Time for a Gold-backed Welsh Pound?
Solution One: Gold-backed Welsh currency
The Welsh economy is receding, hard times are here. Worse is coming, (as with the rest of the UK and the EU). We are in a recession – which means the volume and circulation of money is shrinking.
The Westminster government is doing its part by cutting the budget and shrinking the money supply further. Why be a little sick when we can be easily made even sicker? !#-*(“!!
The Welsh Assembly needs to actually DO something to turn the Welsh economy around – which is not so hard to accomplish when you start messing around with the money supply.
Don’t be alarmed at that suggestion. The money supply has always been messed around with in the UK, at least since 1695 when the Bank of England was established and the National Debt began (and grown ever since).
And even before that, English monarchs used to call in the silver pennies, melt them down, mix in cheaper metal like copper, and then print a whole lot more coins – and keep the “new money” as additional revenue :D.
Money and fiddling the monetary system are two sides of the same coin.
Or to put it in another way:
– if you’re not doing the fiddling – you’re the one being fiddled!
We all know that the banks are screwing us (with the support of the Westminster government bailouts). It has been calculated that interest charges woven into the system (essentially a private banker’s tax) increase the prices of goods and services on average by 35% to 40%.
Isn’t it time we democratically turned the tables here in Wales?
There is a wide range of measures the Assembly could take to get the Welsh economy rolling by massaging the money supply, but for the purpose of simplicity I’m going to focus on only one solution today – a way of fiddling the money supply that is both simple, legal and foolproof – establishing a gold-backed currency for Wales.
And no, it won’t cost Wales a penny. On the contrary it would increase our money stock substantially. It makes us money. Lots of it. Money for nothing – just like the bankers.
Establishing a gold-backed Welsh pound could be easily accomplished by converting the annual block grant (the tax money the Assembly gets back each year from London) of around £15 billion into physical gold, stored in a ‘Welsh Fort Knox’. Then the Assembly simply deposits £15 billion gold-backed Welsh pounds into the Assembly’s bank account as its yearly budget.
In a sense we’ve just doubled our money. A portion of the gold-backed Welsh pounds may leave Wales, but the £15 billion in physical gold bullion will remain :).
The Assembly could use it to pay for their services as they normally would with English pounds. Of course, sufficient amounts of paper Welsh pounds would need to meet local demand and use, like the Bank of Scotland and Clydesdale Bank pounds in Scotland.
Okay, that’s interesting, you may say – but how is that going to help the Welsh economy?
I’m glad you asked.
A gold-backed Welsh currency would be the only currency in the EU that is not just backed by toxic bank debt and fabricated, false confidence. It would quickly establish itself as a currency of substance in stark distinction to debt-based fiat currencies that represent liabilities, not assets. (This worthless debt-based fiat money now rules the world as the Euro, the US dollar and Sterling pound – the rot at the centre of our economic system.)
The stature of gold-backed Welsh pounds would give Welsh business the upper hand in business dealings worldwide. After all, would you rather be paid in gold-backed money, or worthless paper representing toxic debt?
Most importantly, a gold-backed Welsh pound would not be prone to a continual devaluing through inflation – a chronic and unavoidable symptom of debt-based currencies like Sterling and the Euro.
If pegged to the Sterling like the Bank of Scotland and the Clydesdale Bank pounds, the volume of Welsh pounds would grow without cost. If floated on the open market, the value of the Welsh pound in relation to Sterling and other world currencies would rise, as would the Welsh economy in general.
However you look at it, establishing a gold-backed currency would immediately place Wales on a sounder economic footing than our two nearest neighbours, England and Ireland.
The only real debate worth having is whether we let the gold-backed Welsh pound float on the open market, or peg it to the English pound. There’s are benefits to both approaches.
Those who would feel obliged through tradition or pressure to oppose a gold-backed Welsh currency would probably repeat the worn-out mantra:
“Mainstream economists don’t agree to returning to the gold standard.”
Given the state of the economy these days there is a good argument for dismissing anything the “mainstream economists” might advise. Mainstream economics have brought us oppressive debt and now austerity misery while stressing out the ecosystem of the planet. Mainstream economics has been thoroughly discredited.
(If you still have any doubts about the credibility of mainstream economics and government fiscal policies, click here for some education.)
I have floated the idea of a gold-backed Welsh currency to a number of ‘non-mainstream’ economists and the only argument against it was from HW, a dyed-in-the-wool British nationalist, who complained it might undermine the sovereignty of the English pound. (Yes, that’s the same HW who once disclosed his fantasy of blowing up the Welsh Assembly so we could go back to direct rule from London.) In short, there are no credible arguments against a gold-backed Welsh currency.
So how much would Wales gain if it started a gold-backed currency?
Over 5 years the price of gold has risen 168% from £399 per ounce to £1,050 per ounce today. Given the increasingly dire state of debt-based economies, the black-hole of swelling debt, and the continuing march to collapse, reason would say that the price of gold will rise exponentially over the next 5 years. Speculators are predicting a 300% to 1000% increase over the next few years.
But just to be very conservative, let’s say that gold slows in price growth to only a 20% increase per annum over the next 5 years. So 15 billion times 3 billion per annum increase equals 45 billion. So even with a conservative estimate an additional £45,000,000,000 (45 billion) would be created for the Welsh economy over 5 years. Or to put it another way, an additional £15,000 for every Welsh man, woman and child.
Mind you, the fact that China along with International Banks world over have been buying and stockpiling gold like crazy over the past year clearly shows that confidence in debt-based money is crumbling and the world economy will continue to collapse. This means we are quickly approaching a spike in gold prices. Rises to a 1000% or more over the next 5 years is very likely.
How much would a Welsh gold-backed currency gain in this probable event? – an extra £750 billion pounds, or £250,000 per woman, man and child – or around 1 million pounds per two child family!
Seems too incredible to believe? You do the sums. It’s not Rocket Science!
That additional funding could be sent directly to all Welsh residents as a Citizen’s Basic Income (without means testing), along with the elimination of council tax. The effect would be a super-charged Welsh economy.
The unambitious could retire early and live off the interest. Others could go into business on their own. The bottom line is financial freedom for everyone. No debts. Money in the bank. Good money – backed by gold.
The weakest point to adopting a gold-backed currency for Wales would be our lack of border control; our powerlessness to stem a highly probable flood of economic migrants from England and Ireland. To solve that problem we would need an independent Wales, independent of London and Brussels – step two :).
The bottom line is this: given the perilous state of the world economy with chronic recession and inflation, and another six years of ‘austerity’ in the pipeline pushing us towards an impending economic collapse – what have we got to lose? It’s time to think outside of the box. It’s time to do new things.
Albert Einstein once said that the definition of stupidity is doing the same thing over and over expecting different results. That pretty much sums up the Welsh Assembly’s approach to our economy so far. Isn’t it time we stopped being pig-stubborn and stupid? Isn’t it time we did something different? A gold-backed Welsh currency would be a good start!