Sound Money

By Edward M. Gonzalez

Edward Gonzalez advocates legalizing silver and gold as competing currencies.

Goal: The establishment of a sound monetary system that is immune to manipulation and the inflationary policies of government officials.

Solution: For thousands of years of human history, two commodities have consistently been chosen as the accepted medium of exchange in a market free of government interference: Gold and silver. In addition, The Constitution states that gold and silver are the official moneys of the States and the U.S. was on a gold standard until Franklin D. Roosevelt seized Americans' gold in 1933.

The modern day solution is a law that allows individuals, businesses, and banks to accept gold or silver as money in addition to our current Federal Reserve Notes. If businesses and individuals choose to trade paper notes printed by The Federal Reserve they may, but they would also have as a choice both gold and silver. Commerce in the United States would then have three competing currencies, and anyone going to the store to purchase items would be able to pay in dollars, gold, or silver. The choice would be left to the individual. Remember that store owners are also individuals and they also have a choice of what their stores will or will not accept.

If three thousand years of human and monetary history are any indication, society will transition back to the precious metals. They have been proven over the course of history to be the best money time and time again. However, no government legislation would force this transition. Individuals would still be free to use Federal Reserve Notes for as long as they desire.

A transition back to the precious metals would remove from government the power to manipulate the money supply, devalue the currency of the American people, and redistribute wealth to their favored organizations. Gold and silver cannot be created out of thin air; therefore, they retain their long term value regardless of the bad policies of politicians.

In line with individuals accepting Federal Reserve Notes, gold, or silver; a single national sales tax would allow an efficient method for collecting taxes in all three forms. An individual would simply pay the percentage in the form he was making the purchase. So if an individual went to the store and bought items totaling ten ounces of silver with an inclusive sales tax of 20%, eight ounces of silver would go to the store owner and two ounces to the government.

There is a worry that this system would require individuals carrying bags of gold and silver coins to stores in order to buy groceries. This would reduce the efficiency of the modern economy by making debit cards, checks, and internet purchases impossible. A system is already in place to use precious metals in the modern market place. A private bank that stores gold and silver and allocates it digitally to the individual's account is already in use today. This system, if made legal in the United States, would allow debit card purchases, online bill payments, and every other payment currently used today, but done with physical gold and silver. For more information see GoldMoney and read anything by its founder, James Turk.[2]

In the long run, there is no reason why other forms of money could not also be added. Copper has been used throughout history as sound money, and there are arguments today in favor of platinum and palladium money. There is no logical reason why these and many other forms of money couldn't be accepted in a free society, but the step we can take today as a nation is to once again allow gold and silver to circulate as money.

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[1] http://research.stlouisfed.org/fred2/series/BOGAMBNS?cid=124

[2] http://goldmoney.com/index.htm