Financial Structures: A New Gold Standard With Anthem Blanchard


TWS 38 | Financial Structures


It’s no surprise that financial structures drive so much of the world: how people interact, how people do business, and how people consume. However, with the changing times, financial structures are also adapting, which means that it’s everyone’s responsibility to keep up with what’s going on and continue to be informed. Patrick Donohoe is joined by Anthem Blanchard, the Co-Founder of both AnthemGold and AnthemVault. Anthem and Patrick hit on the many ways that financial structures, as they are, play into our daily lives. They also dive into what could be coming next and how people can put themselves in a position where they can adapt.

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Financial Structures: A New Gold Standard With Anthem Blanchard

My guest is Anthem Blanchard. He is the CEO of, as well as Anthem has a long family history of being in the financial services space, specifically around the asset that has proven itself worthy throughout history which is gold. His father, Jim Blanchard, was the primary influence and lobbyist to legalize the ownership of physical gold, which those of you who understand and know history was made illegal during the Great Depression in 1933. In 1974, Anthem’s father put lots of pressure and he did on previous presidencies as well, but they finally legalized the gold. Anthem has continued the legacy of his father and Anthem Gold is a traditional golden silver broker with vaults around the world.

They have lots of inventory where most don’t have any inventory. He has also taken it a step further. incorporates the idea of blockchain and cryptocurrency. It is the first cryptocurrency that is backed with a hard asset, which is gold. You’re going to get a kick out of this episode. He’s a genuine guy and intelligent when it comes to money and carrying on that family legacy and doing some amazing things. We talk about a lot of books and other things. We reference a few different areas where Anthem has been inspired and where he goes to find opportunities.

We have a new YouTube channel. It’s We switched over from another YouTube channel. I hope you’re doing well. I hope you’re taking advantage of this very tumultuous time where it may seem like opportunities aren’t there. I realize how difficult it is looking around and trying to find the good in what’s going on but there’s a lot of it. I hope you are capitalizing on opportunities and seeing how things are going to evolve and improve and how we’re all going to grow from this set of difficult circumstances. Thanks for reading. Thanks for the support. I hope you learned something from this episode.

Anthem, it’s awesome to have you on. Thanks for being here. Thank you for what you do. I’m excited to get your perspective about what’s going on. We’re in interesting times and you have such an incredible background and bring a perspective that most don’t have. First, as you sit back and paying attention to what’s going on, how do you characterize what’s going on in society and in markets? How do you describe it?

What we’re seeing is a great shift in value, understanding value and how we value services, goods, people and other things like health. It’s causing a big inflection because when you don’t have things, all of a sudden it causes you to think like, “Do I miss these things? Do I want these things? What was I doing these things?” It’s perverse in a way. I hate to even talk like that because it’s such a crazy, hysterical time for a number of reasons. I think that there are a lot of good positives that are coming out of this. You have to stay positive. Otherwise, you’ll fall into the doom trap and that’s a death spiral.

My kids are home and they were asking me questions about the music we used to listen to when we were kids. I remembered my brothers and I, my mom likes the band Chicago. It’s their song about you don’t know the value of something until it’s gone, until you can’t do something. You’re right. It’s being healthy or not being able to travel and having to be confined to close quarters. You start to value friendships, freedom, commerce and employment. As you get into the markets, that’s added a layer because you had the hysteria of the Coronavirus. Now you have the hysteria of the markets. You have those two things happening and here in Utah, you have the hysteria of earthquakes. It’s like three waves. As you specifically look at markets, are you surprised by how they’re acting like what’s going on in markets? Maybe speak to the bailout that is about to be passed and what you feel that’s going to do.

Anyone that would say they weren’t surprised by what happened, there wasn’t an emergency federal rate cut for many years and then two happened in three days. That was definitely a shocker. The unemployment numbers. It looks like there’s a chart error because the charts are so high with the number that they put out. All those things being said, you and I being in the United States, we should feel extremely grateful because of all of the 100-plus jurisdiction countries that we could be living in, probably the US will be the best off because it has the world’s reserve currency. Whether anyone else in the world likes it or not, the system is what it is and it’s a dollar system. I think it will fade into the sunset. I don’t expect it to pull a Titanic. We need it and we’ll need it until we don’t need it.

How would you explain to someone that doesn’t necessarily understand why markets would need rates to go down or why the fed stepped in and did this mass disruption to create liquidity? Why did that have to happen?

It relates a lot to the genius that you teach and that you help provide people with infinite banking and different products that provide leverage. That’s a microcosm of how the entire system works. That’s why it’s such an effective strategy. We probably are sitting on 4 or 5-plus quadrillion of US dollar-denominated, they call it interest rate swaps. These are very sophisticated credit instruments that the very largest banks and central banks deal in. When you look at these numbers, $100,000 per person in the US would increase the debt at $33 trillion, which is gargantuan by GDP. It eclipses GDP. In essence, that still would only be less than a hundred. That looks like a total US dollar derivative. There’s a massive deleveraging that’s happening. At the same time, there’s also a releveraging happening by the Federal Reserve because they agreed that US Treasury and part of the bailout to bail out the fed at least $500 billion for whatever.

In an attempt on the government side, that’s why you’re seeing this fiscal policy pushed by both Trump and Bernie Sanders and everyone in between of having to put dollars out there. An old friend of mine, Mike Maloney, told me many years ago that he expected one day to see lifetime tax refunds. I thought that was curious but in a way, I was like, “You might be right.” I think now it’s more evident than ever of his theory probably being proven true there. I think that’s the path because the system needs it for its existence. It needs to be reinflated with a value from the base level as possible.

What happens if it doesn’t get it?

We’re going to see massive credit contraction. In this day and age, because of what happened several years ago, the Federal Reserve spent so much time. We had experienced the longest bull run in security market history. The Fed, Ben Bernanke, Janet Yellen, the whole regime spent so much time putting in all of these backstop mechanisms to be able to show signs of strain with a push of a button. Kashkari came out and said it, one of the big fed heads. They’re going to push the button and they can print more. They can buy whatever they want. It’s what discrepancy of what they’re willing to buy. That’s what it comes down to and how much.

I know why that’s a good thing. If you have so much debt out there and you have businesses using debt to grow. People are using debt to go to college, buy a house and buy cars. I can see why it’s a good thing, where you have the fed stepping in and ensuring that that continues to happen. Why is it bad that that continues to happen? We always hear the positive. What’s the downside? How are we ultimately going to be even more negatively affected?

The downside is that the reality is 95% of the value will probably go to less than 5% of the people. The reality is most of us will get hurt more because our goods and services like what we buy and sell every day relative to what we make every day will become harder. It will become more costly, more expensive for most of us to live. You read about billionaire, art collections of CEOs and public companies that were bailed out. You can start seeing where a lot of this value goes like Art Basel, people buying bananas that are rotting to take the simple deduction because then you get the appraiser to appraise the banana that you bought for $200,000, whatever. There was a great meme about this.

We're evolving away from money to barter. Click To Tweet

You take that appraisal thing and you donate it, then you get the deduction. You get the huge write-off from all the stock that you sold that you pumped up with all the buybacks. You decide from the zero interest rate policy or even before we went zero, still the rates were ridiculously low. If you were a big company, you could access them. If you or anyone else, you couldn’t unless you’re smart. They’re trying to find retail investors. The best way to get yield and leverage is a big part of the game.

What do you feel is the end game? A lot of these activities and what’s going on can’t happen forever. Plus you have a very globally connected world where when we do something in the United States, because of how we exchange globally, there’s an impact across the board as we’re putting $2 trillion into the economy. What’s amazing is I feel like the wall is being pulled over people’s eyes because there are these guys who are like, “You’re going to get $1,000. You’re going to get $500 per child. You’re going to get this money.” That’s a small portion of the bailout. It’s more than double that as far as other money that’s going to be created and go to certain places. As you’re talking about corporations that had their hand out for stimulus, whether it’s Boeing. It’s every industry. Everyone has their hand out. Why is it a bad thing that companies have to get to that point in order to continue their operations?

It’s a scalability story. That’s what you’re alluding to. What this whole problem is showing and exposing is that we’ve reached the limits of the scalability of the current economic system that we’ve had for thousands of years. That’s been a hierarchical, centralized, money-based, bank-based system, lending and fractional reserves ultimately to make up for the fact that none of us can trust any of us 100% because it’s impossible for any of us to prove 100% anything that we’ve done in the past. Because there’s always doubt, it causes fear and collusion to be necessitated. Who do we study in history? The people that get the wealthiest and the people that killed the most people. Are these things coincidences? No, they’re all a fact of what I call force commerce or forced marketplace. We’ve had to necessitate rules of force, reprisal and punishment in order to try to enable trade in the world that we lacked trust. I think what’s happening is that people are starting to appreciate this point because for every $100 of debt that the government, the fed, central bank around the world or government might add, at this point, they might only be getting $0.50 or $0.10 of new economic growth.

It’s diminishing returns. We’ve never had negative interest rates for this long of a period for this many debt instruments ever for thousands of years of recording in history. I was a finance accounting major and EBA. It defies the whole concept of risk-free rate. Once the treasury goes negative, which I expect it will happen eventually, probably in the next several months. That defies all finance axiom. That is the axiom of finance. You’re taught in every first finance class, the treasury is the risk-free rate. That’s one of the basis is that you apply everything else in finance on. I look at it like we’re moving to barter. That sounds crazy, but it’s moving away from this idea of a violent currency that has to be defined by people, governments, central banks, some third party conduit of value.

You want a good, here’s a key for it. You want a service, here’s a key for it. You want to get that key for good or service, you get that key and you trade. All the headaches of all your accounting, your bookkeeper, your auditor, your reconciler or your inputter messing up. All of these traditional business headaches that you and I deal with every day. This is going to be eliminated with the commercialization of Bitcoin. Bitcoin being the first trusted historical record that man has ever created and being the strongest historical record that men has ever created has led the path to create all these other communities.

What these blockchains are, they’re communities. They’re protocols technically, but they’re communities of people that believe in the value of the service or good that provided so much that they’re willing to contribute to the proliferation of this better service. This is the era we’re going to see. It’s going to be cooperation, voluntary-based instead of this idea of you’re forced to inscript in the government’s draft or this or that. It’s forced. Volunteerism isn’t really volunteerism. We’re going to be in a much better place. I hope we get through this time quickly and peacefully as possible. That’s my greatest hope.

What has to happen in order for a new system to take place? Because I look at what the fed has to lose, what corporations have to lose by the system that we’re in. Also when there is disruption among people, the emotions spread quickly. Look at the toilet paper idea. I get it. I know why a person would respond the way that they responded. It’s very irrational but we all do that. We’re all human beings and are susceptible to that. When somebody is in that fear and uncertainty mode, is that the time when somebody looks to a different system or are they looking to the same system for help and guidance, which is happening? What do you feel has to happen in order for us to go to maybe a new monetary system?

I think it’s both depending on the personality type. You can look at it by the numbers. Even the doom website like Zero Hedge were showing that the US savings rate is about 8.5%. I remember reading articles years ago, it was zero or negative. That to me is a great deal of this new devastated nuclear looking landscape that we’re looking at with stocks and monetary policy. Something that’s encouraging to me is that people are thinking about savings. That shows that people are thinking in that behavior. The fear part of it is starting to make people think about, “The way that I do things, how secure is it?” One of the areas that we specialize in is ransomware. I would argue the biggest under recorded story of 2019 and 2020 is a number of infections of ransomware.

It tripled in 2019 and year over year, 2/3 of those were government debts. The vast majority of them went unreported. I know of one case in Los Angeles in particular. You’ve never heard of this story. The City of Torrance got it. Another city that’s arguably the most important to a certain industry, that’s arguably the most important to the country, got hit twice in 2019 and didn’t report it. $7.5 billion of reported losses in 2019, 2/3 of those were government. Bitcoin ends up solving this issue because of the way that it’s distributing the data, rather than centralizing the data, which is what we have. Everything is centralized, whether it’s Google or Amazon or any of these services. There’s a central company and they might have decentralized depots of servers but at the end of the day, you still have to rest your information on one instance and then you’re on there one gigantic stride.

TWS 38 | Financial Structures

Financial Structures: Whether it’s Wall Street or big business, what they got away with was placing the blame on people’s irresponsibility with their mortgage, but that’s not what collapsed the market.


What they call public protocols is the techie term that blockchain was. There’s information all over the place. It’s like having an Easter egg hunt. They’re hiding a bunch of value all over your property instead of in one place with the additional benefit that they have to get every little piece of the code and put them together to have the whole thing be a value to them. This type of architecture is a hundred-plus times more secure than what exists now. There’s been a lack of recognition because even a city of under 100,000 probably has over $100 million budget if it’s somewhere between 50,000 and 100,000 people in this country. We’re used to throwing money at things, more municipal bonds, more bonds, more money into the same location, areas and things.

It takes times of stress to point out where the breaks are. We’re used to doing this in business all the time long, especially in software. They call it stress testing of the software where you do all kinds of crazy things to it in preparation of what happens in these what-if scenarios. I think we’re experiencing one of these macro what-if scenarios of the society. It’s causing us that I have a lot of inflection whether we like it or not, whether we think it’s a conspiracy or not, whether we think who’s behind it or it’s nature or not. Whatever it is, irrespective, it doesn’t matter.

To me, disruption is good. You’re hitting on something that I hadn’t thought about. I’m going to try to articulate it so that the audience can understand it. For those that don’t know what ransomware is. We got hit some time ago and thankfully we caught it within a day. We had cybersecurity insurance and we were able to shut everything down and do new authentication. It would have cost us $300,000, $400,000, but we were able to do it for our deductible, which is $7,500. I think our premium went pretty high at this last insurance. Our systems are amazing. My brother is second to the chief legal counsel for a big hospital network in Colorado and they got hit.

They had their information taken. They weren’t able to catch it and they had to pay $2 million or $3 million in Bitcoin. My brother is like, “No one even knew how to get Bitcoin.” It’s one of those amazing things where it’s happening everywhere. What it’s doing is it’s causing people to realize like, “Our systems are vulnerable. We need a new system,” but it hasn’t gone to the money thing yet. That’s what you’re more referring to. It’s gone to compromised systems. Being able to create stability to create security there, but when it comes to how you do transactions with other people, that’s what you’re referring to. It’s that second level.

It’s a little of both. For example, we’re talking with different officials in different states like Louisiana or Texas. Louisiana has been under a state of digital emergencies since August of 2019. They opened up a cyber-security fund like convention centers, state DMVs, the property assessors in cities getting hit. New Orleans is already over $20 million of losses and counting. Baltimore is over $30 million because they refuse to pay. The only way that you can get this data is to pay. They’ve been hitting their heads against their titanium walls.

We were in the gold business. We’re originally online gold dealer. We’ve started building a gold Bitcoin effectively years ago. Part of the obstacle that we stumbled on was how do we secure this stuff in the vault? How do people know it’s real? We ended up building inventory software called Hercules that we then realized you can apply this to anything. We anchor the information into Bitcoin effectively. By doing that, it provides any of that data with 100% assurance that no one tampers with it. That date timestamp, that information got saved that nobody could have gone back and changed anything. That’s part of what these viruses take advantage of because all it takes is one email, one bad attachment, one bad link and that’s it. Someone’s downloading Ariana Grande, bootleg, RAR file on a Win that hasn’t been updated and all of a sudden, the whole Windows environment and that whole organization is corrupted and it’s under ransom.

I want to make sure we hit the ransom piece because they’ll get into your systems. They’ll take your data, people’s names, phone numbers, addresses, Social Security numbers, medical records, whatever they have. They’ll take it and they may even lock you out of it. They’ve done that in some instances. Even if they take the data then they’ll say, “I have all this data, here’s proof. It’s going to go on the internet, the dark web unless you pay this.” I want to make sure that people realize that.

Sometimes with states, they even paralyze the actual mechanism. It was massive. NPR and Wall Street Journal did cover this one, but it was more like how Lubbock staved off the infection because they were like, “We ended up catching it early and unplugged it,” and someone didn’t click anything probably to have a code with the network, so that’s good. Lubbock did that but probably the other 21 cities didn’t. They probably got hit with a $3.5 million bounty that they probably paid because the story died after that. That’s what happened. Imagine if you could provide someone with an application like a Dropbox on the data side that’s ransomware resistant from these email spam attack. That’s what we’re doing. All of a sudden people are paying attention, not because they were paying attention before with the ransomware so much, but because of the Coronavirus. It’s a psychological thing. It’s causing people to stop and think more deeply a little bit about things.

We’re creatures of habit. The majority of what we do is unconscious and we’ve been used to doing it. You don’t adopt new behaviors unless there’s some disruption that causes you to realize, “I keep doing that. That’s not good for me. I need to figure out something else to do.” Let me gravitate towards what I’m being coming aware of talking to you because as I look at the question I asked, is it going to take a collapse or more disruption for people to adopt a new system? I’ve thought about it. What has been inspiring to me with this whole pandemic is how much humanity is raised to the occasion. We’re looking at the government for all the solutions. At the same time, I look at all the amazing technology, whether it’s the 3D printing of masks or whether it’s factories figuring out how to do ventilators. The guy that invented a ventilator that you could 3D print but is getting sued because of intellectual property stuff. It’s one of those things. Peter Diamandis, I’m not sure if you know who Peter Diamandis is. He’s in your neck of the woods.

It takes times of stress to point out where the breaks in the structures are. Click To Tweet

I got to meet Peter luckily at a dinner.

I’ve met and heard him speak a couple of times. He has such an amazing perspective of the world and he helped me back in 2009 or 2010 when he came out with his book Abundance. Looking at what the XPrize does. Simply being able to say, “Here’s a $10 million XPrize. If you guys figure out how to solve this problem, the prize is yours.” They had $100 million XPrize to solve hunger or to sustainably feed a billion people. Sustainably is defined by less than a couple of bucks a day. It’s one of those things where you have humanity that is intelligent and connected but yet the government is still there because we’re used to having them there. I like your theory, which is you potentially have ways in which people get used to using blockchain for different protection measures and transaction measures. You have humanity coming up with solutions, whether it’s computing or industrial. The global supply chain is totally jacked and people don’t even know it yet. It’s the solution to replace what we used to rely on China for. I think humanity is going to be able to solve those problems and ultimately create a system of exchange, some of your barter comments, that will replace the necessity of a medium exchange being the currency.

That’s well said and we’re seeing it happen. We can have over three ounces of “hand sanitizer” in an airplane. That got abolished. There are all these petty crimes and things that are getting abolished. Why were we even doing these things in the first place? All of a sudden they’re lifting limits on FDA. The latest thing I’ve heard, which would be like XPrize Infinity is to up the crowdfunding limits and there will be no requirement. There are talks about maybe upping it to $5 million to eliminate the income requirements. Everybody creates an XPrize to $5 million if that’s where they cap it. Things are pushing in the right direction. It’s where you’re looking if you want to look behind you or in front of you.

This is a question I wanted to reserve to the end, but I’m going to ask it now. The place where people get their news and information. There are companies that are very tight, whether it’s with the corporate world and needing to have markets to operate as well as contracts with the government. Where do you go to get information that is as pure as possible? Pure, meaning we’re all humans. We’re all susceptible to error. You’re never going to have 100%. Where do you go to get the information that you usually do not get from standard media?

I would say the best place is communities that you already have. Social media communities, chat group communities, WhatsApp, Telegram, whatever you use, whatever you like. Those are great places because you’re going to get all these new stories in there and you’re going to get dialogue from people that you respect in some way. If you’re a loner and you don’t have any friends, then start Googling in points of interest. Go to a website and start commenting on comment groups and see where that leads. Find the community there. Those are the places. Interactive forums of information are critical in this day and age because it’s the one-way channels of communication that have done a lot of devastation and manipulation. That’s what we’re receiving from and that’s what this era represents of hyper peer-to-peer social interaction like TikTok, Instagram, Facebook and Twitter.

How do you disseminate what is an opinion and emotionally driven information that’s valid? That might be valid but it may not be. I was talking to my wife and she’s still freaked out because of these earthquakes. We talk a couple of times a day. She’s like, “Did you hear that Putin put 800 lions on the street in Moscow?” I’m like, “No way in hell did he do that.” It’s a fake news but it’s one of those examples. How do you disseminate what is true and what’s not?

Find an intimate group that you respect like that. Maybe it’s your spouse. Maybe it’s your brother, sister, your parents, grandparents, friends, uncle, aunts, cousin, blood brother, blood sister, whoever it is. It doesn’t matter. The most unintimidating way I think is meet up or Google something you’re interested in. Even like a decent-sized city, there’s probably a group. If there isn’t, create one. If no one comes to that first one, make it a little more general. Change topic and see. The best suggestion ever is stay curious because if you stay curious, you’re going to keep poking. Who benefits? How is someone benefiting from collusion, oligopoly and corruption? These are the ways that people become wealthy.

Our system that’s existed for thousands of years and we live in now were migrating to this new way, but no one uses Bitcoin, Ethereum, IPFS, Tardigrade, Hercules or any of these blockchain softwares yet in their businesses or in their governments. We’re out there to change that. The ideas, better, faster, more efficient, a hundred times more secure to bring about better accountability, better commerce, more peaceful world. There are less arguments about discrepancies to things like numbers that are critical in anything business. All of a sudden, all the conflict resolves down.

This crazy Tiger King Netflix thing, I think everyone should watch it because it’s an incredible entertainment. There’s an incredible amount of life lessons in this too. One of the big life lessons is how something that was two people feuding over baby cats. They went to someone getting threatened for the other person murdering them. All of these lives being disrupted. All these animals being killed, facilities being burnt. Plot spoiler but it’s way more interesting than that because it’s the human personalities that drive the show. To see ego, money, fame, sex, drugs and all these things that we’re all susceptible to and we’ve all done. This is an interesting time for all of us. Some things that maybe we have different access to or not the same access to that causes us to pause a little bit. It’s a hiccup in the schedule on everything.

You hit on something. This is something that I feel these days, it is easier to find what that something is more objectively and that’s incentive. Everybody has an incentive to behave and act. Whether it’s a $2 trillion bailout, a business or somebody writing a book. Everybody has an incentive there. It’s not a bad thing. We’re all driven to do that. We’re married because we have self-interests of wanting something for ourselves. What’s interesting is you have to be the opposite in order to get that. The idea is that knowing what a person is driven and incentivized by is vital. It’s knowing the intention. You go behind the scenes of why does Boeing need the money and where is it going? Why does this paper company, this railway or the NPR need all of this money? What’s the incentive there? Follow the money. You’re going to be able to determine the true story or at least closer to it. When it comes to literature, movies or people that have inspired you, what would you say are your top 3 or 4 that you have learned principles, you have learned truth, you’ve learned things that enable you to discern information and weigh them against what you’ve learned?

TWS 38 | Financial Structures

Financial Structures: It takes only one email, one bad attachment, or one bad link in order for viruses to take over your system and destroy or steal important data.


I’m named after a book Anthem. I have to say that’s an influential one by Ayn Rand. I’m named after an author, my middle name Hayek, a famous economist that my dad interviewed 35 years ago. It’s on YouTube. It predicts Bitcoin in the interview because he says, “The only way for nationalization of money is through some SLI mechanism.” They also started talking about using metal tokens effectively, which is what we’re doing. It’s freaky and you’ll see the comments on YouTube about Bitcoin and Hayek. It’s on’s YouTube channel. That’s a good one because it got some good comments on there. Ed Griffin’s book The Creature from Jekyll Island, that’s a great one. Bastiat’s The Law is a classic. It’s a very short book like Anthem but powerful messaging.

In terms of movies, Matrix trilogy, Star Wars trilogy. Any kind of episodic, even Marvel. Anywhere where you can see a storyline transition. It’s such a long storyline that it transitions between eras. You can juxtapose what’s happening with the change in the film’s narrative with what’s happening in the narratives of society. Sometimes it helps you to look at things differently. It’s like travel is nice. You go to a different place. You still eat, sleep, drink and do all the same things, but we do it in a different place and in a different way. Different things bond on us. That’s why I think film and music, you can call trigger. A lot of these document series on Netflix or an Amazon are great because it opens up some light and some darkness that we all have. We see it in extremes and sometimes gross extremes.

You need extremes. You need both sides.

That’s freedom. That’s their freedom to choose and the freedom to figure out because we’ve all seen people that are given everything. Harry is the best example of the Royals. That’s the best example of somebody who’s been given everything by their DNA. He doesn’t want it. He wants freedom. He wants his own identity. That is more important than money. That’s when you started thinking about what is money? It is a violent currency because it’s like, “Why do we have this weird relationship with it?”

Let’s end with you talking a little bit about your business, which is fascinating. The story of your father during the Great Depression. Gold was made illegal to own personally. You had to give whatever you had. Your dad in mid or early ‘70s influences the powers that be to legalize the ownership again and you’ve continued that. Talk about Anthem Vault, Anthem Gold, and the mission you have. I remember hearing it when we talked years ago about your Anthem Gold. I was fascinated by it and it’s awesome that you have figured out derivative businesses. Why don’t you give the audience an idea of what your business mission is, what you’re doing and how they can learn more.

One last book recommendation is my dad’s autobiography, Confessions of a Gold Bug. That’s a fun read too. The transcript is on Cato Institute‘s website because he’s a board member there for fifteen years. We started as an online metal dealer. We still maintain all the brands. Anthem Vault is a way that you can own gold and silver bullion for open. We have availability. We have access to availability. It’s Lloyd’s insured. You can buy and sell from your bank account in the US. We also have a gold token product that’s interesting named Anthem Gold. It’s available to residents in Texas, Wyoming, Montana and in 170-plus other countries. That shows you how many regulatory tapes there are in the US. You have to get licensing in the rest of the states.

For those looking for a drop-ship metal, because I know a lot of people were having a hard time. We have our Oklahoma based drop-ship dealer of Amagi and AGI metals. It’s famous in the Bitcoin world because it was the oldest precious metal dealer to accept Bitcoin. The founder of Ethereum, which has been the second most popular blockchain after Bitcoin wrote an article about this shop that we bought several years ago and interviewed the founder at the time. We’ve got Valcambi, Eagles and Perth. We can get gold, silver and metal too. If you’re interested, please contact us. We’ve got great support. We’re there to help people.

We migrated to an enterprise business. We have Hercules, which is the enterprise software that we built. We have a development company named Hera Software Development. It’s like our Red Hat IBM and Hercules is a little bit like our Linux Doc. What that is, is like an open-source software to enterprises. All of that’s the same. What makes us a little bit different is that we use this blockchain software and that makes us resistant to ransomware, which is something like the real plague that’s no cure like chloroquine, Z-Pack, vaccine or anything has been created yet.

Better accountability and better commerce lead to a more peaceful world. Click To Tweet

Anthem, it’s awesome to have you on. This has been fascinating. We should do another one this season talking about Anthem Gold and Anthem Vault. Let’s wait to see how some of this stuff plays out because I believe that there’s something about gold that is understood by those that have been around a long time. I think the younger generation will start to understand it better and gravitate toward it. It always happens, generation after generation. The way in which you’ve been able to modernize ownership is pretty fascinating. Let’s do another one. Are you down for that?

I’m down for that. It’s an honor. I have great admiration for what you built and what you do. It’s impressive because it takes a lot of math understanding to be able to simplify what you have and productize. Kudos to you. Anytime you want me on, let me know.

Thank you so much for reading. Anthem, you’re amazing. Thank you. I’m inspired.

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About Anthem Blanchard

TWS 38 | Financial StructuresAnthem Vault was co-founded in February 2011 by CEO Anthem Hayek Blanchard and President Cynthia Blanchard. Anthem brings extensive knowledge of the gold and silver industry to the company. He was raised by legendary goldbug and precious metals pioneer, James U. Blanchard III, who helped restore Americans’ right to own gold and also founded rare coin and bullion company, Blanchard & Company – once, the world’s largest.

A co-founder of cryptocurrency blockchain company AnthemGold Inc. ( and co-founder of precious metals dealer Anthem Vault Inc. (brands:,, Anthem Hayek Blanchard also serves as both companies’ Chief Executive Officer as well as a member of both Board of Directors. He was raised by legendary goldbug and precious metals pioneer, James U. Blanchard III, who helped restore Americans’ right to own gold and also founded rare coin and bullion company, Blanchard & Company – once, the world’s largest. As Director of Strategic Development and Marketing with European-based GoldMoney, Anthem helped develop and implement their current business model, overseeing marketing and product development efforts which resulted in an increase of total value held by the company from $1 million in 2002 to $368 million by 2008; today, the company holds over $2 billion in client assets. He also assisted thousands of clients personally over the years, answering their questions regarding buying and selling gold and silver. From 2010-2014 Anthem served as an independent director and member of the audit committee, compensation committee and nominating committee at Pernix Therapeutics Holdings Inc. (ticker symbol: PTX, traded on NASDAQ), a pharmaceutical company based in The Woodlands, Texas. Anthem holds a Bachelor of Business Administration degree from Goizueta Business School at Emory University, with concentrations in Professional Accounting and Finance.

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Why Certain Societies Succeed And Others Fail with Dr. Richard Rahn

TWS 20 | Why Certain Societies Succeed


Why do certain societies succeed and why do others fail? Former Economic Advisor to President George W. Bush and currently the Chairman of the Institute for Global Economic Growth Dr. Richard Rahn sheds some light on this question as he shares his perspectives on successful and unsuccessful environments.  As an entrepreneur, he lends his understanding of how businesses and people affect economies. He talks about how only a few understand the importance of respecting structures which led to the stagnant growth of their entrepreneurial pursuits.

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Why Certain Societies Succeed And Others Fail with Dr. Richard Rahn

Thank you for tuning in to this episode where we are discussing the theme of entrepreneurship. I hope you have enjoyed and learned a lot from the number of guests that we’ve had this season talking on a variety of topics. I definitely have learned a lot and this is no exception. This is an individual that when I saw him scheduled as a guest, I was excited. It’s someone that I have followed for quite some time and I believe you are going to learn a lot from him. I’m going to introduce him first then talk about what I wanted to get out of the interview, what I was trying to learn from him and I’m hoping that you also are going to learn the same thing or potentially something different.

My guest’s name is Dr. Richard Rahn. He is currently the Chairman of the Institute for Global Economic Growth and is the former Economic Advisor to President George W. Bush and a Vice President and Chief Economist of the United States Chamber of Commerce during the Reagan administration. He’s also a former senior fellow at the Cato Institute and he is consulting and writing for the Washington Times. I met Dr. Rahn several years ago in the country of Belize. I was down there visiting a real estate development of some strategic partners and he happened to be down there as well advising the Belizean government. The group I was with was able to coordinate a dinner with Dr. Rahn.

I still think about that dinner and some of the things that were discussed in relation to Dr. Rahn’s involvement, not just in what Belize was doing, but also a lot of other countries especially in the former Soviet Union, helping to consult with establishing the infrastructure for those countries to thrive. I didn’t know what I didn’t know and back then, that conversation sparked some ideas in my mind and I’ve thought about him and developed more and more respect and admiration for what he has done with his career.

He’s consulted with numerous governments and has truly made a difference. That’s what we get into. The reason why I wanted to bring him on and I’m hoping that you all gain from this is understanding this role of an entrepreneur and the nature of the structure in which they operate. I’ve come to realize that there is these entrepreneurial instinct in most human beings or maybe all human beings. I look at how vital the environment is. He goes into what I would say the hierarchy of the structure of economies, the structure of societies in order for the entrepreneur to thrive. If not, they’re going to leave and the growth of these specific economies or societies will be stifled without the structure.

The reason why I wanted to have him talk about certain things was I believe that there isn’t necessarily a respect for the structure, especially the United States. Very few people have experienced the other side of the spectrum or the lack of a structure in which their entrepreneurial pursuits could take root, take hold and grow. I’d say now, in our day and age, you’ll find that there is a lot of divisiveness with regards to political stances and perspective. This divisiveness, I believe, is creating camps and people are joining camps or aligning with camps without understanding the fundamental reasons behind certain stances on economy.

It’s more that this person believes this way, therefore, I’m not going to give any regard to the structure in which they believe or what they are advocating as the right political or economic environment because they had this name, wear this hat or wear this label. I’m going to discount them completely. I think that’s where we are as American society is we’ve joined these camps more off of emotion than off of reason and logic. I look at going forward and how amazingly entrepreneurial the United States is.

Even though you have an idea of the tax system, if you don't have the rule of law, it still won't work. Click To Tweet

I would say for those of you reading who are US entrepreneurs is to be able to have an understanding of all sides of the spectrum when it comes to the appropriate structure of the economic environment, the political environment and the monetary environment. That we can defend based on principle instead of defending based on rhetoric and talking points. That’s where I believe most people are at now. I look at this conversation as I’m someone who has experienced the pros, the successes of certain structured economies and societies as well as the failures.

I think that within the failure side of things, you learn a lot about what works and what doesn’t. I know we didn’t have a ton of time, but as I researched this interview, watched videos and read articles, especially in the Washington Times where he talks almost every week about these topics. I gained the admiration for how he looks at things and what he’s saying. I think you are going to learn a lot from the show but also learn a lot if you follow Richard and what he is up to. If you’re reading for the first time, we did several months on the theme of entrepreneurship. Previous to that, we did a few months on capitalism.

In 2018, we did seasons on the idea of life, liberty and property as it pertains to one of the more famous quotes and points of John Locke who was a British philosopher. If you like what you’re reading now, definitely go back and read those. We’d love your feedback on the show. If you want to give us some good reviews on iTunes, it would definitely help and if you share the episode with your friends and family would be amazing. You are awesome. You’ve been so supportive and grateful for that support. Let’s go ahead and get to the interview with Dr. Richard Rahn.

Richard, it’s awesome to have a have you on. It’s something I’ve been looking forward to for quite some time now. We met a little more than a couple of years ago. I’ve been intrigued with the work that you’ve done and I’ve been looking forward to asking you some of these questions. Welcome to the show.

Thank you very much. It’s great to see you and be with you.

The thing that has piqued my interest in regard to some conversations we’ve had had in the past is in relation to the perspective you have on successful and unsuccessful economic environments. Why certain societies succeed and why certain societies fail. Maybe start out by telling the audience or teaching the audience some of the universal reasons for these outcomes.

TWS 20 | Why Certain Societies Succeed

The End of Money and the Struggle for Financial Privacy

It’s interesting when you mentioned universal reasons because it is indeed true that if you’re looking at six successful countries, you’ll find them over the globe and you find countries that are failures over the globe. It has nothing to do with nationality or planet or where they’re located on the globe. It has all to do with fundamental policy. We have great success stories, not only the US but Switzerland, Singapore and even Ireland now and places that had very high incomes. Venezuela now is the poster child for a country that is rich. It has the world’s largest oil resources and now is the bottom of economic freedom and incomes have been rapidly dropping for a number of years. The place is impoverished because of policy. When you start off, the key policy is the rule of law and without the rule of law, nothing else works. A lot of us like to talk about taxes and regulations and monetary policy.

Even though you have an idea of the tax system, if you don’t have the rule of law, it still won’t work. Fortunately, the British, when they built the British Empire, there was a lot of downsizing there, but one thing they left around the world was the British legal system, the common law system. Many places it took and worked very well. Each country has adapted it somewhat to its own needs. In other places, it got corrupted and it didn’t work. You and I were in Belize a number of years ago. It’s a prime example of a British territory that was given the rule of law, but they managed to corrupt it and destroy it. Once you have the rule of law, you’ve got to have a competent and honest judiciary to carry it out.

The importance of having honest and competent judges can’t be understated. There is then free markets and socialism doesn’t play and work and we can do mini shows on my why socialism doesn’t work. The importance of having free markets, free trade and taxes that are low on work, saving and investment in capital and labor and underlying economics goings-on. Reasonable regulations in many places include those who are overly regulated. There are a lot of unreasonable regulations. I noticed that a number of the Democratic candidates want to take away my plastic straws and I thought I might even do an article on this that I don’t like drinking through paper straws because it dissolves in the mouth. Some places have these aluminum straws, which are terrible because they’re unsanitary, they break your teeth and other problems.

These stupid little regulations are totally unneeded. Having sound money and by that we need money which is a store of value. The dollar has been imperfect, but it’s been far better than the other world currencies. Get off the gold standard and for all intents and purposes, valor is the world’s standard. Those are the fundamentals. If you don’t follow them, you’re probably going to be poor. If you do follow them, you’re likely to be rich. I’m talking about countries, but it’s also true in people’s private lives. People that play by the rules or honest and work hard tend to do better than those who are trying to find the shortcuts, it usually it doesn’t work out too well.

In my experience, many people don’t have the perspective that you do when it comes to other countries and what they faced as the consequences of not following this hierarchy of universal infrastructure. That’s where you look at a lot of the younger entrepreneurs that have built successful businesses and have become wealthy themselves discount sometimes that infrastructure. Oftentimes, they point to the more socialistic type of structures to essentially help those they consider less fortunate. Do you consider that a slippery slope and why?

It’s naive. A number of countries tried it. People often talk about Sweden being socialist. Sweden’s not a socialist. It had been for about a 30-year-period. Sweden had been very capitalistic from about 1870 until around the 1950s and ‘60s. The social go-getters took over and they nationalized a number of things, but they built a welfare state. They didn’t go overboard with the nationalization. They didn’t go as far as Britain and before Margaret Thatcher, but it didn’t work. Sweden went from the fourth wealthiest in the world to something like seventeenth. The Swedes spent many years ago began to reverse course as Sweden is now much more capitalistic. They still have a big social safety net but when you’re there, everything it was privately owned. They have begun the rule of law. They are quite entrepreneurial.

The dollar has been imperfect, but it's been far better than the other world currencies. Click To Tweet

You can start your own business without problems. They’ve got this social welfare state, which works somewhat in small homogeneous economies. In places like Finland, which is very homogeneous, it works somewhat there. There are still the imperfections, but it doesn’t work in large heterogeneous companies. People always think of this wonderful work, everybody gets along and shares. In reality, it’s not what people do. I think it’s interesting a lot of the very wealthy people in the US who are left-leaning and talk about this thing are also the least generous when it comes to private giving. There was a wonderful book years ago by Arthur Brooks, Who Really Cares, and it turned out that there were much greater donations to greater causes from a lot of what are considered some of the tough guy capitalists than the social liberals.

Do you know that people who you view as the hard-headed businessman give enormous amounts of money to hospitals and all kinds of things and that’s a good way. Particularly in this society, when you get billions of dollars, there’s this sort of pact among a number of the billionaires to give away all the money. How much can any one person spend on themselves? Not that much. Bill Gates stresses the same way we do. Have you ever seen him in a suit? Once in a while. They might have a bit nicer car. The one thing they have is a private jet. This is one thing I like, but for the most part anybody who’s successful they can’t eat more and there’s a maximum size of house you want. They have this test of how far should the bathroom be from the master bed. Because some of these houses were being built that the bathrooms were such as distance from the bedroom that you had quite a trek.

I noticed this has now shrunk back down to a reasonable thing. Most people, particularly as they get older and have to get up in the night or whatever. Kids don’t want to walk 200 feet to the bathroom. The point is there’s an optimum in all kinds of things. When a society becomes sufficiently wealthy, there’s no sense of overdoing anymore. Look at Steve jobs with a t-shirt. The billionaires in Silicon Valley wear t-shirts. A few of them have massive houses, but a lot of them don’t. I live in a fairly affluent community in Northern Virginia and we have a neighborhood pub. I never know if the guy sitting at the next table is a billionaire or runs the neighborhood lawn service. That’s wonderful about the US because it doesn’t matter. We’re all there together and that’s true equality when we all have the quality of opportunity, but not necessarily as a result.

There’s a saying I heard a number of years ago that the secret to living is giving. I was intrigued when a local billionaire to where I’m at passed away a few years ago, Jon Huntsman. He had a chemical company and he was very entrepreneurial. He founded one of the first renowned cancer hospitals and that’s what he said in his biographies. He talked about how he became wealthy because he just learned the satisfaction of giving at a very early time. He realized that the more he grew, the more he could contribute and give. I think that’s something that is very interesting when you look at the Bill & Melinda Gates Foundation and what they’ve been able to accomplish.

I had a bit of a partner and he’s also the senior partner, a guy named Bob Krieble years ago. Bob had invented superglue by the Loctite Corporation. He was a great entrepreneur, but he spent most of the time giving away his money. He used to drive a little Ford Escort around Washington and he’d be up in the CDs and he’d scare me to death the way you drove. I said to him one day, “Bob, why don’t you get yourself a bit bigger car? You can afford it. He said, “The more money I spend on myself, the less money I have to give away.” That was his attitude. I thought, “That’s such an American attitude.”

Look at now where you have Bill Gates is a perfect example where he’s still involved to an extent, but for the most part he’s giving. The impact he’s made on the entire world based on his desire to grow. His vision of having a computer at every home has blessed the world and benefited the world. That’s where I look at. It’s interesting where you have this left-leaning entrepreneurial crowd who in essence wants to delegate that responsibility to government and to distribute wealth through taxation and to take care of those that are less fortunate. I think that’s a very flawed philosophy because the government hasn’t created much. If anything, it’s the entrepreneur. It’s the human being and their ability whether it’s creating things in industry or industries themselves changed the way in which people live. Because in order for them to be wealthy, they have to make lives better for a lot of other people first.

TWS 20 | Why Certain Societies Succeed

Why Certain Societies Succeed: When a society becomes sufficiently wealthy, there’s no sense of overdoing anymore.


In fact, I could argue that Steve Jobs did more to increase the rural standard of living than any human beforehand. With the iPhone and iPad, just of the Apple version, there is like 1.5 billion out there plus all these other versions. For sure anybody on the planet now has it. If you look at the places in Africa, but they all have them and they now do their banking. You’d have a smartphone and you’d have all the world’s knowledge in your hand and things like medical care. Much has stuck you can outsell treatment back. We know that when a typical American comes down with something, the first thing they do is go to WebMD to see how serious it is or whether they could self-treat or they have to go to the doctor.

We look at all the apps that take care of it, things like cameras. I’ve always traveled around the world to go deal with the work I’ve done and I used to take a camera with me, a Rolodex and all these kinds of things. Now, I have everything in my hand all the time. Even poor people around the world have this. That has been enormously empowering and greatly reduced mortality rates and increase this stock of happiness for people. People now know if they have a shortage of something and they know what the world markets are and where surpluses and things are or where shortages are. The markets can arbitrage that over the globe instantaneously. That’s a wonderful innovation and people haven’t thought through of it. It’s one reason we have this apparent worldwide deflation is that the improvements in technology had been so fast that they’ve in certain ways overwhelmed the ability of the government to inflate the currency, which is bizarre.

Interestingly enough, that’s where I wanted to go next. Maybe not specifically to currency, but to maybe the belief systems that you are seeing in the US and American society that may not be in line with what we’ve been talking about. I believe these universal truths are evident in a lot of different respects, a lot of different successful societies. In our day and age, I see a lot of fragileness associated with the markets with interest rates. It starts with the American Society’s belief system or perspective when it comes to how things should operate. What would you say are maybe some of those fragile points that you see that American society is adopting as their belief system?

The biggest problem and you alluded to it is that people don’t understand how the system works and you got a lot of these young entrepreneurs who became rich. They don’t understand why they became rich and how they could do that in the US, but they couldn’t do it in Venezuela. They have the same person. It’s the same genetic structure. This can come from a good family in both countries and in one place, you’re stuck. You have to get out. There was no way to do anything. Then they can come to the US and do most everything. Many years ago, I was very much involved in the economic transition in Eastern Europe and the former Soviet Union. What struck me is when I started working in these countries are all these very smart young entrepreneurial people, but they couldn’t do anything in their own country. They had to get out and then came to the US or Europe or other places, but particularly come into the US.

Particularly, I have worked in Bulgaria and Bulgaria now is a great free-market country. I noticed that the index of economic freedom it’s in the top quintile now. Years ago, it wasn’t. For a Bulgarian to succeed, it was much easier to leave the country. You had all these young Bulgarians who would come to the US and get an education. I used to say, “Why don’t you go back to Bulgaria and help the country?” They say, “It’s hopeless. I’ll stay here.” A lot of them became quite wealthy, some of them who worked for me. I realized that they made the right decision and then Bulgaria changed. They’re the first ones to put a 10% flat tax in and they have a lot of crushes, but they’ve gotten rid of much of it. It is a remarkably different place now because they started adopting the rules that worked in every place. We take Chile. Chile I think is now the 30th freest country in the world. Many years ago, it was a Marxist dictatorship.

It was horrible. It was a communist country. It hadn’t been that long that a guy named Allende who was in his time a dictator, he was overthrown. It took them a number of years to get a democratic government, but they started the economic reform quite early. Now you go to Chile, San Diego and it reminds me so much the way California used to be before California went downhill. It’s beautiful. It’s got the same climate. San Diego is like Southern California. The mountains come up in the sea and beautiful beaches and it’s gorgeous. The vineyards grow almost everything. You’ll see that change for a country was a poor Marxist dictatorship and now is the wealthiest country in South America. It’s the same people and the only thing that’s different is the systems.

True equality is when we all have the equality of opportunity. Click To Tweet

What I find fascinating is polarity oftentimes gives you a different perspective when you’ve experienced what it’s like to have a dictatorship. I think the value that’s placed on freedom is so much greater. I look at how I characterize the perspective of the United States is we don’t have polarity. We’ve had freedom, we’ve had success and we’ve had an infrastructure for so long that people have discounted its nature. Subsequently now, our questioning is nature. Do you see the same thing or maybe something different?

I think you put your finger on it. We look at what’s happening in Hong Kong. The people who are the citizens of Hong Kong, most of them are the descendants of people who came over in the late ‘40s or 1950s from China. If they didn’t directly experience Communism, their parents or grandparents did. They know what it’s all about. You don’t have to explain it to them and you look at how they’re risking everything. They are unarmed and every weekend and every night they go out there and are protesting what may seem like fairly minor issues, but they’re not because they understand that once they start to lose some of these things, there is a slippery slope. They’ll end up looking like China rather than Hong Kong. You can see that they don’t want to go back and I worry about the situation, but the facts that these people have this courage without any weapons or anything. They go out there and confront the authorities night after night and demand to keep the freedoms that were given to them on the basic agreement between the British and Chinese 50-year agreement.

The fighting comes from that understanding of what it’s like to have the opposite and their neighbor is China. If you look at with regards to one of those universal fundamentals, I know that you have some experience here which is a currency, a sound monetary system. I look at what’s going on in our country and we’ve benefited from so much yet at the same time, there’s a great cause for concern with the deficit spending with the future obligations of Medicare and Social Security and the way in which that is operating. You had some communications with a lot of the Silicon Valley folks that were looking at internal payment systems associated with cryptocurrency or blockchain and figuring out new ways in order to make exchanges. It would not only create more efficiency with exchange but would ultimately reduce the central influence and power around that type of exchange. Do you mind speaking to that?

Central Banks are relatively recent phenomena. They are going to be a short-lived phenomenon. From about 1870 to 1914, the world was on the gold standard, which is the great error of monetary stability around the world because all the major countries were on the gold standard. Nobody could control the price of money, there are supply and demand. It worked extremely well. There were no exchange fees between countries because an analysis of gold in London was the same as New York or Tokyo or wherever. That worked well and the reason it fell apart is that when they went in World War I, the countries needed to borrow a whole lot to engage in war. None of the gold sends you’ve limited to how much should you borrow and we should have constrained war. In fact, it destroyed the money engaged in the war.

We look now and we have these they call fiat currencies. The US dollar has backing and the US dollar is the world’s currency. The backing the US dollar has is the ability of the government to tax, take real resources. Take things that have real value that we all own. Take them to the point of a gun and seize them. They try to manage the value of the dollar. We see they can do this less and less well. The open market operations. Some of your readers learned about some of the tools and most of these tools are less potent than they used to be and are hardly used anymore. I should back up, I was a great fan of FA Hayek, the great Nobel Prize economist-philosopher. In 1976, he wrote a book called Denationalization of Money.

I was a young economist at the time and I was fascinated by the book and I was an advisor to one of my exchanges at the time in Austin. I thought, “He’s nailed it, but mechanically it’s hard to do.” This would be before the modern computer digital age. I wrote a lot about it and played with it to how we could do it. In 1998, I wrote a book called The End of Money looking at digital money and so forth. Eventually, several years ago, the blockchain came along with Bitcoin in the early cyber purchases. The question is where does all of this lead? To start with the basic goal would be to have a worldwide monetary standard which would make trade and investment very easy around the world with these big fluctuating exchange rates.

TWS 20 | Why Certain Societies Succeed

Why Certain Societies Succeed: Central Banks are relatively recent phenomena, and they are going to be a short-lived phenomenon.


Think if you are a German chemical manufacturer. The price of the euro that the Germans use goes up and down considerably against the dollar. Do you put your plants in Louisiana? Do you put it in Hamburg, Germany? Do you put it someplace else? If you make a mistake because you’ve misgauged what the exchange rate would be and nobody knows this for certain. This can be extremely costly too. You can have windfalls or often great penalties. If you had a constant currency throughout the world that everybody used, that problem goes away. A lot of these investment decisions, which are almost difficult to make, disappear and you’ll put your money where it makes the most sense given raw materials in markets and so forth. That is a great promise of the cryptocurrency digital age.

You have then a debate of, “What should be high-end with cryptocurrency?” With Bitcoin, there’s nothing better than a computer algorithm. They kept a scarcity by the system they have and you have to mine the new ones that have increased costs. They have limits. It’s $21 million. There’s nothing real there. Someday somebody will figure out how to hack it. Nobody has to date, but things can go wrong or you have a meltdown of the rural electronic system for some period of time. It won’t be permanent and you see these science-fiction things and not all of them are still science fiction of the electrical grids going down and so forth. If a currency has nothing more than a computer algorithm behind it, you’ll have many more problems that I think are necessary. A lot of people recognize this problem. They’re trying to do cryptocurrencies, but have real backing like with gold or silver, the traditional precious metals.

These are heavily-regulated and I’ve argued that you can use almost any standard commodity, things in trade and organized futures market around the world. We had the standards for a long while. I have a few others who had created a company which we are willing to an aluminum-backed cryptocurrency. That may sound ridiculous because aluminum is inexpensive. It is found everywhere, but it has a number of great advantages. It’s never going to be worth zero. We’re not talking about carrying around aluminum foil in your pocket. The goal is an important flag to carry around. Digitally, she would have stored at any place and still trade and still use it. I think this is the way we’re moving and I had been putting my money and time where my mouth is on the whole thing. It’ll be interesting to see how this works out. When you’ve got a thousand different experiments around the world this time or at any given time.

Richard, one of the conversations we had when we were in Belize was around an idea that you had regarding how to essentially create some sort of ETF or fund around the natural resources of Belize and what that could potentially do to back their currency. It sounds in a similar way what you’re talking about, having something that backs a cryptocurrency.

What I was talking about there was a standard currency board. I used to be on the board when I came out on monetary authority and I’ve got a currency board there where the Cayman dollars fixed the US dollar. Those of us who are on the board, we managed that. It’s easy to have a fixed exchange rate. Years beforehand, I had done some work in Estonia and they had a number of natural resources. The Estonians were trying to figure out how to establish new money and they had some gold in the Bank of England and in New York. They had a lot of timber, oil, shale and so forth.

They were able to put together a currency board which gave total backing for currency. It wasn’t a cryptocurrency, it’s was normal currency at the time. The currency boards I have been, a lot of them is set up in Eastern Europe, the former economist countries. They worked very well for mid-sized countries because they get monetary production outside the political process. Bulgaria has got one and it’s affixed in euro. Bulgaria can inflate as well and have problems. Bulgaria has a very good fiscal policy. Before they had the currency board, they went through a couple of episodes of hyperinflation. Back when I shared the transition project back in 1990, I argued for the courtesy board then they had to go through these bouts of inflation. I got a call one day and said, “Richard, you knew that idea you had for a currency board.” The paper was ready. That is in 1997 and it has worked well since.

If a currency has nothing more than a computer algorithm behind it, you'll have many more problems that are unnecessary. Click To Tweet

That’s the polarity idea. Where ideas and solutions could be valid but if that’s the only thing that a person sees, then it may not be relevant at the time. When they go through some sort of a crisis and experience not having it or something that could have prevented it, that’s when they value it more. That’s I would say one of the last things we can talk about before the end of this fascinating conversation. Where do we stand with the fragile nature of potentially in America and what we experience? I know we have a lot of strength in so many different areas, but do you look at where we’re at as a society and identify one part of it or a couple of parts of it that are more fragile than others.

Yes. The most fragile part is this notion of getting stuff for free and the idea that you can have free medical care and free pensions and so forth. These don’t have to be actuarially sound. That always ends up a disaster. Every place in the world is a separate tribe. It’s like these people, Madison did these debates. It’s like, “People have read no history.” It’s quite astounding to me that they think they can do this. There are some crazy things as Bernie Sanders comes out. It’s like the Soviet Union and all of the other places never existed or maybe in his mind may have worked perfectly.

For those of us who’ve been there, “No, that’s true.” It impoverished everybody. We look at Social Security. We have to make adjustments to the system as we age as a society. When Social Security was first developed in the 1930s, there were about twelve working in Americas for each person’s Social Security. Now we have about three. That at racial continued to decline as people start living to commonplace to 100, 110, 120 or whatever. We can’t have people retire for half their lives and have a good retirement income.

Somebody has to be doing the work. He said, “We’ll increase the taxes,” but the more you increase taxes, that discourages work. You get out of yourself on these treadmills and it’s a formula for disaster. We’re seeing it play out in places in Europe and Japan and other places and in worse shape than the US. In the last few years, we saw it play out in Greece and the average Greek has a per capita income of about 30% less than they did a few years ago. That’s a huge drop in the standard of living and the idea is that we’re going to spend money if they weren’t earning and you can only do that up to a point. At some point, people say, “I’m not going to loan to you anymore.” When that happens, the game is over and that’s what I fear in this country. On the socialized health systems, we’ve seen plenty of those around the world and you tend to get inferior care, queuing and then you always end up with two sets.

I look at it in all the places. There is a medical system for people in welfare willing to pay for their own. They have decent hospitals and state of the art and then there’s the medical care for everybody else’s free. It’s like the VA system. Do you want to go there? One of the great changes the Trump administration made it is now the VA have a choice to either to the VA or go to your own doctor. They call the VA and they say, “We can’t see you for a few months. You can go to your own doctor.” They send the bill over to the VA.

TWS 20 | Why Certain Societies Succeed

Why Certain Societies Succeed: We have to make adjustments to the system as we age as a society.


I refer to what’s going on sometimes as psychological warfare because it seems that rational thinking has been thrown out the door and its demagoguery and rhetoric that has taken over. It’s the hot buttons. It’s the trigger buttons that ultimately get people to react emotionally. When that exists, you throw rationale at the window because history has shown what some of the things that are being proposed have done to societies. Yet history and reason have nothing to do with the conversation anymore it seems.

I thank you for giving me an opportunity to speak to your audience.

You’re still active and you are still writing. Why don’t you tell people about what you’re doing with the Washington Times and other ways in which people can follow you and keep up to speed with what you’re talking about?

I do a column which is published each week in the Washington Times. You can find on the Washington Times website or the InstituteForGlobalEconomicGrowth.orgI. I think you’ve got all the information on that and it appears in a lot of other places. If you Google my name, you’ll find me on Twitter and Facebook. You’ll find 2,000 columns by me and my ideas on the week.

Richard, it has been a pleasure. Thank you so much for your time. It’s been an awesome conversation. I appreciate it. I’ve learned a lot.

Thank you.

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About Richard W. Rahn

TWS 20 | Why Certain Societies SucceedRichard W. Rahn is an economist, syndicated columnist, and entrepreneur. Currently, he is Chairman of Improbable Success Productions, the Institute for Global Economic Growth, and Metal Convertibility LLC. He writes a syndicated weekly economic column which is published in The Washington Times, Real Clear Markets and many other places, and serves on the editorial board of the Cayman Financial Review.

Previously, he served: as the Vice President and Chief Economist of the Chamber of Commerce of the United States; as a representative of the United States Information Agency in a number of countries; as the Executive Director of the American Council for Capital Formation; as a member of the Board of Directors of the Cayman Islands Monetary Authority; as the U.S. co-chairman of the Bulgarian Economic Growth and Transition Project (1990-91); as a member of the Quadrennial Social Security Advisory Council (appointed by President Reagan in 1982); and as an economic advisor to President G.H.W. Bush (in 1988-1989). In 1990, he founded the Novecon companies, which included Novecon Financial Ltd., Novecopter, and Sterling Semiconductor (now owned by Dow Corning). He has taught in graduate schools at several universities, and for the U.S. Air Force.

He is a member of the Mont Pelerin Society and has served as a senior fellow at the Cato Institute, the Hudson Institute, and the Discovery Institute; and a visiting fellow at the Heritage Foundation. He has written more than a thousand articles for newspaper, magazines and professional journals, such as the Wall Street Journal, USA Today, Forbes, The American Spectator, The Weekly Standard, National Review, and The National Interest. As an economic commentator, he has appeared on such programs as the Today Show, Good Morning America, Kudlow and Co., Wall Street Week, the PBS Newshour and Crossfire, and was a weekly commentator for Radio America.

He has testified before the U.S. Congress on economic issues more than seventy-five times. He earned a Ph.D. from Columbia University and was awarded an honorary Doctor of Laws by Pepperdine University. In 2018, Dr. Rahn was a recipient of the annual Hayek Lifetime Achievement Award.

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