ‘barbarous relic’ that has no place in today’s modern portfolio, given our current financial innovations and instruments.

Yet when examined carefully, it is clear that gold is another asset that has the potential to add non-correlated returns to a portfolio. In this manner, it actually fits very well with modern portfolio theory, and gold should be incorporated by all investors and responsible financial advisors.

Why gold gets a bad rap as an investment

One of the biggest misunderstandings about gold as an investment is an unfair comparison to other financial assets. Gold is not an ‘investment’ in the sense that it brings the expectation of a positive return or cash flow, like stocks or bonds that pay interest or dividends.

An ounce of gold in your portfolio today will be an ounce of gold 100 years from now. It will not magically grow, expand or compound. It will not pay anything in return, and will likely cost a very small amount in storage fees or insurance. This is why gold is sometimes referred to as a non-productive financial asset.

As a financial asset, it is also criticized as something that only keeps up with inflation over the long-term, usually underperforming stocks and bonds, while exhibiting price volatility. But this is unfair and a misrepresentation of the essence of gold and the purpose it serves in a portfolio. Gold should never be considered as a stand-alone investment, but always as a part of a portfolio.

How to evaluate gold

Gold EvaluationThe main function of gold is to protect purchasing power, both locally in terms of inflation as well as globally in terms of currency fluctuations, and to mitigate risk. Gold performs well in times of stress or domestic/international crisis, as well as serving as one of the most liquid of all assets and commodities.

In other words, it doesn’t make sense to evaluate something based on criteria that do not apply. After all, you wouldn’t evaluate a bus by how fast it can go and then compare it to a Ferrari. A bus is not designed for speed and high performance, but for transporting a large number of people.

Similarly, some people inappropriately evaluate the nominal returns on gold and compare this to the performance of stocks. But the purpose of holding gold is not capital appreciation, but capital preservation.

Those familiar with modern portfolio theory understand that the holy grail of investing and asset allocation is to obtain more return and less risk. An asset will be added to a portfolio if it can significantly reduce risk without giving up much in terms of return. This is akin to the concept of correlation, or how much two assets move together: either in step with each other (correlated) or out of step (non-correlated).

Physical gold has either very low correlation or even negative correlation to almost all other asset classes, including stocks, bonds, cash, real estate and even other commodities. Therefore, even though gold can be quite volatile in price, those swings are usually going the opposite way of other major asset classes like stocks.

Therefore since gold is such a good diversifier, reducing risk without giving up much reward, the question is: how much of your portfolio should be in gold?Gold Investment

In a white paper, Merk Investments ran a few portfolio simulations that reverse-engineered the proper amount of gold. In other words, the study found what percentage of a portfolio should be invested in physical gold in order to achieve the highest return for a given amount of risk, something financial practitioners refer to as the efficient frontier.

The study found that from 1971 through February of 2014, a whopping 29% allocation to gold would have achieved the best risk-reward profile for a portfolio, compared to 100% in stocks; this, despite gold being more volatile than stocks during this period.

To be clear, the study does not state this as investment advice; it is simply finding the percentage number that fits the historical data. However, the study clearly drives home the point that a surprisingly high percentage allocation to physical gold would actually improve the risk-reward balance of a portfolio.

Of course, portfolios are not merely divided between stocks and gold. Other non-correlated assets can also be added, such as real estate or other commodities. Previous studies over the years have found that a 5-15% allocation to physical gold is therefore reasonable.

Here at Anthem Vault, we believe a reasonable allocation to gold is 10-20% of your investment portfolio, depending on your level of risk acceptance and other factors. Contrary to the opinion of some, and in-line with historical data and modern portfolio theory, this allocation can greatly lower your portfolio’s risk without sacrificing returns.

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Florentine Florin: A Symbolic Reminder of Gold’s Global Appeal

Since the dawn of civilization, precious meals like gold and silver
Statue of Michelangelo's David in front of the Palazzo Vecchiohave been used for currency and wealth accumulation, starting with the first coin dating back to around 550 BC.

Italy’s Florence has a storied history concerning money and coinage which spans thousands of years, a trend which started in 1252 with the creation of the Florentine florin (3.5 grams and 54 grains of fine gold), this being the first European gold coin minted in sufficient quantities for European commerce since the 7th Century.

With its name of fleur-de-lys deriving from the flowering iris – the badge of Florence – the florin was destined to make a mark on the international currency market, since many Florentine banks had European branches. Its staying power as a dominant currency of commerce was tied to the outgrowth of the Florentine economy and its major stakeholders, which included money-changers, silk manufacturers, furriers and guilds.

Gold Florin, FlorenceThe weight of the original 1252 florin equaled the value of one lira in the local Florentine money. Interestingly, while the florin’s gold content stayed the same, the lira experienced such inflation that by 1500, the value of one florin was seven lira.

The florin did experience competition from European rivals in terms of its economic presence. Although their coins never attained the success of the florin, the Italian city of Genoa – its most prominent competitor – also began gold coinage in 1252.

The florin’s ascendancy led to wide acceptance across Europe, serving as an engine for international commerce throughout the continent. Its role at the time in fostering global economic growth held great significance; a level of status that no doubt led to its mention in Dante’s Divine Comedy, a perennial classic that was completed in 1320.

In recognition of its growing prominence, the British government released a 2-shilling version of the florin in 1849, valued at 1/10th of a Pound Sterling. This coin remained in circulation in the British currency system until the country’s foray into decimalization in 1971. Additionally, the Dutch florin – known as the guilder – endured until The Netherland’s currency disappeared in 2002 with the advent the Euro. This signaled the end of the florin’s long and illustrious reign as the world’s practical ‘gold standard’ of currency.

Nevertheless, the florin’s endurance throughout the ages is a symbolic reminder of gold’s continuing global appeal and its impact on world economies. 

At Anthem Vault, we have long championed the spirit and staying-power of gold, ensuing from legacy currencies like the florin. Over time, gold has continually demonstrated its dominance as a transactional asset that protects and enhances wealth. This track record underscores our commitment to making gold an easy-to-buy, safe, secure and affordable element of your savings, investment and wealth-protection strategy for you, your family and for future generations.  

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