James Turk was kind enough to answer some questions for Gold Silver Bitcoin. What he had to say, as usual, is incredibly valuable–-regardless if you’re a Bitcoiner, goldbug or none of the above.

Turk has been in the financial industry for decades. And in 2001, he founded GoldMoney with his son and today is an active board member and advisor. For those of you in the crypto space, you might know GoldMoney as the company which acquired Bitgold.

Turk has written and shared his ideas for many years on sound money, gold, and silver. You can read his articles at Free Gold Money Report.

The first question I asked him revolved around the gold and silver paper markets.

Many people buy gold and silver shares that are held at bank, but many people believe the banks have issued more shares of gold and silver than they have on hand.

Turk brought the conversation all the way back to 1932 and 1933, at the onset of the great depression. Too much debt had been created during the roarin’ 1920s.

“The amount was far beyond what the country could reasonably repay, which meant there were only two alternatives,” he told me.

Those alternatives? Maintain sound money or debase the dollar to lessen the debt burden. The US government chose to debase the dollar.

“[T]here was in the early 1930s a frenetic rush out of financial assets into gold,” Turk explained.

In those days, the dollar was pegged to gold. You could redeem a dollar into 23.22 grains of gold or silver.

President Roosevelt changed that. He devalued the dollar. After that, you could only redeem a dollar into 13.71 grains of gold or silver.

“That meant it took $35 to exchange for one ounce of gold instead of $20.67,” as Turk said.

This was hardly a solution to the monetary and banking crisis. The same thing happened during the 2008 bailouts of banks. I remember when that happened. I didn’t even know a trillion dollars existed back then.

The question, as Turk sees it, is, when banks get into trouble, do you bail them out or let depositors bear the consequences of bank failures?

“Do you maintain sound money, which benefits everyone, or debase the currency, which hurts savers and pensioners in particular but has an insidious effect throughout the economy?”

Turk brought up an old quote by Lenin. I did some digging around, and here is what The Atlantic quoted Lenin as having said:

“Hundreds of thousands of ruble notes are being issued daily by our treasury. This is done, not in order to ﬁll the coffers of the State with practically worthless paper, but with the deliberate intention of destroying the value of money as a means of payment….

...The simplest way to exterminate the very spirit of capitalism is therefore to flood the country with notes of a high face-value without financial guarantees of any sort….

Men will cease to covet and hoard it so soon as they discover it will not buy anything, and the great illusion of the value and power of money, on which the capitalist state is based will have been definitely destroyed."

Turk concluded: “To attest to the accuracy of his admonition, look at what is happening in Venezuela.”

Read the interview here.