Combatting Inflation with a Banking System Based on Gold

There are a lot of modern financial problems that are facing the world today. In fact, among all the concerns and issues that are running rampant in various societies around the globe, it is an undeniable fact that financial issue rank number one.

And there is data to support this idea. In fact, in a survey as recent as the October of this year, it became apparent that 42% of all respondents are universally worried about inflation.

And no wonder why people are so afraid of this issue. If you take a look around the world, it can be easily surmised that left and right traditional and conventional fiat money and currencies are losing their value.

In the economy of most countries around the globe, fiat money is the bedrock of the financial system. Now imagine this bedrock is built upon something that is not at all sturdy and that can crumble at any moment.

The founding visionary of Counos Blockchain industry, Puya Chamer has previously addressed this issue:

How to Transfer Value without Banks and Fiat Money?

Now in this article, Puya Chamer wants to pinpoint to a specific segment of this value transfer system which will lead to a banking system built around the precious metal gold – this specific segment is called Lender.Gold

Banking Redefined; Gold as the New Metric

As mentioned previously, Puya Chamer states that, “in order to combat inflation and the depreciation of the value of fiat money, countries need to turn to a new banking system that is entirely based on gold.”

He further adds:

If gold is to be regarded as the new vehicle for value and the transfer of it, then it would only be prudent to conceive of a new banking system that is run based on gold, as its main currency.

          In this way, gold can potentially and feasibly replace the fiat money of different countries as the main currency. This fact could especially prove beneficial for countries whose fiat money is in shambles. And with a quick look around the world, we can find many that are in this situation.

          In this new system of banking, countries would stop lending and borrowing fiat money all the time – especially fiat money. Because countries are building up higher and higher volumes of fiat money debt.

          Countries can lend gold instead of fiat money, because in this case, they can also get back gold. They can also borrow gold from this gold lender system that is proposed. And last but not least, governments and countries can use up their unused sources of fiat money, sources which are usually just gathering dust, and purchase gold with them, which can then be lent back into the system, and it goes again and again, gold goes, gold comes back.

          One of the most important feats that is accomplished with this new banking system is the prevention of exchange of a country’s national currency into another country. Because as it stands, we see that national currencies, especially of less industrialized and less developed countries, into other fiat money and currencies. But with this system, the value of the national currency of countries can be preserved and protected.

Lastly, Puya Chamer believes that the biggest advantage of this system is as follows:

The biggest advantage of this banking system that is built around gold is that it takes a lot of control out of the hands of bad players in the system. What this means is that people, institutions, and governments can no longer issue money over abundantly. Because the finite resources of physical gold can act as reasonable restraint to control the issuance of currency. This way both inflation and deflation that can be present with a fiat money system can be avoided.