The Sound Money Defense League is Working to Bring Back Gold and Silver as America’s Constitutional Money
In a Nutshell: The Federal Reserve instituted a policy of unlimited quantitative easing in March 2020 in response to the COVID-19 pandemic, in effect injecting trillions of dollars into the economy. But some analysts believe the consequences of that action may not be limited to stimulus checks and paycheck protection. According to Stefan Gleason, Director of the Sound Money Defense League, the Fed’s pandemic response is only the most recent manifestation of a long-standing inflationary monetary policy enabled by unbacked fiat currency. That’s why Gleason and the Sound Money Defense League advocate for returning to a limited currency backed by gold and silver to preserve the value of money and reward savers.
(Adam West for CardRates.com) In March 2020, people in the U.S. began to shelter in place in the wake of the COVID-19 pandemic, and economic activity slowed considerably. The Federal Reserve pledged to put as much new money into the economy as necessary by purchasing government debt and asset-backed securities on the open market.
With that, the Fed effectively created new dollars through the issuance of credit — a process sometimes known as printing money. The Fed’s post-COVID-19 policy of unlimited quantitative easing has made trillions in new dollars available to policymakers to help protect businesses and consumers.
That sounds like a good thing — until it isn’t, according to Stefan Gleason, Director of the Sound Money Defense League.
Gleason’s Sound Money Defense League is the public policy arm of a group of businesses that includes Money Metals Exchange, a national precious metals investment company and news service with more than 500,000 readers and 150,000 customers. It also includes Money Metals Depository and Money Metals Capital Group, a lending agency.
According to Gleason, the Fed’s recent moves differ from long-standing monetary policy only in scale, not in intent. Since the creation of the fiat currency system in 1913, U.S. dollars have leaked value as the size and scope of government has increased.
What’s needed to halt this chronic inflation, Gleason said, is a return to a monetary system in which circulating currency is limited and backed by gold and silver rather than by government fiat.
“The constitution set up a system where gold and silver was the money of our country,” Gleason said. “And as we’ve severed ties with gold, it’s enabled huge deficits and massive growth of government. Gold and silver are the antidotes to that.”
Working to Reform the Legal and Financial Status of Precious Metals
Gleason came to his role as an advocate for the gold standard after more than 15 years of involvement in free-market politics.
“Some of that is pertinent to precious metals,” he said. “Since 1913, the goal of U.S. monetary policy has been to create inflation, which devalues savings through interest rates that are below the rate of inflation and thus basically steal purchasing power.”
The Sound Money Defense League works on the federal and state level in a variety of ways to promote the investment potential of precious metals and clear a path toward the eventual readoption of the gold standard.
Before the Great Depression, the Federal Reserve was required to have enough gold to back 40% of U.S. currency. But bank failures during the Great Depression frightened the public into hoarding gold, making the policy untenable. Soon after taking office in 1933, President Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 turned in for other money, abandoning the gold standard and making possession legal again only in 1975.
The Sound Money Defense League supports legislation calling for an audit of U.S. gold reserves famously held at Fort Knox along with a review of the Federal Reserve itself.
On the state level, the Sound Money Defense League encourages states to remove sales and income taxes from monetary metals, hold precious metals as reserve assets, and take other steps to support sound money.
“At the state level, we also publish the Sound Money Index, which ranks and evaluates every state on its policies relating to precious metals and sound money,” Gleason said. Additional issues concern whether the states operate depositories for precious metals, whether they have laws that harass precious metals dealers and investors, and whether they invest in or hold precious metals in their pension and reserve funds. Wyoming, Texas, and Utah currently lead the index.
“We’re encouraging states to affirm that gold and silver are money as prescribed by Article 1, Section 10 of the U.S. Constitution,” Gleason said...
The second half of this article, originally authored by Adam West of CardRates.com, can be found here.
ABOUT THE AUTHOR: Adam West is the Managing Editor for CardRates.com, where he routinely corresponds with financial experts to produce the latest news and advice on topics related to helping consumers achieve greater financial literacy and improved credit. He has more than 12 years of storytelling, editing, and design experience in print and online journalism and is most knowledgeable in the areas of credit scores, financial products and services, and the banking industry.