Spend Gold Freely Again: Did We Fix Money?

Written by Kim Coleman, Director of Strategic Relations

Goldback is making it possible to spend gold freely again. In this short series, we will examine how gold freedom was lost, what the Constitution authorizes and prohibits regarding gold freedom, and what steps can be taken, with your help, to make it possible to spend gold freely again.

Did We Fix Money?

As I speak to people around the country about Goldbacks, there is a common reaction: big eyes, big smiles, and an expression along the lines of “You fixed money!” I nod in agreement, to which they often repeat, “No, really, you fixed money!” 

Goldbacks are a 24K gold currency denominated in a variety of increments—as small as 1/2,000th troy oz, which at the time of this writing exchanges for about $4.33 USD. They’re fungible, affordable, and accessible. They are not merely representative of gold; they’re the real deal. And there are thousands of merchants around the country who will gladly exchange their goods and services for Goldbacks. 

So did we “fix money?”

Clearly, Goldbacks provide a viable alternative to our troubled monetary system. But “fixing money” would require the freedom and ability to use Goldbacks more broadly. That freedom is limited by laws and regulations that vary from state to state. Even where laws lean favorable to using gold and silver as legal tender, the relatively new technology required to produce a Goldback was not contemplated at the time these laws were passed, and some definitions may exclude them. 

For instance, in some states, only federal government issued gold and silver coins are legal tender. In other states, definitions may list “bars,” “ingots,” “coins,” or “rounds,” which technically may not include Goldbacks. Missouri recently passed a bill that is the most inclusive of gold products, including Goldbacks:

“…bullion fabricated into products of uniform shape, size, design, content, weight, and purity that are suitable for or customarily used as currency, as a medium of exchange, or as the medium for purchase, sale, storage, transfer, or delivery of precious metals in retail or wholesale transactions.”

Currently, only Alabama, Idaho, and Missouri clearly qualify Goldbacks as legal tender, but a few other states may be interpreted to include Goldbacks. For instance, Arizona, defines legal tender as:

“…a medium of exchange that is authorized by the United States Constitution or Congress…”

This stops short of declaring legal tender status for gold and silver, and, rather, defers to the Constitution for interpretation. Other states, such as Arkansas and Utah, can recognize gold and silver that isn’t federally issued, but only if a court approves it first—and that has not occurred to date.

Our Founders Intended Our Money to be Gold and Silver

In drafting a Constitution designed to limit federal power, coining money was one of the few powers given to the federal government—along with a prohibition on states making money. Despite reliance on paper to support the Revolutionary War, our Founders understood the weakness and vulnerability of paper currencies historically proven to fail.

“The trifling economy of paper, as a cheaper medium, or its convenience for transmission, weighs nothing in opposition to the advantages of the precious metals… it is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted.”

Thomas Jefferson

“To emit an unfunded paper as the sign of value ought not to continue a formal part of the Constitution, nor ever hereafter to be employed; being, in its nature, pregnant with abuses, and liable to be made the engine of imposition and fraud; holding out temptations equally pernicious to the integrity of government and to the morals of the people.”

Alexander Hamilton

“Specie [gold and silver coin] is the most perfect medium because it will preserve its own level; because, having intrinsic and universal value, it can never die in our hands, and it is the surest resource of reliance in time of war.”

Thomas Jefferson

The State of Money Today

Despite their best warnings, it wasn’t long before paper became the predominant currency. There is almost nothing left resembling the intent to base the nation’s monetary system on gold and silver. In fact, the government rejected it entirely when it seized private gold in 1933, ended redemption of Federal Reserve Notes for physical gold in 1934, and removed the U.S. dollar from the gold standard in 1971. This resulted in a full fiat currency system that has suffered the same issues our Founders described.

We see it. We feel it everyday. The green piece of paper we hold in our hands purchases much less than it did even five years ago—25% less!¹ Americans are losing their purchasing power and hopes for future prosperity. But there are options to regain that power, and Goldbacks can play a key role in that.

In the next article we will explore some promising ideas and necessary steps to make it possible to spend gold freely again.

¹   ICPI Calculator. In 2013 Dollars.  https://www.in2013dollars.com/us/inflation/2020?amount=1