What if banknotes and gold coins were paired together? An interview with Goldback’s Jeremy Cordon

 

The company that creates the Goldback money in various denominations, Goldback Inc., was founded and is led by Jeremy Cordon. The concept is straightforward, though maybe deceptively so. It is difficult to lawfully supply the market for sound money, yet it exists. Nonetheless, Cordon has suggested a method of serving that market—at least in a retroactive sense. But, individuals who believed in the promise of cryptocurrencies may have second thoughts. Cordon consented to a conversation. This is the outcome.

What is Goldbacks, exactly?

Cordon: Goldbacks are essentially a sort of money that is made of gold. One-thousandth of an ounce of gold is included in each Goldback.

Borders: What type of technology—short of disclosing trade secrets—goes into making Goldbacks?

Cordon: Many people mistakenly believe that Goldbacks are composed of foil, but they are created using a technique called vacuum deposition. The same method is used to coat phone microchips with a coating of gold and space helmets.

Borders: I don’t use Bitcoin exclusively, but I use it a lot. Yet, because too many people see Bitcoin as a speculative asset rather than a digital good, it has experienced volatility in this skewed economic context. What role do you think Goldbacks will play in the present market competition between gold, fiat currencies, and virtual currencies like Bitcoin?

Cordon: Goldback is much more like cash in that it is a practical, personal kind of money. Instead of being stored on a blockchain or the internet, the value is in your possession. Goldbacks, however, differ from other types of gold in that they are intended to be used for modest purchases like a sandwich or a gallon of petrol.

Borders: It’s simple to see how Goldbacks may function locally, say, in the case of a financial crisis or scenario of financial collapse. When the dollar turns into grey slime, I can envision exchanging Goldbacks for ammunition and other supplies. So how do you see Goldbacks fitting into a world where consumers desire quick, international transactions?

Cordon: Goldbacks are useful in any situation where actual money is useful. Goldbacks may also be used to make international payments, however in that case you would be dealing with a third-party vaulting business, like Alpine Gold. Within the next few years, Goldback cryptos could be released.

In the case of Goldbacks, what’s intriguing about subjective value is that the strong plastic sleeve that protects the gold generates a high level of usefulness that makes it usable as payment when a gold coin is not. Have you seen instances when Goldbacks have gained value beyond that of gold?

Yeah, cordon. Some elderly people fight back against premiums, but they don’t realize that it’s more useful to conceive of a Goldback as having a value rather than a premium. For instance, when COVID-19 struck in March 2020, Goldbacks almost quickly sold out everywhere. The only way to get them was on eBay, where they could be purchased for $50 each as compared to $2.50 the previous week.

This price increase may be attributed to the fact that gold backs are more useful as money than gold coins and bars are. In the next years, I believe that the same event may occur once again. Owners of Goldbacks now will have a greater tool than owners of bars and coins tomorrow.

Borders: Yeah, but what if someone wanted to or needed to remove the gold from a stack of them due to some circumstance—perhaps wear and tear? Can it be done?

Cordon affirms Right now, we guarantee each Goldback. Even better, you may exchange Goldbacks for Gold coins with us. The leading Goldback dealers now allow customers to cash out at a spread of about 5%, which is equivalent to that of gold coins and bars.

Borders: You’re going to have to speculate, but… How do you see Goldbacks functioning in a future global market, if you could dream big?

Cordon: The consequences of hyperinflation are evident in the developing globe. An individual’s entire savings might be depleted in a week or even a single day. This puts the central banks in these nations in a bind since it is their responsibility to provide a currency that is both functional and widely accepted. Zimbabwe, for instance, is now experimenting with the production of small gold coins. Several other foreign central banks are attempting to spread the use of gold. These Central Banks would be considerably better off using the Goldback. I believe that Goldback technology will be used by Central Banks because they may run out of alternatives. You must keep in mind that central banks own the majority of the world’s gold reserves. They might benefit greatly from this technology.

Borders: The US government and Federal Reserve dislike competition. What distinguishes Goldbacks from other forms of “legal money” that are more “regulatory proof”?

Cordon: Nonetheless, there is a multibillion-dollar, decades-old precious metals market in the United States. While it would be a stretch to describe anything in America today as “regulatory proof,” I would suggest that Goldbacks primarily function as a currency under state laws rather than federal ones. The production of any money or currency is technically forbidden by federal law unless expressly permitted by a state. We adhere to a state-level statute known as the Universal Commercial Code, which all 50 States have ratified.

Have you ever seen a monetary value on a gift card or coupon? The UCC is what gave rise to this currency value. The way this works with Goldbacks is that they may be exchanged for US Mint-produced Gold Eagles in quantities of 1,000. The face value of these Gold Eagles is $50. The gold that is already present in Goldbacks may now be exchanged for newly-minted gold thanks to the same rule that allows coupons in the US to be exchanged for cash. Since they may be exchanged for government-issued specie legal currency, every Goldback becomes a specie legal tender instrument.

This legal plan is, in our opinion, quite sound.

Borders: It doesn’t seem likely that institutionalized adoption of Goldbacks would happen overnight. Instead, it’s more likely to take off as a safeguard against the issues with our old systems. Yet, our legacy systems (such as the Federal Reserve and the Treasury taxation system) are constructed on top of systems (processing networks) (big finance). In a world dominated by massive central banks, the WEF, the IRS, financial titans, and Visa/Mastercard, how do you see Goldbacks competing?

Cordon: Institutions may eventually experiment with Goldback technology in the same manner they do with cryptocurrency. The most promising scenario for Goldback would be for institutions to employ the technology sparingly. Maybe Goldbacks will take the role of currency, but all other digital dollars will remain unbacked. Even so, it would be a significant advancement. How the public reacts to the Goldback will determine its long-term success. The prospects will improve if people develop a strong interest in and excitement about inflation-proof cash.

Mastering the technology that powers holdbacks may become of critical national importance. What if the United States provided all nations with the money of the future? There may be a scenario for the United States that is even better than the declining dollar reserve status. We might lose that in the end. There are several things to consider.

Goldback is now too little to be regarded as a danger to anybody. Since 2019, just roughly $50,000,000 worth of Goldbacks has been exchanged. In terms of local currencies, it is a huge amount, but in terms of dollars, it is not even worth noting.

Borders: Is there anything I missed that you’d want to communicate to our readers?

Cordon: I find it amazing how much the Goldback is extending the precious metals market as a whole. The Silent Generation, which is rapidly dying out, owns a significant proportion of gold bullion. The younger generations aren’t developing that desire nearly as quickly as the one that is most engaged in coin collecting. According to one estimate, the market for precious metals is losing almost 250,000 clients annually (the remaining customers buy larger volumes). Anecdotally, we have lost half of our neighborhood coin shops in the previous 20 years. That portends a very bleak future for sound money.

The situation has changed since 2019 Goldback attracted 750,000 new participants to the precious metals market for the first time. A Goldback was often given to these folks as a gift or as a tip at a restaurant. Between the ages of 24 and 42, millennials make up the bulk of these clients. This is injecting the precious metals market with a lot of much-needed new energy and interest.

Borders: I appreciate your time, Jeremy.

Cordon: It’s an honor.