12/21/09 New York, NY – [Editor's note: In a series of three memos to President Barack Obama, Sioan Bethel recommends that real US assets be used to amortize or repurchase the US national debt.]
MEMORANDUM #3
To: President Barack Obama
From: Sioan Stephen Bethel
Subject: Issuance of restricted U.S. Gold Notes: A Regional Gold Standard
A persuasive, perhaps binding, precedent for the creation of U.S. representative money (100s’ billions – trillions) is that, of a single, restricted issue of U.S. gold notes, backed by Gold Bullion fractional reserves with an acceptable cover ratio. The new gold notes, separate and apart from Federal Reserve Notes (fiat money) in general circulation, would be used to amortize or re-purchase significant portions of the U.S. National Debt, fund or reimburse funds for stimulus packages, bailouts, and additional initiatives as warranted. To date, there has been no significant asset-based monetary innovation to address the nation’s financial crisis and chronic financial instability. Gold is a conventional and traditional backing for representative money.
Course of Action
The binding precedent for new, restricted U.S. Gold Notes is provided by the 1922-1923 “stable valued” currencies, price indexed to gold or silver, by the German issuing bodies: Rheinland-Main-Donau, Neckar, Suddeustche Festvertband Stuttgart, Schleswig-Holsteinische Elektrizit, Baver Grosskraftwerk, State of Hamburg (Silver) and the City of Lubek (Swedish Crown) [Attachment].
An issue of U.S. Gold Notes separate and apart from Federal Reserve Notes in general circulation, would function as a means of payment or repurchase of significant portions of the U.S. National Debt, and fund or reimburse funds for stimulus packages, bailouts and additional initiatives as required. U.S. Gold Reserves once covered all dollars in circulation. Now, the amount of notes in a re-issue would be predicated on existing U.S. gold reserves [8,133.5 tons] with an acceptable cover ratio [Attachment]. No doubt, the new issue would be substantial, in the hundreds of billion, if not trillion dollar levels; a significant alternative to present central bank gold sales.
Assessment
“In light of the history and development of money, however, it would not be surprising if a movement to return to a gold standard were to arise (although whether that would be advisable or not will not be so clear). The study of economics is about the study of cycles, and perhaps there is a decades-long cycle in which societies swing back and forth from a gold standard to fiat money. Because the cycle can last as long or longer than a human lifetime, it is perhaps inconceivable or even nonsensical for a person living in the fiat money era to acknowledge the possible reality of the alternative. So, the return to a gold standard may sound like something from the fringes of reality to the contemporary reader. If it is a cycle though there may be a time in the near future when questions about fiat money increase at the same time that a desire for something tangible also increases.”
-Professor John J. Chung, “Money a Simulacrum: The Legal Nature and Reality of Money”
Targeted, regional gold standards would facilitate parallel time cycles regarding fiat and representative money. In a December of 2008 address before the United Nations, President Sarkozy of France called for the revival of a Bretton-Woods type agreement; a return to an international gold standard. The problem of available gold reserves supporting the present and future expansion requirements of money in worldwide circulation no doubt still exists. The localized use of gold standards, however, by the United States and the European Union, for instance, avoids this dilemma and provides a targeted solution to the financial crisis and provides a new underpinning for long-term financial stability.
Again, the use of gold backed representative money (100’s billions – trillions) requires no additional taxation or borrowing nor risks hyperinflation with excessive issues of fiat money. A measure perfectly suited to the temperament of the American body politic.
Sioan Bethel
Mr. Bethel is a specialist in strategic, consensual business relationships, bridging the private, non-profit, and global sectors. Economics, political philosophy, and public policy, via Dartmouth College and the Milano graduate program of the New School for Social Research, compose his academic foundation while auto-didacticism comprises his life-long vocation. The Obama Memos are an outgrowth of Mr. Bethel’s letter, appearing in The Nation, March 27, 2008, in response to Jeff Faux’s essay, ‘Is This the Big One?’
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“Gold is a conventional and traditional backing for representative money.” How long ago was this and what was the population at the time? Well it sounds good for those dreaming of a big pay day by owning and hoarding the yellow metal. Of course the only way it would work would be to outlaw ownership of the yellow metal and Central banks will pay pennies on the dollar for it. Good luck.
99 cent, do you read…at all?????
The US was on the gold (and silver standard) until 1971.
Honestly, can you read? Brain damage? (Just curious.)
All the dopes in the world (like you) seem to think the last time we used gold and silver as money was in the 14th century. Really sad.
BTW, the Middle East, China and Russia (even Germany and the UN) are all now openly discussing silver and gold for their next currencies.
Still too little too late , we are in the dog house because once global discard of the dollar , hope you have physical GOLD.All government lies to tax you and me until we get rid of ALL central banks, too late , this will not happen till we have world war 3 +.
That’s a great article and I think we are already to the point where metals are becoming ‘money’ again. Digital currency has offered us the convenience of instant safe transactions backed 100% by gold.
Mark
editor@dgcmagazine.com
New TV.Com do you read…at all????? What was the population in 1971? When was it that the US made it illegal to own gold and why?
99, NewTV wins and you lose.
The US population was 207,660,677, and the world population was getting close to 4 billion in 1971. What is your point? That there were very few people on the planet in 1971? Bhawahahaha.
When gold was confiscated, very little was actually taken, and in a very short time it was made legal again. It went from 20 to 35 dollars an ounce in this process during the depression.
Like NewTV.com said, you may want to read just a little before you post as it makes you look like a complete idiot.