Episode 185 - Goldbacks in Your Pocket with Benjamin Shaffer
Max talks to Benjamin Shaffer about a new product called Goldbacks, which are bills that can fit in your wallet and are made of gold. This innovation allows people to transact in small denominations of gold. They discuss how this fits in with our changing monetary system of fiat and bitcoin.
Benjamin Shaffer
Links
Goldback Website: Goldback.com
Alpine Gold Exchange
Related Episodes
Episode 157 - Financial Tsunami on the Horizon
Transcript
Max Sklar: You’re listening to The Local Maximum Episode 185.
Time to expand your perspective. Welcome to The Local Maximum. Now, here’s your host, Max Sklar.
Max Sklar: Welcome, everyone. Welcome. You have reached another Local Maximum. Today, we’re going to talk about gold, but I promise you that for the next 45 minutes, this is not going to be just a gold commercial. Because as I mentioned at the beginning of today’s interview, the way those gold commercials are often done on radio and on podcasts, that just always kind of rubs me the wrong way. I’ve actually never owned gold until these Goldbacks now. This is pretty exciting. It always seemed... Owning gold, sure, if you have a brokerage account, you could invest in an ETF, but that never seems too exciting. It always seems, well, you might as well invest in something else. Investing in physical gold or gold certificates just seemed too technical. Too much research needs to be done like who’s reputable and who’s not.
I just wasn’t too interested. But I found this company recently—Goldbacks. They’re doing something pretty interesting, which is taking physical gold and turning them into these really nice-looking bills. I know I don’t have one here with me. Don’t worry, we’re going to show them. You’d be surprised how positively people react when they are given these bills made of gold. People like this stuff. If you’re looking for a good gift or something like that, it’s always tough to find good gifts, but the lowest denomination here for the Goldbacks is under $4. You’d get these things without risk. Today’s discussion will connect with several other topics that we’ve been discussing in The Local Maximum. First of all, emerging technology. You think gold is an old technology but the ability to turn them into bills is pretty innovative, so we’ll get into that.
Also, monetary technology, our money system, which is very important topic to continue discussing these days. What’s happening with our monetary system? Big changes. I’m a believer in Bitcoin and crypto, in general, as you know, so I just want to talk about how this plays out with gold. I don’t have any of these Goldbacks on me today. I wish I could hold them up because I gave them all away. People like them so much. But I ordered more. They should come in soon. You should also know that if you’re not watching the video, there will be video available for this episode up on Odysee. My guest today does hold up all of these to the camera so that you’ll be able to see what they look like. Let’s get into it as soon as possible, so we can see it.
My next guest does merchant and legal services for the Utah-based Goldback, Inc., which creates gold for the masses and is recently expanding into new states, as well as New Hampshire. He’s also a prolific Goldback enthusiast. Benjamin Shaffer, you’ve reached The Local Maximum. Welcome to the show.
Benjamin Shaffer: Thank you, Max. I’m excited to be here.
Max: Okay, before we get into what this whole Goldback thing is, I want to start... A lot of podcasts have these persistent gold commercials, and I don’t know if you listen to late-night talk radio. It usually starts with some very pessimistic message like, “The world is getting darker. You need gold.” So, I want to approach this a little bit differently because I’ve gotten some of your gold slips a couple months ago at PorcFest, and I’ve given them out to people. So many people have such a positive reaction like, “Whoa, cool. Is that real gold?” These are just regular people. These are not gold bugs. These are not people who would think about investing in gold. But before we get into what this is, why do you think we aren’t used to seeing gold regularly on a day-to-day basis? Most people have no experience in gold. Have you experienced the same reaction that I’ve gotten?
Benjamin: Oh, absolutely. We get a lot of really strong reactions when people see the Goldbacks for the first time. I think the main reason why you don’t see it very often is because it’s rare, of course, and it’s very valuable. We’ve debased our currencies so much. Now, it is interesting to note, however, that anytime you got a coin from any jurisdiction, even though it’s usually made out of something cheap, some kind of pop-metal, something like that, they still try to make the outside look either golden, silver, or copper in color, even though it’s not actually made out of that. Why is that? I think there’s something deep in the human psyche. We’re looking for value. When we see that, we know this is something special.
Max: What are our coins made out of then if they’re not made out of... Yes, I’m not surprised they’re not made out of gold and silver but what are they made out of?
Benjamin: Well, most coins are made out of zinc. Sometimes it’s nickel-plated copper, things like that. What they’re trying to do is to try to make the material for the coin cheaper than what the coin is worth on its face value. The more inflation occurs, the harder and harder that gets. Of course, it used to be that a penny-size amount of copper was worth a penny. But now, it’s worth quite a bit more so they started making pennies out of zinc, and then copper plating that zinc. Now, the zinc is even worth more than a penny’s worth now, to the point that it’s about six or seven cents for every penny that they mint. We’re just literally throwing away gobs of money even making the penny.
Max: Is that why you hear, every once while you hear proposals to get rid of the penny but they never seem to pan out?
Benjamin: That’s precisely why. We’ve actually reached the point now where a nickel, even though it’s not made out of value, it’s not even made out of nickel anymore. But even a five-cent coin isn’t even worth... That metal, even though it’s cheap pot metal, it’s actually worth more than five cents as well. Really, they need to get rid of the penny and the nickel. They’re just throwing money away, trying to pretend that our currency is worth more than it actually is.
Max: This is interesting. Now, I’m starting to think like, “Okay, why is the nickel bigger than a dime again?” I don’t know if you have to get into it.
Benjamin: Originally, it was bigger because nickel is worth less than silver, and dimes were made out of silver, but they’re not anymore. Dime, again, is cheap pot metal, but I still think it only takes about eight or nine cents worth of it to make that little tiny coin out of cheap, hot metal now.
Max: The dime is not underwater yet, but it’s just a matter of time.
Benjamin: It’s coming. It’s only a matter of time.
Max: All right. That’s fascinating but let’s get into what you’re doing. Let’s get into what is this Goldback? Goldback, I know, is a word that goes way back. You guys didn’t invent it. But what exactly is your product of Goldback, and where does the name come from, and what’s the goal here? Maybe you could show us some too. Now, those of you who are on audio only won’t get to see this. That might be an incentive to go check out the video.
Benjamin: As you can see, it’s extremely shiny. It’s also called the Goldback partly because as a laminated piece of gold, the reverse side of the Goldback is just pure elemental gold that you can see through the plastic coating. It does take on this image though.
Max: I could almost see what’s on your computer screen a little bit. Don’t worry, people won’t make it out.
Benjamin: What’s that?
Max: I can almost see what’s on your computer screen a little bit. That’s how shiny it is.
Benjamin: Yeah, yeah exactly. It’s so reflective. It’s very, very difficult to photograph for that reason. But the Goldbacks are essentially, they’re very fractional gold products. You could think of it like a very, very thin coin, but it’s so fractional, meaning it’s such a small piece of gold. This one Goldback contains only 1/1000 of a troy ounce. That means that if you were to melt this down, and you can, by the way, melt them down and recover the gold. It’s not in this form forever unless you want it to be. If you were to melt this down, it’s like a grain of sand. It’s a tiny grain of sand. It’s all that it really is. That amount of gold. Now, why do we want such a small amount of gold? That’s what makes it possible for us to make this into a currency system.
So, the difference is, you mentioned those late-night talk-show commercials. People buy gold because it’s a commodity. It’s a valuable commodity. But it’s not really a currency. It’s not really a money system. But the Goldback is a money system. The 25 Goldback is worth 25 of the ones or 5 of the fives. It’s all fully fungible. This makes it possible for you to make purchases with a Goldback. Now, the other reason why it’s so tiny is that we want you to be able to buy regular things. One gold coin is worth, and it’s been worth for a while, about 2,000 dollars.
Max: An ounce of gold is about 2,000.
Benjamin: One ounce of gold. What are you going to buy with that? Let’s say these late-night talk-show commercials are right. The apocalypse is coming, and people need to save their value in gold because everything else is going to get wiped out. Well, even if the currency, the US dollar did get wiped out. You still won’t be able to buy anything with a gold coin. It’s just too valuable. Unless you’re buying a used car, I suppose. That better not be a 3,000-dollar used car. It better be the 2,000 or 4,000 or 6,000–dollar used car because you can’t make change.
Whereas in this case, one Goldback today is worth about 3.70-something. 3 dollars and 70-something cents. You can buy something for less than four dollars. You can buy your groceries, you can buy a couple dozen eggs, or something like that. Then, the Goldback also just has so much more utility just because it is a form of cash money right in your hands that you can spend on all those things. We’ve been building a network. There are hundreds of retailers now, and services, and professionals in the Goldback states, where the Goldbacks have come out, that are acceptable but act as payment.
Max: I want to get into how to build that network in a little bit because that’s going to be key here. But first, I want to ask why hasn’t this been done already? Why hasn’t gold been divided up into these tiny amounts before?
Benjamin: It seems kind of no-brainer, right? Let’s just do this. I think the main reason is the technology really didn’t exist until quite recently. Let me tell you a little bit about our process.
Max: What does that mean? The technology didn’t exist. Is it taking that grain of sand and flattening it out or something?
Benjamin: Yeah. Let’s say we were to use increments this small for purchases a hundred years ago. You’d be talking about having teeny tiny little coins that you can easily lose. Can you imagine if you had a, let’s say you had a hundred of these in your pocket but they weren’t in this form. They were tiny, tiny coins. You’d lose them. Oh my goodness. You’d be having like a little bit of sand in the bottom of your pocket. When you go to the beach, your pocket is out. You’re like, “Man, there’s more sand in here.” Then, it’s like, “Oh, there goes 200 dollars. There goes 300 dollars.” That would be catastrophic. It would never work. The way we’re making these, you can see all that sheen of gold, but it’s really so thin. Really, we’re talking several layers of gold atoms but only several layers of gold atoms to make this.
Max: It’s amazing you could see that, but I guess...
Benjamin: Right. It’s not transparent at least. The one, however, is just enough. If you get a really bright light and you shine it on it, it’ll actually shine through slightly, a little bit of the glow. That’s actually how a spectrometer measures whether or not something is made out of gold, which parts of the bandwidth of light are reflected or traveled through the piece. You can actually test the Goldback that way—a one Goldback. But basically, I want you to take a look a little bit at this reverse image, okay? That image isn’t printed. That is in the gold itself atom by atom. It’s right down to security features like the serial number. I don’t know if you can make that out. The serial number there is literally imprinted in it at an atomic level for security purposes.
Max: Is this considered as some kind of nanotechnology?
Benjamin: Basically, yeah. What we’re doing is called vacuum deposition. The first sheet of polymer, which is where all of this printing is printed on, goes to the top of a vacuum chamber. The bottom of the vacuum chamber, we’ve got this pure elemental gold, a big sheet of pure elemental gold. We’re taking pieces of that elemental gold off with the high ionized laser and then fusing it to the... You can almost think of it like 3D printing. It actually has a texture you can feel.
Max: Yeah, yeah. I felt it. I would take mine out. I gave them all away. That’s why I had to buy more.
Benjamin: Well, yeah. We’ll have to get those out to you. I will. I’ll get those right out to you. Of course, there’s lots of places you can buy them. But even more important than that is there’s lots of places you can spend them. Because it’s one thing, again, to stack gold. Don’t get me wrong, I appreciate it when people have the foresight to have savings. This is a great way to save your money as savings is in Goldbacks. But really, what I’m passionate about is trying to get America on to a true sound money system. I tell people, “Your freedom is about your life, liberty, and property. You do not have any one of those if one of them is denied. You don’t really have rights to life if they can take your property. You don’t really have your liberty if they can take your life or your property.”
Now, rights and property are so important. Seeing the rights of property are so important. How do you have a right to property? Well, you don’t have a right to property if you don’t have a free market. You don’t truly have a free market unless you have a free-market money system that actually allows you to have control over your property. Otherwise, if it’s manipulatable, if it can be inflated away, if it can be printed out of thin air, you don’t really have a right to property if you’re denominating it in dollars is what I’m saying. Because they can always just change what your property’s worth, in a sense taking your property from you.
This really is a liberty issue. This really is about building a stronger economy. These are local currencies. This one I have in my hand right here’s the Utah Goldback. In Utah, we’re building up our local communities by using this. The town I live in has dozens of vendors that all use the Goldback. When we spend our Goldbacks at those businesses, like yesterday, I just got my car worked on actually and paid in Goldbacks. I know that that money isn’t going to be sent from that auto shop. It isn’t going to be sent to some other state or some other country. It’s going to circulate again, and again, and again within my community.
Max: Right, right. I feel people are going to do what I did with it. They want to keep a few as souvenirs, and then they’ll get more to spend. Once people are seated with those, they almost have to be not sick of seeing them, but they’ve been like, “Okay, I’ve seen this one.”
Benjamin: “Okay, I can let a few go now.” Yeah, this is a problem some people call... It’s called Gresham’s Law.
Max: Okay, yeah. We’ve gone over this on the show, but please restate it.
Benjamin: Yeah, so basically the idea is you’re not going to spend the less valuable thing instead of the more valuable thing. I’ve got a one-dollar bill here. I know this is going to be worth maybe 80 cents next year so I might as well spend it now. Just get rid of it. This is worth about three dollars and seventy cents right now, but I know for certain it’s gonna be worth more than four dollars within a matter of months even, probably. Why would I want to spend this one when I could spend that one? That’s just a rational choice.
Gresham’s law basically says people are going to spend the less valuable thing away first. The bad money drives the good out of the economy because you’d rather spend the worst money and keep the more valuable money. This is why actual, pure silver dimes like we mentioned earlier or even pure copper pennies. You don’t see them in circulation much anymore now. Of course, they’re still around, but people grab them. People pull them out, and they don’t spend them. They keep them because they know they’re worth more. A silver dime is worth two or three bucks now. Why would they spend it for ten cents when they could get three dollars for it?
Max: When were those made again? The silver?
Benjamin: Oh, the actual silver? Before 1963.
Max: Any time before 1963 is silver?
Benjamin: Almost, yes. During World War Two, they made some steel dimes and stuffed more...
Max: That’s why you probably, if you’re looking for a dime before 1963, you’re not going to see them very often.
Benjamin: You’re not going to see them very often. Not because they’ve deteriorated or something, but because when someone sees that, they’re just not going to spend it for ten cents. It’s worth more. It’s the same thing with these people who want to keep them.
Max: Do you have a strategy for overcoming Gresham’s Law? Or is that something that you see as a hurdle to be overcome? Or something that could help you in the long run?
Benjamin: I think it’s really fine. Basically, Gresham’s Law helps us because it encourages people to use Goldbacks for their savings. I think that’s a great strategy. Honestly, I think it’s smarter than stacking gold coins or silver coins in the sense that in the event you do want to spend them, you’re not going to sell them for dollars. You’re just going to spend them directly as Goldbacks. There’s more usefulness there.
But I also, think that it’s not going to be too much of a problem because the more vendors we build into the network, the more merchants there are that accept the Goldback, the more likely they’re going to be to sweeten the pot a little bit, do promotions, use them as coupons, use them for say, “Hey, if you pay in Goldbacks, we’ll give you 10% off.” Things like that. That encourages people to circulate them more. As long as the market is there, as long as the economy is functioning with the Goldbacks in it, I think that it’s okay that some people save their money. We need more savings anyway.
Max: It sounds like you need a certain critical mass in your network where no one’s going to run a promotion if they have one customer for Goldbacks every month or something. Or maybe one.
Benjamin: True. Here’s a few statistics for you. The first year we did the Goldbacks, which was the end of 2019 until the mid-2020. Don’t forget, those were weird economic times. That first year, we did just over a million dollars turned into Goldbacks. That wasn’t enough to reach that critical mass, right? But it still put them in the hands of a lot of people. We’re doing more than a million dollars into Goldbacks every month now. We are actually looking at increasing our production so that by the end of 2021, we could be doing as much as four to six million dollars a month into Goldbacks.
At that point, I think we will finally catch up with demand a little bit better. We might not catch up all the way. There’s a lot of demand right now, a lot more than our manufacturing capabilities. But at that point, there will be enough in circulation. We already have Goldbacks in the hands of over 300,000 Americans have at least a few Goldbacks. It’s a lot of people. Eventually, it’s definitely very worthwhile for any business. They’re going to be missing out if they don’t accept Goldbacks.
Max: Which states do you have right now?
Benjamin: Okay, so the first state was Utah, The Utah Goldback. Utah was one of the first states to pass a legal tender act, making these legal tender. The second state was Nevada. Nevada is taking off pretty well too. They’re a very libertarian state in a lot of ways so they care about liberty issues and free-market ideas.
Max: Does that have anything to do with... Like you also have Vegas, so you have all the gaming?
Benjamin: Oh, sure and they love...
Max: Probably like putting that down.
Benjamin: The gleam of gold down there in Vegas and then, New Hampshire. New Hampshire is the third state. New Hampshire is a great freedom-loving state and had very favorable laws. But we’re very excited to be coming out in the next couple of months with the Wyoming Goldback. Here’s the really exciting thing about Wyoming. They have already passed a law. It’s on the books that if you pay for your purchase in Goldbacks, there is no sales tax associated with that purchase, which is mind-blowing. They’re basically saying that they favor the Goldback over the dollar in their state. They’re gonna be given special consideration and make it so that you can be sales tax–exempt for all transactions done in Goldbacks. Well, I think that is going to be massive, and we’re hoping for massive adoption. That’s a strong incentive.
Max: I was going to say let’s do that here in New Hampshire, but then I realized we don’t have a sales tax.
Benjamin: No sales tax in New Hampshire anyway, which is one of the reasons why we want to do it in New Hampshire. Makes the accounting easier and all that when people are using an alternative currency.
Max: Are you going to have to do 50 of these, ultimately? What’s the plan?
Benjamin: Oh, well, we’re going to definitely do more than 50, eventually. It is going to take a while for us to get all 50 states. I expect there will be several foreign countries before we do all 50 states. Really, gold is the ultimate international currency. It’s all completely interchangeable. We get asked this all the time. People say, “If I’m in New Hampshire, can I use a Utah Goldback? Or does that have to be New Hampshire Goldback?” Well, different arts don’t change the nature of it. It’s still the same amount of gold, the same type of currency. It’s sort of having different state quarters. It’s still worth 25 cents no matter which state you’re in.
Max: Right. Didn’t they have the... They had the presidents on them once it’s like it doesn’t matter if I’m giving you... you’re not going to check the quarter. “What? This is Benjamin Harrison. Oh, no. Don’t give that to me.”
Benjamin: “Oh no, this quarter is from Pennsylvania. I can’t spend it here.” No. Of course it’s fine. That also will make it, I think, a really great international currency. We are actually in some talks. I can’t announce anything too specific yet, but we are in talks about making some foreign Goldbacks already. When those two come out, it will be exchangeable again with the domestic ones.
Max: I know you don’t want to tell me where it is, but is it a place that I would want to visit and then spend the Goldback.
Benjamin: Oh, definitely. Definitely.
Max: Oh, good. It could be like we’re doing another country but it’s...
Benjamin: But no like, “Ooh.” Then again, war-ravaged countries, like, say Venezuela, they’re in desperate need of something this. We have no plans to do Venezuela by the way. It’s not there. But they’ve inflated their currency so badly. When I was in New Hampshire, launching the New Hampshire Goldback, and I went to PorcFest, I had a fellow come up to me. He said, “Hey, can I buy some Goldbacks in bolivars—Venezuelan Bolivars? I said, “Sure. Let’s just see what the exchange rate is.” I was thinking I would charge him the actual value.
Well, in the end, I ended up just trading him one Goldback just for the curiosity purpose or as a demonstration tool. For a 100-million bolivar note, that 100 million bolivars is worth so much less than one US penny. You’d have to have a huge stack of it to make one US dollar.
Max: Wow. Yeah, that’s hyperinflation.
Benjamin: That kind of hyperinflation is impossible when you have a sound money system. Sound money doesn’t fluctuate like that. The Goldback is the way I think now. I think it was the Goldback as the stable currency amount. The Goldback exchange rate with the dollar changes. People say, “Oh, well, is the Goldback going up or down?” I’m like, “No, no. The Goldback is pretty much the same. The dollar is going up and down.” It’s the same thing with the olivars. The bolivar used to be as strong as the dollar. But now, hundreds of millions of them won’t even buy you a sandwich. They won’t even buy a piece of candy. They literally have piles of it in the street.
They really, really could use... Have used something like this, would have prevented some of the economic disaster. There is one other thing that we’ve recently announced, though, that I should mention and that is South Dakota is getting its own Goldback. We’re in talks with other states. Other states are already in development, but we can’t announce them until we get all the legislation and everything in line so that we know that it’ll be accepted as a local currency.
Max: Right. Okay, I’m sure you deal with a lot of people who are into monetary technology and people who love freedom. I’m sure a lot of people are saying, “Hey, I do Bitcoin” or “I do crypto. That’s the future.” Maybe that’s where I’m coming from a little bit. I know you’re not anti-crypto, so what are your thoughts on that reaction? Does this play with crypto? How does that work?
Benjamin: In a lot of ways, I see this definitely as natural allies. “Why does something exist,” is kind of a big question. You always have to ask yourself about any of these. Why make it? What purpose does it serve? Money is a tool. It’s really just an idea of value so that we can get something done with it. Why do we need crypto? We needed crypto because we wanted to create something with an independently verifiable value. We wanted to be able to create something that was decentralized, that couldn’t be manipulated, that couldn’t be stolen from us so easily, that wouldn’t be part of us being surveilled all the time, make it possible for there to be greater privacy—privacy on one hand, but also transparency on the other. We know what it’s worth. We don’t have to know all of your business in order to transact in it. The Goldback actually solves all those same problems but in a different way.
The one difference for me and probably why I’m a little bit more enthusiastic about the Goldbacks than I am about crypto is that the Goldback value is so stable, and it’s so physical. It’s so physically real. I can melt these down and turn it into earrings or a ring. I don’t have to trust in a theoretical value. Now, don’t get me wrong, Bitcoin is valuable. But why is it valuable? It’s valuable only because we are choosing to value it, but it has no physical reality. This is one of the reasons why Bitcoin is so much more unstable. The value has shot up from almost nothing into astronomical highs and today, for example, it drops quite a bit.
Of course, I expect it to rebound robustly over time. But the Goldback is handy partly because you know what it’s worth. In this case, one Goldback, if they’d have the technology to create them, but this amount of gold, 2,000, 3,000 years ago would have bought you about the same number of amount in goods and services as it does today. I’d be willing to bet that one Goldback will still buy you, say a sandwich, or a loaf of bread, or a couple dozen eggs, or something like that. I bet you it’ll buy those same things in a thousand years as it does now.
Max: That’s a pretty good bet. We could test this even 10 years from now, I’m sure.
Benjamin: Of course, the other thing too that’s great about the Goldback is it is decentralized much like crypto. Every person who has it in their wallet is essentially a node in the network. It’s independently verifiable. You know exactly what it’s worth. It doesn’t matter where it came from or where it’s going. It’s totally untraceable, therefore, it’s much like a privacy coin in that sense.
Max: It’s a lot easier to onboard. That’s what I’ve been trying to get, onboard people to Lightning Network. I’ve been pretty successful when I walk someone through it. But just giving someone a gold note, they know how to...
Benjamin: You just hand it to them, right? Now, that does bring up the one thing that’s a real drawback to Goldback. The crypto has been doing a little bit better, and that is it’s so physical that I really do have to hand it to you. Right? I’m going to be mailing you some Goldbacks. But you’re going to have to wait until they get there. I can’t email you the Goldbacks essentially or do it through an electronic wallet. Now, there are a couple ways around that if people want to get into the Goldback.
I think the best place to buy it is alpinegold.com and there’s something called the United Precious Metals Association which actually offers escrow services. You can think of them as banking like in the sense that you can have an account there. That account can be denominated in Goldbacks. Then, you can transfer from one account to another between individuals, for example. Much like you might use Venmo or something simple like that, and they simply transfer it from one account to another. That can be a really useful way of doing it a little bit more electronically. But it’s true. If you want to make most purchases, you got to have the gold in your hands.
Max: Yeah. Well, it’s interesting to think. It’s sort of a different set of trade-offs, I think. It’s interesting. It’s definitely fun to have and give out.
Benjamin: We are actually in talks about making a crypto token that will be denominated in Goldbacks and can be exchanged for delivery in Goldbacks. If any of your listeners think that they’ve got the next brightest thing in creating some kind of crypto token, that it will be just as private, just as handy as any of the others, then surprise us.
Max: Yeah. All right. Cool. Let’s take a look at the bills and the denominations that you have. I’m kind of interested. Why did you pick the denominations and amounts and where does that art come from? It looked somebody worked a really long time on that artwork.
Benjamin: Yeah so I’ll show you some of the Utahs. This is Utah one. Each Goldback has a virtue. A Latin virtue is what’s printed on it. This is Prudence, and she’s represented during the Utah native period as a Native American woman with various symbols from each of the Utah tribes. She’s holding a mirror in her hand. I wanted you to see that. She’s looking, gazing in the mirror.
Max: Yes I can see it.
Benjamin: So Prudence, it’s about self-reflection. Then, there’s a little phrase at the bottom of each. In this case, it says, “Deal Prudently.” The Utah five has truth. Veritas is her name. She walks barefoot, which is interesting. It’s like the Naked Truth. “Truth has nothing to hide. It engages with the world directly.” She carries a lantern of lights aloft, light of truth. All of these have beautiful symbolic meanings in them. The woman who did this series, her name is Cheri. I kept calling her Sherry Jensen but she is Cheri Jensen. This is Lady Justice. She’s got the scales in one hand and the sword in the other, and the blindfold, and all of that. Then, each of the backgrounds will come with part of the landscape of the state that it’s in, and the wildlife that lives there, and all kinds of details like that. Then, there’s the 25, the first woman to vote.
Max: Pretty valuable now. That would be… That’s a hundred bucks.
Benjamin: Close to a hundred bucks. Victoria, we named her, because she is about the first woman who voted in 1870 in the US election. Her name was Seraph Young. There’s also Utah 50. Now, the 50s have always been Lady Liberty, some form of Lady Liberty. Let me grab a 50.
Max: All right. Those 50s, I’m looking forward to seeing because they’re... What’s that going to be? Nearly 200 dollars of value.
Benjamin: This is why I don’t always carry it in my wallet. Let me show you. I’ve been showing you the Utahs. Let me show you a New Hampshire here. The New Hampshire Goldback 50 has Lady Liberty on it. She is part of what was called the Pine Tree Rebellion and has a flag here that said ”An appeal to God or an appeal to heaven” is what their flag said on it. The idea was, the British, they wanted to cut down the forest of New Hampshire to build the British fleets. The Sons of Liberty of New Hampshire rose up and said “Nope. You’re not going to take our trees for the purposes of tyranny.” They had a little motto, it’s on her skirt, as well, about unity. ”Visinita Forta...” I’m partly mispronouncing. Our fortress is our unity essentially. They’re filled with all those items.
The Utah Lady Liberty is different. She’s holding the torch and the cup. We’ve got the lion laying down with the lamb. That’s a Utah mountain lion, right? All of that. Libertas. Libertas is liberty in Latin. Each of these bills then, it tells a story. It tells the history of the state which it represents. The artwork, we believe it’s really come out quite beautifully and really depicts some of the virtues that we’re trying to stand for in having a sound money system.
Max: If I remember when I held them because I’ve only dealt with one so far, but they get heavier and heavier. You can actually feel it.
Benjamin: The 50 and the 1, the 50 has 50 times the amount of gold in it. Now, with the one, like I said, it’s very, very thin. What you’re dealing with here is probably... What I’m feeling from bending it and all that is I’m feeling the plastic resistance. But by the time you get to the 25, it’s quite a bit stiffer. If you hold them in your hand, you can definitely tell. In fact, one of the other things that’s kind of fun is that they’re all a different size, as well as a different thickness. Let’s see if I can make them line up nicely for you.
Max: If you put them all end to end or you stack them up.
Benjamin: If you stand them up, you see they’re all different sizes. Not only does it make it fun and easy to count in your wallet, but even a blind man can tell you exactly what denomination they have in their hand. Not just from the size, but also from the thickness.
Max: It’s also helpful in learning about it. It’s like I said before, why is the nickel so much bigger than a dime? That’s always confusing for children when they learn. No, no, no. This one’s more than that one.
Benjamin: In this case, they do get bigger and thicker because here’s the other thing. Why does that confusion come up? Because most of these systems have been multiple metal systems—tri or quad metal systems. This is a single metal system. Why is that powerful? That’s powerful because the interchangeability, the fungibility, it flows really, really, really well. Gold, the value of gold, if it fluctuates, they fluctuate together. Now, what happens when you have, say, silver coins and gold coins in the same system? The silver might go up, with these go down. What’s that?
Max: If I’m not mistaken we used to do that in the United States. We were on a hard-money system, so that was a good idea. But we did have that duel that was always causing some issues, right?
Benjamin: That’s always creating problems because the people will say, “Oh, but silver is up so I’m going to collect more silver. I’m going to spend the gold, or the copper, and all those things.” What the government tried to do was they tried to force peg it. They tried to say, “You have to trade ten copper pennies for one silver dime. It has to be the same.” Even though they’re not the same. They’re changing their values relative to one another all the time. The government said, “No. It’s against the law to speculate on this. You have to do it.”
Well, we’re not into forcing anything. This is a voluntary local currency project. We want this to be true freedom-based money. You can’t have a forced pegging system if it’s going to be a truly free market economy with a truly free market system. We don’t have that problem with the Goldback because it’s all just pure 24 karat gold. 999 Gold. It says 24k on it, it really is 999.
Max: What is 24k?
Benjamin: Basically, that means that the purity of this gold is guaranteed down to one part per thousand, it will be a gold atom. At least 999 atoms out of every thousand atoms has to be out of elemental gold.
Max: It’s so crazy that we’re talking on the atomic level.
Benjamin: That’s what that basically means. It means it’s as pure as it can possibly be refined. Now, what is that occasional other thousandth atom? Probably silver. That’s basically where that comes from in nature when we try to refine it. That’s usually what it ends up being.
Max: There’s a little bit of silver in there.
Benjamin: Oh, no. Oh, no. But such a tiny, tiny amount. The other thing, too, is in order to guarantee such a tiny amount of gold, 1/1000 of a troy ounce it says on here, we have to go over a bit. So you’re actually getting slightly more than what is guaranteed. I’m sure that covers even that one occasional atom out of thousands of all atoms.
Max: You mentioned regulatory issues in some states you can’t make this in. What are those issues? What’s the legal thing there that’s holding you up?
Benjamin: When we did some research on the history of local currencies, as well as the history of precious metals trading, we wanted to make sure that what we were doing was so fully compliant with all of the laws that we wouldn’t be able to foresee that there could be any conflict or any difficulty. One of the things that we’ve done is we’ve tried to make sure that these are local currencies, actual local currencies. There are laws that protect that type of thing, whereas if this was simply a competitor to the dollar, this isn’t really a competitor to the dollar. This is a complimentary local system. Then, we’d be running up against “Well, are you coining Federal Reserve Notes?” No, we’re not. “Are you coining dollars?” No, we’re not making dollars. We’re making Goldbacks. We actually put this little disclaimer on there. I don’t know if you might be able to see it. It says “Privately issued. Not US dollar legal tender.” Because these aren’t dollars.
That protects us. Also, when we do it under state laws, according to the Constitution, states have the authority to mint coinage so long as they only coin in gold or silver, and these are gold. That makes it possible for us to coin these under the Constitution. It avoids a bunch of other other pitfalls or various complaints people have had. For example, about various local currencies looking too much like the dollar getting them in trouble. You see, the dollar is oriented horizontally, ours are oriented vertically. That was part of that reason.
Max: They also look very different.
Benjamin: They look very, very different. That’s very, very intentional.
Max: Has any regulatory authority tried to make your life difficult or go after you?
Benjamin: No, and we really do believe that we are fully compliant that they probably won’t. The other thing too, though, that I do like to point out is... Because some people are nervous sometimes. They’ll say, “Someone’s going to shut you down. Someone’s going to get mad at you.” We’re trying our best to make sure that what we’re still doing this completely legal. Someone might get mad at us eventually. Here’s the fun thing. Let’s say we do get shut down. That does not ruin the value of the Goldbacks. If anything, it makes them slightly more valuable because we’ll stop minting them. That’ll just make them even more rare. But if you’ve got a Goldback in your pocket, you’ve got the gold in your pocket. It doesn’t matter if they shut us down. It’s still a circulating currency that still has an intrinsic value or at least a commodity value of being made out of real gold.
Max: Tell me about actually spending these. How do you approach businesses? Which ones of them have been open? What kind of pushback have you gotten? Are there any fun stories about spending these where it actually worked out really well?
Benjamin: Well, I would say that there’s certainly a fairly broad middle of people who are like, “Yeah, but how does it benefit my business,” have some practical concerns. Generally, we can address those. I believe that it’s a very effective system. But of course, sometimes, you just pull that out, and they see the gold, and they go, “Whoa, that is so cool.” People just freak out, and they’ll be on board before you even know it. Of course, sometimes, you pull it out and people go, “Oh, no. Oh, no, no, no. That’s going to be too complicated for me. I don’t want to have anything to do with that.”
Just because we are trying to introduce them to something that is new or maybe outside their paradigm. Think about it that way with crypto adoption. I’m sure everybody that watches this show, who’s ever gotten on with crypto or tried to explain crypto to some, but there’s people who definitely don’t get it. There’s others who do. But I’d say in general, it’s got the bling factor. It’s got that wow factor. People see that and they just go, “Oh, my goodness. That’s so amazing. I got to get some of those.” I’d say that it really is more than 50% of business owners who seem to want to adopt it.
Max: Is there a type of business that seems to be more open to it than others?
Benjamin: Yeah. It really comes down to how much local control they actually have. True mom-and-pop shops, they are almost always on board. One of the biggest problems that I didn’t even realize until I went out trying to set up businesses to accept the Goldbacks is just how much of the US economy might appear local but is actually run by big international conglomerates. It is a lot harder when you can’t talk to someone who actually has the authority to make any decisions about how their business is run because all those decisions are made in New York, or London, or Qatar. When I found out how much of the hotel industry is owned from the Middle East, I was shocked.
I thought some of these unique little motels in small towns, figured they’re probably all local owners who live there and just run a hotel. No. Shocking, shocking number of even unique-looking little businesses are all owned by these huge, megahotel and resort conglomerates and things like that. That’s really what I found to be the hardest thing about adoption is that this is a local currency. It’s about strengthening local business. It’s really a powerful tool for entrepreneurs. But it’s shocking to me to realize how little control of the US economy entrepreneurs actually have and how hard it is to get into that market, not just hotels but any market. In America right now, it seems to be highly regulated and controlled by these big, huge companies. That’s been our biggest difficulty really is we have to take over the local economies before the big conglomerates for you to be on their radar.
Max: Yeah. I was thinking. Near me, I don’t know if they’re ultimately owned by a big conglomerate or what, but there’s a gas station, convenience store chain, and there’s four of them here in Southern New Hampshire. They all have Bitcoin ATMs in there, so I’m like, “Okay, maybe that would be a good one to go check.”
Benjamin: If you guys want to get onto goldback.com, you can contact us. You can also contact me at benjamin@goldback.com. If there’s a business you shop at, if you’re a business owner who’s watching this, please get in contact with us. Let’s get you into that network so that we can know about your business, and we can all use sound money.
Max: Do you have any stories of businesses where... Has it helped them at all? Like “Oh my God. We used these Goldbacks and...” Either it got people in or we’re just really excited to use it. People like the concept, it gets them excited.
Benjamin: Oh, yeah. I suppose this is just a funny little one, but I was at the county fair in my county just last weekend. I was walking around with my kids. I came up to a guy who is a beekeeper. Not only he sells his own local honey, he has honey from all over the world, and special exotic honeys, and things like that. I walked up and I saw he’s got a little “We accept the Goldbacks” sticker on his...
Max: You saw one out in the wild?
Benjamin: Yeah, just at random. I didn’t put it there.
Max: By the way, as an aside, before you go into the story, that’s one of the most exciting things like when you work in a tech startup. The early days of Foursquare, when I’d build a feature, and then I’d hear people talking about it when I...
Benjamin: They don’t know that you had anything to do with it. It’s just there, right? She’s got that up, and I was like, “Hey, you accept the Goldback.” She’s like, “Oh, yeah. It’s been great. As soon as you guys advertised that I accepted the Goldback, I had lots more people ordering from me and paying me in gold.” He’s happy about it because he knows that the Goldback is going to be worth more if he can save some for a few months.
Max: What type of place was it? Is that the fair, you said?
Benjamin: Oh, yeah. I was at the fair that he had this particular booth, but he also has a regular store.
Max: What’s he selling?
Benjamin: Primarily honey, and honey products, and things that have honey in it. He’s not as big as Burt’s Bees yet or anything, but he’s got his own little business here. It’s a unique niche kind of thing, but because it’s local and because here in Utah, we are seeing much wider adoption, he felt it was really helping his business. I think that that’s going to become more and more common. As we said though, with Gresham’s Law, we really want to see these circulate a lot more than I feel like they are. A lot of times, again, when people are like, “Yeah. I do have Goldbacks and all, but I’ve also got dollars in my wallet. I’ll just spend the dollars. I’ll keep these. These are too pretty. These are too cool.”
Max: Yeah, but dollars, I actually have to go to the ATM and get more so once the dollars are gone.
Benjamin: I’ve also heard stories, and it’s a little funny to me, but I’ve heard stories of people getting on to our network, being really excited to find other businesses that love a free market, love liberty, want to use the Goldbacks, and then, they’ll deliberately go, and they’ll patronize those businesses but pay them in dollars because they didn’t want to give the Goldback. Come on. Use the Goldbacks. Buy more Goldbacks with the dollars instead. Keep it circulating.
Max: You can always purchase, and then refill. That’s been a crypto strategy of mine too. If I buy something that is 100 dollars worth of Bitcoin, I’ll spend the Bitcoin, and then I’ll replenish it with 110 dollars. I’ll tax myself a little bit, but then I’m saving more. It’s like an incentive.
Benjamin: That’s what I want to see people doing with Goldbacks because I think that’s the only way to really make the ultimate difference is for it to circulate fully. We want to make sure that free market is really coming.
Max: All right. Well, I’m really looking forward to giving it a shot and getting some. If I end up having to.
Benjamin: Hopefully spend them, right? Because you wanna keep them in your pocket, right? Otherwise, you can buy a few extra and spend them.
Max: Well, that’s why I got a few extra. We’ll see how long they last. Hopefully, I’ll probably spend them, too.
Benjamin: One of the coolest things I like to do is if anytime you go out to eat, ask your server. “Would you like your tip in paper or in gold?”
Max: I’ve seen someone do that here.
Benjamin: They’re almost always going to say gold. So don’t forget. Just use them as tips, things like that. It gets the word out, and then pretty soon, the business owner is like, “I need to sign up our restaurant to accept the Goldbacks.
Max: You know what? I’m going to start doing that. That’s a great idea. Okay, so thanks so much, Benjamin for sharing all this today. I know I’m excited to get it. I’m going to give you the last word. Just tell us any closing thoughts, any wrap-up? Also, I know you’ve given a few websites already but where can we go to get these and find more?
Benjamin: Yeah, I bet you’re going to put these links into your description?
Max: Yeah, yes. It’s going to be at localmaxradio.com/185.
Benjamin: Awesome. What you’re going to want to do is go to goldback.com. On goldback.com, you can do things like see some of the featured business network. You can use a transaction calculator which makes it a lot easier to accept this at your business. You can see the exchange rate. We also have hundreds of pages about the history, the art, the purposes of sound money, and things like that to educate you on that website. It’s a fun one to see. I also recommend alpinegold.com. It’s one of our favorite retailers. They will mail them to you and also help you through the United Precious Metal Association. That’s at upma.org, where you can create accounts.
I suppose the last thing I’d really like to say is if you want freedom and you want to be able to protect your assets, gold is a good way to do it. Gold is the best way to make sure that you know that you actually have the value. I believe that the Goldbacks are the most useful form of gold because it’s the only gold that you can actually spend as a truly fungible currency. If you’re a big Bitcoin-er for example, and you’re in it partly because you value the principles upon which it’s based, but you need to diversify, frankly, if all your money is in Bitcoin. Give us some of your Bitcoin, and we’ll give you some gold. Then we’ll both be diversified a little bit better, and we’ll keep striking a blow for liberty.
Max: All right and with that, Benjamin, thank you so much for coming on the show.
Benjamin: Yep. Thank you, Max. Have a good day.
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