The 10 Commandments of a Fair and Equitable Monetary System (Why Gold, Not BTC or ETH, Can Save the World)
Throughout history, philosophers have deemed certain characteristics that all sound money should possess to create a fair and equitable monetary system. Thousands of years ago, Greek philosopher Aristotle deemed that all sound money should maintain four characteristics: (1) Durability; (2) Portability; (3) Divisibility; and (4) Intrinsic Value. Of course, over time, technology and financial systems have progressed substantially over thousands of years to the point where definitions of sound money must change to meet rapidly expanding advancements in technology and financial systems. As such, I updated Aristotle’s definition of sound money from the necessity of four characteristics to ten characteristics that must be present if such money is to serve humanity on an egalitarian and just basis. I presented these ten characteristics in one of my courses about sound money contained in my soon to be launched Academy.
Today I am not going to discuss the ten characteristics that money must possess to be of a sound nature. However, I am going to discuss an equally important topic. This topic involves ten non-negotiable systemic characteristics that a fair and equitable monetary system must possess to serve all of humanity equally that I call “The Ten Commandments of a Fair and Equitable Monetary System”, of which our current fiat currency system clearly does not possess. So let’s review this list that exposes the moral deficiencies of our current fiat currency system and that clearly delineates in an indisputable exposition the many reasons our current currency system is far from “the best one available”, as is often falsely claimed by banking charlatans. I hope that in explaining this new system, that it will become abundantly clear that our current fiat currency system is designed to shift wealth away from nearly every one of us and to only the richest people on planet Earth.
The Ten Commandments of a Fair and Equitable Monetary System
(One) Ease of Receipt, Storage and Spending
All money should be easy to receive, use, store and spend, even by the poorest of the poor living in the margins of society.
This qualification automatically disqualifies cryptocurrencies like BTC and ETH, given the difficulty in solving security issues for the poor that would be systemically problematic were they to adopt cryptocurrencies as their primary asset for their savings. All fair money advocates acknowledge that Commandment One is non-negotiable for money to be equally beneficial for all, and not just for those engaging in shameless self-promotion of their books for personal gain. Because of the poor encryption and security measures engaged in by the poorest of the poor due to (1) inaccessibility to necessary hardware for offline cold storage; (2) inadequate education about such matters, or (3) simple lack of financial resources to purchase necessary items to secure cryptocurrency savings, adoption of BTC and ETH as a primary mechanism of savings for the poor is wholly unrealistic. The failure of the greatest market-cap cryptocurrencies at the present time to provide ease of receipt, usage, storage and spending for all disqualifies them for widespread adoption as the foundation of a new monetary system at the current time.
(Two) The Provision of a Consistent Store of Value Embedded in an Intrinsic Characteristic
A form of money that must be converted to fiat currency for widespread utility in today’s economy (as not a single city in the entire world, let alone a village, currently prices all its goods and services in BTC or ETH) logically cannot serve as a viable solution to our fiat currency conundrum.
This is easily one of the simplest but most ignored criticisms against the systemic utility of the largest market cap cryptocurrencies today. To state that pricing a new currency in the very units of currency for which it is supposed to provide a solution is a viable working model is like changing all the locks in your home after it has just been robbed and consequently handing an entire set of new keys to the robber that just plundered your home. If a new currency is going to present a viable solution to the deficiencies of the fiat currency system, it cannot require conversion into fiat currencies to be of widespread utility, as is the case today.
Let me provide an additional simple analogy to further hammer home this point. For those of us that want gold to serve as the solution to our fiat currency problem, we would never continue to price gold in US dollars or Euros and expect such a system to serve as a sustainable solution to our current global monetary failures. Neither a US dollar or Euro price is an intrinsic characteristic of gold. However, the uniform weight of four nine gold could capably serve as the unit of storage and value versus a fiat currency price.
(Three) Dependable and Consistent Purchasing Power Over Decades
Massive purchasing power volatility over hours or weeks is a non-acceptable characteristic of money that can capably underpin a new global monetary system that is fair and equitable for all.
The historic price volatility of BTC and ETH in which it has soared and crashed in price by more than 30% in a mere few hours and/or days presents serious problems as a store of value for the poorest of the poor, as to HODL savings in the event of a severe price crash means potential death for many that require consistent reliable purchasing power in order to purchase basic necessities for daily survival. This non-negotiable characteristic is self-evident in exposing why ETH and BTC can never work as a savings mechanism for billions around the world today as long as its purchasing power exhibits wild swings up and down over very short and condensed timeframes. In the future, if ETH and BTC achieve consistent price stability over periods of decades, then it will fulfill the third non-negotiable characteristic of a fair and equitable monetary system for all.
(Four) Rare But Sufficient Supply to Fuel a Global Economy for Hundreds of Years
The advent of blockchain technology provides applications for far superior solutions than BTC, ETH and physical gold alone as the foundation for a fair and equitable monetary system.
If we combine this technology in a cryptocurrency 100% backed by physical gold, then one unit of a 100% physically backed gold cryptocurrency could be as small as 1/1000 of a gram or even smaller. Such possibilities granted by the combination of physical gold and blockchain technology in forming a new currency destroys the intellectually vacuous and disingenuous argument that the world’s limited gold supply could never support a 100% physically-backed gold currency. In my course about sound money in my upcoming Academy, I discuss in great detail how economists can determine the proper unit of weight for each nation as the determined unit of weight would depend upon the nation’s stage of economic growth and development.
If paper notes were printed with 1 unit of this new form of money representing the determined unit of gold weight proper for that nation’s economy, such a system would obviate the need for any of us to carry physical gold in a 100% physical gold backed system as is a frequent non-intellectual banker criticism against the return to a real gold standard. Furthermore were the blockchain used to document all creation of paper monetary notes 100% backed by gold, if paper notes were stolen after their creation from its owners, the simple documentation of serial numbers associated with those paper notes in the physical world could provide a mechanism to report the stolen notes with consequent cancellation of their validity and an inability of the thief to spend such stolen notes. After cancellation of the stolen notes, a bank could reissue new notes with new serial numbers, documented on the blockchain, that would require no increase of as the new gold reserves to back them, as the gold backing the stolen notes would merely be reassigned to the newly issued notes on the blockchain. Furthermore, such a system would allow all participants of this monetary system an opportunity to fully recoup the value of stolen paper notes, a situation impossible under our current fiat currency system, and one that is very much realistic.
In order to prevent loss when gold-backed notes are stolen, the only necessary precautions would be the safekeeping of serial numbers of the notes in a secure place on a piece of paper, multiple pieces of paper, or electronic devices, and the prompt reporting of the theft that will lead to cancellation of the existence of such money on the blockchain before it is spent.
(Five) The Ability to Quickly Identify and Stop Fraud and to Protect the Savings of the Poorest in the World
The use of blockchain technology can radically change our unethical, immoral fiat currency system for the better.
The monetary system I envisioned above can stop criminal bankers in their tracks before they ever get started in printing more notes than are 100% backed by gold reserves. Even during ancient Roman times when only gold and silver coins were used as money, it was very difficult to stop Roman emperors from cheating the people if the emperors decided to mint coins with less silver weight and replaced silver with other impurities to equal the same weight per coin. By documenting all unique serial numbers of printed paper notes on the blockchain, a banker advisory and oversight committee can ensure a relationship of a perfect 1:1 ratio of monetary units of paper notes in existence and the weight of gold held in reserves.
Furthermore, any banker found guilty of violating this perfect ratio or being complicit in a conspiracy to weaken the purchasing power of each note through dilution of gold reserves should automatically receive a sentence of 50 years in prison, with zero chance of early parole. Such a system would ensure the purity and goodness of my suggested monetary system and no one would ever have to worry about the real world application of Gresham’s Law ever again.
Such a perfect system of monetary accountability, transparency, and oversight would ensure that for the first time in our history, the poorest of the poor could actually move out of poverty with an increase in daily income earned. Today, if the poorest of the poor double their income over seven to ten years, due to the enormous rot in the purchasing power of emerging market fiat currencies, even a doubling of income during this time may never increase their real inflation-adjusted purchasing power and thus never help the poor escape their poverty. However under my proposed system, every increase in daily income earned would translate to a real net increase in purchasing power, as annual inflation would be nearly zero year after year for decades on end, and this would help the poor escape the unyielding drag of the gravitational pull of poverty.
(Six) The Complete Absence of a Debt Component in the Creation of Every Single Monetary Unit
No money should ever be created as debt because this allows the architects of a debt-base monetary system to control nations.
In 1941, Chairman of the US Central Bank Marriner Eccles stated, “If there were no debts in our monetary system, there wouldn’t be any money”, revealing the immorality of our current fiat currency system still in use in 2021. In other words, over eighty years ago, the Chairman of the Federal Reserve acknowledged the built-in immorality of the monetary system engineered by a few powerful banking families that is still in use today. The above statement was an acknowledgement that the mission and functionality of our current global monetary system was the complete control of humanity by bankers by putting every human being on planet Earth into as much debt as possible. Thus, instead of creativity, production and progress being the basis behind our global monetary system, debt and regression was its basis The fact that the immoral basis of our current monetary system does not infuriate every single person that reads the above quote illustrates an enormous problem with our current education system and a critical fault in our understanding as a whole about money and monetary history.
Since we live in a world in which not a single dollar, Euro, yen, yuan, pound or peso would exist if all citizens had no debt burden, such a monetary infrastructure reveals that First World economies actually depend upon the heavy indebtedness of Third World nations and their occasional inability to repay debt to function. If you can read that sentence without thinking that our current global monetary system is of extremely low utility and functionality to every resident of our planet, then you do not yet understand the inner workings of our current monetary system and require some further education about monetary history.
In recent history, numerous examples exist of the inability of the Third World to service First World loans, almost always granted at punitive high double-digit interest rates in which debt must be repaid in the currency of the First World lending nation and not in the heavily devaluing fiat currency of the Third World nation, a loan condition that further exploits the enormous gap in wealth between the First and Third World in favor of the First World. In the past fifty years, there have been three prominent periods of global debt crises - the 1980s Latin American debt crisis, the 1997-1998 Five Tigers Asian debt crisis, and most recently, in the years that immediately followed the 2008 global financial crisis, a combined European and Latin American illiquidity and/or insolvency crisis.
In response to such debt crisis created by First World bankers in Third World nations, the proposed solutions of First World bankers always exceed the immorality inherent in their creation of these unnecessary and very preventable crises. The solution of First World bankers has always been to bury these nations under even greater mountains of debt, which is presented to the world through their media-controlled channels as World Bank and IMF “bailouts”. To truly understand the disingenuous use of the word “bailout” in mass media, think of these bailouts as a restructuring of a 30-year mortgage at 8% interest rate to a 45-year mortgage at 15% interest rates.
Furthermore, realize that punitive repayment conditions always accompany the restructuring of debt with the inclusion of stipulations that you must first apply any disposable monthly income at the end of each month to service the new loan, even in lieu of applying this disposable income to more urgent possible needs such as feeding your own family or taking care of medical emergencies. Additional loan covenants are likely to require your purchase of necessities like food, after servicing the required monthly payments, from food companies owned by your lenders with no option to potentially purchase higher quality food at lower prices from a competitor. And this example, ladies and gentlemen, is typical of the type of loan restructuring covenants included in “bailouts” announced around the world by mass media as beneficent actions undertaken by the global banking cartel.
Whenever you travel to developing nations and observe the presence of Western food companies and restaurants on every street corner, like Tesco Lotus, Walmart, Starbucks, McDonalds, KFC, Cinnabon, Wendy’s, Burger King, etc., the reason for the proliferation and dominance of Western companies over local companies in emerging market nations is not due to the savvy of these companies executives’ foreign expansion plans, but rather due to stipulations attached to debt restructuring “bailout” deals.
However, if my proposed new global monetary system backed 100% by physical gold were in use today, these repeating sovereign debt illiquidity and insolvency crises would disappear, as much of the incentive for First World bankers to place heavy debt burdens on Third World nations would disappear. Why? As a far superior and just monetary system, my proposed monetary system would establish a free market balance between economic growth and monetary creation versus the banking model that exists today in which First World nations’ economic growth comes at the expense of increasing Third World nations’ debt burdens.
If money were no longer created as debt, but only to serve real sustainable economic growth instead of to service unserviceable, unsustainable economic projects, then these debt crises and disasters would stop happening over and over again.
(Seven) The Complete Abolition of Banker Authority in Setting Market Interest Rates, Including Interbank and Commercial Lending Rates
Under a fair and just monetary system that benefits all of mankind, rich, middle class or poor, equally, the ability of bankers to set interest rates completely out of line with interest rates set by the free market would be destroyed. Furthermore, the banking practice of giving the best, lowest interest rates to the sector of the population, the richest, that need it the least while hammering the economic demographic that can least afford to pay high interest rates, the poor, the most, would be savaged and destroyed under a fair and equitable monetary system like a 100% gold backed system.
Bankers should never be allowed to grant loans to emerging market nations at punitive interest rates (anything greater than 2% per annum) and demand repayment in a hegemonic global currency (aka the US dollar) versus repayment in the domestic national currency.
In reality, under the system I described in (1) of this article, since governments would no longer need to service the debt that accompanies monetary creation, as under my system, no debt component accompanies monetary creation, everyone wins as the need for any income tax collection disappears during peace time as the primary use of this collection is to service the debt that accompanies monetary creation. Secondarily, though bankers throughout history have always been greedy and my system wouldn’t necessarily stop their historical practice of charging insane undeserved interest rates on loans, the creation of free markets for the first time in our lives through my system would create competitive other markets that would presumably vastly undercut bankers that charged any interest rate above 2% for loans and therefore bring their lending interest rates back in line with free market interest rates.
(Eight) The Abolition of Creating Money Out of Nothing
No power should ever be granted that allows money to be created out of thin air, as such a power is in direct contradiction to money that equally benefits all of humanity.
By now, if you are still reading, it should be self-evident why this is, as any money that can be created out of thin air versus possessing intrinsic value, gives all the power over money to solely its creators and no one else. Of course, anytime the control over monetary supply and demand is granted to just a few people in a world of nearly 8 billion is a situation in direct opposition to freedom and liberty of the masses.
(Nine) Monetary Units That Possess Nothing But a Strict Numeric Meaning Must Be Forbidden
Ask someone today, “What is the origination of the number 1 on a US dollar note?” and you are almost guaranteed to receive a look of complete bewilderment in return. Most often, due to our complete ignorance of monetary history and the complete abolishment of such teachings around the world in institutional forums of “education”, most people will answer, “What do you mean? A one just reflects the numeric value of one, just like a 10 reflects the numeric value of 10.” This, of course, is the completely wrong answer regarding the derivation of monetary units printed on the first paper money issued in the first British colonies established in America. All fiat currency in use today, in which Central Bankers have completely destroyed the previous intrinsic significance of these numeric units, must be forever forbidden. Why? Because the existence of such conditions means a return to money that is nothing more than an idea with no tangible, intrinsic value. And such conditions allow its creators absolute control over the freedoms of mankind.
No money should ever be allowed to be created in which the unit of money (i.e. one dollar, one euro, one yuan, one yen, one Colombian peso, one Lebanese pound) has no real meaning other that its numeric value and its numeric relation to other units of money, meaning 100 Colombian pesos allows one to purchase 100 times more goods and services than 1 Colombian peso
If the 9th Commandment of a fair and equitable monetary system confuses you, then please allow me to assign some homework to you right now. I have always believed that the exposition of truth is best accomplished and far more effective when we have to put our skin in the game to discover the truth in the form of our time, research and effort. Merely informing someone of the truth is often a very ineffective tool in convincing someone to reassess their erroneous beliefs and to embrace the truth due to decades of extremely effective monetary propaganda programming.
When the first paper monetary notes were created in America, the numbers printed on these paper notes possessed a meaning distinct and greater than the mere indication of its numeric value. If we were to return to a 100% physical gold backed system, which I strongly believe should happen, then any numbers indicated on paper notes would possess a far greater significance that just an indication of the quantity of units of paper notes held by its owner. As it was when the first paper monetary notes were circulated in the first British colonies in America, it should also be today.
To get you started on your journey, I will inform you that the first paper money printed in America occurred in Massachusetts Bay in 1690.
(Ten) Bankers Should Play No Role in Creating any New Monetary System Moving Forward
Banking history is one full of deception, chicanery and treachery. The many sins of bankers at numerous global firms including ScottiaMocatta, Bank of America, Merrill Lynch, Deutsche Bank, Barclays Bank, ABN Amro, JP Morgan, Goldman Sachs, UBS ,Citibank, just to name a few, exposed from internally leaked communications during the 2008 global financial crisis should alert us that from a systemic vantage point, while a few decent bankers may still exist in the system, we should never trust the system.
Thus, if we allow bankers to be the architect of a new banking system they inform us is a gold standard, the one certainty in the world will be that this new system will be the very antithesis of a gold standard. The only architects we should trust to develop the rules and oversight policies of a new monetary system, such as the one I described in this article, should all be people whose careers have existed, for the vast majority of their professional lives, outside of the global banking/political system.
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