M E M O R A N D U M
FROM: ANTAL FEKETE, NASOE
SUBJECT: GOLD BILLS PAYABLE IN GOLD SOVEREIGNS
DATE: SINGAPORE, THE IDES OF MARCH, MMXIV
For a number of years I have been working on a plan to reestablish gold coin and gold bill circulation that, in promoting peace and prosperity would equally benefit all nations. I came to the conclusion that the British sovereign was the most eligible coin for the purpose. It is the oldest coin that has been struck continuously at the Royal Mint without changing its in weight or fineness through many a year of peace, wars and revolutions. The sovereign financed world trade successfully between 1815 and 1914 and is fully capable to repeat this feat during the next one hundred years. It has the highest name-recognition of all coins ever struck anywhere. It is known and hoarded in all countries of the world. The sovereign is hall-marked with the name of Isaac Newton, ‘humanis generis decus’, Master of the Royal Mint and the father of the gold standard in modern times. On its reverse the sovereign depicts St. George in the act of slaying the dragon. Surely the symbolism will not be lost on people long suffering from the ravages of the global experiment with irredeemable paper currency, nor on producers of gold long unfairly prevented from bringing the benefits of their product to the world.
A firm in London yet to be named, herein called MondOr will upon delivering the metal draw gold bills on the Royal Mint payable in sovereigns. Thus the number one endorser of the gold bill is the Royal Mint. The drawer, MondOr, will offer gold bills to producers of gold or anyone else in exchange for gold brought to it or to its agents with no limitation on quantity. Gold bills are to mature in 91 days to reflect the time it takes for the Royal Mint to strike the coins from refining the metal through delivering the sovereigns. MondOr will auction off its surplus gold bills to the great trading houses financing world trade, among which the bills will subsequently circulate till expiry. At maturity the full face value of the gold bill is paid to bearer in sovereigns at the Royal Mint or at its agencies. Transfer is subject to endorsing and discount in the same way as it was a century ago. Endorsement represents the transfer of title; discount reflects the time remaining to maturity as well as supply and demand in the bill market. Both sovereigns and gold bills payable in sovereigns will be available to the general public with no charge for seigniorage and no charge for the cost of minting.
It would be hard to exaggerate the great historical significance of the rehabilitation of gold bill circulation after a hiatus of one hundred years, and that of gold coin circulation after a hiatus of four scores of years. Not only will world trade once again be financed with a currency that keeps its value from day to day, from year to year and from decade to decade as it did for a century prior to 1914 but, for the first time since 1933 it will be possible to exchange gold for a gold income and vice versa. Individuals will once more be able to save in confidence and earn a decent return in gold on their savings, no longer subject to crude central bank interference in contemptuous disregard of the virtue of saving. This is a giant step towards the realization of the ideal of Carl Menger (1840-1921): the peaceful and voluntary cooperation of individuals under the system of division of labor. The threat of war will be virtually eliminated - including the currency war between the United States and China. It is a giant step towards the prevention of the vanishing of world trade in consequence of gold rushing into hiding that is happening right now. It is a giant step towards eliminating unemployment, especially the blight of youth unemployment. All efforts that aim at abolishing poverty in the world without putting gold coins and gold bills back into circulation are doomed.
Signed: Antal E. Fekete
New Austrian School of Economics