Arizona Governor Ducey Vetoes Gold

In my testimony in support of the gold legal tender bill this year, I discussed failing pension funds. Retirees who count on their pension checks are being told that their monthly check will be reduced by up to 60%. This is devastating to them, obviously. What isn’t obvious is the cause. In the news coverage of this, the angry pensioners are blaming the union, the fund manager, and Wall Street in general.

None of them point the finger where it needs to be pointed. The Fed has centrally planned our interest rate downwards, ever downwards, for 35 years. Now a 10-year bond pays a mere 1.7 percent interest. Pension funds are designed to invest and earn a real return on the money collected from workers’ paychecks. This breaks down when the interest rate collapses.

There is no cure for zero interest rates (and negative in Europe and Japan). The central banks have created a monster, a Frankenstein that is now ravaging the economy and especially those who depend on fixed income.

It is no longer possible to earn a yield on paper money, without taking undue risk of precisely the sort that retirement funds should not take.

The only antidote to zero yield on paper is a positive yield on gold.

I explained to the legislators that this bill would not fix the problem in itself. It is a necessary but not sufficient step.

I made a different argument to Governor Ducey. Most legislation creates winners and losers. Those who will be hurt by a new law of course lobby against it, and may become enemies of the governor for signing it. This bill created no losers. No one would be hurt by recognizing gold as money. It would have been good for the state, adding jobs, and even tax revenue.

Unpersuaded by either the plight of the pensioners or the prospect of business growth in Arizona, Ducey vetoed gold. This is his second time to shoot down gold.

I have just two points to make about this. One, let’s stop perpetuating the myth that Republicans—or even pro-business Republicans as Ducey brands himself—are for gold. This is a big reason cited by Democrats for why they are against gold.

Two, Governor Ducey knew he could get away with this veto because few people care. While our monetary system drowns under zero interest and runaway debt, people are worried about the Kardashians and the gender of Bruce-now-Caitlyn Jenner.

You had better start letting your government know that you want to start removing the roadblocks and start moving towards the only honest money: gold. No one knows how much time you have, but it is not that long.

16 replies
  1. kinghigh says:

    I have only ever voted once in my life and that was for proportional representation a few years ago. And like a bunch of sheep, my brother included, the British public voted against this because they fell for the ‘it would cost too much to implement’ argument.
    So in my country you can’t even vote who you want to be elected you have to make a tactical vote like voting for someone who will keep someone else out. In the last election something like 15% of the population voted for a Nationalist Party that was always seen as bit of a joke but now has an enigmatic leader. Basically a one man party. 15% (if it wasn’t 15 it was a substantial %) and only a single representative was elected as an MP. I think I read somewhere it would have been 23 elected MP’s if it had been proportional. One day the British people will realise they need to change the voting system but it won’t be for another 2 or 3 elections down the line. That’s 10 – 15 years at least.

    If we can’t have honest elections how do we vote for honest money? And if there was a vote people would stick with what they know anyways LOL even Switzerland voted against their banks holding more gold. Just before that election I asked a Swiss acquaintance – who has an interesting and intellectual occupation – what he thought of the vote. It was the first he had heard about it.

    However thinking about all this now it wouldn’t surprise me if the Euro gets backed by gold sometime. That would be a way out!

  2. MichaelTzu says:

    Yes – I too am from UK and even I had to explain the concept of money to my bookkeeper and accountant. My account disapproved of me buying gold and silver in November as an insurance hedge against bad times. Well I am glad I did.

    By the way it all starts with education. Watch or read anything by John Taylor Gatto, on Youtube.

    His voice takes a bit of getting used to but really nails the dumbing down of kids and hence adults.

  3. kinghigh says:

    And talking about people voting for what they know rather than voting for change let me quickly say the UK would be better off outside Europe but naturally we will vote to stay in.

    But did you hear if the vote is a low turn out and people vote out and it’s really close like 49/51 then Parliment would be within its rights to say not enough people voted so it doesn’t count and we stay in. I mean if that’s right and if that happens it will be time to ?

  4. Rueffallais says:

    Even if you are able to reach the top of a country in order to change the system you will not be heard, or more precisely the system will rule you out. THe only example I know is Jacques RUeff with De Gaulle (Ok I am French it helps to give the example).
    The conclusion is therefore quite a pessimistic one , Rueff had the same one : “Le suicide de l’occident”.
    History seems to teach that the only way out is not a good one.
    If your theory of the basis is accurate , the metal is not really missing. Therefore I see only one explanation : THe only game is not to have the People to get the metal, the metal has to be funneled to Central Banks (even from other countries) to prepare something.

      • Rueffallais says:

        I am just a Rueff fan reading all what he could have written. At the end of his life , after organizing the meeting between Chinese officials and De Gaulle that never occured due to De Gaulle’s death Rueff was writing “le suicide de l’occident”, never published (the Rueff family has still some document but not easy to have access).
        Very interesting your blog , it gives a lot to think about. I am still investigating on lessons from history because according to me that’s where lies the true understanding of what’s going on , thanks for what you are doing

        • Rueffallais says:

          The suicide may not be for everybody. I think the key of all the explanations lies in summer 1927 in long Island.
          If your theory is right the gold is not scarce at the moment, therefore some entity is funneling gold to where it should go in order to prepare for the next phase , phase that will not be a nice one. Eery similarities , history doesn’t repeat itself but gosh it often rhymes and in our strange world it is when gold moves.

  5. jwebbb says:

    I think your idea of exchanging gold bonds for US Treasury obligations is brilliant. And I think that a president Trump would be open to it if you can somehow get the message across. That is our best bet. He seems tortured about what to do about the debt issue. He certainly is the only candidate to have brought up the subject and talks about it often, except for Hillary when talking about Bernie Sanders to say that Bernie’s program would bankrupt us. But nothing about the present debt and what to do about it – meaning that she can get away with not bringing it up, since few people seem to care, and even if they did, no one knows what to do about it.

    • Keith Weiner says:

      It is a pleasant fantasy to think that any politician on the scene today would listen.

      Trump’s initial salvo to just impose haircuts on Treasury bond holders is terrifying. I have no idea what he might want to do–and I bet he doesn’t either!

  6. Theosebes Goodfellow says:

    I have to concur that the gold bond idea is the way to convert US debt into viable, extinguishable debt. It is also about the only way to get the US, (and subsequently the rest of the world), back onto a gold standard. But as James Rickards argues, it would have to be a well thought out gold standard and it would require fiscal responsibility from Congress to never allow the country to overspend again.

    This issue of gold as money and gold bond debt is another example of a need for a limited constitutional convention. There are issues that the country needs to address that have sat too long on the sidelines and whose resolution must be addressed with calm, judicious appeal.

    Keith, I found the Governor’s letter to be thin on explanations as for the reasons for his veto. It required me to read the bill to see upon what his objections may have lain, and the only conclusion that I can come to is that he was not going to allow PMs to be considered money and therefore not subject to capital gains against FRNs. Keith, if you have another interpretation I’d love to hear it.

    • jwebbb says:

      Even if there were a state that allowed a suspension of the capital gain tax for sale of precious metals on that state’s level, the tax rate that most states charge pales in comparison with the 28% federal tax rate and so I doubt if any behavior would be changed as a result of such state action. The best you could say is it would be a weak start.

      • Theosebes Goodfellow says:

        And that was the argument I was making, jwebbb. That although the state revenues would not be impacted to any significant extent, the governor would be barking right up the federal tree, and he, (Ducey), probably has no stomach for a serious tango with the IRS. To propose and to implement gold as money at the state level imperils everything that is the federal monopoly on Monopoly money. I mean, good heavens, can you imagine what would happen if EVERYBODY, (the other 49 states), did that? Tons of people would go to PMs just to beat inflation that supposedly doesn’t exist. Obviously, that’s all crazy talk.

  7. sbailey says:

    Keith, you cannot be that naive. There is a loser constituency for this bill. I’m very certain that Ducey was reminded of this by that constituency. That constituency is the central banking bureaucracy, big government which is funded by the central bank and debt-backed money and big banks which are part of the central bank cartel and have their losses socialized. Yes, it is true that in the long run everyone benefits from gold money. But, all of these constituents are driven by greed and power and cannot tolerate anything that threatens either.

  8. bbartlow says:

    Well written.

    Just wondering if the statement “The only antidote to zero yield on paper is a positive yield on gold” can be expressed as an equality. haha

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.