My recent posting brought up the difference between currency and money. I was queried about it. As said in that writing, most confuse the two or at least conflate them. I meant no insult to those who are in that camp because it is far far more common than one might think. One reason for this conflation is that on a day to day basis, we pull out those $1s, $5s, $10$, $20s, $50, and $100 and vendors accept them as payment. Remember what is printed on each dollar bill, ""This note is legal tender for all debts, public and private". A missing but implied addition is “OR ELSE!”
Here is the legal citation from 31 USC: §5103. Legal tender. United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.
This means that a creditor is legally obligated to accept legal tender toward repayment of a debt. You will see that this is quite funny in a second.
When a national government whether in the US or other nation declares their bills to be legal tender, then it IS legal tender by law and not accepting it is really not an option unless you barter. I'll give you 3 eggs for that hammer…if both parties agree the deal is struck and they exchanged eggs for hammers which can both be considered commodities acting as money. It could also be said that they acted as currency. Currency is a medium of exchange for goods and services. In general, it's money in the form of paper and coins, usually issued by a government and generally accepted at its face value as a method of payment. Hmmm, this seems to say that currency is money, but is it?
Money and currency are interrelated but different terms. Currency is one form of money. Often issued by a government, it is one type of payment that people can use within a jurisdiction. Money, however, refers more broadly to a system of perceived value which allows for the exchange of goods and services. How interesting here to use “perceived value” rather than actual value. To have actual value, something would have to have a USE CASE. Like those eggs in a barter situation have the use case of being nutritional food for humans and the hammer's use case is that works great for pounding in nails or skulls. This use case makes them useable as money. But who carries around eggs and hammers. So many items could function as money in a barter system and did in fact. Eventually as mankind advanced a few commodities became widely agreed upon as having value around the world. These were Gold and Silver and others. In addition to gold and silver, numerous commodities have been used as money throughout history. These include cowrie shells, salt, tobacco, tea, cacao beans, and even cigarettes. These items are considered "commodity money," meaning they possess value not only as a medium of exchange but also from their use as something else. Maybe you can now see that the use case could be localized as with cowrie shells or far and wide as with Gold.
The Romans, a fairly modern and sophisticated nation state with a legislation that passed laws etc used gold and silver and at times other metals to coin their money which was their currency. It was money due to its use case and currency due to the fact of its broad circulation among the populace. It was instantly recognizable and accepted because all knew it represented stored vale, and contained a specified weight of valuable metals being either gold or silver. That weight could be degraded by shaving off a little here and there thus cheating the recipient and wrongfully enriching the one doing the shaving. This is a very good analogy for what governments do to their currencies purchasing power through inflation. If there were $10 in circulation and the government printed another $10 then there is $20. If the number of goods remained more or less constant each $1 would buy less, in this case 50% less. This is called debasement of purchasing power. It is a modern yet age old phenomenon. When currencies get debased, people using that currency have less purchasing power and thereby get poorer and their lifestyle suffers.
Debasement is much harder to accomplish using what is called “sound money” a commodity like gold or silver because the value is not derived from an edict that one MUST accept it, it is on the other hand, accepted willing due to its intrinsic vale. that is NOT merely a perceived value, but an actual value that has a use case, rarity or limited quantity and a long history of being a store of value. The idea that some piece of metal stores value requires agreement. That history can simply be a blacksmiths hard 4 hours pounding out horse shoes or a doctors care or a mechanic fixing your carburetor on and on. These and the myriad of valuable life skills and goods are made easier to exchange using the highly agreed store of their value as money and currency. There is no need to verify that those horse shoes were made or the doctor cared for his patient because the very fact of possessing the gold or silver money/currency was self evident proof of value. The only thing needed was to have a reliable way of telling if the gold or silver was real and/or at the prescribed weight. Maybe you see the point here, that counterfeiting or cheating is age old. In those old western films you'd often see some wrangler bite a coin before accepting it to test its veracity. This practical and crude method was used for the authentication of gold since this metal is very malleable. Today, we have modern devices that can verify gold and silver for both purity and weight. Coin shops use these to prevent getting scammed by forged coins.
Back to currency. Carrying around gold or silver or eggs for that matter was not safe and in fact was cumbersome especially for silver which required more of it to get to any particular value. Gold on the hand stored more value is its compact form and gold and silver developed a ration of their respective values like 50 ounces of silver = 1 ounce of gold. This ration is still watched and currently it takes about 100 ounces of silver to 1 ounce of gold. This ratio varies but god's ratio as it sometimes called is more like 7 ounces of silver out of the ground to every 1 ounce of gold out if the ground. The rarity of that ration can explain why gold is the more valuable of these two metals. In fact gold is referred to as God's Money by many. The use of gold and silver as currency was common in the US and is the only money mentioned in the US Constitution. It might surprise you to learn that there is no Constitutional right for the federal government to issue printed money or as its called FIAT money. Article I, Section 8 of the Constitution gives Congress the power "To coin money, regulate the value thereof, and of foreign coin". This clause, however, does not explicitly mention the printing of paper money.
The US Constitution does provide: Article 1, Section 10 of the U.S Constitution, stating that “No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts.
That term FIAT means by edict or it could be meant under threat as in jail, fine, or other punishments even death. But the States cannot issue FIAT money, only gold and silver coins. Florida is the latest in a string of States officially passing gold and silver as legal tender laws. This trend exemplifies the mistrust in the USD and seeks to give its population a choice of using the debasing USD or God's Money which holds its value and cannot jsut be orinted at will. It takes lots of work to get gold and silver out of the ground and that is surely part of it intrinsic value.
Some ask if there is enough gold and/or silver to be used by the billions of people on Earth. That answer is yes because the weight is divisible. The weight of gold is divisible into very small increments, with the most common unit being the troy ounce. One troy ounce is equal to 31.1034768 grams. Gold can also be further divided into smaller units like pennyweights and even finer increments like milligrams. But it is unlikely that anyone will be carrying around large amounts of gold or silver again and a new currency backed by gold or silver can be issued. This would not be a FIAT currency but one that simply represents verified stored gold or silver held in depositories. This is the simple definition of sound money. A currency backed by a real intrinsically valued commodity. Texas has established a Depository for Gold and has plans on giving its citizens access to it accompanied by a modern digital ledger (think block chain) and associated card that when used will reduce that user's gold holdings in the Depository when transferring it to the vendor accepting the card. This already exists in private cards like GLINT. This card is actually a prepaid debit card under the Master Card system. The prepaid part is not USD but Gold by weight that gets instantly converted to whatever currency the vendor requires. In the USA that would only be the USD due to the legal tender thing but make no mistake, the users of GLINT cards are sending their gold held in reserve in a Swiss vault. It's a very cool system and I use it. There is an associated cost to the GLINT system when buying and storing gold or silver within that system. But it is modest and far outweighed by the escape from debasement of currencies. I have not calculated the exact experience I have had but suffice it to say that Gold has risen 28% in 2025 so far while the USD has gone down in purchasing power by 2.3% which is the inflation rate. When you hear “inflation” just think of a debased purchasing power and you will see the value of GLINT. I am not a shill for GLUNT, just a user. I also advocate for Goldbacks a form of real gold encapsuled in a beautiful foil like currency. You can lear more about it at www.goldback.com. I display a Goldback on my landing page so take a look. These are works of art as much a 100% gold in the weight described on the bill.
Maybe this long writing is of interest and you'll be encouraged to learn more about Sound Money. It is a current hot topic that is bound to get hotter as the USD and other Nation's currencies keep dropping in value. The old sharpy salesmen adopted an expression about the last guy to get the BS drift of their sales pitch…he's the one that gets left holding the bag.
Note:
The expression "left holding the bag" originated in eighteenth century Britain and spread throughout the English-speaking world. In this context, a person left holding the bag is stuck with the stolen goods, taking the blame from the police while the rest of a criminal gang escapes
OK then, try not to be the one left holding the USD bag.
Best,
Donn Marier
DM-Your Own CFO