Bob Moriarty: Solving Our National Problems Starts With Sound Money

At the Casey Research Summit last month, Chris had the opportunity to sit down with longtime precious metals investor and proprietor of, Bob Moriarty.

Right before their conversation, Bob had picked up a local Arizona newspaper and read an AP article titled "US Reliability Questioned Overseas" (the government shutdown was in full swing at this time). It discussed, among other concerns voiced by foreigners, whether continuing to rely on the US dollar as the world's reserve currency is prudent given America's political dysfunction and its debt levels.

Bob took this as one of a growing number of important data points that suggest the world public is beginning to wake up to the fact that the status quo may not be sustainable, or wise. By no means is this awareness mainstream, but it's notably more prevalent than it was 5+ years ago (to the point where it can be discussed openly in a small US metro newspaper). Bob feels, now more than ever, that sites like his, and their 'alternative media' peer set can play a critical role in helping the world get to the "tipping point" of awareness that the system is not just broken, but needs a full reset - and to agitate constructively for it. In his eyes, returning to a sound, fixed currency system is an important place to start:

We know exactly what the weight of a gram is. And a gram weighs the same thing in the United States that it weighs in France and it weighs in Tanzania. We know exactly what the quantity of liter is. A liter is a liter is a liter, no matter where you go. We understand temperature and temperature is fixed.

Now, there are some things that in life that have to be fixed. If you are going to be a tailor and you are going to make a suit for someone, the length of a meter cannot change from day to day. Because if you made half the suit and then you went home, you had dinner, you went to bed, and you got up the next day, and they changed the length of a meter, and you are making the left side of the suit as opposed to the right side, the length of the sleeve would be different. It might be longer, it might be shorter, but because the value of the meter has changed, it would be impossible for you to make a suit that actually works.

Here is something I have never heard anybody say but everybody needs to think about: Between noon Monday and noon Tuesday, the value of the U.S. dollar on the commodities exchanges will probably change 10,000 times. Now, if a Martian flew to Earth and landed, and he was talking to you, and he said, okay, how do you measure length, and you say, well, we do it in meters, and it is this long, and he says, oh, that is cool; how often does that change? Well, it never changes; the length of a meter is fixed. And that way, everybody that makes a suit, makes suits with sleeves that are the same length. And he says okay, well, how do you actually measure the weight of something? You say, well, we use grams, and gram is the same from day to day, and people say that is cool. And the Martian says okay, I can see that that works. How do you measure something like water or gasoline or liquids? Well, we use liters. And the Martian says, okay, I like that; that makes a lot of sense. And he says, okay, what do you use for currency, how do you exchange goods, you trade things? And you say, well, we use dollars. And he says, okay, dollars; that is cool; how often does the value of the dollar change? and you say, well, between noon today and noon tomorrow, it will change about 10,000 times. The Martian would look at you and he would be convinced you had lost your mind. Because how can the value of a currency change 10,000 times in a day?

Now, that did not occur prior to 1970; currencies were relatively fixed. They changed periodically based on economic events, but currencies were relatively fixed. When we got off the gold standard in August of 1971, all of a sudden we had a currency system that changed on a constant basis. Now what I am telling you is, that is absolutely insane. And when you go insane, you have to regain your sanity and you have to come up with something that makes sense. The value of money should be fixed. And I argue that many of the political problems that we have, the political bankruptcy that we have, the fiscal bankruptcy that we have, the failure of our education system, the failure of our health system, the failure of our legal system, is all tied to having a currency that is not fixed.

We do not know what value is anymore. So we have lost our financial compass, and that affects a lot of other things. We need to have that restored. And to read in an average newspaper, a German newspaper is writing about America being politically bankrupt – something that I have said for years, people here at the conference have said for years -- but people are waking up to it. We are financially bankrupt, we are politically bankrupt. You can be a Democrat and you can believe the Republicans are the worst people in the world, or you can be a Republican and believe the Democrats are the worst people in the world. But what we have is total corruption in government. If you are the biggest supporter of Obamacare, there is a 99% chance that you cannot even sign up. Our government is in a state of failure, and we need to restart, we need to reset. 

Click the play button below to listen to Chris's interview with Bob Moriarty (26m:39s):

This is a companion discussion topic for the original entry at

First: 1 meter is not always a meter (well it used to be, but not anymore). It is a fact. Do you know the definition of 1 meter. Look it up, do you know why the definition changed. It is tied up to the speed of light, why would they do that. To hide the fact that the speed of light is not a constant, it changes. Still believe there exist something called science. its all belief systems - religion.
Second:The bedrock is not sound money. It is honest and truthful behaviour and attitudes. If the people are corrupted/rotten not any kind of system will do any good. Systems are a distraction to keep us occupied.

We do not have a system crisis we have a "spiritual" crisis.

Bob Moriarty sounds ike a straight-shooting, knowledgable and caring kind of guy.
There is an old piece of sage advice that says “don’t tell me how much you know until you tell me how much you care”. Anyone who has hung out here at Peak Prosperity knows that Chris, Adam and their team cares and It sounds like Bob does as well. I am very happy that PP will be working with Bob in the future and look forward to hearing or reading more from him.
Will be checking out Bob’s website.
AK Granny

Bob said:

I live outside the United States and I do not travel anywhere without having several ounces of gold and silver with me, because I know the banking system is very unstable, and one day it is going to collapse.
How does he do this while going thru security checkpoints and not be labeled as a

lunableu -I know the answer - Bob explained how it does to me when we were in Tulsa. But I'll keep silent out of respectful discretion.
Suffice it to say, he's a crafty guy.

Gold bullion jewellery I expect. That's how I'd do it.

[quote=Adam Taggart]lunableu -
I know the answer, but can't tell. Bob explained how it does to me when we were in Tulsa.
Suffice it to say, he's a crafty guy.
Start a new thread giving advice on how to take PMs through customs.  No one will ever figure out how you got the info. ;^)

with a couple of gold coins in my wallet.  Same with my wife.  TSA has commented twice, and then just shrugged.  In Europe, they didn't care.  S. America they acted like it happens on a daily basis.  Caribbean countries don't even check.  
Now, I can afford to lose a few coins so, I don't worry too much.  But again, I've never had a problem.  Keep them in a plastic foldup coin holder, with it's description and it looks like something you've collected. 

Rolls of junk quarters or dimes pre-1965. It's US currency.

Canada has loonies and toonies and other small coins. Anything smaller than ounce coins in your wallet with the other coins won't even get noticed.

The problem of constructing a substantially just monetary system is Real whether the solution is fiat with good stewardship or gold based and pegged.  When reality changes, a fixed monetary system has problems.  So for hundreds of years we had 'problems' with financial crises even on a gold standard.  That said, the question of which is better is a fair question.  Generally one or the other gets picked and the rest of us just live with it.  Change after all being hard (and dangerous). And so here we are. I am not looking forward to the necessary deflationary collapse or crippling inflation though.  I'm 60. But change is what we are going to get.  I have some gold but it could be a crummy investment for a long time, there is less than an ounce for each person in the world. Everybody needs 'money' to eat but the big gold holders and rule makers might decide they need more of it to run things properly.  We could go to world money (SDR or bancor) or use gold as part of a basket of currencies and do a reset. There are a lot of scams we have not tried yet given the cluelessness of the public.
And buying gold is faintly illegal. Perhaps a majority of people think you should pay sales tax when you buy and capital gains when you sell. It's a commodity not a legal currency. They don't have any and don't want any.   Governments think you should pay too. Gold can go underground but it can't buy a house and get a title if the source of funds must be proven.  No, the law holds the whip hand.

  What is interesting are the rules that can be generated about how you can use your own money. You can't take your own money to France without telling a functionary, who may or may not decide that it is suspicious.  If it is, prove where and when you got it, that it is really yours and that you have paid all applicable taxes. (Let's just do a quick check of that 1040.)  You cannot buy a car with cash in the official economy.  You cannot use a $100 bill at Starbucks.  Cash has been made defacto illegal.  Go to the bank and ask for your $30,000.   You can have it next week if you tell the bank manager why you want it.  What if she doesn't like your reasons?  Government would like to "save money" by banning cash and getting everybody fired up about using their phone to buy things.  That new and improved system would undoubtedly work as well as big companies customer service phone lines.  Even now I have to agree to the new account terms or change my password before I can even get into my online accounts.  Mother may I anyone?

Personally I like the idea of a maximum amount of freedom.  Gold and silver should be allowed to be bought and sold with minimal transactional barriers. People could buy all the PMs they wanted and its fluctuations would be a judgment on the official money.  And we would pay real taxes and the government would make real budgets that politically we could really discuss and vote on.  But the current system is just flat wrong and at least 50 captains of financial industry should be in jail.     After all, if the government can print all the money it wants, why does it need mine?

The Big Steal is coming because honoring promises is actually hard…

And there I was thinking that I was the only one who knew that they are fudging natures sacrosanct Constants.
This has echoes of Plato's idea that the sun and moon were perfect circles. We haven't come very far, have we?

The foundations of my faith are being white-anted. What next? Will we have to dump the "Thou shalt not create nor destroy energy"?

If the speed of light is not set in stone- can we stretch it? (May we?) Just for a little while, to get us to where we want to be going. This is something else again.

And then there is G, the gravitational constant. Such a pitiful thing, and so inconvenient. Surely we could do something about that.

I had better stop before I get excited.

Edit: Too late. I'm excited.

Professor Vyovskii took to Plank with a large hammer and bent it all out of shape. How bold is that? Anyway what was Plank doing loitering around between the micro and the macro worlds?

Well apparently they dont like to use the word fudge, its called intellectual phase locking.
The beginning is near.

Good point. Even with a gold standard, the bankers will still be in control and the system will still be manipulated to maximally screw the middle class, regardless of how it's constructed. For example, there is nothing inherently unworkable about a government-issued, non-interest bearing, non-debt backed currency. It would not even need to be gold backed, it could be completely paper money; and it would work in perpetuity. No need for perpetual growth; and no solvency issues because the system wouldn't be debt backed. Along with this, ban usury (interest) like the Muslims do, along with fractional reserve banking (aside: this was only invented as a way to help the European economies grow at a rate faster than gold supply was increasing centuries back when they were colonizing and taking over the rest of the world – now that the world is no longer growing we no longer need credit. The only reason we have it (and people believe we still need it) is because, conveniently, it is a very effective way for the bankers to keep all the serfs in debt servitude and prevent them from actually owning any of the wealth – now, the only way the average person can own anything is to go into debt first). This would be the most just monetary system possible.
Of course people will counter argue that if you put the government in charge of the money supply it will inevitably be used and abused by politicians to screw us all yet again. Sure, but I am to believe that a private unregulated banking system (even gold backed) run by profit-driven bankers wouldn't? I ask: what entity other than the government could possibly have a shred of accountability to the public? The "private free market" would sort all that out on its own based on supply / demand dynamics? Yeah right… Just because our political system has been hacked and corrupted by private banking interests does not mean that all political systems need to be this way; nor have they always been this way.
The problem is that this ideal monetary system is nothing like what we have now, and the bankers in charge would never in a million years allow that kind of a system to be put in place under their watch. Instead, our governments (as is everyone else) are corporate debt slaves to the banks; the public and private sectors have merged into one central unregulated Orwellian regime of oppression. 
Ultimately, the problem is that the vast majority of the people are sheep; they are mesmerized by the media and its lies and diversions, and they therefore enable / allow those in power, whomever they may be, to manipulate the system to fleece the sheep. As long as this continues, and it seems this has pretty much always been the way it is, it doesn't matter what kind of monetary system we have in place – the wealth will be continually stolen from the middle class, necessitating even more economic growth to replenish that stolen wealth, and this will continue until all the world's resources are used up and modern civilization collapses into the dustbin of history.
We as a species are simply not adapted to live coherently in these large groupings we call "countries". We came from tribes and that is how we best function. Schools of herring, on the other hand, can work together collectively quite well.

This is a very interesting conversation because we are thinking about what a just system might look like.  I don't happen to think that a (fixed) Gold standard is the answer… I am more of the mind that you need to let Gold float freely as a separate reserve currency/money that is therefore reflective of the true value of any fiat currencies.  With regard to debt-based money…  I am of the mind that non-debt based Gov't issued fiat would actually be worse than the banker's debt based money because there is simply no natural limiting mechanism… at least when it comes to debt-based money… the demand for debt is (theoretically) the limiting factor.  As we know. QE throws that right out the window.  In any event, debt-based money still has a nominal limiter on it… debt.  Gov't issued money, outside of a Gold standard, has no governor that I can see.    
Here is my latest thought experiment on fixing the problem;  As Chris has talked about, our system is unstable in part because the system creates the principle, but not the interest fraction. This causes total debt to run away from the total money in the system… which makes debts harder to pay… and makes the system constantly short of money.  One of the answers that the bankers have come up with is to keep the system in a state of perpetual growth… nominal growth if need be.  If you have ever asked yourself why the FED targets 2% inflation, even though their charter is, "price stability"… this is why.  Having first access to the new money benefits the banks and the .1% mainly.   

There is potentially a simple fix to this;  Create the interest money whenever new debt is created, and distribute it equally to all system participants on a regular basis.  Put this money in the pockets of the people as a system dividend of sorts. 

What does this do?

1)  Takes away the need to artificially grow the system… the system is not dynamically imbalanced anymore… though we still have to face the pressure to contract, which will not go away. 

2)  Gives the "new money" benefit to everyone equally… if more debt is being created, more money is in the pockets of the average person.  

If you think about it… this is no more absurd… i.e. money for nothing… than the idea that banks can create money from thin air and then force you, the borrower, to pay it back with interest.   

I think there would be somewhat of a limiting mechanism – inflation. I envision more of a system like they have in India where people use gold and silver as the vehicle of savings and the currency as simply a vehicle fro transactions. This is why the bankers hate India… It's really hard to extract wealth from a populace that simply doesn't place its wealth in the central currency and that currency is continually inflating as a result.
We'd have no more concerns about deflationary collapses because there would be no more credit money. Bond vigilantes blowing up government debt would not be a concern either. All the system would be is this: the government decrees that "thou shalt accept this currency, or gold or silver, as payment for goods and services". That currency would be brought into the system by the government printing it up and spending it via its programs. Money would be taken up via taxes and destroyed which would maintain prices.
What would prevent the government from simply printing up and spending more of its money? Hmm, good question, I haven't totally worked that one out yet. I guess that's why historically governments had a gold standard, that's what the whole point of a gold standard is! So then maybe a government-issued, non-debt backed, non-interest bearing, gold standard currency would be the answer. Spending would be held in check by the gold reserves. The only inherent problem I see with that is that our governments' historical gold reserves (which used to belong to the people) have been stolen by central banks, and it seems it all might be headed over to China leaving us with nothing to back a new currency with.Imagine that – the gold which is supposed to belong to the American people hasn't been audited in 60 years and not a single member of the public has any idea how much is left.
Inflation would be a check to prevent rampant government printing and spending, although admittedly inflation's never held it in check before. On the other hand, so what if there is perpetual 5% inflation, if savings aren't parked in that currency? It's merely for transactions. Let gold and silver prices float and that's where you'd park your savings like the Indians and Chinese do.

[quote=Jim H]]
If you think about it… this is no more absurd… i.e. money for nothing… than the idea that banks can create money from thin air and then force you, the borrower, to pay it back with interest.
I think we should be open to all ideas (each one has some merit to it even if it isn't a perfect solution) because nothing is more absurd than the current monetary system.

I always enjoy reading people's solutions to the issue of the problems in our monetary system, because I don't have a solution of my own, and so as a result I want to see what other people come up with.  The current system is absurd, but all the other solutions I've seen have issues of their own.  Are they worse?  I think that depends on the circumstances.Our current system has survived because for a long time, it was aligned with the overall economic growth picture we had in the world.  Money supply had to increase because economic growth and population growth were the reality on the ground.  Lots of things were tried, and the one that emerged as the winner was the current one - with all its faults and gifts of power and control to the banker class.  It allowed monetary growth to parallel actual growth, in energy, population, and so on.
However if we project forward a world without growth, its crystal clear that the current monetary system just stops working.  Another system will have to appear that deals properly with a no-growth reality on the ground.  So perhaps its a gold standard, or maybe its a currency based on a basket of commodities, or maybe it's government-printed money (along with - perhaps - constitutional limits on how much can be printed and under what circumstances).  I can see good arguments for any of these systems.  Eliminating fractional reserve lending also sounds good, since fractional reserve lending has always seemed like fraud to me.
However at the core of failures in other man-made systems is human nature.  People have this distressing willingness to forget the lessons of the previous generation, and they often succumb to the desire to take the easy path and try to get something for nothing.  Can a monetary system function over the long term more or less unchanged when administered by flawed humanity?  My sense is, humanity will eventually find a way to change the rules in order to allow "the free lunch" (at least "temporarily - for the duration of the emergency") in order to avoid facing tough choices.  We seem to be programmed this way.
Take Communism.  It has this aspect to it that it tries to be fair, yet fails in any large-scale application because it fails to deal satisfactorily with a broad cross-section of the human condition - many of us are greedy, ambitious, selfish, some have a drive to succeed, and some are lazy.  If we were just better people, Communism would be great.  But since that's not the reality on the ground, it fails.  Capitalism, on the other hand, leverages those very negative attributes towards making the system more efficient, at the cost of having to restrain a not inconsequential amount of rapaciousness.
So can we design a monetary system that takes into account - that even takes advantage of those human frailties, the same way capitalism does with invention, production, and motivation, while not being overrun by rapaciousness?
Its just a thought.

Chris and Adam, should have a skeptic join their ranks and not a convert! I have said this before and I say it again. Diversity adds value, controversy makes us think. PP should not be a closed site, but an open one. To me it seems that the ideas floated on the site are the same ice cream with different flavors. Today we get chocolate and yesterday we got Vanilla. We all love ice cream, but once in a while we should be served. Pie, Meat, Rice. Otherwise we will miss the boat. Bitcoin exploded, I am "angry" with myself for having missed that boat and mainly it's because, I kept the gold hat on. That is one error I will not make again. What other ships (ideas,investments,initiatives) being launched today which we will not consider because we keep eating the same ice cream over and over again, just because it feels good and changing the tune is risky and we will shock our audience. I for one, am here to be shocked and not to hear the same pop music. I say this with all the respect to Chris and Adam. Chris is my hero and he is one of the most people i respect in this world. 
My 2c


Davefairtex said,

So can we design a monetary system that takes into account - that even takes advantage of those human frailties, the same way capitalism does with invention, production, and motivation, while not being overrun by rapaciousness?
One interesting aspect of Bitcoin is how the designers harnessed the natural self-interest of the programming community to support the decentralized network... the folks running the creation software.. the, "miners" who expend their CPU cycles in creating new Bitcoins, are the same folks that maintain the Blockchain (Bitcoin's DNA), constantly self-referencing for consistency, etc.  The miners maintain the Bitcoin network, and they benefit by getting the incremental Bitcoins they create.  Interesting ecosystem. 

This also leads to a kind of feedback loop that regulates the rate at which new Bitcoins are made… as the effort needed to create new Bitcoins steps up (this is the mechanism of scarcity enforcement) the CPU time cost increases, hence miners would not be motivated to make new Bitcoins unless, in fact, the value of a single Bitcoin continued to increase.  Based on this understanding, I think it would be possible to project the value of the 18 millionth Bitcoin, or the 19 millionth Bitcoin… based on the expected rate of MIPS cost (always decreasing as computing power becomes more commoditized) vs MIPS needed (going exponential toward infinity for the last incremental Bitcoin), etc.  I have not gone through the exercise, but it might be surprising how high this model suggests Bitcoin value could rise to in years to come.      

Yes, I was just thinking about Bitcoin. I believe there is a fixed maximum of 21 million bitcoins, isn't there?I wonder if a monetary system could be made that had a fixed circulation of 21 million electronic pounds or dollars or whatever?
There would be no fractional reserve banking. Growth would be achieved by deflation. (The money in your electronic bank account would get more valuable as time went by.) Instead of interest, you would have to pay tax on what you have in your account, so you wouldn't get rich by being idle.
Loans could be done similar to a sharia compliant bank account: The bank buys the house or car or whatever, and sells it back to you at a higher price by payments over time.