Goldbacks, Good Money and Gresham's Law:

Sir Thomas Gresham was a wealthy 16th Century English financier and principal economic advisor to Queen Elizabeth I, who was an advocate for the importance of stable coinage to ensure export competitiveness and the management of public debt, writes Shannon Berkley. 
 

Gresham’s law is the monetary theory named after Sir Thomas Gresham, which highlights the principle that ‘bad money drives out good’- this essentially means that if there are two forms of commodity money in circulation which are accepted by law and have a similar face value, the more valuable commodity will end up disappearing from circulation, as it is hoarded. Although there are at least 180 currencies in existence today, there have been thousands of now defunct fiat currencies that were formerly used as a medium of exchange throughout history, along with more than 55 instances of hyperinflation since the year 1900.
 

Hyperinflation is characterised by a very high and accelerating inflation that quickly erodes the real value of currency, as the prices of goods and services increase. During these conditions, the rapid and continued escalation in nominal prices, nominal cost of goods and supply of currency all become alarmingly noticeable. As general price levels soar in excess of the money in circulation, the local currency in question becomes a hot potato- as people desperately attempt to rid themselves of the devaluing money as soon as possible. This also renders savings and pensions in the hyperinflated currency worthless.
 

During the Weimar hyperinflation of 1922-1923, central banks used more than 30 paper factories, 1,800 printing presses and 133 companies to print banknotes and pay German workers. This resulted in skyrocketing prices, with workers being paid twice daily, just to keep up with the extraordinary level of debt monetisation. A loaf of bread costing 250 Reichmarks in January 1923, ended up costing 200,000 million Reichmarks by November of the same turbulent year.
 

During the chaotic hyperinflation under the Federal Republic of Yugoslavia, the government ballooned the money supply, resulting in monthly inflation catapulting to 313 million percent and prices doubling every day and a half. The black market was the only place where weekly essentials like bread and milk could be acquired.
 

‘BAD MONEY’ CAUSES HYPERINFLATION

Throughout the tumultuous period of hyperinflation under Robert Mugabe, runaway inflation shot up from 100,000% in January 2008, to a whopping 1,000,000% by May, and subsequently skyrocketed to 250,000,000% in July. This was also due primarily to the Federal Reserve Bank of Zimbabwe’s reckless monetisation of currency, among other factors. As a result, Zimbabwe’s citizens were turned into poverty billionaires, capable of filling wheelbarrows full of cash- which had little value. Their purchasing power was stolen by the manic monetisation of a central bank, which eventually issued treasury bills with denominations as high as one hundred trillion dollars!
 

Unfortunately, these are just but a few examples of the havoc that quantitative easing wrecks on economies and on private citizens. From the Lydians, to the Athenians, to the Spartans, to the Romans, to the Phoenicians; the concept of monetary debasement precipitating economic collapse, has been exemplified throughout history all over the world for millennia. Great empires historically used sound money in the form of pure gold and pure silver coins to drive their economies, but over time- would chip away at the gold and silver content, adding other materials and making these coins worth much less. This incremental process of debasement continued until the currency was worth nothing, and the formerly great empire- crumbled. An economy is officially considered to be in hyperinflation when prices increase 50% per month, with the introduction of a new currency being required to end the hyperinflation.
 

Having been knighted by the Queen in 1559, Gresham’s plan to quell inflation following the ‘Great Debasement’ under King Henry VIII, required the recall and remint of all debased silver coinage in England. At the time, the purity of gold and silver coins produced by England’s issuing authority had been declining incrementally by decree of the Crown, in an effort to increase revenues. After the general public gradually realised that newer minted (bad) coins had less purity than the usual money that was in circulation, they hoarded their older (good) coins, choosing to spend the newly debased currency in the marketplace and hence- ‘bad’ money was driven out by ‘good’ money.
 

Far removed from the days of physical money as of 1971, there is a great debasement going on- an invisible war waged by central banks on the people of the world. Over 40% of all dollars in existence from the founding of the United States, to present day- were printed in 2020. £500 billion was printed by the Bank of England in recent years- a GILT trip worthy of attracting criticism from retired governor Mervyn King. The European Central Bank’s balance sheet reached a historical high of €7 trillion in 2020. All of this unfortunately (according to math and 5,000 years of human history) will not end well, as the maniacal monetary wizards fan the mother of all bubbles they have pumped up for the last several years- towards a pin factory. According to the painstaking research by Mike Maloney in his critically-acclaimed Hidden Secrets of Money series, real money must possess seven critical attributes which are:
 

Money must be a Store of Value - It must be capable of retaining your purchasing power over long periods of time.

Money must be Fungible - Each unit is of equal value to the next. My pound is worth the same as your pound.

Money must be Divisible - It must be capable of dividing equally into smaller units and of making change.

Money must be a Medium of Exchange - It should be used as an intermediary in trade.

Money must be a Unit of Account - Able to be numbered and counted.

Money must be Portable - It should be easy to carry or transport.

Money must be Durable - Has a long useable life.
 

Goldbacks are a highly divisible inflation-resistant local currency like no other, and were manufactured by Valaurum, Inc, in an effort to democratise gold ownership. Created out of 24-Karat gold, with the lowest denominatednote containing 1/1000th of a troy ounce and the largest 50 Goldback note containing 1/20th of an ounce, they are small enough for use in daily transactions. Unlike fiat currencies which are backed by nothing and from which central banks can print an infinite amount to destroy a currency’s purchasing power, Goldbacks cannot be manipulated in the same way because they are made of gold! They are are a spendable form of gold that was created to preserve the purchasing power and financial stability of individuals, families and communities. Issued in jurisdictions where the Aurum® precious metal technology can be considered ‘legal coin’ under local statutes, Valaurum also counts various authorities from countries like Gabon, The Republic of Cameroon, Tanzania, The Republic of Ghana, and the Cook Islands amongst its financially sophisticated clients, and these nations all have their own unique legal tender designs.
 

SPENDING FUNGIBLE, DIVISIBLE GOLD

The Goldback transaction calculator on their website displays exchange rates and enables you to work out exactly how much Golddbacks you owe, or how much change you should receive in any given transaction. Not only is it the most aesthetically beautiful currency you will ever see in a 100-mile radius, but it solves a 2,600 year old problem by allowing gold to be spent in small, interchangeable increments, which is why every American man, woman and child ought to be using them every day to preserve their purchasing power and monetary sovereignty, against the backdrop of global debt monetisation.
 

As an extremely fungible form of gold that can be used in the event of a financial crisis or barter economy, Goldbacks may be the perfect solution. You would not be able to trade two 1/2 ounce gold eagle coins for a full 1 ounce gold eagle coin, because the way premiums are calculated on their sizes gives these metal weights different prices. However, five 1 Goldback denominated notes can be traded in for one 5 Goldback denominated note, and vice versa. The technology is extremely difficult to counterfeit; they are created with 5th Generation vacuum deposition technology have government-level security features and individual serial numbers, all embedded in the note with the metal. Mike Adams went through meticulous testing processes to determine the authenticity of the gold contained within the notes at VerifiedGoldBacks.com
 

Superior to CBDCs in every conceivable way, Goldbacks are portable, durable, fungible, divisible, a unit of account, a medium of exchange and a store of value, which make you wonder- if CBDCs, UBI, ‘programmable money’ and ‘tokenisation’ of debased fiat currency are all forms of ‘bad money’ and trial balloons for the control mechanisms that will hold a gun to our collective heads, threatening our livelihoods, privacy, monetary autonomy and wealth- isn’t now a great time to ‘drive out bad money’ with ‘good money’ alternatives that are capable of doing the opposite, while hedging against inflation? Just a thought!   EG