Scholar’s Request: Dr. Woods, could you make up a “/gold” part of your website as a resource page on this topic? If a page already exists, disregard request.

I oppose a monopoly supplier of money, an exclusive legal tender, a central bank, regulated interest rates, bailouts for too-big-to-fail-banks, subsidized borrowing for too-big-to-fail-banks and deposit insurance. I further oppose a state taxing and spending exclusively in a particular currency, even if courts do not order settlement of contracts in this currency. I favor free (as in speech) money and free banking in general.

But I also oppose a statutory gold standard of the sort advocated by Larry White and others. In this type of reform, Congress declares a standard price of gold in “dollars”, around the current price, while exchanging all the gold in Ft. Knox for Treasury securities held by banks.

Dollars continue to be legal tender for public and private debts. Contracts specifying dollars, including contracts agreed before the reform, are unchanged.

Government at every level continues to collect half of GDP exclusively in dollars and continues to spend this volume of dollars along with any other revenue it raises by selling more entitlement to tax revenue.

Government continues to distribute tax revenue to holders of Treasury securities purchased before the reform.

In other words, the Congress simply replaces an inflationary fiat money with a deflationary fiat money. Then it raises taxes through the roof to pay off all the Treasury securities it has already sold.

Instead of embarrassing episodes of raising the debt ceiling, politicians face embarrassing episodes of raising taxes, like they can stomach the former but not the latter when lobbyists in the corporative state come knocking. We must pay our debts, mustn’t we? We can’t default on grandma’s savings bond. That’s unthinkable.

And while adopting this statutory gold standard, does Congress also repeal deposit insurance, or must we expect this reform only when pigs fly? Grandma needs here secure “savings” too, doesn’t see?

Does Congress instead renew the unlimited insurance of corporate bank deposits that Doug French discussed last month, insurance already attracting risk averse, corporate officers like flies to a shit house while my kids search in vain for work?

Do corporations with cost-plus government contracts then accumulate ever growing piles of notes promising gold in these taxpayer guaranteed accounts while my kids pay ever higher taxes along with higher interest rates on the mortgages they signed at home prices reflecting a (formerly) very realistic expectation of inflation?

When we discuss a gold standard, we’d better discuss all of these related perils as well, because if we don’t, folks will blame us when the new fiat money they get screws them more even painfully than the one they already have.

Promising a hoard of gold, most of which is already held by a few of the wealthiest people and institutions on Earth (including Ft. Knox), to common people with a few dollars in bank accounts, and owing even more dollars to the state and its cronies, is no panacea for the ratchet effect.

Great video Tom. One point i wanted to add. It’s about the argument concerning the extra burdens from the costs of mining gold under a gold standard. Couldn’t one reasonably argue that these costs already exist? Right now gold is readily converted into $$….why would there be any more incentive for further mining under a gold standard as gold is already money?