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  • Dagny

The Real World Currency

What is a Goldback?

The Goldback® may be the world's only circulating interchangeable physical gold money. Goldbacks are created in various series to circulate under the applicable laws, and in the jurisdictions of Utah, Nevada, Wyoming, New Hampshire and South Dakota.

Unlike most gold products, the Goldback is designed to be used as a currency with interchangeable denominations rather than varying premiums based on gold content. This means that the fifty denomination (1/20th of an oz) can be traded in for fifty of the one denomination (1/1,000th of an oz). A Goldback is a unit of measurement. One Goldback is equal to 1/1000th of a troy ounce of 24 Karat gold. One thousand Goldbacks of any combination equal an ounce of gold. They may be bartered with like other forms of non-current money gold anywhere in the world, due to the fact that they carry intrinsic value. They are easier to spend than other forms of gold because they can be used in small transactions and they don't carry varying premiums.

Goldbacks . . .

  • do not need someone else’s approval to spend.

  • do not specify where they can be spent, or what they can be spent on.

  • are anonymous — there is no need to know who you are to spend them.

  • generate no data on your transaction for third parties to record.

  • can be spent, traded, or purchased with no fees.

  • can be quickly counted to know exactly how much you have on hand.

  • can not be frozen in your account by a payment processor.

  • are not a ‘counterparty’ instrument. 

  • are not eaten away by account or storage fees.

  • do not need layers of hardware and software to operate at the point of sale.

  • have universal value worldwide via their precious metal content.

  • can be carried on your person.

  • do not depend on their supply or scarcity for value.

  • do not need electricity, the internet or hardware to have value.

(Disclaimer: Dagny has a personal investment in this. We never talk about a product we have a financial interest in except this one time because it is so relevant and because the President of GoldBack will be on our show today. Please submit your questions in the chat during the show. It is in Studio B of at 3PM PST. and can be listened to for free any time at the archives.)

🇺🇲 Elon Musk predicted the end of the dollar if the United States does not deal with the national debt.

During Biden's presidency, the US national debt has risen to $34.4 trillion. As the IMF predicts, in 2024 it will exceed 123% of the country's GDP.

Seizure of Russian Assets is leading to Gold Asset Insecurity

The big U.S. aid package for Ukraine and other allies that President Joe Biden signed Wednesday also allows the administration to seize Russian state assets located in the U.S. and use them for the benefit of Kyiv.

That could mean another $5 billion in assistance for Ukraine, coming from Russian Central Bank holdings that have already been frozen in the United States. The seizures would be carried out under provisions of the REPO Act, short for the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, that were incorporated into the aid bill. 

But it’s not likely the U.S. will seize the assets without agreement from other members of the Group of Seven nations and the European Union. 

The new U.S. law requires the president and Treasury Department to start locating Russian assets in the U.S. within 90 days and to report back to Congress within 180 days. A month after that period, the president will be allowed to “seize, confiscate, transfer, or vest” any Russian state sovereign assets, including any interest, within U.S. jurisdictions. 

The European Union already has begun to set aside windfall profits generated from frozen Russian central bank assets. The bloc estimates the interest on that money could provide around 3 billion euros ($3.3 billion) each year.

“The Russians will not be very happy. The amount of money, 3 billion per year, is not extraordinary, but it is not negligible,” EU foreign policy chief Josep Borrell told reporters in March

Still, some European leaders have expressed hesitation about moving forward with a plan to formally seize Russia’s assets in Europe. 

European Central Bank President Christine Lagarde said at a Council on Foreign Relations eventearlier this month that confiscating Russian assets “is something that needs to be looked at very carefully” and could “start breaking the international legal order.”

Critics of the REPO Act say the weaponization of global finance against Russia could harm the U.S. dollar’s standing as the world’s dominant currency. 

To confiscate Russia’s assets could prompt nations like China — the biggest holder of U.S. Treasuries — to determine it is not safe to keep their reserves in U.S. dollars.

Comment: It's not just dollars. Any asset including gold might be seized from percieved enemy nations.

The U.S. and its allies immediately froze $300 billion in Russian foreign holdings at the start of Moscow’s invasion of Ukraine. That money has been sitting untapped — most of it in European Union nations — as the war grinds on. But roughly $5 billion of it is located in the U.S.

Scholz announced that the EU had reached a consensus on using 90% of the proceeds from the frozen assets of Russia for the military needs of Kiev

🇺🇸 🇸🇦🇪🇬🇳🇪🇿🇦🇸🇳🇨🇲 Several African and Middle Eastern countries have begun to withdraw their physical gold reserves from the United States.

These countries include Saudi Arabia, Egypt, Niger, South Africa, Senegal and Cameroon.

🇬🇭🇳🇬🇨🇲🇸🇦🇺🇲 The largest economies in Africa and the Middle East are moving their gold reserves out of the United States .

🇨🇳 China has bought enough gold to equal 1/3 of Federal Reserve’s Strategic Stock Piles over last 2 years

Physical Gold purchases are Up:

Gold as Currency - The Gold Dinar

Newly disclosed emails show that Libya’s plan to create a gold-backed currency to compete with the euro and dollar was a motive for NATO’s intervention.

Historians of the 2011 NATO war in Libya will be sure to notice a few of the truly explosive confirmations contained in the new emails: admissions of rebel war crimes, special ops trainers inside Libya from nearly the start of protests, Al Qaeda embedded in the U.S. backed opposition, Western nations jockeying for access to Libyan oil, the nefarious origins of the absurd Viagra mass rape claim, and concern over Gaddafi’s gold and silver reserves threatening European currency.

Though the French-proposed U.N. Security Council Resolution 1973 claimed the no-fly zone implemented over Libya was to protect civilians, an April 2011 email [archived here] sent to Hillary with the subject line “France’s client and Qaddafi’s gold” tells of less noble ambitions.

The email identifies French President Nicholas Sarkozy as leading the attack on Libya with five specific purposes in mind: to obtain Libyan oil, ensure French influence in the region, increase Sarkozy’s reputation domestically, assert French military power, and to prevent Gaddafi’s influence in what is considered “Francophone Africa.”

Most astounding is the lengthy section delineating the huge threat that Gaddafi’s gold and silver reserves, estimated at “143 tons of gold, and a similar amount in silver,” posed to the French franc (CFA) circulating as a prime African currency. In place of the noble sounding “Responsibility to Protect” (R2P) doctrine fed to the public, there is this “confidential” explanation of what was really driving the war [emphasis mine]:

This gold was accumulated prior to the current rebellion and was intended to be used to establish a pan-African currency based on the Libyan golden Dinar. This plan was designed to provide the Francophone African Countries with an alternative to the French franc (CFA).

(Source Comment: According to knowledgeable individuals this quantity of gold and silver is valued at more than $7 billion. French intelligence officers discovered this plan shortly after the current rebellion began, and this was one of the factors that influenced President Nicolas Sarkozy’s decision to commit France to the attack on Libya.)

Though this internal email aims to summarize the motivating factors driving France’s (and by implication NATO’s) intervention in Libya, it is interesting to note that saving civilian lives is conspicuously absent from the briefing.

Rumors on where the Libyan Gold Went

For years, rumors have swirled that billions of dollars, at least six million carats of diamonds, and an unknown number of solid gold bars were hidden in South Africa. About $20 billion was believed to be held across four banks, while the rest was allegedly hidden in warehouses and bunkers around Pretoria and Johannesburg.

In 2013, South Africa agreed to return Libyan funds worth 10 billion rand (nearly $780 million at today’s rate) to the new government, in line with the UN’s rules, with no mention of the rumored cash, diamonds, and gold hidden in storage lock-ups.

Gold Discovered In Haiti Estimated at $20 Billion

Gold Discovered In Haiti Estimated at $20 Billion By Afolabi Ogunde on June 29, 2012 Haiti – Its capital is blighted with earthquake rubble. Its countryside is shorn of trees, chopped down for fuel. And yet, Haiti’s land may hold the key to relieving centuries of poverty, disaster and disease: There is gold hidden in its hills — and silver and copper, too.

A flurry of exploratory drilling in the past year has found precious metals worth potentially $20 billion deep below the tropical ridges in the country’s northeastern mountains. Now, a mining company is drilling around the clock to determine how to get those metals out.

In neighboring Dominican Republic, workers are poised to start mining the other side of this seam later this year in one of the world’s largest gold deposits: 23 million ounces worth about $40 billion.

Haiti’s annual budget is $1 billion, more than half provided by foreign assistance. The largest single source of foreign investment, $2 billion, came from Haitians working abroad last year. A windfall of locally produced wealth could pay for roads, schools, clean water and sewage systems for the nation’s 10 million people, most of whom live on as little as $1.25 a day.

“If the mining companies are honest and if Haiti has a good government, then here is a way for this country to move forward,” said Bureau of Mines Director Dieuseul Anglade.

Hillary Clinton's brother landed lucrative gold-mining permit in Haiti after Bill Clinton helped country recover from earthquake devastation

The World Gold Council said in its annual report on gold reserves that 27 tons of gold had disappeared from Libya since the overthrow of Muammar Gaddafi in 2011, adding that Libya's gold reserves went down from 143.82 tons in 2011 to 116.64 tons in 2014. Libya, the Council said, ranked among five Arab countries at the top of gold reserves' list of Central Banks around the world.

Hillary and the Libyan Gold

The brief visit of then-Secretary of State Hillary Clinton to Libya in October 2011 was referred to by the media as a "victory lap."

"We came, we saw, he died!" she crowed in a CBS video interview on hearing of the capture and brutal murder of Libyan leader Muammar el-Qaddafi.

Before 2011, Libya had achieved economic independence, with its own water, its own food, its own oil, its own money, and its own state-owned bank. It had arisen under Qaddafi from one of the poorest of countries to the richest in Africa.

Education and medical treatment were free; having a home was considered a human right; and Libyans participated in an original system of local democracy. The country boasted the world's largest irrigation system, the Great Man-made River project, which brought water from the desert to the cities and coastal areas; and Qaddafi was embarking on a program to spread this model throughout Africa.

But that was before US-NATO forces bombed the irrigation system and wreaked havoc on the country. Today the situation is so dire that President Obama has asked his advisors to draw up options including a new military front in Libya, and the Defense Department is reportedly standing ready with "the full spectrum of military operations required."

Of the 3,000 emails released from Hillary Clinton's private email server in late December 2015, about a third were from her close confidante Sidney Blumenthal, the attorney who defended her husband in the Monica Lewinsky case. One of these emails,dated April 2, 2011, reads in part:

"Qaddafi's government holds 143 tons of gold, and a similar amount in silver ... This gold was accumulated prior to the current rebellion and was intended to be used to establish a pan-African currency based on the Libyan golden Dinar. This plan was designed to provide the Francophone African Countries with an alternative to the French franc (CFA)."

In a 'source comment', the original declassified email adds:

"According to knowledgeable individuals this quantity of gold and silver is valued at more than $7 billion. French intelligence officers discovered this plan shortly after the current rebellion began, and this was one of the factors that influenced President Nicolas Sarkozy's decision to commit France to the attack on Libya. According to these individuals Sarkozy's plans are driven by the following issues:

1. A desire to gain a greater share of Libya oil production,2. Increase French influence in North Africa,3. Improve his internal political situation in France,4. Provide the French military with an opportunity to reassert its position in the world,5. Address the concern of his advisors over Qaddafi's long term plans to supplant France as the dominant power in Francophone Africa."

Conspicuously absent is any mention of humanitarian concerns. The objectives are money, power and oil.

An illegal gold mining network operating in the Libyan desert and employing Chinese, Chadians and Nigerians has been dismantled, the Prosecutor's Office announced on the night of Sunday to Monday.

The network, led by a Libyan, carried out "gold mining activities in violation of regulations" and "without the agreement of the authorities" , in four sites in the desert of southern Libya , the Prosecutor's office said in a statement. communicated.

The search for gold was carried out by Chinese, Chadian and Nigerien nationals staying illegally in Libya, according to the same source. Five suspects - a Libyan and four foreigners - were arrested by security services, the statement added.

Third World Chaos over the Seizure of Gold Mines: An Example.

"The decision in 2022 of President Sadyr Japarov to nationalize the largest gold deposit in the republic, Kumtor, which was accompanied by scandalous stories, could not go unanswered either.

In particular, a year before reaching an agreement, the country's authorities accused the Canadian Centerra Gold Inc. of violating environmental standards in the operation of the mines, and the Canadians in response filed a lawsuit with the wording "seizure of the mine by the government of Kyrgyzstan".

❗️And, according to our information, a kind of response, expressed in multi-format pressure on the Kyrgyz authorities, will be implemented in the very near future."

Executive Order 1110 gave the US the ability to create its own money backed by silver. …

On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest. On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. Mr. Kennedy’s order gave the Treasury the power “to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury.” This meant that for every ounce of silver in the U.S. Treasury’s vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous.

With the stroke of a pen, Mr. Kennedy was on his way to putting the Federal Reserve Bank of New York out of business. If enough of these silver certificates were to come into circulation they would have eliminated the demand for Federal Reserve notes. This is because the silver certificates are backed by silver and the Federal Reserve notes are not backed by anything. Executive Order 11110 could have prevented the national debt from reaching its current level, because it would have given the government the ability to repay its debt without going to the Federal Reserve and being charged interest in order to create the new money. Executive Order 11110 gave the U.S. the ability to create its own money backed by silver.

After Mr. Kennedy was assassinated just five months later, no more silver certificates were issued. 

America After the Decline of the Global Dollar

"One of the more interesting, and unexpected, findings we came across in our work is that the United States is an extreme outlier when it comes to the relationship between its current account deficit and its income level (living standard). We found that in general there is a robust relationship between the current account balance and the income level of a country. This relationship held for both BRICS and developed countries.

This finding confirms the fact that there is a strong case to be made that income levels are at least in part determined by a country’s capacity to grow its exports in line with its GDP – a relationship known in the literature as ‘balance of payments constrained growth’.

If this is the correct interpretation, it gives us an opportunity to model what the United States economy might look like in a world where the US dollar is no longer the global reserve currency. This is important because there is increasing evidence that... many countries are preparing to move away from the dollar...

Currently, the average daily income of the United States is just over $74 despite its current account deficit of around 2.7% of GDP. In what follows we will allow American living standards to fall to their equilibrium level when we allow the impact of the current account to have its impact – that is, if we assume that the US dollar loses its ‘exorbitant privilege’ (as global reserve)...

As the graph above shows, if we allow American living standards to fall to their full equilibrium level, they fall by around 57%... If we calibrate the model not on the entire sample but rather on the wealthier countries, it shows a decline in American living standards of around 27% if the country was forced to equilibrium by a decline in the US dollar as the global reserve currency.

This seems a more sensible model than the 57% decline we saw using the full model in that it drags American living standards down to roughly average European levels."

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