Is a sound money bank on the horizon? Part 2.

 A SOUND MONEY BANK ALTERNATIVE

A BANK THAT WOULD PRESERVE YOUR WEALTH

The possibility of a new banking system is greater today than anytime in recent modern history. While we watch as most western governments hope to introduce a Central Bank Digital Currency, CBDC, which would be a fiat currency on steroids, without any freedom and a complete control of what can be bought or sold with the attached strings of government regulators. It would be the ultimate loss of freedom and the dream of authoritarian government. 

The need for an alternate is now a must to preserve one's wealth and freedom. Such a bank would not be a weapon to be used against existing systems but an alternative that would function for those who choose to take advantage of this sound store of wealth. 

At present, such a bank is in the theoretical stage, but is being considered by the BRICS economic group. While the following blueprint for such a bank is not proposed by any group as yet, it would be starting point for discussion and explorations and I believe a sound banking system.

Such a bank would need to be controlled or managed by a diverse group of representatives of several  nations, hopefully as many as 10. The banks charter would be the foundation of the bank and would be a gold backed currency. While seed money would be needed that could be repaid in the future, it would be a new currency without control of any one nation. Deposits into the bank would only be accepted in gold or a currency that could be converted by purchasing gold. The bank could facilitate the purchase of gold deposited in currency. The gold would then be stored in the bank or banks of the new banking system. In exchange for the gold, the depositor would be issued a new currency that would be backed by the gold held in the bank. The currency could be exchanged for actual gold if desired.

Example: Today gold is $2600 an ounce, it is differently priced in other currencies. So, if you deposited an ounce of gold or the equivalent value you would be issued 2600 units of the new currency, or possibly 260 or whatever percentage or valuation should be decided upon. This currency could redeem an ounce of gold in the future. No currency could be issued or created without a corresponding deposit of  gold. Quarterly reports would be needed and audited to ensure the transparency to all.

It costs money to run a bank and part of this idea would be that every deposit would require a fee of 1/2 of 1 percent of the deposit. Each depositor would then be issued 1 share in the bank for each ounce of gold deposited or fraction thereof. This bank would be a safe sound preservation of the depostors asset and an investment. While initially these shares would have little value, but as the bank grew, and it surely would, the bank then would be in a position to make loans and make a profit on the loans. The depositors then would be entitled to dividends on those profits. The bank could only loan a modest percentage of the deposits on hand, not more than the actual amount of deposits, as is the case now.

At present we have seen the disaster of the fiat system with a continuous loss of purchasing power of your asset and hard labor, an incentive to acquire debt and repay with devalued currency, often saddled with debt way into one's retirement years. We now see a world awash in unpayable debt that is indeed unsustainable. A debt that will only be reset at the expense of the workers and savers of the world. 

While this new bank theory is just that, it is very likely that something similar will be implemented in the near future, maybe not as described, but with a currency that is not able to manipulated and debased by government.

Any such currency can be used alongside existing currencies, but would be the most stable store of value and least prone to be inflated or devalued.