Gold rallied last week to nearly match its former record high before futures market sellers pushed prices back down by just a few bucks.

Gold above $2,000 per ounce is already stimulating a huge boost in interest in precious metals among the investing public. Bullion buying is going through the roof – and spot prices could soon go through the roof as well.

Many fear that it would give governments complete control over individuals by allowing them to track, and even block, individual transactions and to impose taxes at will.

In the United States, though, “money” has a constitutional basis so firm that, despite its name, a US government CBDC would not be “money” or even “currency.”

Article I, Section 9 stipulates that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Laws; a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”

Article I, Section 10 says that “no state shall… coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts.”

The reasons for those policies are well understood and uncontroversial. Americans wanted their new nation to be a common currency area, so only the national government could have any monetary policy discretion.

As shown above, all three types of money specified in the Constitution – bills of credit, foreign gold and silver coins, and domestic gold and silver coins – were (and remain) physical bearer instruments.

In other words, they are “current” in the sense used in Section 8 above, meaning that mere possession provides sufficient proof of their ownership.

To tender current money is to turn over physical possession to another party in order to consummate a trade or pay a debt. Due to its physical nature and bearer-legal status, “money,” as used in the Constitution, can be used anonymously as a means of final payment.

Can the government say that CBDC is now money and confiscate Federal Reserve Notes and bank deposits like it confiscated gold during the New Deal? No, not lawfully.

• Wednesday, April 12th – Consumer Price Index. Investors will be looking for signs of softening of inflation pressures in the CPI report for March. Favorable CPI data would lessen the odds of another rate hike from the Federal Reserve and could prompt the U.S. dollar to extend its recent selloff.
• Thursday, April 13th – Producer Price Index.
• Friday, April 14th – Retail Sales.

This week’s Market Update was authored by Money Metals President Stefan Gleason.

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