Recently, when writing about the growing popularity of “Gold ATMs”, I mentioned that they’re being placed in cities all over the world, including within the United States. But being able to exchange fiat Federal Reserve Notes for real money at an ATM is only the first step; the next order of business is for banks to allow their customers to set up gold- and silver-based accounts, which they can use to pay their everyday expenses via their debit cards linked to those accounts.
That next step is already here.
First, we had Peter Schiff opening a bank last year that allowed its customers to do exactly that: open accounts in any denomination you want, whether fiat currency OR gold bullion — whatever you’d like. You can even get a “gold debit card” that you can use anywhere in the world. It’s backed by actual gold, which converts to whatever currency you’re needing at the time you hit that ATM.
It’s just the sort of thing that the Constitutional Tender Act calls for in banking…
…Well, there is one caveat: you can’t open an account at this bank if you’re a U.S. citizen.
U.S. security laws have become so intrusive, burdensome, and expensive to comply with, that it made it difficult for Schiff to offer his services to his non-U.S. clients on a globally-competitive basis. So, he opened his bank offshore, in St. Vincents and the Grenadines. Since it operates outside the jurisdiction of U.S. security regulations, and does not accept accounts from American citizens or residents, U.S. regulations don’t apply.
As a result, this offshore bank can offer a far more robust platform of services, with less hassle and at lower cost, than Schiff’s U.S. brokerage firm. In addition, bank clients’ privacy is protected by strict bank secrecy laws of St. Vincents and the Grenadines.
So, if you’d like to finally open a bank account backed by real money — sound money — that you can have at your fingertips (literally!) at any time — well, now you can…
…Unless you’re American.
That needed to change… and now it’s starting to.
I received an email notice today that a company called Perpetual Assets is now offering a Debit Card… backed by SILVER:
Perpetual Assets is proud to now be offering clients the Precious Metals Access Card. For the longest time one of the greatest objections to owning precious metals was that they were not accepted by merchants, therefore were not practical as a means of living off of, paying monthly bills, and conducting transactions.
That objection has now become a thing of the past. The Precious Metals Access Card allows you to have the inflation hedge of actually owning physical silver, while also providing instant liquidity. Anywhere Visa is accepted, as far as the merchant is concerned you’re using USD to purchase the good or service. Your account is 100% fully segregated, 100% fully insured, and 100% maintains your balance in ounces of silver until your transactions take place.
Gone is your need to find the local dealer to sell your silver too, gone is the worry of how much disposable income should be maintained in silver, gone is the need to educate merchants on sound money.
From what I’m hearing from other sources, there are even MORE silver- and gold-backed debit cards coming, from other financial institutions. This is exactly what we said would happen, and this is exactly how these kinds of accounts can be used after passage of the Constitutional Tender Act: businesses and consumers, who would now be required to use gold and silver coins to pay taxes to, or receive payment from, the State (because the U.S. Constitution requires it), would find themselves in need of converting their fiat Federal Reserve Notes into real money, that is, gold and silver coins. They would still be using FRNs in non-State transactions, of course; but as businesses start posting their prices in dual currencies (FRNs and Gold or Silver Eagles) in order to take in coins to pay taxes, consumers would start seeing that the prices of goods are rising in FRNs, but they’re remaining fairly level in Eagles. (For example, that cool digital camera at Wal-Mart is priced today at $1 Silver Eagle, or $22 FRN; next month, its price has risen in FRNs to $32, but it’s still priced in silver at $1 Silver Eagle, because that one-ounce silver coin retains its actual value in relation to the amount of products it can buy.) In a kind of “reverse Gresham’s Law” effect (which economist Peter Bernholz has labeled “Thiers’ Law“), the use of money that keeps its value — gold and silver coins — would increase, and the use of money that loses its value — FRNs — would decrease: good money would chase out bad money.
Even simpler will be the use of ATM Cards, Debit Accounts, and “Secure Credit Cards” backed by gold and silver: you’ve got 20 Silver Eagles in your account from your recent State income tax refund; the cashier runs the camera you want over the scanner, you swipe your card and choose from, say, “FRN credit”, “FRN debit”, “Silver/Gold credit” or “Silver/Gold debit” on the little touch screen; you select “Silver/Gold debit”, pay a Silver Eagle out of your account and into Wal-Mart’s, and voila, the camera is yours… and Wal-Mart has another silver coin it can use to pay its own State sales taxes or business fees.
What if you don’t have enough silver in your bank accounts to pay for the camera, but you do have enough fiat money? Then pay with Federal Reserve Notes… or whip out your iPhone, fire up your banking app, and convert some FRNs into your Silver account by using your friendly bank’s automatic conversion service which keeps track of the silver and gold price in real time — just like those “gold ATMs” do.
It’s simple. It’s easy. It’s already being done. And it would save the monetary system of the State and, ultimately, of all these United States.
Why is any of this important? Why should we care if we can use gold ATMs, or use silver debit cards at Wal-Mart?
Because, as I mentioned in the previous article, one of the most interesting things to come out in the State legislative committee hearings that the Constitutional Tender Act received when it was first introduced in Georgia, was the idea in those legislators’ heads that gold and silver simply could not be USED as money, PERIOD. We heard comments like these:
- “Where would the State keep all of its gold and silver coins?” (Answer: Where does the State keep all of its Federal Reserve Notes? In a BANK, of course – just like they would under this Act.)
- “How would people be able to carry around all of those heavy gold and silver coins?” (Answer: How do they carry tens of thousands of dollars in Federal Reserve Notes around? They DON’T – they carry checkbooks and debit cards – just like they would under this Act.)
- “How would people buy things at the grocery store?” (Answer: How do people buy things at the grocery store now? With physical cash, or with a check, or with a debit card, or with a credit card – just like they would under this Act.)
What do all of these kinds of questions have in common? They’re based on a narrow view of what money is. Too many people have simply gotten used to the idea that pieces of green paper with dead presidents’ pictures on them, and that aren’t backed by anything of value, are “money,” and gold and silver are “commodities.” But that’s a rather new idea, historically speaking; fiat money (pieces of paper backed by nothing, and declared “legal tender” by the government) was very much frowned upon by our Founders – which is why they explicitly denied to the States the power to use it, in Article I, Section 10. Until the past century or so, you could always pay for things with actual gold and silver coins. But, the general population has been trained by our “modern” government to throw that notion away, and to keep using those pieces of paper that lose more and more of their value every day… while gold and silver keeps its value in the long term.
THAT is why the gold ATMs and the silver-based debit cards are important: this is just a “taste” of the modern specie-based banking we can look forward to, if we implement ideas like the Constitutional Tender Act. And that’s why these ideas are key: the more we get used to the notion of gold and silver being money, the sooner we’ll finally return to sound money that holds its value — and the sooner we can save our trashed economy.
William Greene is the author of the original Constitutional Tender Act, a bill template that can be introduced in every State legislature in the nation, returning each of them to adherence to the United States Constitution’s actual legal tender provisions. He is an Assistant Professor of Political Science at South Texas College.