The 21st Century Case For Gold: |
A New Information Theory of Money
by George Gilder
7.16.15 - Review by DAVID BRADSHAW, Idea Factory Press
"Time is the coin of your life. It is the only coin you have, and only you can determine how it will be spent. Be careful lest you let other people spend it for you."
Being a so-called "gold bug" can be very counterintuitive in today's world of changing economic and monetary values.
The public has been told over and over by so-called experts to think of gold as either "just
another commodity" or "just another investment". But for over 30 years Swiss America has told
the public the full story: "Gold is neither a commodity nor an investment - it is the world's most trustworthy store of value, time and labor."
Now a new scholarly book and scientific theory, with substantial imperative evidence, backs us up our premise.
"Is money a measuring stick that gauges the value of economic activity? Or is it a magic wand
wielded by central banks to summon new economic growth?" asks economist-technologist-philosopher George Gilder, bestselling author of 'Wealth and Poverty,' 'Microcosm,' 'Telecosm,' 'Knowledge and Power,' and co-founder of Discovery Institute in his newest book entitled, The 21st Century Case for Gold: A New Information Theory of Money.
We've long argued gold is the ultimate, worldwide "numeraire" (most fundamental form of money)
or base good and that all similar goods must be valued and priced against the base good. Thus
in today's corrupt world of floating currency values it has become impossible to identify
the true value of almost every other asset.
The U.S. dollar has morphed from a promise to pay a specific weight measurement of gold or silver
into a nebulous promise to pay an unmeasurable weight of debt. Our economy and money system, once
a solid "gold-based" monetary system, has gradually become a politically "faith-based" system.
During such a time as this, I am thankful George Gilder has undertaken to make the case for gold.
We need wise men to explain to us in fresh ways why gold matters both to our present freedom and
to rebuilding the exceptional American entrepreneurial spirit in the future.
Key quotables from Mr. Gilder's thought-provoking INTRODUCTION:
MONEY AS INFORMATION SOURCE
Mr. Gilder introduces his brilliant essay by asking readers to think, "Is money chiefly a source of
information? Or is it an embodiment of wealth that can be created out of thin air and
distributed to the financial institutions closest to government?"
WHY IS GOLD RELEVANT?
"Is gold even relevant in the new 21st century information age economy?" asks Gilder. "For too many of the
best and the brightest, conservatives as well as liberals, the debate over monetary reform
and, in particular, a gold standard, is ancient history."
WEALTH IS KNOWLEDGE
"A new information theory of economic growth leads to new insight into monetary policy.
Most educated people understand that knowledge leads to wealth creation, but this understanding
is incomplete. It is not that knowledge creates wealth - wealth, in its deepest form, is knowledge."
MONEY MEASURES LEARNING/GROWTH
"If knowledge is wealth, growth is learning. The most important role of money is as the measure
of that learning. Money is the channel that carries the information to investors, workers, small
businessmen, major corporations and entrepreneurs. All need to gauge the success or failure of
their attempts at growth."
AN AUTHENTIC MEASURING STICK
"The older case for gold sprang from the idea that its value as
money derives from its objective value in economic activity.
But this view has it exactly backwards. Researches in Bitcoin
and other digital currencies have shown that the real source
of the value of any money is its authenticity and reliability as a
measuring stick of economic activity. A measuring stick cannot be
part of what it measures."
GOLD: A PURE MEASURE OF TIME
"Gold can function as money because it operates outside the financial
economy as an index of the time it takes to extract it from the
earth. The cost of extraction rises almost in proportion to the advance of
mining technology. Gold thus cancels capital and technology and
becomes almost a pure measure of time. Only gold money is rooted in time."
TIME IS MONEY - MONEY IS TIME
"The source of the value of money is time - irreversible, inexorably
scarce, impossible to hoard or steal, distributed with remorseless
equality to rich and poor alike. As an index of time, gold imparts
the accurate price signals needed for sustained economic growth
and expanded opportunity."
A NEW MONETARY REFORM AGENDA
"These insights impel an imperative agenda of monetary reform.
Money is not chiefly power - it is information. While government
power can increase monetary volume, it cannot enhance
monetary value. Value is an expression of entrepreneurial
knowledge. The quantity theories of money must be replaced
by an information theory of money that preserves the currency
as an objective medium of measurement rather than as the
government's latest message. As a vessel of knowledge rather
than an instrument of power, the new theory ultimately leads us
to money rooted in time. It will bring us to a new consideration
of the necessary role of gold in a global Internet economy of
I sincerely hope Gilder's book receives wide public discussion and distribution, and serves as a beacon for other brave monetary reformers. I plan to reread it, as there is so much packed inside it.
Mr. Gilder reminds readers that no paper currency can ever be an accurate measure of wealth or time unless it is rooted an unchanging "a store of value". For thousands of years gold has been the ultimate "numeraire" for measuring all other forms of money. This simple chart illustrates how gold has protected your time, labor and future over the last three generations.
Will physical gold and digital currencies converge at some point in the near future as he predicts? Time will tell. Thankfully Gilder's book confirms that, in the meantime, freedom-loving citizens seeking alternative forms of money that will stand the test of time can put themselves on a "personal gold standard" with confidence. Discover The Timeless Truth About Gold & Silver.
WHAT OTHERS ARE SAYING
Mr. Gilder's book is a "Monetary Must-Read" for all serious gold-bugs and monetary reformers, according to Jim Grant, of Grant's Interest Rate Observer. "Gilder makes you think - he insists on it....You're going to have to see for yourself how the story ends. Something to do with gold and Bitcoin displacing Janet Yellen."
"Gilder's new book tackles key questions about how monetarism distorts the economy and leads to misallocation of investment. Gilder covers a variety of topics, including Milton Friedman's greatest 'error,' money supply and velocity, the perils of high-volume trading, Bitcoin and how it mimics Gold, and why a Gold Standard is superior to targeting based on a basket of commodities," according to
"In 106 lucid pages, Gilder magisterially demystifies money. In the hands of Copernicus, Newton, and Shannon as channeled by Gilder, money becomes simple and intuitive. Gilder reveals anew the gold standard's deep scientific foundation. Buy a copy on old fashioned paper in better bookstores everywhere or download it and read it," writes Ralph Benko at Forbes.
A GOLDEN PLUMBLINE
The Best Economic Solution To Mispriced Money & Markets
6.25.14 - By DAVID BRADSHAW, Idea Factory Press
Today's modern world is defined and driven by numbers.
But what if "the numbers"
we're using are all wrong?
What if everything, including money itself, is mispriced?
What if only one "numeraire" matters in the end?
This was the topic of a recent briefing held by author and Swiss America Chairman
Craig R. Smith with his team, which served as a preview of his latest book,
Don't Bank On It!: The Unsafe World of 21st Century Banking (Free White Paper)
The word "numeraire" is an economic term which represents an ultimate unit of account which serves as a universal plumbline for all economic transactions.
According to Investopia:
In French, the term means "money", "coinage" or "face value". A numeraire is usually
applied to a single good, which becomes the base good. All similar goods are then valued
and priced against the base good. This comparison makes it possible to identify which
goods are worth more than others.
The U.S. dollar is still falsely presumed to be the world's "numeraire", based on the
mid-20th century Bretton Woods Agreement which defined a U.S. dollar as 1/35th
of an ounce of gold. Linking the dollar with gold once provided a gold standard
for all other currencies because the dollar was fixed to a defined weight of gold.
But today, with the U.S. dollar currently valued at about 1/1200th of an ounce of gold,
we have strong evidence the dollar is no longer a numeraire for anything!
Yet somehow, the global financial markets appear to function and expand despite the
widespread "mispricing of money"
as economist Chris Martinson calls it, which he says creates a "mispricing of everything."
So, if virtually every financial asset (stocks, bonds, T-bills, real estate, currencies, etc.) in the world is currently mispriced and misvalued in terms of U.S. dollars, what possible chance does an individual have to protect themselves against a
worldwide debt-liquidating currency and asset crisis/depression?
Not much, unless they discover the timeless truth about money.
The solution is so simple it escapes most people and virtually every politician: Reboot! Convert some of your
assets back into the original "numeraire" - GOLD! In recent years this solution is catching on and
helps explain why central banks worldwide are suddenly stocking up on physical gold
at the fastest rate in decades.
You may be asking, in today's upside-down financial world, isn't it possible then
for gold to also be mispriced? Can speculators ruin even the purest form of money
which has served the world as the ultimate plumbline of value since day one?
In the short-term, yes, all things are possible. In fact, some experts firmly
believe the gold price is currently very undervalued and provides concerned citizens with a golden buying opportunity - especially for those who have not yet converted any assets into gold.
But over the longer-term (5, 10, 25 or 40 years) gold prices are unimportant.
You could argue the price of gold never really changes at all in the exchange for
goods and services, due to gold's unique 'store of value' qualities. But gold prices
will always fluctuate in comparison to mispriced, fiat currencies; like the U.S. dollar.
As difficult as it may be, I'm asking you to forget almost everything you've
been told about gold by a vast multitude of so-called experts. For example,
every day the press refers to physical gold as being either a commodity
or an investment, right?
Wrong! Gold is neither a commodity nor an investment, but rather the world's
one and only trustworthy "numeraire" - which explains why the gold
standard provided a stable foundation of growth and prosperity in America
for 170+ years (1792-1964). In fact, the buying power of gold gradually increased over time, in stark contrast to
the declining value of the dollar reflected in the rising cost of living.
Today virtually every currency, stock, bond and bank deposit is at risk of being "mispriced". The daily headlines are screaming of the potential risks of new market bubbles created by the Federal Reserve's rampant artificial money creation over the last five years; as documented in The Inflation Deception, The Great Debasement and The Great Withdrawal books.
But not so for the ultimate "Numeraire" - physical money consisting of gold coinage will always be respected and accepted worldwide,
because it is a pure, debt-free asset that can be held safely in your own hand. With gold in hand you're positioned to preserve your
wealth for a lifetime as well as for the next generation.
Such is the secure and peaceful life behind the financial shield of a personal gold standard - no
matter what "the numbers" may say, no matter how much mispricing is allowed by progressive politicians living under the delusion
they can create "money" from thin air forever.
One day soon the rug may be pulled out from under the value of every
single paper currency and investment on earth, but throughout all of history
physical gold coins have faithfully served as wealth insurance against runaway price inflation ... or worse!
When will this day of reckoning come? It could be tomorrow, in a month or even a
year from now, but as Swiss America spokesman Pat Boone says, "Be prepared! It's
better to be a month early, than one second too late!" In today's crooked world everyone needs a golden plumbline to build a portfolio that will stand the test of time.
The ONLY Asset Protection Plan Designed in Heaven and Proven by 4,000 Years Experience!
6.15.13 - By DAVID BRADSHAW
, Idea Factory Press
I have invested over a quarter century in researching and reporting on economic trends from a Christian worldview for Swiss America.
In that time, I have watched debt enslave and devour American culture. Even scarier, the world money system today is on a collision course with Biblical economic principles of honest money management.
How can you and I stop the destruction of Christian culture . . . and simultaneously expand the Church's impact to Kingdom dimensions?
In addition to adopting ambitious plans to restore soundness through political action, I suggest that we start by cleaning up our act and becoming personal models of Biblical values (Matthew 5:16 and 25:14-30).
We should ask ourselves a key question: "What does the Bible say about savings and investment?"
The Old Testament is full of examples of godly men who understood that saving and using money well was a sign of God's blessing. Genesis records that Abraham was a man of true wealth, having stored up gold, silver, land and cattle.
His son Isaac and his grandson Jacob (Israel) also grew their wealth. His great-grandson Joseph became the #2 ruler in Egypt, and was directed by God to store food and provisions for the coming lean times. His obedience was rewarded with a vision to help save his nation during seven years of famine.
The party's over. Now, the work of rebuilding begins.
The Biblical model of storing up a portion of your resources is not widely practiced today. We Christians in America have become soft during what appeared to be an endless era of prosperity.
That era is now ending. Those who live beyond their means are discovering that hard times are a part of God's preparation for his people. The current "dip," I fear, is not something that is going to blow over in a few months. It may be the "new normal."
Part of the reason Christians suffer from confusion in the area of savings and investment is a lack of a balanced perspective. Jesus said that we should not lay up riches here on earth, yet the Apostle Paul instructed Timothy (I Timothy 5:8) that if a man does not provide for his family he is worse than an infidel. Are these conflicting principles? Not at all.
The context of Jesus' statement was that faith must be placed in God, not in money. Money is simply a tool to advance our faith and provide for our needs in the process. The key is to make the spiritual issues our first priority ... "Seek first the kingdom, THEN all these things will be added unto you" (Matthew 6:33).
The magic of advance financial planning is seen in I Corinthians 16:2:
"On the first day of every week, each one of you should set aside a sum of money in keeping with your income, saving it up, so that when I come no collections will have to be made." And also, "Each man should give what he has decided in his heart to give, not reluctantly or in response to pressure, for God loves a cheerful giver." (II Corinthians 9:7) (Actually the Greek word for cheerful literally means "hilarious," but today that seems like a stretch.)
In sum, the great problem nowadays is that our whole debt-based money system is strangling Christians (and all Americans) because we have neither learned nor obeyed the scriptural mandates for an honest money system - and have not avoided unproductive debt.
And now, a bit of history and politics.
From the beginning of recorded history, men have perverted honest money and sought to counterfeit it with everything from clay tablets (dating back to Babylon) to today's credit/debt systems used on computers. Our modern credit/debt system originated in 1,800 B.C. when Babylonian bankers loaned credit (which they "created", or conjured, out of thin air) and then charged interest (usury) on top of it. Sound familiar?
Notice that symbolic money (credit and debt) are intangibles and can be easily manipulated by the powerful to enrich themselves at others' expense. Our modern banking system is patterned after the Babylonians and based on the premise that God's economic laws of wealth are not trustworthy. Therefore, modern banking principles have usurped God's system and created a credit system using only money substitutes, which always, throughout history, have collapsed to their intrinsic value - zero.
Socialist elitism says, "Because some men are smarter than others, it is their duty to devise plans to order society and rule over the masses of ordinary men by force."
Following a similar line of thought, politicians quickly conclude that if you work harder or smarter than other folks, you should be penalized by paying a higher percentage of your income in taxes. This is how they use the law to level the "inequity and unfairness" of society. In other words, they believe in equality at the starting line of life and the finishing line. Thus they penalize hard work and education, and reward sloth and ignorance.
In sharp contrast, God's economic system holds out the promise of freedom and prosperity to all men who work earnestly and live by the truth.
If we choose to ignore Him, we limit His blessing and abundance in our lives. Furthermore, He has created no man to rule over another man by force. Instead each man is created free, provided we do not infringe upon the life, liberty or property of another man. Or so says the American Constitution.
Did you know that the Bible has more verses that discuss money than discuss salvation? I've counted more than 783 Biblical references to money, yet few economists can even define the word "money" correctly, Biblically.
Americans of all political stripes today blame government leaders for unemployment, rising inflation, and today's trillions of dollars of debt. But in reality, it's our lack of self-government under God that has permitted civil government to expand exponentially. Sadly, We the People are just about as near to bankruptcy as our federal government is.
We must be careful not to define wealth as the world does, but rather to recognize "true" wealth as attaining our full spiritual inheritance and destiny. The survival of our country (and other nations of the world) depends upon prepared men and women of God mobilizing His resources under our own stewardship.
As pioneer evangelist and reformer John Wesley said, "Earn all you can, give all you can, save all you can."
All of this (and much more) is covered in Swiss America's FREE "The Truth About Money"
CD featuring Chairman Craig R. Smith explaining the stark contrast between man's money system and God's money system, along with a radio interview I did on the subject with the "Worldview Matters" radio show.
Where Do We Go From Here?
Today God's wall of protection around our nation is breaking down just as Jerusalem's wall did in Nehemiah's time. And as in that time, various enemies are threatening to rush in.
But God wants to raise up a new army of Josephs and a million Nehemiahs whose eyes see the world being run from His perspective, according to His plan to bring everything together under his Son. (Ephesians 1:10)
So where do you start as a pioneer Nehemiah?
First, you should study and obey God's economic principles of thrift, savings and charity. Then live within your means. As a famous preacher said, "If your outgo exceeds your income, then your upkeep will be your downfall!"
However, if you still have more bills than money, then you have two choices: Earn more or spend less. Tighten your belt, reduce your lifestyle by 10-20% to allow for tithing, savings, retirement planning, a vacation, and Kingdom investment. You can do it! Sure, it's painful. Sometimes even embarrassing. But if you must take bold steps in order to start having something to save, do it. If you have to move into a smaller apartment with a leaky roof, do it! If you have to give up TV and get a second job, do that. If you need to sell your Harley or your boat to pay off loans, do it. And don't succumb to self-pity, which is actually a demonic spirit, not just a neurosis.
If you are a parent, you are responsible for training your children in disciplined habits when they're young, before they fall headfirst into the world's credit snares. It's more important to give them a good example than a lecture.
Even my 11-year old daughter understands that "debt" cannot also be "money" at the same time. Yet most Americans still perceive the U.S. Dollar as "money" despite its dismal failure as a store of value over the last century. Each dollar bill used to proclaim itself as a "silver certificate," kind of an I.O.U. against silver in the U.S. Treasury. But now even that pretense is gone. As Pat Boone writes in his preface to the widely-praised book The Inflation Deception
, co-authored by Swiss America Chairman Craig R. Smith, today's dollar bills should say "In God We Trust, Not in This Paper."
Growing Wealth Over Time
Ever since the Great Global Credit Meltdown of 2008, the Federal Reserve and other central banks worldwide have flooded the markets with liquidity, trillions in paper money conjured from thin air, causing the money supply to triple. During that period, gold prices shot up from a low of $750/oz. in 2008 to $1,900/oz. in 2011 - a 150% price rise! Yes, commodity prices, including gold, can fluctuate a lot in the short term, and past performance is no guarantee of future growth. Yet gold's long-term trend remains up - steeply.
Investors who bought gold around the year 2000 have already prospered from a fourfold growth in value. The next ten years may yield similar results. With several trillions of new dollars in circulation now compared to ten years ago, the outlook for Gold grows stronger as the politically-debased dollar grows weaker.
Four decades ago, the U.S. abandoned her Constitutional and Biblical mandate to have a "just weight and measure" in her money system, but there is nothing to stop you from putting your family on a personal gold standard!
A Precious Metals IRA: As Good as Gold.
No, Actually Better!
The best way to begin the process of putting yourself on a personal gold standard is to open a "Precious Metals IRA" . . . or roll over an existing IRA or retirement plan into one based on U.S. gold and silver coins, which carries no tax consequences.
To the amazement of those of us who aren't used to getting much help from the government, since 1986 it has allowed Americans to place certain types of high quality U.S. gold and silver coins into retirement plans. An IRA allows you to save up dollars, stocks, or gold/silver without paying any taxes on them until you withdraw them.
Over the past decade Precious Metal IRAs have outperformed all other asset classes by far. I firmly believe that IRAs are the sweetest deal you're ever going to get from Uncle Sam in this life!
With one brief phone call, Swiss America can help walk you through the simple process of starting an IRA or shifting some of your paper assets (minimum $5,000) into gold and silver with no tax penalties on new contributions by converting an existing IRA or other retirement fund into a "Self-Directed Precious Metals IRA."
A Final Note of Urgency
These are not normal times. The broader economic situation the world faces today is growing more ominous by the moment.
To my knowledge, no one has any idea how to bail us out of this very leaky boat. Instead, the U.S. debt is increasing by more than $58,000 a second! Amazingly, Congress is more concerned with other problems, such as global warming, universal health care, terrorism, illegal immigration, class conflicts . . . and putting all the blame for the recession on others.
In a word, the U.S. is broke. It may seem unlikely to most, but any major catastrophe could possibly sink the entire fragile and weakening paper-based global economy overnight.
Free resources to protect your savings from a wipeout!
To help Americans prepare for what could be the greatest economic crisis of our lifetime (as well as the greatest opportunity to advance the Kingdom of God) Swiss America and I will send you a FREE "Golden Opportunity" educational kit
which includes: "The Truth About Money" CD, "Re-Making Money" Special Report and "A Rare Opportunity" DVD.
Register here for a FREE "Golden Opportunity" educational kit
or call 800-289-2646.
"The Truth About Money" CD, "Re-Making Money" Special Report and "Timeless Truth" DVD.
- FREE in this special
Discover why gold is real, Biblical money to provide for your family and to help fight and win
the economic and spiritual battles ahead.