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Countries around the world are moving forward to the Gold Standard, while the U.S federal government seems bent on destroying the U.S. Dollar by printing more and more paper, diluting the value of the Good Faith of the United States, see(United States Defined) previous post. China the number one holder of U.S debt, is moving in two directions regarding their fiscal policy. First they are the number one buyer of Gold. And two they are building their industrial base , largely on the backs of the American Taxpayer.

Ask yourself this question. What would happen to the one hundred-dollar bill in your pocket if the fed all of a sudden pulled a trillion dollars out of circulation. Like any other commodity its value would instantly climb. Is that ever going to happen with this government , NO! Keep this in mind when you fill up your tank or walk out of the grocery store with four sacks and you’ve spent one hundred to one hundred fifty dollars. In short the dollar is now worth nineteen cents plus or minus a penny or two. Some say it’s even worse than that. Ron Paul has stated its around four cents. When we can go to a bank , hand them a twenty-dollar bill and walk out with a twenty-dollar solid Gold coin. We will be on our way back to the strong fiscally sound Industrial Nation that we were intended to be.

Until recently India was the largest buyer of Gold. Obviously with the intent on moving toward a Gold backed currency. China is currently trading for oil using a basket of currencies, moving away from the dollar as their method of payment. The next step should be obvious , the Yuan would then backed by gold and in fact convertible to gold at any Chinese Bank. .

Lets look at this another way. I’m suggesting that banks should be re chartered by the states or a group of states in a region of the country. A state styled Glass Stegeall act or law should be enforced with in the individual states. Meaning that a Commercial Community bank may not also operate as an investment bank. That said, lets say that your bank down the street is holding gold currently valued at ten (10) million dollars in its safe. Now that number is based on what the free market says gold is worth on any given day, so its going to fluctuate. State banking then says, that this bank may loan to consumers (50) million or in other words , it must have a reserve of (20%) in the case of defaults or foreclosures. Under standard loan policies, such as twenty to twenty-five percent down , these bank loans are secured not only by the borrowers ability to pay, plus additional collateral, but also by a (40%) percent instant equity in the note. And since we are using Gold based on free market principles, knowing that countries all around the world are moving to the Gold Standard , those loan positions will continue to improve over time.

We currently are seeing several states studying the idea of having their own gold and silver backed currency. Utah, Iowa, South Carolina come to mind. There were three of us running for Governor this last time that talked about that in our states, Arizona, Nevada, and California. In fact I went so far as to say that we could here in Arizona, create a currency backed by our many natural resources that could be held in reserves by the state and then sold to the banks to meet lending reserve requirements. Those natural resources are those located on state lands including all forest lands.  In point of fact, the only way states are going to create jobs that are sustainable , is going to be if they come up with a currency backed by something of value,(gold or silver) etc, rather than some electronic machine in the District of Columbia, that adds zeros to a balance sheet. We need to elect more thinkers and fewer party faves ,if we are going to get our states back on sound footing.

Now the question by some is, where does this $50 million come from. That’s the best part. It comes from the residents of the local communities. This policy would encourage folks to invest in interest bearing deposit accounts, and therefore receiving a reasonable rate of return that would be predictable over extended periods of time. Would this not be better than loans made, then sold to who knows who or where? In short the federal government has no business being involved in your business or real estate loans. We’ve all heard the saying that politics is local , well so should be banking.

The following links are provided to give further insight as to the benefits of moving forward to a Gold and Silver backed currency. My goal is to see states do this on their own. Let the belt way go back to getting their revenue the old-fashioned way, earn it rather than steal it from Americans. Its going to happen anyway, might as well be sooner than later. Moving to the Gold and Silver standard would over night solve our nations spending deficit problems. It would bring the control of the free market back to the local level rather than Wall Street and the Federal Reserve.