Citizens for Sound Money

Why do the richest not trust the banks? Josh Anderson discusses the "Circle of Wealth" and why the world’s largest oil companies refuse to store their value in the U.S. banking system. Full episode premieres TONIGHT at 7pm EST!

Why do the richest not trust the banks? Josh Anderson discusses the "Circle of Wealth" and why the world’s largest oil companies refuse to store their value in the U.S. banking system. Full episode premieres TONIGHT at 7pm EST!

Here is the dirtiest secret about inflation: It hates the working class. When the currency supply expands, prices for food and rent go up fast. But wages? They take the stairs. During the Civil War inflation, prices rose 183% while wages only rose 54%. President Jackson’s advisor noted back in 1833 that "the working man finds all the articles he uses in his family rising in price, while the money rate of his own wages remains the same." Inflation is a regressive tax on labor.

How is currency born? It is borrowed into existence. As the Fed admitted in its 1977 "Putting It Simply" paper, they create currency by writing checks against zero balances. Every dollar in your pocket is a piece of debt that carries interest, ensuring the total debt can never actually be paid back.

Defying Inflation: The Strategy to Reclaim Your Wealth x.com/i/broadcasts/1…

Between 1870 and 1914, the "Golden Constant" proved that market feedback loops achieve what central banks cannot: true price stability. The American price level in 1914 was within a mere 6% of its 1870 level, despite a massive industrial revolution and westward expansion. Under gold, the only way to get "rich" was to actually produce something of value, rather than lobbying the state for a favorable interest rate.   Stability is a product of market, not "bureaucratic wisdom."

@freedom_rpt youtube.com/watch?v=lK-f2I…

Is the silver market rigged, or just misunderstood? Rob Kientz (@freedom_rpt) joins Daniel Diaz to pull back the curtain on the COMEX, explaining why physical shortages haven't triggered a price explosion yet, discussing the difference between 'delivery' and 'load-out,' the impact of the new Silver Act, and how the Sound Money Trade Association is building the infrastructure for a post-fiat world. Premieres TONIGHT at 7pm EST!

War is expensive. If governments had to tax you directly to pay for it, you’d stop the war pretty fast. So they use inflation because it allows the state to hide the true cost of war by siphoning wealth from your bank account silently. During WWI, governments suspended gold redemption to print money for bombs. Peace and sound money go hand in hand.

If you print money in your basement to pay bills, you go to jail. When the Fed does it, they call it "Quantitative Easing."

Gold & Silver Forecast: Breakout or Pullback? | Rob Kientz x.com/i/broadcasts/1…

Sound Money is Honest Money. Gold and Silver can't be faked, printed, or inflated. #SoundMoney

You’re still mixing up production financing with monetary properties. How something is financed has nothing to do with whether it can function as money. Oil fields are financed with bank credit. Copper mines issue debt. Farmers borrow to plant crops. That doesn’t make oil, copper, or wheat “liabilities” on someone’s balance sheet. Gold is different because it is a non-liability asset. When gold changes hands the asset itself transfers and the payment is final. No issuer, no counterparty, no balance sheet behind it. Historically miners didn’t need fiat credit to “issue” gold either. They simply retained a portion of the gold they mined or took raw gold to a mint and received coined gold in return. The metal itself was the money. Your point about modern mines using fiat financing only reflects that we currently live in a fiat credit system. It says nothing about gold’s monetary nature. And dismissing history in a monetary debate is a strange move, because monetary systems are understood precisely by examining how they functioned historically.

@4SoundMoney No, you are missing it. No one cares about history. We live in the 21st century. The "issuers" of gold (mining co.) need FIAT credit to produce it. Hopefully, they find enough to sell & spot price doesn't collapse for 20 years, pay back the debt, and make a profit.

Why did Ludwig von Mises love gold? He loved it because politicians hate it. Gold has one specific virtue: It cannot be printed by a government bureau. It is a geological constraint on the state's ability to rob you. Mises viewed the gold standard as part of the Bill of Rights. It separates money from the state, just like we separate church and state. If the government controls the ledger, they own you. If the ledger is anchored in reality (gold), you own yourself.

You’re still missing the distinction between how something is produced and what it is as money. When gold functioned as money historically, miners didn’t need a fiat system to “produce” it. They simply retained a portion of the gold they mined as payment or took raw gold to a mint and received coined gold in return. The metal itself was the money. Your point about modern mines using fiat credit just reflects the fact that we currently operate in a fiat system. It says nothing about gold’s monetary nature. Gold remains fundamentally different from modern fiat money because it is a non-liability asset. When gold changes hands, the asset itself transfers and the payment is final. No issuer, no counterparty, and no balance sheet stands behind it. That’s why gold historically served as the base settlement asset in monetary systems. And even today it’s still used that way in many contexts. More than 4,500 businesses in the U.S. already accept gold for payment of goods and services, particularly in states where gold and silver have been reaffirmed as legal tender. So pointing out that modern mining operations use fiat financing doesn’t undermine the argument. It simply describes how production is funded in today’s credit-based economy, not what gold is as money.

@4SoundMoney Modern gold mining is financed with fiat credit. Labor, energy, and equipment are paid in fiat. The gold is then sold for fiat to repay the debt. In practice the credit economy produces the gold — production isn’t paid in gold.

Your chart is showing commodity prices relative to a trailing 10-year average, which captures supply shocks and productivity changes as well as monetary effects. That makes it difficult to treat it as a direct measure of the dollar’s stability. Even using your CRB metric, the metallic standard period clusters closest to equilibrium, while the largest deviations occur during the Greenback period and the modern fiat era. And the “Cross of Gold” deflation period you highlight (1869–1897) is often misunderstood. Prices fell largely because productivity surged during industrialization; railroads, steel, and mass manufacturing dramatically increased output. Real wages rose and the economy expanded rapidly during that period. Falling prices in that context reflected increasing productivity, not monetary instability.

@4SoundMoney @BitcoinGambit Sorry, but this is silly. Obviously, economic calculations and decisions are going to be most accurate and reliable if all of our units of measure are constant in magnitude. The system you advocate will yield a dollar with a variable and unpredictable magnitude.

Money isn’t a laboratory unit like meters or kilograms. It’s a market good whose purchasing power emerges from supply and demand. Every monetary system has variation in purchasing power. The real question is what mechanism governs that variation. In your framework the magnitude is managed by policymakers targeting commodity prices. In the alternative framework the adjustment occurs through decentralized market processes and settlement constraints. Gold historically functioned as a settlement asset that limited how far credit could expand relative to reserves. That constraint disciplined the system without requiring a central authority to continuously recalibrate the unit of account. Banks, markets, and arbitrage provide information about risk and credit conditions that no central authority can fully observe. Allowing those signals to guide adjustment relies on decentralized information from market participants, rather than attempting to stabilize the unit through centralized policy. So the choice isn’t between a perfectly constant unit and a variable one; no monetary system achieves that. The choice is between administrative stabilization by policy or discipline imposed by market settlement and balance-sheet constraints.

As noted above, the dynamic you’re describing; a run toward final settlement money; is really a credit structure problem, not a flaw inherent to gold. Banks expand credit on top of a settlement asset. When credit expands faster than the settlement layer, the system becomes fragile. When confidence breaks, those credit claims rush to convert. That can happen under any monetary system. One approach, which you’re describing, is to stabilize the system by expanding base money to support the credit structure. The alternative approach is to allow credit to exist, but constrain how far it can expand relative to the settlement asset. Historically Congress implemented the monetary framework through statutes like the Coinage Act of 1792, which defined the dollar in gold and silver coin rather than through commodity price targeting. Gold functioned as the settlement layer. It didn’t eliminate credit cycles, but it imposed discipline on how far the credit layer could expand before adjustment occurred. In that kind of system, discipline comes primarily from the banks themselves, which must manage their balance sheets and understand their total exposure. Banks have to know the threshold where credit expansion becomes unsustainable relative to their reserves and settlement obligations. The global gold stock also grows slowly through mining, roughly 1–2% per year, which is close to the ~2% inflation rate modern central banks try to engineer through policy. And historically we even saw decentralized metallic systems like the Latin Monetary Union, where multiple countries standardized gold and silver coinage without a central authority targeting commodity prices or managing money supply. In that context, contraction following excessive credit expansion can be part of the system correcting prior imbalances, not evidence that the settlement asset itself is flawed.

@4SoundMoney @BitcoinGambit For the past 235 years, the U.S. economy has behaved (in terms of NGDP and inflation) as if the CRB Index was a valid indicator of the real value of the USD. Congress should define the value of the dollar in terms of general commodity prices and force the Fed to maintain it.

The interwar system wasn’t a classical gold standard. After WWI it became a gold-exchange standard run by central banks, layered with war debts, sterilization of gold flows, and politically fixed exchange rates. Those policies prevented the normal adjustment mechanisms that operated under the classical gold standard before 1914. Many economic historians point to those policy distortions, not gold itself, as the reason the system became unstable. Barry Eichengreen explains that the interwar system differed fundamentally from the pre-1914 gold standard because central banks interfered with gold flows and tried to maintain politically chosen exchange rates. Ben Bernanke also noted that adherence to those distorted exchange-rate policies transmitted deflation internationally during the early 1930s. And economic historian Michael Bordo has written that the classical gold standard functioned because governments followed its adjustment rules, while the interwar version collapsed because those rules were overridden. So the episode doesn’t show that gold as a settlement asset “guarantees deflation.” It shows what happens when governments try to run a gold system while simultaneously overriding the mechanisms that make it work.

@BitcoinGambit @4SoundMoney Nope, the use of physical gold as "final money" guaranteed that the monetary system would suffer a deflationary implosion at some point. Our economy exhibits dangerous positive feedback behavior with respect to changes in the real value of the USD.

That question doesn’t change the point. Wartime alliances don’t erase the broader political spectrum. Liberal democracies opposed both fascism and communism throughout the 20th century. During World War II the Soviet Union and Western democracies happened to fight the same enemy. That was a temporary military alliance, not ideological agreement. So the original point still stands: opposing communism does not automatically mean endorsing fascism. That’s exactly why calling it “communism or fascism” is a false dichotomy.

@4SoundMoney If it's a false dichotomy (which is not), let me ask you this: what trench would you be in in Stalingrad?

You’re still assuming the premise that money must be a claim on something. Gold isn’t a claim on anything. That’s the answer. It’s a non-liability asset. No institution issues it and no balance sheet stands behind it. Most modern money works differently. Bank deposits are liabilities of banks and Federal Reserve Notes are liabilities of the Federal Reserve. Gold historically functioned as the base settlement asset used to extinguish those liabilities. When gold changes hands, the payment is final because the asset itself is transferred. So asking “what is gold a claim on?” assumes money must always be someone else’s debt. Historically, that simply wasn’t the case.

@4SoundMoney You ignored the question and are off in the woods somewhere. I didn't ask you about credit. I am asking you specifically what is gold a claim on??? You are telling me nothing. Am I right?