By Alex Newman
With inflation plaguing the economy as the U.S. dollar is increasingly being sidelined in international trade, potentially even at risk of losing its status as the global reserve currency, lawmakers in Washington and state capitals are touting gold and precious metals as the solution.
From congressional efforts that would once again back the U.S. dollar with gold to state-level initiatives to facilitate commerce in precious metals, proposals are proliferating. Some have already advanced.
Private-sector players are getting in on the action, too, arguing that gold can be a defense against economic calamity as foreign governments and central banks stockpile record amounts of precious metals.
In a series of interviews with The Epoch Times, state and federal lawmakers working to restore gold as money argued that this was the best way to defend the dollar, stabilize the economy, rein in government spending, and protect U.S. interests.
A bill introduced in Congress this year by U.S. Rep. Alex Mooney (R-W.Va.), dubbed the Gold Standard Restoration Act (H.R. 2435), would redefine the dollar in terms of a fixed weight in gold. The legislation would also require authorities to exchange paper currency for gold.
“How can you look at a country that’s 32 trillion in debt with out-of-control spending and think it’s the right standard to go by?” Mr. Mooney asked in a phone interview with The Epoch Times, warning of peril ahead for the dollar if its gold backing was not restored.
“Returning to the gold standard would bolster domestic and international confidence in the U.S. dollar because its value would be tied to something of actual worth, not just the ‘full faith and credit’ of the U.S. government,” added Mr. Mooney, who has been sounding the alarm throughout his political career. “This would preserve the U.S. dollar’s global reserve status.”
Meanwhile, in Texas, lawmakers concerned about the stability of the dollar and the U.S. economy are working to facilitate commerce in gold through the Texas Gold Depository.
“You have to look at history,” said Texas Rep. Mark Dorazio, a Republican who introduced the bill to facilitate intrastate trade in gold. “Over the last 6,000 years of history, gold and silver have kept their value and served as the standard.”
“It is the go-to in economic crisis and instability—everyone knows you go to gold,” the lawmaker told The Epoch Times in a phone interview.
“Everybody I talk to likes the idea of using our depository to conduct business,” he added. “Plus it would make money for the state. It’s a win-win for everyone.”
Ron Paul, a longtime champion of the gold standard and sound money who spent decades in Congress attempting to draw attention to the issue and wrote a best-selling book called “End The Fed,” told The Epoch Times that gold is likely to play a major role in the future.
As what he called the “Mickey Mouse” dollar continues to lose dominance, “something will have to replace it, [and] now we are seeing that,” he said, warning that “the Chinese are buying a lot of gold.”
Dr. Paul ridiculed the IMF’s Special Drawing Rights and emerging central bank “digital” currencies without inherent value as potential alternatives, saying something tangible such as gold is what’s needed.
“If there’s a digital currency that is truly backed with gold, that might be helpful,” he said.
Ultimately, Dr. Paul said he would repeal legal tender laws, abolish the Federal Reserve, and allow the market to decide what should be used as money.
“Gold and silver became money spontaneously thousands of years ago, and metals have worked well,” he said, praising state and federal efforts on precious metals. “We need sound money.”
Despite his pessimism about the economy, Paul, who gained national prominence during his runs for president, celebrated the growing number of states declaring gold and silver to be legal tender.
“The Constitution is very much on their side,” he said.
Rep. Ron Paul (R-Texas) is a longtime champion of the gold standard. (T.J. Kirkpatrick/Getty Images)
Among other benefits, this can facilitate trade in precious metals by removing sales taxes and eliminating other obstacles, he said.
“This is a silent revolution going on at the grassroots level, passing legislation on this,” Paul said, adding that gold could protect countries, states, and even individuals. “That is a help in changing attitudes.”
As government debt and inflation continue to grow amid moves by U.S. adversaries to displace the dollar, interest in precious metals will continue to expand, multiple experts told The Epoch Times.
What Happened to Gold?
Until about 50 years ago, the U.S. dollar was still officially backed by gold. Because other currencies were mostly exchangeable for dollars on demand, the global monetary system was in effect underpinned by gold—at least in theory.
An illustration of the decline in the purchasing power of the U.S. dollar over the past century. (Illustration by The Epoch Times, Shutterstock)
In fact, for thousands of years, precious metals have served as money. Economists say this is because they are durable, portable, scarce, and inherently valuable.
But with a series of major policy changes, beginning with the establishment of the Federal Reserve in 1913 followed by a 1933 executive order by President Franklin D. Roosevelt limiting gold holdings, that began to change.
Under the leadership of President Richard Nixon, the U.S. government formally severed the dollar’s final link to gold in 1971, ending the ability of even foreign powers to exchange their dollars for gold.
That was a turning point. Conventional wisdom holds that the move by Nixon resulted in the end of the gold standard forever as most of the world was suddenly plunged into what is known as a “fiat” monetary system. Fiat means the currency has value by government edict, rather than any inherent value.
Economist John Maynard Keynes famously referred to the metal as a “barbarous relic,” a view that has proliferated in academia and in central banking circles.
But the world is now facing escalating economic and monetary turmoil. Just last week, Fitch downgraded U.S. debt in a historic blow as debt levels surge and the purchasing power of currencies worldwide plummets.
The problems with the dollar are growing. As reported in May, U.S. adversaries such as the Chinese Communist Party are actively working to reshape the global monetary system and replace the dollar.
Even traditional U.S. allies such as France and Brazil are now doing international deals in other currencies.
Multiple experts explained that Biden administration and Federal Reserve policies were contributing to the trend through high spending and loose monetary policy blamed for inflation.
Calls for major monetary reform at the international level have been steadily growing for decades, and have ramped up further in light of current events.
Numerous world leaders and central bankers, including the People’s Bank of China, have proposed an international reserve currency to displace the dollar, and senior U.S. policymakers have even flirted with the idea publicly.
People walk past a currency exchange shop in Istanbul, Turkey, on June 23, 2023. (Chris McGrath/Getty Images)
But in the United States, more traditional options for drastic reforms involving metals are being explored, too. Indeed, developments are causing many experts and lawmakers to take a fresh look at the “barbarous relic.”
At the same time, reports that authorities in the BRICS nations (Brazil, Russia, India, China, and South Africa) will consider a gold-backed currency are fueling interest in monetary metals worldwide.
Non-Western central banks are buying gold in record quantities, according to the World Gold Council, and analysts expect that demand to remain strong.
“We think this trend of central bank buying is likely to continue amid heightened geopolitical risks and elevated inflation,” Swiss bank UBS said in a note to clients in late May.
Gold Standard to the Rescue?
Several congressional Republicans who spoke with The Epoch Times pointed to current events to highlight what they say is the urgency of legislation to protect the dollar by once again tying it to gold.
Mr. Mooney of West Virginia, the chief sponsor behind the “Gold Standard Restoration Act,” explained that severing the link between the dollar and gold has produced extreme spending, inflation, and other problems.
“We need to learn from history,” he told The Epoch Times. “When President Nixon unfortunately took us off the gold standard, it made everything worse. He claimed at the time it was going to control inflation, but the opposite occurred.”
“It was a huge mistake,” continued Mr. Mooney, who introduced the bill in the last Congress as well. “Inflation is still out of control to this day.”
Because the dollar is no longer tied to gold, and because the federal government is rapidly losing the trust of Americans and people worldwide, the dollar’s status as the global reserve currency is at risk, he said.
“They keep playing monetary games at the Fed, with borrowing and printing money, and that makes the dollar less stable and more susceptible to international competition,” the congressman warned, adding that the Chinese Communist Party is taking full advantage.
In 1913, The Federal Reserve Act established the Federal Reserve System as the central bank of the United States. (Kevin Dietsch/Getty Images)
But eventually, change may be forced upon the United States.
“If we get to the point where we literally can’t pay our debts anymore—where we default on our loans—it would force some fiscal restraint in our country, but it would also jeopardize the dollar and give a great opportunity for communist China and other countries to not use the dollar anymore as the standard,” he said.
Mr. Mooney also pointed to increasingly erratic U.S. foreign policy such as the Afghanistan withdrawal “debacle,” saying other governments were now reconsidering whether the United States is truly as stable as previously believed.
Aside from restoring the gold standard, Mr. Mooney said it was imperative for the U.S. government to come up with a plan to control spending. “Democrats have absolutely no plan to do that,” he said.
He also warned that if current trends continue, economic disaster is a certainty.
“I can’t tell you what the exact limit is, but I never thought we’d be able to get this far,” he said, blasting the $5 trillion in new debt added under the current administration as “totally irresponsible.”
The only answer is to get back to a real standard where the dollar is backed by gold, he said. “If we got back to the gold standard, at least we would have a restriction there in terms of government spending,” Mr. Mooney added.
Another co-sponsor of the bill, Rep. Paul Gosar (R-Ariz.), also warned about the consequences of allowing the dollar to be debased.
“If our currency continues to suffer from rampant inflation, and our wealth and retirement become less and less valuable, Americans can thank [President] Joe Biden for printing more money out of thin air,” he told The Epoch Times.
“H.R. 2435 would protect families and businesses against Biden’s spending sprees by repegging the dollar to a fixed weight of gold at market price,” Mr. Gosar concluded.
Numerous other lawmakers have supported the general proposition as well. Commenting on the Federal Reserve’s efforts to bring in a Central Bank Digital Currency, U.S. Rep. Marjorie Taylor Greene (R-Ga.) also touted gold.
“We should go back to the gold standard, not digital currency payment systems. Hard pass,” she wrote on Twitter in April.
State-Level Gold Initiatives
Lawmakers and analysts told The Epoch Times that currently there is little chance of President Biden signing such measures into federal law. That could change under the next president as the economic situation deteriorates, however.
But at the state level, initiatives to expand the use of gold are proliferating nationwide. In recent years, multiple states have even passed laws declaring gold and silver to be “legal tender,” in line with Article I, Section 10 of the U.S. Constitution.
In Texas, lawmakers are making some of the biggest moves yet.
In 2015, the state approved the creation of the Texas Bullion Depository, which, among other functions, stores precious metals for clients.
Now, a growing coalition of lawmakers and experts are working to use the institution to facilitate trade within Texas using precious metals.
The idea was first hatched about 3 years ago, Texas Republican Rep. Mark Dorazio told The Epoch Times, as lawmakers gathered to discuss solutions to “out-of-control overspending by the federal government” and “the people of Texas being taken advantage of through inflation.”
“The question really was, ‘How can we protect Texans from the federal government?’” the lawmaker said. “That’s where this idea came from.”
“I’ve always been interested in silver and gold because of the stability they provide,” he added, noting that gold has remained stable and preserved its value for over 5,000 years, going back to the Bible’s Book of Genesis.
Recent inflation as well as banking collapses and bailouts have only added urgency to the issue as Texans grow increasingly concerned about their retirements and pensions, explained Mr. Dorazio.
China’s and Russia’s ongoing purchases of gold also suggest Texas must take the issue seriously, he said.
The goal is for Texans to be able to use a debit card-style system allowing them to transact and make payments using their gold deposits at the state depository at merchants around the state.
Mr. Dorazio credited economic warfare expert Kevin Freeman with the idea, but other experts as well as multiple lawmakers also played a role.
“This bullion bill would give everyday folks on the street the opportunity to own gold or silver and, when they need to liquidate or transact business, they can do it, just like they would with a credit card, with any vendor,” Mr. Dorazio said. “The depository would just deduct that amount in gold from the holder’s account. The merchant never even knows, they just get paid.”
A man shops at a grocery store in Houston on Dec. 18, 2022. (Brandon Bell/Getty Images)
Eventually, Mr. Dorazio and others behind the effort hope that Texas’s new system can be expanded and potentially even serve as a model for other states and countries.
“When this came to me, I said, ‘We’ve got to push this thing,’” he continued. “We pushed it hard.”
The bill did not pass in this year’s session. However, Mr. Dorazio and other lawmakers intend to file what they say is an improved bill in several different committees next year, “and I think we’re going to get it passed.”
Mr. Freeman, the economic warfare expert Dorazio credited with the concept, told The Epoch Times that the move by Texas would have benefits for all Americans.
“If passed into law, this becomes a safe haven for those who want to buy, hold, and even spend precious metals,” he said, pointing those who would like to learn more to TransactionalGold.com.
“This effort would strengthen our financial system and as a result actually help the dollar by adding gold and silver to America,” he said.
Numerous state legislators who spoke with The Epoch Times expressed an urgent desire to pursue similar solutions for their states.
Another prominent lawmaker embracing gold is Republican Rep. Ken Ivory of Utah. Even as he sees a “fiscal and monetary earthquake on the horizon,” his state is especially vulnerable as a significant portion of its budget comes from the federal government.
“The big concern we have is the most vulnerable people in Utah are dependent on federal funds that the Government Accountability Office and the Congressional Budget Office both tell us are unsustainable,” he said. “We need to figure out as states how to end that dependence and really find a stable system for caring for people in Utah.”
The Utah State Capitol building in Salt Lake City. (Scott Catron/CC BY-SA 2.0 via Wikimedia Commons)
While Utah is consistently regarded as one of the best-managed states, Mr. Ivory said, “it doesn’t matter how diligent we may be, because it’s like we’re on a treadmill going the wrong direction as they continue to inflate the money—they just keep printing money—and so even as one of the best-managed states, we are still losing ground.”
Mr. Ivory is one of a growing number of lawmakers across America who see major economic turmoil ahead that is “going to devastate the most poor and vulnerable,” the lawmaker told The Epoch Times in a phone interview, referencing debt, deficit, and the accelerating de-dollarization trend.
“It will be terrible for everyone,” he continued, “but the most vulnerable will pay the most.”
Citing military leaders, Mr. Ivory also called the looming economic trouble one of the most significant threats to national security.
As such, it is time to begin “contingency planning,” he said.
The Utah legislature is not currently in session, but Mr. Ivory and other state officials are already working on legislation for 2024 that will give the state treasurer the authority to hold gold and silver.
“We also want to do more of what Texas has done, starting with the [gold] bill that did not pass as a template for Utah,” he said.
Private Sector and Individuals
Even without action from authorities, individuals and the private sector can also play a role in protecting themselves from trouble with the dollar, experts in economics and the metals industry told The Epoch Times.
Charles Nenner, a prominent trends forecaster and economic analyst, recommended diversifying investments as a way for individuals to protect their own wealth and savings.
People should “move as many assets as they can out of the dollar since the U.S. dollar is very vulnerable,” he said, suggesting that the loss of confidence in the dollar was part of a broader “super cycle” involving the end of U.S. global dominance.
University of Bayreuth Honorary Economics Professor Thorsten Polleit, who serves as chief economist at Degussa, Europe’s largest precious metals trading house, also recommended diversification out of fiat currencies for investors and companies.
“I think that the official fiat currencies—U.S. dollar, euro, Chinese Renminbi & Co—will see their purchasing power erode over time,” he told The Epoch Times. “So people and businesses should not rely on the ‘stability’ of fiat currencies, but to minimize their money holdings.”
“In addition, people should diversify their assets: hold physical gold and silver, invest in a globally diversified stock portfolio; and don’t put your money in money market funds and bonds,” he added, suggesting investment for the long-term.
Ultimately, Mr. Polleit said many of the political and economic problems facing not just the United States but the world could be traced back to “state monopolized money, or fiat money.”
“The solution is a return to a ‘free market in money’: Ending the state’s money production monopoly by giving people the freedom to choose the kind of money that suits their needs best,” he said, adding that people would likely choose gold as it has “always been the finest money available in human history.”
One Utah-based company, Goldback Inc., is working to circulate gold in the market already by turning the metal into notes with 1/1,000 of one ounce of gold in them to be spent at willing businesses.
“We are really focused on helping people use gold as money,” Goldback CEO Jeremy Cordon told The Epoch Times, adding that over 1,000 businesses already accept Goldbacks and the number of participating merchants is growing fast.
The biggest barrier to more widespread use of gold in commerce at the moment is sales taxes charged on precious metals in various states, including even some conservative states, he continued.
“I think it’s great that state legislators are paying more attention to these precious metals laws,” Mr. Cordon continued, adding that the firm is tracking legislation nationwide. “We are seeing a huge uptick in action on the congressional side, too.”
“A lot of these lawmakers know people are starting to use gold as money as part of the de-dollarization environment we’re in, and that is going to continue,” he said, calling it “encouraging” that more and more states were acting on the issue.
Neither the Federal Reserve Board nor the U.S. Treasury responded to requests for comment.