The Phaserl


The Golden Revolution, Revisited

by John Butler, GoldMoney:

John Wiley and Sons published my first book, “The Golden Revolution”, in 2012; its core thesis was that a longer-term consequence of the global financial crisis of 2008 would be the remonetization of gold. This would occur initially at the international level to settle accumulated international imbalances in trade and cross-border investment. The book then also explored how this might come about, and what the implications may be for the price of gold and the financial markets.

Five years later, it is my pleasure to announce the arrival of the new revisited edition. It contains a new section on the monetary sources of inequality and new chapters on fintech, which address cryptocurrencies and digital gold. The text has been updated throughout to reflect recent developments in international economic and monetary affairs.

The new revisited edition will appear as a special series of Goldmoney Insights over the coming months. This first instalment of the series includes an introduction to my new book along with the introduction from the original edition.

View the entire Research Piece as a PDF here.


“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed prior to 1914, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard. I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now?”1 ALAN GREENSPAN, JUNE 2016

Much has transpired since the publication of The Golden Revolution in April 2012. The Golden Revolution, Revisited is thus more than just a new edition. It is substantially expanded, revised, and updated. There have been significant monetary, economic, and political developments during the past five years that have, in their various ways, reinforced or confirmed certain views or predictions and are worthy of inclusion. Yet there have also been unforeseen developments that, nevertheless, relate to the subject of international monetary regime change and, in some cases, provide for a deeper understanding of our current place in what I call the “monetary cycle of history.”

Let us begin here: if there is one thing that I hope readers of this book take away it is the perspective provided by the broad study of monetary history. This is absolutely essential if one is to understand what may seem a truly extraordinary set of contemporary economic circumstances, ranging from zero (or negative) interest rates; a near-decade of hyperactive monetary policies in much of the world; the continuing existence of too-big-to-fail institutions; persistence of government deficits; and, to bring these abstruse topics home to many, the increasingly evident evisceration of the middle class of society. This latter topic, referred to in dangerously facile fashion as simply “inequality” by most, and deserving of a separate book in its own right, is the central topic in the entirely new, first section in this revisited edition.

Also entirely new in Revisited is a discussion of the astonishing rise of interest, public and private, in so-called digital- and/or crypto-currencies. While Satoshi Nakamoto’s original bitcoin paper was published in 2008, it took the creation of bitcoin in 2009 and several years more for blockchain technology to capture even the imagination of the tech community, much less that of the public at large. But somehow, in early 2014, the topic suddenly went mainstream and publications such as the New York Times and Newsweek investigated and reported on the bitcoin phenomenon and its potential implications.

About one year later, major central banks, including the Bank of England, began to study the topic in earnest and published extensive papers regarding the potential implications of blockchain, as a more general reference to the technology behind bitcoin, rather than the bitcoin algorithm itself. It has subsequently become a mainstream view that so-called blockchain technology will contribute to the disruption and disintermediation of a wide variety of financial and commercial activities and many so-called FinTech (or financial technology) start-up firms are seeking ways to provide practical applications and solutions. Even banks have come to embrace the technology, with internal working groups seeking ways in which to apply it to realize efficiencies and streamline operations across multiple divisions.

It is a discussion of the implications of FinTech more generally that comprises the final new chapter in this edition. The Golden Revolution did touch on this at a few points along the way, but recent developments demand and deserve an expanded and more thoughtful treatment about how FinTech is not only about realizing greater efficiencies in transactions, payments, settlements, and regulatory protocols but about a range of developments which, in my view, are going to facilitate, perhaps even catalyze, a return to a gold-backed monetary system for much if not all of the world. Exactly how this would come about is of course unclear. Of all the various possible scenarios presented in the original edition, the spontaneous, “bottom-up” process of individuals simply refusing, one by one, to use fiat currencies for commerce and to switch to gold instead, seemed perhaps the most far-fetched at the time. No longer. Financial technology could be a game changer in this regard, as I explain at the end of Section III.

It is my hope that this new, revisited edition—nearly a new book some might say— will draw interest not only from the original audience but also an entirely new one that, during the past five years, has become more interested in the future of money, banking, and finance generally. The evidence that the current financial system is chronically dysfunctional is now glaringly obvious amid zero or negative interest rates, poorly capitalized banks, and stagnant or declining per-capita real income growth. The increasingly ad-hoc, strained, even outright illogical explanations of mainstream economists as to why their policies are not as effective as claimed or are producing nasty, unintended, counterproductive consequences, are ringing increasingly hollow. As Thomas Kuhn argued so cogently in his masterwork, The Structure of Scientific Revolutions, these are clear and present symptoms of a fundamentally flawed intellectual paradigm, in this case for the understanding the proper role of money in the economy and, by extension, in society. While even now only a comparable few have been willing to consider that it is the use of debt-backed fiat money itself that is the fundamental systemic flaw, their ranks are growing.

For those who have been following developments closely, such as recent calls by senior economic officials in multiple countries that cash should be outright banned, it may still feel as if we are continuing to proceed down the “Road to Monetary Serfdom,” to paraphrase Nobel laureate Friedrich von Hayek. However, ahead in that road lies a largely hidden, sudden curve: one that leads back along the well-established monetary cycle of history.

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