The Voluntary Gold Standard: Realizing Sound Money Through Decentralization

Because of the enduring legacy of Ron Paul, most liberty-minded individuals understand the importance of sound money in relation to freedom. It is now a well-understood fact that a government stripped of its power to print money is necessarily a limited one. That is why the cause of liberty and the gold standard go hand-in-hand.

The conundrum that we as liberty conservatives face right now is understanding how to reach our noble mission in a prudent manner. We know where we need to go, but we just haven’t quite figured out how to get there.

Looking at our dismal monetary system, it is difficult to be optimistic about what is to come. The damage has been done, and it is likely irreversible. At first glance, there seems to be no easy way to escape the madness. If the Federal Reserve was brought to an end overnight and no longer had the power to manipulate interest rates, assure bailouts for corporate banks, and pump money into the moribund economy, there would almost certainly be catastrophic consequences that immediately followed.

While those consequences may hurt the banksters and federal stooges in Washington D.C., the American public would likely bear the lion’s share of the burden from the fallout. This is an outcome that we must work diligently to avoid as responsible liberty activists. The ends simply do not justify the means in this scenario. We must strive for peace and prosperity, and a full-fledged economic collapse would be disastrous for those goals.

Thankfully, the uniquely American system of federalism gives us an option that can facilitate a non-coercive, bottom-up solution to the money problem. By taking action at the state level to create gold bullion depositories and remove sales tax on precious metals, a voluntary and painless return to the gold standard can occur organically without any onerous government mandates.

Last year, Texas Gov. Greg Abbott signed a law that created a gold buillion depository in the Lone Star State. This was a ground-breaking move that may end up having cascading ramifications throughout the entire nation’s monetary system. A Tenth Amendment Center report explains the significance of this law and how it could revolutionize money in the digital age:

Many state politicians hope that the State of Texas will be able to relocate its own gold holdings into Texas from New York where it currently sits. The state spends a million dollars per year on its storage.

Moreover, existence of the depository opens up the possibilities for users creating a new type of currency in which purchases are made electronically with the backing of the gold in the depository. In other words, one could potentially use the depository’s infrastructure to make purchases using gold, and to have gold either directly deposited into another’s account, or converted to US dollars and deposited in a conventional bank. Arguably, this is just an electronic version of gold-backed money.

Under the depository model, individuals are empowered to take control over their own finances and to choose a more stable monetary unit. The folks who support Washington D.C. and their centralized management of the economy are more than welcome to keep trading in Federal Reserve Notes. It’s their own funeral. The rest of us can deal in gold and silver, and state-run bullion depositories make hard money transactions easier to complete than ever before.

The idea is gaining traction across the country as well. This year, legislators in Oklahoma, Wyoming, Tennessee, Washington, Arizona, Utah and Kentucky introduced measures to create depositories or otherwise move toward the goal of sound money. As our federal government continues to falter, we must look back home for the solutions to our problems. On the paramount issue of sound money, the principle of decentralization can be used to forge a brighter economic future.

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