The Return of Sound Money

[helmuth_hubener]

See, helmuth. Not to pick on our misnomer-ed friend r3volution 3.0, but it's a perfect example of what Rothbard talked about in Ethics concerning people more attracted to the idea of liberty than the goals:

Now, again, maybe this isn't who Rev3 "really is", you know... "deep down" or whatever, but the sentiments he expresses are spot on for the comparison.

Well, look, he's not my favorite either; I still have him on ignore. However, he has come and taken the time to give feedback on my project, and that helps me, even if it's negative. I think. I could be wrong. I suppose if the thread gets too overwhelmingly negative it could become toxic and be a net loss.

So anyway, good on ya and thank you, r3volution 3.0.

So I'm going to stick around on your thread. I've subscribed and what-not so I'll do my part to thwart the gatekeepers. You've actually done something, and you're aware I have as well, and neither of us are anonymous. So that's something to build on.

I'm very much interested in sound money strategy, and we've both put a lot of effort into it, so perhaps if nothing else, we can learn something and cause others to learn something.

Well thank you very much. Yes, I hope so.

Still waiting to hear about April 19th.

Lexington and Concord. Patriot's Day.

And one was safe and asleep in his bed
Who at the bridge would be first to fall,
Who that day would be lying dead,
Pierced by a British musket ball.

I honor that man. I honor him. I honor them all. May we remember them forever.

So through the night rode Paul Revere;
And so through the night went his cry of alarm
To every Middlesex village and farm,---
A cry of defiance, and not of fear,
A voice in the darkness, a knock at the door,
And a word that shall echo for evermore!
For, borne on the night-wind of the Past,
Through all our history, to the last,
In the hour of darkness and peril and need,
The people will waken and listen to hear
The hurrying hoof-beats of that steed,
And the midnight message of Paul Revere.

Also, very curious that you are the first "sound money" project I've seen from a member here in the 10 years this site has existed. Thought I would be the first, but you beat me by 2 days. Kinda spooky.

I guess it was time.

 

[helmuth_hubener]

Helmuth, what about this:

What if, in addition to auto-conversion to dollars, you passed this through bitcoin as well, or any other crypto for that matter.

I buy gold, and in addition to my account being useable with the card, I also have a bitcoin wallet to spend my gold. If you tie the gold vault to the bitcoin wallet on the bank side as well, it gives a level of transparency and auditing that the blockchain provides, and also removes this stigma everyone's throwing at you that "it's really just dollars behind it all isn't it?"

You could peg a crypto as a gold weight, heck, there might already be one. I haven't really ever looked.

In other words have an additional pay-out mechanism: bitcoin and other cryptocurrencies. I don't know how much demand there would be for that. Bitcoin enthusiasts can already pay people and merchants who accept bitcoin. Of which there are not all that many, by the way (relative to how many merchants accept Visa).

That said, there is an attractiveness to being a hub, an elegant and simple-to-use nexus, connecting together gold, bitcoin, and the dollar. I think that a lot of people (especially libertarians) would like that. So there is something to your idea.

 

[helmuth_hubener]

For what? I thought I'd posted here, but I can't find it.

Sorry to confuse you, osan. No, you hadn't posted here yet. I am ask for and inviting your feedback regarding the new gold-backed payment card I have created. Check it out, if you have a moment:

https://Midas.gold

Thanks!

 

[helmuth_hubener]

FRB is popular because people would rather earn interest than pay fees on their demand deposits.

The fact that people are not getting virtually any interest on their deposits right now from the incumbent banks, along with the fact that many millions of people actually pay more in nuisance fees than they get in interest, makes the incumbents highly vulnerable to disruption at this point in time.

Retail banks today make a majority of their revenues from... what? <Fanfare>: Fees! That's right, banks profit when their customers make a mistake! That is their #1 revenue stream. It will take decades of the "interest payments" you're talking about for all those .1 percents to finally offset a single $20 overdraft fee.

That is the real situation.

I intend to out-compete these buggers.

 

[Origanalist]

The fact that people are not getting virtually any interest on their deposits right now from the incumbent banks, along with the fact that many millions of people actually pay more in nuisance fees than they get in interest, makes the incumbents highly vulnerable to disruption at this point in time.

Retail banks today make a majority of their revenues from... what? <Fanfare>: Fees! That's right, banks profit when their customers make a mistake! That is their #1 revenue stream. It will take decades of the "interest payments" you're talking about for all those .1 percents to finally offset a single $20 overdraft fee.

That is the real situation.

I intend to out-compete these buggers.

I left Bank of Amigo over those fees, $35.00 a shot if I remember right. It was a complete scam, they weren't anything but thieves holding your money. I went to a small community bank and haven't had one single problem for years now.

It's not very accessible as it only has 5 branches and isn't open Saturdays but it's worth it not to have the greedy bastards leeching off my hard earned money.

 

[helmuth_hubener]

So to set up an account, I send you dollars. Since I am in the US (like most here- your site says there is one for overseas customers) I will be charged a fee.

No, not at all. There will be NO FEE.

You issue me a debit card I can use against that money I sent you- which you use to buy gold (which doesn't really affect me

It does affect you: you are the owner of the gold. You now own gold. That is different than owning dollars, just as owning real estate is different than owning junk bonds.

Now, that may not be a huge difference, depending on how you look at it, but it is a difference. Gold and (present-day paper) dollars are two different classes of objects. They have dramatically divergent properties.

Previously, one big difference was that dollars you could spend, in virtually all situations calling for spending, whereas gold you could not spend in virtually any situation. This made dollars a whole lot more useful.

Midas changes that. It makes gold more useful.

 

[helmuth_hubener]

Sure, I guess. But you like a lot of people are missing the point entirely. You take your FRN's, transfer them into gold backed currency, and then spend them at your leisure. I don't see what you're all freaked out about, I'm going to use it and if you don't want to don't. Personally I'm going to do everything in my power to deny the federal reserve any way I can no matter how trivial.

Thanks a million for all your support, [MENTION=40014]Origanalist[/MENTION]! And thanks for your patience; I know it's taken a long time.

Thanks also [MENTION=1144]wizardwatson[/MENTION] for holding down the fort and for the very generous words of support. I've got to get back over to your site and do some more testing for you one of these days soon, here. Check out his Metric Reserve system, people!

http://www.ronpaulforums.com/showth...-last-official-business-thread-Metric-Reserve

www.metricreserve.com

 

[helmuth_hubener]

Helmuth is the only one using the gold.

Totally false lie.

 

[wizardwatson]

Thanks a million for all your support, [MENTION=40014]Origanalist[/MENTION]! And thanks for your patience; I know it's taken a long time.

Thanks also [MENTION=1144]wizardwatson[/MENTION] for holding down the fort and for the very generous words of support. I've got to get back over to your site and do some more testing for you one of these days soon, here. Check out his Metric Reserve system, people!

http://www.ronpaulforums.com/showth...-last-official-business-thread-Metric-Reserve

www.metricreserve.com

Thanks,

Yeah, I'm in the middle of an interface overhaul. In fact pondering just today whether to just go ahead and blockchain the concept myself. Meaning, take the metric reserve model and implement it on a blockchain, and just have www.metricreserve.com be an interface too it, much like coinbase is.

I'm sure I'll finish the interface overhaul in any case. Just a lot of work if I go the blockchain route.

But this ongoing convo about FRB has made me realize just how pro-blockchain I am. People are so in love with FRB, money in this world really needs the blockchain. Shell game needs to end where money is concerned.

Thanks for the plug.

 

[helmuth_hubener]

...as to your debit card idea...question...i give you 1000 frn's when gold is at exactly [comex] 1000 frn's/oz...6 mos. later (and no account activity) gold is at exactly 1500/oz..how many frn's are available to me?....and how many frn's are available to me if the price drops to exactly 500/oz?...

Great question, Hank!

When gold is at 1500/oz, $1500 FRNs will be available to you.

When gold is at 500/oz, $500 FRNs will be available to you.

 

[Origanalist]

Great question, Hank!

When gold is at 1500/oz, $1500 FRNs will be available to you.

When gold is at 500/oz, $500 FRNs will be available to you.

 

[helmuth_hubener]

Regarding the Fractional Reserve Banking issue:

I will briefly weigh in. Midas is 100% reserve. RIAs are, in fact, legally required to be 100% reserve with respect to their clients' funds. We will never be fractional reserve. I am strongly committed on the side of full-reserve.

I, like Rothbard, am opposed to FRB on economic grounds. Also, I did not read the entire conversation but I will admit that r3v is correct when he says that two parties should in general be able to contract with each other however they want. Contract is sacred. In a free society, we must respect contract.

That said, there is some problematicness in being inherently bankrupt, and also in incurring obligations which are mathematically impossible to keep in realistic scenarios with non-trivial probability of occurring (scenarios which, in fact, can be expected to occur eventually and have occurred repeatedly throughout history).

Anyway, these are interesting technical issues. Even with time deposits, by the way, solvency would require the cumulative average loan duration to match or to be less than the cumulative average deposit duration. These are just good, sound, safe accounting practices. 100% reserve is good and sound and safe. Might other less sound arrangements be acceptable to some people? Perhaps.

Just not to us at Midas.

 

[r3volution 3.0]

The fact that people are not getting virtually any interest on their deposits right now from the incumbent banks, along with the fact that many millions of people actually pay more in nuisance fees than they get in interest, makes the incumbents highly vulnerable to disruption at this point in time.

...

I intend to out-compete these buggers.

There may be an opening there; they've gotten complacent in their cartel and charge higher fees/pay less interest than they could.

This doesn't necessarily have anything to do with gold, mind you (a payment system that uses dollars exclusively might compete on this front).

Anyway, I have a specific question about how your platform works:

You're doing at least one round-trip exchange from dollars to gold to dollars per transaction, right?

And you're storing physical gold in Switzerland?

If you don't charge any fees, how are you covering those costs?

If you already explained this, my apologies.

 

[helmuth_hubener]

There may be an opening there; they've gotten complacent in their cartel and charge higher fees/pay less interest than they could.

This doesn't necessarily have anything to do with gold, mind you (a payment system that uses dollars exclusively might compete on this front).

True.

Anyway, I have a specific question about how your platform works:

You're doing at least one round-trip exchange from dollars to gold to dollars per transaction, right?

And you're storing physical gold in Switzerland?

If you don't charge any fees, how are you covering those costs?

If you already explained this, my apologies.

We'll make it up on volume!

No, it's good to be suspicious of companies with no visible revenue source. First off, the storage fees and conversion fees we're dealing with are surprisingly low. At least part of the long-term revenue plan involves sharing a portion of the merchant charges (which, as you may know, is a significant percentage). Profitability will not be immediate (especially with significant sunk costs), but with enough active customers it should be able to turn a profit.

 

[r3volution 3.0]

We'll make it up on volume!

LOL

No, it's good to be suspicious of companies with no visible revenue source. First off, the storage fees and conversion fees we're dealing with are surprisingly low. At least part of the long-term revenue plan involves sharing a portion of the merchant charges (which, as you may know, is a significant percentage). Profitability will not be immediate (especially with significant sunk costs), but with enough active customers it should be able to turn a profit.

Gotcha

Do you anticipate getting merchants to pay from the outset (I would assume you'd need a fairly large user base to entice them)?

And how do the merchant fees compare to other payment systems?

 

[helmuth_hubener]

Do you anticipate getting merchants to pay from the outset (I would assume you'd need a fairly large user base to entice them)?

I don't want to share too much confidential information, but I do not anticipate being profitable before at least 1,000 customers.

 

[specsaregood]

Send me information on how to sign up as a beta tester.

But, what are the tax implications? IF gold goes up and we convert to USD to spend are we not on the hook for capital gains?

 

[r3volution 3.0]

I don't want to share too much confidential information, but I do not anticipate being profitable before at least 1,000 customers.

Fair enough

I remain skeptical of the political value of this sort of thing, but it does sound plausible as a payment system.

And I do applaud your ambition

Best of luck

 

[Zippyjuan]

No, not at all. There will be NO FEE.


It does affect you: you are the owner of the gold. You now own gold. That is different than owning dollars, just as owning real estate is different than owning junk bonds.

Now, that may not be a huge difference, depending on how you look at it, but it is a difference. Gold and (present-day paper) dollars are two different classes of objects. They have dramatically divergent properties.

Previously, one big difference was that dollars you could spend, in virtually all situations calling for spending, whereas gold you could not spend in virtually any situation. This made dollars a whole lot more useful.

Midas changes that. It makes gold more useful.

Thank you for the correction. Since you are in Switzerland I assumed that Americans would be considered foreign customers.

Foreign Transaction Fee: 2% of each foreign purchase transaction or foreign ATM advance transaction in U.S. Dollars; 3% of each foreign purchase transaction or foreign ATM advance transaction in Foreign Currency

 

[osan]

Sorry to confuse you, osan. No, you hadn't posted here yet. I am ask for and inviting your feedback regarding the new gold-backed payment card I have created. Check it out, if you have a moment:

https://Midas.gold

Thanks!

Well, it is a damned sight better than anything we have at this time. It seems you are effectively issuing gold-backed electronic money. My question, and I have not yet read the site because I just got in from doing farm stuff and I'm whipped, is whether it would be convertible. I see both virtues and hazards in convertibility. I can easily see hordes of people panicking and depleting the gold reserve in about 10 minutes when some talking-douche on the TV announces that the economy is crashing hard and that we are all about to die. We all know how that sort of thing goes.

Were this to take off, and I wish you all success, I see several possibilities. Firstly, you become a billionaire, which would please me to no end. There would be an effectively stable currency, all else equal - which leads me to some concerns. Were this to succeed, one of two things would likely happen: either every bank on the planet would jump on the bandwagon, or your body would be found floating down some obscure river in Outer Mongolia. If stable and effectively real money (or currency) is precisely what Theye do not want, I would fear for your very life because you are poking a large and dangerous creature whose attention most men do not want. Of course, all this assumes that money such as this is an actual economic factor in the grander scheme of global economic politics, which it may not be. I suspect that one of the reasons we have not had a global currency meltdown is because of all the electronics. There are vast swaths of currency stores that can simply disappear and reappear with a few keystrokes. That changes the power game fundamentally when compared with paper that must be run through a press and which, once released into the market, becomes very difficult for Themme to control.