If you can get your friend to stop laughing, and actually give you an answer as to why it would be a bad idea to return to a classic gold standard, you will invariably get one of the following responses. As we will see, some of these are either just plain wrong, or they are at best misunderstood.
1. Nobody wants heavy gold coins weighing down their pockets
This response is usually accompanied by some quip about going back to medieval times, with gold ducats carried around in purple drawstring pouches. But this just shows a lack of understanding of the essence of a gold standard. Yes, under a gold standard, you could transact in actual gold coins, which is what happened earlier in history. But people eventually figured out they could use paper currency that represented claims on the gold actually stored at banks and in vaults. The only stipulation for a gold standard is the ability to convert or redeem your money into gold, if so desired.
Therefore, you can still have currency and even units like ‘dollars’ as long as they represent a fixed amount of gold. This is what is meant by ‘gold-backing’. The option to convert to gold keeps banks and governments honest, but as long as citizens are unconcerned that banks or governments would ever default on this pact, then they will happily use the dollars and leave the gold in the vaults. In fact, our monetary system wouldn’t look much different; you would still have your checking and savings accounts, debit cards and credit cards, all denominated in dollars. The only difference is the additional option to convert those dollars to gold at any time.
2. Gold is a barbarous relic
Economist John Maynard Keynes and even talented investors like Warren Buffet and Charlie Munger have described gold in these terms. It has been suggested that if aliens saw humans digging up gold from the ground – refining it and shaping it into coins and bars, only to bury it back in the ground in vaults and guard it – they would think we are crazy. Perhaps this is not an unreasonable remark, considering the wasted resources on all of this energy, equipment and labor.
The abolitionist Harriet Tubman has long been admired for her civil rights legacy. And if a grassroots organization has its way, she will one day adorn the front of a $20 bill.
The group, Women On 20s, recently asked the public to vote to get Tubman on U.S. printed currency. She garnered nearly 34% of the vote, edging out former First Lady Eleanor Roosevelt for the distinction of replacing Andrew Jackson. If this is codified by the Department of Treasury, Tubman would make history as the first woman and the first African-American to be represented on American paper currency.
A little history about Tubman. She was arguably the most influential figure in the Underground Railroad Movement, a network of routes that facilitated slaves fleeing to northern free states as well as Canada. Tubman, who herself escaped slavery in Maryland, made it her personal cause to free hundreds of slaves out of bondage. In addition to her work to free slaves, she was a passionate advocate for women’s equality and suffrage.
As she noted about her abolitionist work, “I was a conductor on the Underground Railroad, never running my train off the track and never losing a passenger.”
This campaign to highlight women via U.S. paper currency has gained a ton of political support, including U.S. Senator Jeanne Shaheen (D-New Hampshire), from a state that has a prominent history in the freedom movement. Women on 20s has delivered a petition to President Obama, asking him to instruct Treasury Secretary Lew to circulate these bills in anticipation of the women’s suffrage centennial in 2020. This will be an unprecedented move if executed; one with rich historical significance for the cause of liberty.
A few of my friends here in the Rocky Mountain State recently had a jagged boulder heaved their way. Sadly, I had warned them that this would be likely to occur, but they wouldn’t listen. Now, after drinking the health care reform Kool-Aid, they are the ones whining about the very initiative for which they had high hopes.
So here’s the scoop…..
Colorado HealthOp, a non-profit co-op that has been a key element of Obamacare in this state, announced last week that it will not be offering health care plans in 2016, becoming the seventh of 23 taxpayer-funded co-ops to shut down across the country. This comes on the heels of the $2 billion-plus in government funding that has already been distributed to insurance cooperatives across the nation to fuel a more competitive environment for Obamacare marketplaces.
This decision to close down is due in large part to a ruling from Colorado’s health insurance regulator, decertifying the insurer from Connect For Health Colorado, the state’s Obamacare marketplace exchange. Reports suggest that the move is linked to financial troubles at the co-op, attributed in large part to the federal government reneging on its commitment to provide $10 million for operational support under the Obamacare Risk Corridor program. As a result, it is estimated that nearly 83,000 Coloradans will struggle to find alternative Read More…
“I will lose my vehicle if I don’t get my money. My car note is past due.”
“They (Rushcard) make 94 cents every time a direct deposit hits, $2.50 every time you withdraw money and $1.00 every time you use the card.”
“No access to my money. Been waiting since Oct. 9th”
“This card only preys on poor folks who have messed up their credit and can’t get a regular bank account.”
These are among the comments posted on social media in response to technical issues facing RushCard, a prepaid debit card program founded by iconic hip-hop mogul Russell Simmons. This highly popular alternative to traditional banking has recently faced major criticism among its members due to paychecks and direct deposits failing to appear in their accounts. It also raises questions about whether services such as those offered by RushCard take advantage of people who, due to myriad reasons, may be unable or unwilling to secure a traditional bank account. ” Keep reading…
As a child, I loved remote-control toys with complex mechanics. If the toy happened to fly, so much the better. Unlike most kids, I wasn’t too concerned with commandeering them for a role in my latest GI Joe reenactment. I took them apart and attempted to put them back together again, often finding myself in a Humpty-Dumpty situation…“all the king’s horses and all the king’s men….”
Although my RC car days are long gone, the rapidly growing drone market has peaked my interest, as it has with many other people. Drones – long used in warfare for their stealth, maneuverability and often undetectable nature – have become increasingly popular with the masses (looking to be the most popular Christmas gift of 2015). Current drone prices range from under $100 to upwards of $2,000. The majority of drones on the market offer the advantage of aerial pictures and 360° video capability. While these consumer drones are hardly military grade, it seems they pose a challenge for air traffic controllers and a safety hazard for aircraft. Air traffic controllers state that the minimum safe distance for any object to be near an aircraft is 1,000 feet plus.
Irwin A. Schiff just passed away on October 16th, at the age of 87, still under lock and key as a political prisoner. Most people know Irwin Schiff as the father of investor and fellow gold advocate, Peter Schiff. Irwin Schiff was also known as the most prominent tax protester of our time, a man who stood up to the IRS and was imprisoned as a result. But the legacy he leaves is much deeper than his fight with the IRS, and there are some valuable lessons we can learn from his life and teachings.
For those unfamiliar with Irwin Schiff, he was the son of Jewish immigrants. He served in the Korean War and later opened his own insurance brokerage. He read Henry Hazlitt and F.A. Hayek in college, gaining exposure to Austrian economics. He was a staunch supporter of liberty and limited government, undertaking grassroots campaigns and later staging an (unsuccessful) write-in campaign for Governor of Connecticut. He was also a candidate for the Libertarian Party Presidential Nomination in 1996.
Irwin Schiff was also a supporter of sound money, testifying in 1968 before the Senate Committee on Banking and Currency against the removal of gold-backing for our currency. My personal exposure to Irwin Schiff was through his book ‘How an Economy Grows and Why It Doesn’t’. Originally written as a children’s book in an illustrated comic-book style, it is accessible to everyone, yet contains high-level economic and political concepts that most adults do not understand.
The book starts off with an island economy, and it logically illustrates how that economy grows only through savings and capital goods investment. It then shows the disastrous results that occur when the government inflates and devalues the island’s currency. The book has been updated by his sons, Andrew and Peter, and I would highly recommend it to everyone. It is truly a joy to read. Irwin also wrote a similar book called ‘The Kingdom of Moltz’, which is also very clever.
Of course, most people who know anything about Irwin Schiff focus on his tax theories and, unfortunately, many write him off as a tax cheat who was eventually imprisoned for his actions. But his story is much more nuanced.