The Gold Standard The Gold Standard Institute

Issue #42 15 June 2014 1

The Gold Standard
The journal of The Gold Standard Institute

Editor Philip Barton
Regular contributors Rudy Fritsch
Keith Weiner
Sebastian Younan
Occasional contributors Thomas Bachheimer
Ronald Stoeferle
Publius
John Butler
Charles Vollum

The Gold Standard Institute

The purpose of the Institute is to promote an
unadulterated Gold Standard

www.goldstandardinstitute.net

President Philip Barton
President Europe Thomas Bachheimer
President USA Keith Weiner
President Australia Sebastian Younan
Editor-in-Chief Rudy Fritsch


Membership Levels

Annual Member US$100 per year
Lifetime Member US$3,500
Gold Member US$15,000
Gold Knight US$350,000
Annual Corporate Member US$2,000
Contents
Editorial ........................................................................... 1
News ................................................................................. 2
Part I: Reviving a Free Market Gold Standard .......... 3
Legal Tender Renders Planning Impossible .............. 6
The Never Ending Story ............................................... 7
Pacifism: The Death of an Individual ......................... 9
Editorial
The burning down of factories in Vietnam is more
complex than just jingoistic fervour over the fate of
some islands in the East Sea. An interesting article
points out that it is also to do with the widespread
perception of poor conditions for workers in the
factories that were burnt down. Simmering
resentment built up and a geo-political event became
the trigger for widespread arson.
There is a delicious irony in the situation where
workers in a communist country are burning
factories to the ground in protest at the working
conditions. Why would they burn their own factories
down? Dont the workers own the means of
production? It is time for the workers of the world
to unite and demand honest money Gold.
In this June issue of The Gold Standard we present a
free market Gold standard that moves beyond the
theoretical what should be done, into the more
practical realm of how it could be achieved.
Ken Griffith is an educated Gold man (and a
maverick) currently operating out of Kenya in Africa.
In a multi-part presentation, he presents Journal
readers with a clear blueprint for moving from here
to there. Part One appears in this issue.
I would recommend that all those who understand
the grave predicament that the world is in read it and
send it on for others to read. It is the lone
intellectual warrior who will rally the world to a
brighter future. Is this the way forward? I would not
publish this did I not think that it had merit.
According to the Bank of International Settlement
(the BIS), world debt now stands at over one
hundred trillion dollars it was only seventy trillion
when the debt collapse began.
As discussed in previous issues, it is not so much the
size of the debt, though no one seriously believes
that it can ever be paid back in paper money of the
equivalent value to the amount loaned, it is the
manner of the debt creation that is the problem.
To simplify, debt cannot be paid back under the
existing system without simultaneously increasing the
The Gold Standard The Gold Standard Institute
Issue #42 15 June 2014 2

debt. A paper money that is created by debt, cannot
by its nature, pay off that same debt. No amount of
amazing new technological breakthroughs that
herald a new, whizz-bang age of production can
change that fact. Nothing can change that fact
nothing except Gold.
Gold can extinguish debt; nothing else can. That is
why only Gold is, and can ever be, money. That is
why this journal exists.
After over five years of existence, the Gold Standard
Institute remains the only organization presenting a
credible view of a/ the nature of the problem, b/ the
solution to the problem and c/ real hope for the
future.
The world needs a circuit breaker. Maybe Ken
Griffith presents just that. Mr Griffith has appended
his email address to Part One. Those who are
interested in actively pursuing this idea further should
contact him.
Time is running out.
Philip Barton
News
Three articles by Keith at Forbes:
Why did both Gold and Silver become money?
Thomas Piketty pens communist manifesto for
the 21st century
Europe stricken with negative deposit rates

Ready Set Boom: Not much to do with Gold, but a
scary example of a lack of awareness as to the
process in motion in Australia. Yes, this is a current
piece of promo.

Global Economic Analysis: Former Bundesbank
Vice-President says current economic system is
pure fiction
Global Economic Analysis: Oklahoma recognises
Gold and Silver as legal tender

Business Standard: Indian households put two thirds
of their savings into property and Gold

Mineweb: Putin says that Russia and China must
secure Gold reserves

Scrap Monster: China invites top foreign banks to its
Gold exchange

Mining.com: Austria to audit its Gold held by B of E

Daily Reckoning: How Gold helped Iran avoid
defeat by the US

Monetary Metals: Barclays caught red-handed
manipulating Gold

Zero Hedge: Flooded by Gold smuggling, India
prepares to lift controls

Money Week: Three of the strangest things made of
Gold

Telegraph: Europe signs Gold agreement in the
attempt to avoid another Brown Bottom

Pakistan Today: Pakistan proposes slashing import
duty on gold

BBC: Tipu Sultan ring auctioned

NBC: Babe Ruths Gold goes under the hammer

Reuters: First Indian Gold refiner joins LBMA

Arabian Business: 24k iPads
The Gold Standard The Gold Standard Institute
Issue #42 15 June 2014 3

Part I: Reviving a Free Market Gold
Standard
I was born in 1971, three months after Richard
Nixon used an executive order to abandon the gold
standard for the US Dollar. For my entire life I have
heard gold bugs and Austrian economists lament the
demise of the gold standard and clamour for a return
to it. The purpose of this article is to ask whether a
new gold standard can be achieved through private
action. I will refer to this goal as the Free Gold
Standard.
Over many years of reading and thinking about this I
have come to the conclusion that a
government-imposed gold standard run by a central
bank is not likely to solve the money problem.
Politicians and honest money are like (snake) oil and
water - they dont mix. The politicians and central
bankers can be relied upon to debase the currency if
they control it. No nation that has monopolized the
creation of money has ever resisted this temptation
for long. I expect the only way the world will ever
see a true gold standard again is if it can be achieved
through the free market without state intervention.
My gold bug friends used to hope for the US
Government to return to the gold standard. Lately
theyve turned to the more realistic thought that the
US Government is likely to go bankrupt. But that
still doesnt solve the problem. If we wait for
governments to solve this problem, we shall wait
until the end of time.
1

First Try - The e-gold Era
You may not be aware that we had a brief
free-market gold money system that arose on the
Internet which lasted from 1996 until 2008. Led by
egold.com, the gold economy of the Internet
grew to the point that it was doing 80 metric tonnes
per year of person to person gold transactions. At its
peak there were seven digital gold issuers and an
international network of exchange agents, and over

1
The IMFs 2014 bailout loan to Ukraine is denominated in IMF
special drawing rights (SDRs) instead of US Dollars. This is a
good indicator that the powers that be see the end of the US
Dollar, but are planning for yet another fiat currency to replace
it, rather than returning to gold.
two million account holders. E-gold was the fastest
and cheapest way to move money around the globe.
The gold was changing hands at the rate of 78
turnovers per year.
The e-gold era came to a tragic end, however. From
2006-2009 agents from the US Treasury department
indicted and closed down all of the digital gold
companies based on American soil. Their crime was
not having state issued money transmitter licenses as
required by the USA PATRIOT Act. Some of them
had applied for money service business licenses but
were told in at least one case
2

by state regulators that
they did not qualify as money service businesses,
because gold was not money. Likewise, e-gold
petitioned the US Treasury to rule that e-gold was
currency, but the Treasury ruled that it was not
currency - and then indicted them for not having a
money transmitter license.
The EUs Emoney Directive was at that time too
restrictive and prevented the American digital gold
system from simply being transplanted to Europe.
With 80% of the market seized and frozen by Uncle
Sam the digital gold movement simply died.
You may read more about that decade of digital gold
and why it ultimately failed here: Why The First
Round of Digital Gold Companies Failed to Achieve
a Free Gold Standard.
E-gold and friends collided head-on with the
ever-growing regulatory bureaucracy that grew out of
the wars on drugs and terrorism. The digital gold
companies were Internet startups, bootstrapped on
an idea and founders life savings. The financial
regulators did not have a category for these types of
businesses (today Bitcoin is facing the same
problem.)
So government did what government does best - it
crushed the industry by prosecuting those involved
for not having the right licenses.
While the digital gold movement ended tragically, we
should take a moment to look at the remarkable
accomplishment that e-gold and their competitors

2
e-Bullion.com was denied a money transmitter license from the
State of California in 2002 because they did not handle cash.
The Gold Standard The Gold Standard Institute
Issue #42 15 June 2014 4

achieved together. They succeeded in getting a
market of over a million people to use gold as
money. That gold money was turning over so fast
that the velocity was 78 times per year on a base of
about 64,000 troy ounces of gold (roughly $25
million in 2002 dollars). They succeeded in building a
gold money system with multiple institutions and
agents around the world.
The most remarkable thing about e-gold and friends
was that they defeated Greshams Law! More
accurately, they showed that Greshams Law only
applies under certain conditions. They proved that it
is possible for gold to vibrantly circulate as private
money in todays economy.
Digital Gold 2.0
In the intervening years Bitcoin has stepped into the
gap left by e-gold. However, I would argue that it
does not serve the role of international electronic
payments nearly as well as e-gold did. While
technophiles may love Bitcoin, those of us who are
true gold bugs know that in the long run it cannot
replace gold as money. I would very much like to see
the gold community raise up an answer to Bitcoin.
Given the decade of success of the first generation
of digital gold, it should be possible to create a new
Free Gold Standard if we take care to avoid the
mistakes that were made by our predecessors.
I believe the following seven elements are needed
(though not necessarily all at once) to create a new
Free Gold Standard.
1. Jurisdiction
First, we must recognize that we need to be based in
jurisdictions that do not penalize the use of gold as
money. The users and customers can be anywhere in
the world, but the financial institutions at the heart
of a Free Gold Standard must be in friendly
jurisdictions. This means we need countries that:
Have no VAT or sales tax on monetary gold.
Have no capital gains tax on monetary gold.
Have no law against free minting of gold
specie.
Have no major conflicts of interest against
gold as money (eg. the US Treasury).
These requirements rule out the USA, but a
surprisingly large list of countries meet the first three
conditions, including even the European Union.
3

Our safest course would be to make our initial
strongholds in a few jurisdictions that have a vested
interest in the use of gold as money, along with
strong rule of law, and enough muscle not to resist
bullying by the anti-gold powers.
4

Switzerland, Hong
Kong, Singapore and Dubai are top jurisdictions that
fit our requirements.
2. Primary Specie for Contracts
Second, we need a standardized specie for gold
contracts that is small enough to be practical for
daily transactions. There are many manufacturers of
small bars and wafers. One in particular, Valaurum,
has a highly promising product - one-tenth gram and
one-twentieth gram gold wafers in the same size and
flexibility as paper currency. However, Valaurum is
expensive with a premium above 80%, and there are
many manufacturers of 1 gram wafers that could be
used instead.
3. Digital Gold Payments & Accounting
Third, we need a peer to peer (P2P) digital gold
payments and accounting system
5
that allows for
multiple issuers of digital gold to clear payments
between each other. We need a way for gold
payments to clear between institutions in the same
way that Alice can write a check from Bank of
America and Bob can deposit it at Wells Fargo.
Ideally this electronic payments software should
work on smart phones. We would prefer to see a
decentralized system with dozens and eventually
hundreds of digital gold issuers who are compatible
with each other. We dont want a system with only
one company that can be easily targeted and shut
down, like e-gold was.

3
Council Directive 1998/80/EC of 12 October 1998,
supplementing the common system of value added tax and
amending Directive 77/388/EEC - Special scheme for
investment gold. [Official Journal L 281 of 17.10.1998]
4
The anti-gold powers are the Federal Reserve, IMF, IRS and
OECD.
5
Following Fekete, I consider the exchange of real bills to be
part of the accounting system. But for the sake of those who
dont know what bills of exchange are or why they are necessary,
we just call it accounting in gold.
The Gold Standard The Gold Standard Institute
Issue #42 15 June 2014 5

4. Agent Network
Fourth, we need an international network of
exchange agents, who will trade digital gold for
physical specie as well as fiat. These can be bullion
dealers, pawn shops, remittance providers, grocers,
forex bureaus, mobile money agents, and ATM
machines. The agent network is the most important
element to achieve mass adoption by the public.
67

5. Electronic Exchanges
Fifth, we need electronic exchanges to make the
markets efficient and help us discover exchange
rates. Gold is our currency, and we need efficient
foreign exchange between gold and fiat currencies.
Therefore we eventually need an electronic trading
market.
8

6. Dispute Resolution System
Sixth, we need a way to rapidly and efficiently settle
disputes across borders between users of our Free
Gold Standard. Crime, fraud and disputes between
users brought e-gold and friends to the attention of
the jaundiced eye of the US authorities. It is essential
to have a uniform rule of law that works
worldwide for our members and users. For this
reason, we need an arbitration forum and a contract
that binds every member and user of our services to
settle any disputes in our arbitration forum.
9

7. Regulatory Model
Lastly, but most importantly, we need regulatory
model that fits into the existing legal environment

6
MPESA grew to 30 million users in five years primarily due to
their agent network in Kenya.
7
GoldMoney.com created a well-regulated digital gold currency
system, but prohibited independent agents from serving their
customers. Without an agent network GoldMoney users never
took to using GoldMoney as money. Their velocity stayed close
to 1 for the entire decade that they allowed peer to peer
payments.
8
The development of Bitcoin is instructive here. First Bitcoin
was only used as peer to peer money (2008 - 2011). Second,
people created Bitcoin brokers, to trade for fiat (2009-present).
Later, the first Bitcoin live traded exchange was created (2011).
Soon there were dozens of exchanges (2013). Exchanges were
the single largest factor that facilitated the rapid growth of
Bitcoin.
9
This has been achieved very effectively by CA Cert, an
international organizatoin with 20,000 members. We suggest
imitating their model.
and doesnt require governments to pass new laws or
make new categories for us. I do not mean we need
government to make rules for us (as that never
helps). Viewing regulators as well-meaning parasites,
we need a roadmap for how to use currently
regulated entities as issuers of digital gold money, in
order to avoid running afoul of government laws and
regulations, and to minimize the regulatory drain on
our resources.
The regulatory model is the most important element
to avoid a repeat of the e-gold fiasco. For this reason
I will devote the next article to that issue.
Conclusion
The first generation of digital gold currency systems
proved that Greshams Law can be overcome and
there is a market for using gold money in todays
economy.
That early gold system failed primarily for lack of a
strong regulatory model and because they were
domiciled in the USA. The USA, as the issuer of the
global reserve currency (USD) has the greatest
reason to fear and discourage the use of gold as
money.
Unsurprisingly, the US Treasury acted in their own
interest and carried out a jihad against digital gold on
American soil - ending the movement, for a time.
The time is ripe for a Free Gold Standard. I believe
this can be achieved if we take care to avoid the
mistakes of our forbearers. The Free Gold Standard
requires seven elements:
1. Friendly Jurisdictions(s)
2. Standard Specie size for contracts
3. Digital Gold Payments & Accounting System
4. A network of exchange agents
5. Electronic market(s)
6. Efficient Dispute Resolution
7. A strong regulatory model
If we who believe in the gold standard continue to
wait for government to create it for us, it will never
arrive. If we wait until the current global financial
system fractures and collapses, we may find it too
late, or we may find that IMF SDRs become the
new de facto world currency.
The Gold Standard The Gold Standard Institute
Issue #42 15 June 2014 6

If we want to see a gold standard, ever, we need to
do it ourselves. In this series of articles I endeavor to
lay out a roadmap of how to get there.
Ken Griffith
Ken Griffith can be contacted at ken@dineroltd.com. Ken was
editor of The Gold Economy Magazine, VP Marketing at e-
Bullion.com, and later started web consulting company Cottage
Networks, LLC to develop quality websites for small companies.
Ken has served on the Dev Team at CMS Made Simple, and was
a founding member of the International Association for
Financial Cryptography in 1998. Ken's current project is Dinero
Limited, a social savings platform for smart phones that works
with social savings groups to improve financial inclusion in
Africa.
Legal Tender Renders Planning
Impossible
There is much confusion over what the legal tender
law does. I have read articles, written by people who
are otherwise knowledgeable about economics,
claiming that legal tender forces merchants to accept
dollars under threat of imprisonment. Recently, I
wrote a short article for Forbes clarifying how legal
tender law works in the US.
Legal tender law has nothing to do with merchants.
If you want to sell steak dinners in your restaurant
for silver, you may legally have at it. Unfortunately,
the tax code discourages your would-be customers as
I wrote in another article.
The legal tender law targets the lender. It grants to
debtors a right to repay a debt in dollars. In practice,
this means that if you lend gold, the debtor gets a
free put option at your expense. If the gold price
rises, he can repay in dollars. If it falls, of course he
will be happy to repay in gold. Its a rotten deal for
the lender.
The relationship between lender and borrower is
mutually beneficial, or else it would not exist. The
parties are exchanging wealth and income, creating
new wealth and new income in the process. The
government is displeased by this happy marriage, and
busts it up by sticking a gun in the lenders face. His
right to expect his partner to honor a signed
agreement is violated.
Because no lender will lend gold under such
circumstances, gold is relegated to hoarding and
speculation only. This strikes a blow to savers,
because the best way to save is to lend and earn
interest. Savers are forced to choose between
hoarding gold, getting no yield, or holding dollars
and getting whatever yield crumbs are dropped by
the Fed.
If theres no lending in gold, what takes its place?
The Fed force-feeds credit in ever-larger amounts,
and at ever-falling interest rates.
The Fed is supposed to make its credit decisions in
order to optimize two variables. First, employment
shouldnt be too high or too low. Second, consumer
prices shouldnt rise too quickly or too slowly. The
Fed has little ability to predict employment and
prices, and even less control over them.
Most Fed critics focus on the quantity of money. Is
there too much, or too little? Is the rate of increase
too fast or too slow? Is monetary policy too tight or
too loose? Lost in this noise is any discussion of who
the lender is.
If you buy Treasury bonds, then you know you are
lending to the government. You are enabling welfare
spending, and a few cases of lending to such worthy
activities as housing speculation.
What if you dont? Well if you deposit dollars in a
bank, you are funding the banks purchase of
Treasury and other bonds. You know, or reasonably
ought to know, that this money is being lent.
But suppose you dont even do that. Suppose you
keep a wad of dollar bills under the mattress. You
are still lending. The dollar is the Feds credit paper.
You are financing the Feds activities, which consist
of buying Treasury bonds and various other bonds.
Youre the patsy. You are the lender.
Anybody who wants to earn dollars is bringing
demand for dollars to the market - in other words,
making a bid on dollars. With what do they bid?
They bid with their labor, with tangible goods, and
with land. All assets today are bidding on the dollar,
though most people look at it inside out. They think
that all assets are offered for sale at the right price.
The Gold Standard The Gold Standard Institute
Issue #42 15 June 2014 7

In any case, this universal bid on the dollar provides
credit to the Fed. By placing wealth in the Feds
hands, everyone gives it their savings to lend out.
Forget about what this does to consumer prices.
There are much more serious implications. In place
of the delicate, mutually beneficial relationships
involved in lending, the Fed sucks the savings from
the people, and pumps it out at high pressure. The
Feds indiscriminate deluge of credit is not a
substitute for individual thinking, planning, acting,
and lending.
The consequence is incalculable destruction.
The legal tender law does not attack the ability to do
a trade here and now, cash on the barrel head. It
attacks something subtler but just as important. It
destroys your ability to plan long range, to prepare
for the passage of time. Time is a universal in the
human experience. We all work during our
adulthood with urgency, because some day we will
grow old and be unable to work. To plan for that
day, we save while we work and lend our savings to
earn interest.
The motivation to borrow also comes from planning
for the passage of time. The entrepreneur wants to
start or grow a business now, while he has the
opportunity, and energy. Thats why he is willing to
pay interest out of part of his profits.
In a loan, the borrower gets money immediately, but
the lender gets paid later. Time is an integral part of
the deal, as one party prefers to be paid later.
In the free market, nothing comes between the saver
and the entrepreneur. In central banking, by
contrast, the legal tender law attacks the very heart of
the free market, like an insidious poison. It
disenfranchises the saver, enabling the Fed to
plunder his nest egg and undermine his retirement
plans.
At the same time, the Fed abuses the hapless
entrepreneur too. It lures him to borrow with the
promise of low rates, and then like Lucy pulling the
football out from under Charlie Brown, cuts the
interest rate again. This drives down his profit
margin and plunders his capital.
Legal tender law takes away your ability to plan for
the future. It replaces a hundred million individual
decisions whether or not to have tea, with a giant
high-pressure fire hose that blasts hot wastewater
indiscriminately. No matter whether they open the
spigot further, or close it slightly, the scalding deluge
of Fed credit is not in any way equivalent to the
individual planning, saving, and borrowing that
would go on if we had a free market.
Keith Weiner
President of the Gold Standard Institute USA
The Never Ending Story
If you read my last article, you have some idea of
how I came to be involved with the work of
Professor Fekete, with Gold Standard University
Live, with The Gold Standard Institute, with Fekete
Research, and with the New Austrian School of
Economics. I hope you also understand the
importance of all this; how knowledge of money,
credit, and the Gold Standard is the road to
economic salvation for humanity.
It is one thing to understand a concept intellectually,
quite another to have a visceral, gut feeling... a true
knowing. So with Gold; reading and studying is fine,
but nothing sets the reality of a concept like a
traumatic experience. Meeting armed border guards
at night, after walking for hours across frozen
plowed fields while escaping from Hungary was
traumatic for a nine year old... and set the reality of
Gold vs paper deep into my psyche.
Freedom and life itself depended on Gold; without
Gold, we would never have passed from Hungary to
Austria, we would never have been able to start a
new life in Canada, and my fathers life in Hungary
would not have been worth a plugged nickel. I
received a visceral knowing of Gold early; it took
much study to fill the intellectual gaps, but the
knowing was there.
So it goes with another concept; the concept that life
is a journey, a journey with no beginning and no
end... a never ending story. A story with waypoints,
highlights, lowlights, but with no beginning, with no
end. Our personal part of the story may start with
The Gold Standard The Gold Standard Institute
Issue #42 15 June 2014 8

our birth and end with our death, but the story goes
forever on.
I am learning this concept not so much through a
traumatic experience, like leaving Hungary under
duress, but through constant repetition. After all,
repetition is the mother of learning, is it not?
Ongoing repetition is the equivalent of one traumatic
incident in the way of learning life lessons.
I thought I had completed my journey in economics
when I studied Mises, till I learned of Professor
Fekete, then my journey really began. I thought I had
completed my journey when I made the
commitment to help preserve and disseminate the
Professors knowledge... but then my journey really
began.
I thought I had completed my journey with the
declaration that Fekete Research will not only
preserve and disseminate the Professors knowledge,
but will work to carry it forward... but now I see that
my journey is about to begin.
I am an engineer by trade and engineers put
scientific principles to work in the real world. They
do this by designing things and processes that make
life easier; like bridges that cross obdurate obstacles,
like ships and trains that conquer distance, and so
forth. I feel challenged to put the principles
discovered by Professor Fekete to work in the real
world. This is my next chapter of the never ending
story.
One of the biggest concerns of students of Gold is
how to transition from the current Fiat fiasco, to
honest money, to an Unadulterated Gold Coin
standard, without having to go through economic
collapse and bloody revolution. In other words, how
to put the theories of Gold and Real Bills into effect,
in our world, right here right now.
As I write this article, Professor Fekete, now an
octogenarian, is traveling the world in his ongoing
efforts to kick start the process: he is currently in
Bermuda, having discussions with His Majestys
Loyal Opposition, to persuade them to embrace the
concept of opening their Mint to Gold; to accept
unlimited quantities of Gold and fabricate the Gold
into coins of the realm.
This is one of the keys to Gold money: unlimited
minting guarantees that there will be a plentiful
supply of coins to support Gold circulation...
without circulation, the Gold standard will never get
off the ground. No long term planning such as
issuing Gold bonds or Gold insurance policies is
possible unless a future supply of Gold Coins,
indeed Gold income, is assured.
NASoE is pursuing the same goal with a slightly
different twist... a market driven rather than a
sovereign driven approach to creating coins capable
of circulation in unlimited numbers. What drives this
effort is the premium of Gold coin over Gold bar; if
you investigate the Fiat price of Gold, you will find
that coins always carry a premium vs. bars.
This is simple; a coin is more valuable, has a larger
purchasing power than the equivalent Gold in bar
form. A coin is more liquid, easier to spend than a
bar... thus the premium. The Mengerian theory of
marketability (liquidity) predicts this effect, and
market action shows the theory to be true; coins sell
at a premium to bars, period.
We are organizing a company with the mandate to
do just this; accept Gold bars, and return Gold coins
to all comers. The coins could be one ounce coins,
like the Maple Leaf or the Krugerrand, but for many
good reasons will be Sovereigns.
One ounce coins are large; with current evaluation at
around $1,200 one ounce coins will have difficulty
circulating. The Sovereign is only about ounce and
much more suitable for common, modest value
monetary transactions.
Furthermore the Sovereign was the basic coin of the
Classical Gold Standard; history and tradition are
important. Coinage of the Sovereign has been
uninterrupted since its inception in 1816, unlike
most other monetary coins. The Royal Mint of
England has been coining, is coining, and will
continue coining Sovereigns. Negotiations with the
Royal Mint have already born fruit; they are eager to
continue their business of coining Sovereigns... and
so is the Royal Canadian Mint.
The Sovereign has no face value stamped on it,
unlike the Maple and other current bullion coins.
The Gold Standard The Gold Standard Institute
Issue #42 15 June 2014 9

Face value is a sham, and needs to be eliminated.
Indeed, the Sovereign class coin was the standard
coin of the Classical Gold Standard; the Gold Frank,
the Gold Napoleon etc. all have the same Gold
content, and are exchangeable with the Sovereign.
This mint operation is a no brainer; the premium of
the Sovereign over Gold bars is substantial, and is
much more than the cost of fabrication (brassage
cost) so a risk free profit is available to any Gold bar
holder. Hoarders, investors, miners... whoever has
Gold will be able to take advantage of this
opportunity; turn Gold bars into God coins, and
earn a Gold profit.
However, the implications of this process go beyond
direct profit; once a bar is delivered, the really
interesting aspect kicks in. In accepting bar to be
coined, there is a time lag... we are not talking about
trading bar for existing coin, but actually processing
bar to produce brand new coin.
Depending on quantities, a delay of 30, 60, or 90
days is to be expected before the new coins are
delivered. The royal mint will accept the bars, and
accept a bill, payable in sovereigns on the due date
up to 90 days in the future. Think about this; these
bills will be Gold bills, payable on maturity in
Sovereigns by the Royal Mint! These are Real Bills of
the highest calibre, the most desirable Real Bills of
all.
Goldsmith Bills that morphed into bank notes are
being reintroduced to the world. Indeed, this is the
key to the new operation; auctioning freshly accepted
Gold Bills, to establish a Gold rate of discount. Like
this; you deliver a Kilo bar of fine Gold to the Royal
Mint, and are issued a signed and accepted ( by the
Royal Mint ) bill guaranteeing Gold Sovereigns in
ninety days.
You may simply wait for the due date, and collect
your Sovereigns; or, you may put your bills up for
auction... and receive Sovereigns right now.
Furthermore, you may also bid in these ongoing
auctions; exchange your cash Gold for a Gold Bill,
and wait for delivery. By choosing to do this, you
will obtain Gold Sovereigns at a discount. At a
discount to the Sovereign count; pay fewer
Sovereigns for the bill now than you will receive on
maturity of the bill.
Is this not a no brainer? Real Bills are market driven,
and offer benefits to both the writer and the
acceptor. Both have potential to gain; profit, at the
cost of time, or time to pay (credit) at minimum cost.
This is the current chapter in the never ending story;
the creation of a market for Gold Bills... and a taste
of things to come.
The next paragraph of the story is already clear; to
facilitate the creation of Silver Bills, in a similar
manner. Bring Silver bars to the Mint, and receive
Silver Bills. The premium on Silver coin vs. Silver
bar is even higher than on Gold, as the specific value
of Silver is less... and the brassage is therefore a
higher percentage of value. More profit is possible in
the coining of Silver coins than the coining of Gold.
And what about the next chapter? Who knows, life
deals and we play the cards we are dealt. Perhaps
once the Gold and Silver bills are in play, other metal
bills can be addressed; copper and other base metals.
Perhaps we will have an opportunity to tackle the
thorny problem of sovereign (Fiat) debt through the
mechanisms of Gold bonds, Gold insurance policies,
and Gold annuities.
As far as more specific details about this new
venture, I am not at liberty to name the company
being formed, as the charter is presently being
written, and the company is being registered. The
exact terms and details of the Bar/Sovereign
transaction will soon be available, as well as
information about Bill auctions. I will have more to
say about all this as the never ending story continues.
Rudy J. Fritsch
Editor in Chief
Pacifism: The Death of an Individual
It will come as no surprise to the readers of this
journal that the monetary system is in a precarious
state at best. Whether it is ballooning budget deficits,
terms of trade imbalances, capital controls, ever
higher taxes, political unrest wherever one looks
doom and despair seem to be the theme. Sound
money commentators (including myself at times)
The Gold Standard The Gold Standard Institute
Issue #42 15 June 2014 10

seem to perpetuate this theme, as though disaster is
inevitable and one must proceed to the fallout
shelter before its too late. This theme, and all those
who accentuate its inevitability, are more than
wrong: they are committing an act of treason against
the sovereignty of the individual.
The act of treason today is synonymous with
betrayal; in its broader use one contextualizes it with
betrayal of the sovereign, such as the Gun Powder
Plot (or Jesuit Treason) of 1605 against King James I
of England. It was during that period, when
Christian Judaic tradition reigned supreme, where it
was perceived that the embodiment of the sovereign,
being the King, was divinely inspired. To attempt to
overthrow the King was to do the work of Satan.
Treason was seen as a betrayal of Gods will, making
it the highest act of blasphemy.
Much has changed over the last six centuries yet
oddly enough, for many, the state is still regarded
with the same divine reverence. Question the states
over reaching power and one is immediately labelled
as though they are speaking blasphemy, Vox populi,
vox Dei. The worshippers of our modern state are
always prepared, always on guard, ready to accuse
the heretic, and there is no greater heretic to a statist
than an individual.
The individual serves no master. They stand alone,
carried by their own conviction that they have the
right to exist without the permission of another - a
concept relatively new to man. The individual is
everything a statist is not. For an individual to
commit an act of treason against their own
sovereignty, it would require a betrayal of the highest
value, their own life, something which statists
demand self-sacrifice. But what does that mean
and how does it relate to the monetary system?
An individuals sovereignty is greater than just
whether or not they exist. A slave was conditionally
cared for in exchange for the surrender of their own
sovereignty. Thus sovereignty is the definitive
philosophical expression of ones right to exist and
therefore to act at ones own volitional discretion;
something which isnt granted by decree or stature,
but by nature. In the absence of recognizing this
right, the individual becomes an object of the state -
at its disposal. This is the heart of the matter and
why one must be concerned.
The monetary system is the tool of the tyrannical
state which affects each and every facet of our daily
lives. The control of the monetary unit wields
unparalleled influence; an influence which deprives
an individual of their liberty as greater and greater
debt is amassed as the currency is borrowed into
existence. Rather than the outright confiscation of
material processions, the state applies counterfeit
credit to siphon ones savings. The process is
insidious but necessary for the ever expanding size
and scope of the state; the man who is deprived of
his effort and incidentally dependent on the state is
effectively enslaved to it. This explains why fewer
and fewer protest to defend their own sovereignty.
As the voices of protest wither and wane, the few
who are best positioned to formulate the moral
defense of the individuals sovereignty - those in the
gold community - dont offer a rebuttal but instead
shy away.
The monetary system is unstable at best which is
why many commentators within the gold space
speak of our inevitable destruction. Yet the
individual, if they are concerned properly with their
own sovereignty, must fight, tooth and nail, to avoid
the disaster. It is never too late to do the right thing,
and at any moment it can all be turned around. Yet
by the adoption of the attitude that it cannot be
saved, that destruction is inevitable - the individual is
abandoning their claim to their own life by not
fighting for it. Pacifism in the face of evil only breeds
more evil.
As advocates of individual sovereignty one must be
prepared for the intellectual battle. Right now such
advocates are up against the wall, surrounded by
statists of every persuasion demanding servitude to
the mob. To concede the battle is to concede ones
sovereignty.
Sebastian Younan
President the Gold Standard Institute Australia