Thomas Jacob on the New Swiss Gold Franc, Why the EU Is a Bad Idea
and Why an IMF Managed Currency Would Be Tragic
by Anthony Wile
The Daily Bell
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Bell is pleased to present this exclusive interview with Thomas
Mr. Jacob studied economics at Zurich University and spent a
year as an exchange student in Indianapolis. Afterward, Mr. Jacob
attended Swissair pilot school and spent 15 years as an airline
pilot flying the DC10, DC9, B747 and A320. During his time as a
pilot, Mr. Jacob had time to indulge extensively in
his interests in free-market economics, libertarianism and people
worldwide. As he says, It all began with Ayn Rand. Thomas
Jacob attended several Mises University courses and many ISIL conferences
during this time of intensive study of Austrian economics, all of
which led to his introduction of the idea of the Swiss gold franc.
Since 2002, he has worked as a financial consultant and coach in
Please tell us about your idea for a gold franc.
Gladly. The idea is the result of my interest in free market economics
and especially my conviction that a commodity money is the most
effective way to curb government involvement in the economy. The
idea is simply to re-introduce an additional gold-coin currency
in Switzerland on the constitutional level.
Is this similar to the idea of a silver libertad being pursued in
The similarity is that it is a legal parallel currency and a commodity
money. The difference is that the Swiss gold franc will be a privately
issued money. The governments role is limited to defining
the appearance and the gold content of the coins and to protecting
honest business practices.
Where are you with your program?
Dr. Ulrich Schlüer from the biggest party of Switzerland, the
SVP [Ed.: Swiss Peoples Party aka Democratic Union of the
Centre], introduced a parliamentary initiative on March 8
incidentally, the same day the Utah parliament [legislature] passed
their gold law.
At the same
time a group of dedicated politicians and economists, including
I, have founded the gold franc association to coordinate the activities
to help realize the idea on a non-partisan basis.
What are the next steps?
The appropriate commission will discuss the proposal probably in
the winter session. They will either accept and work on it or it
goes directly to the parliamentary floor. Should they also unexpectedly
have no interest, we will start a popular initiative. With 100,000
signatures the voters can vote on it directly, independent of whether
the politicians like it or not.
Are you hopeful?
No, I am confident. The time is right; the issue simple. We are
talking about freedom of choice in monetary matters, something that
cannot be opposed in good faith. It is not primarily about attacking
todays monetary system, but giving people the freedom of choice.
If todays monetary system remains as good as todays
authorities claim it is, they shouldnt worry if it
isnt, we, the people, shouldnt be forced to use it.
Give us some background. Where were you born and raised?
I was born in Zurich and grew up in Schaffhausen (30 miles north,
near Germany and the Rhine Falls). I spent one high school year
in Indianapolis and have lived in Zurich ever since.
What is Zurich like? Give us your impressions.
With the weather not living up to the global warming promises, this
rainy summer makes it a bit harder to be all praises for Zurich.
I love it. You can find almost everything in Zurich, one of the
positive aspects of the 30-plus percentage of foreigners from all
over the world. It is clean enough to go swimming in the river running
straight through the city. It is wealthy enough that we are doing
well despite the wasteful socialistic government. Complaining at
our standard of living has a touch of decadence to it.
You were a pilot for 15 years. What was that like?
Great. It was my boyhood dream. I always say today are the good
old times of tomorrow but the times I had as a pilot wont
come back for two simple reasons: on the one hand the airplanes
in the 80s didnt have the range for direct flights and
there were fewer flights, so going, for example, to Beijing and
back took 12 days with three stopovers for the crew. I had tons
of time to study cultures, people and economics. On the other hand,
Swissair was the only privately owned airline in Europe. We had
competitive working conditions but with the competition being state-owned
bureaucracies we did very well.
Why did you retire?
After 15 years even piloting becomes routine. The folding up of
Swissair at the end of 2001 gave me a reason to reevaluate my future.
You went into financial consulting in 2002. Why?
It combined my interests in finances and in people and offered a
challenge pretty much opposite to that of a pilot.
Bell: What is the financial environment in Switzerland like
The economy is strong and so is the financial sector. I see a special
challenge in the uncertainty about future rules and regulations
and their enforcement. A friend of mine, Robert Nef, coined the
term vorauseilender Gehorsam, which means the Swiss
authorities tend to implement and enforce national and international
rules and regulations not only to the letter but ahead of time,
What is the political situation like?
Pressing issues are our relation with the EU, financial themes and
immigration. Party politics is pretty much divided into SVP and
the rest. The SVP has often been the first one to pick up issues
that the people worried about and politics ignored, and has had
unprecedented success to become the largest party ever, with currently
about 30 percent of the votes. The main losers were the parties
in the middle, which had drifted to the left and toward the EU during
the 90s. They seem to have an anti-SVP reflex in most issues.
The parliamentary elections this fall will be interesting: if the
SVP keeps winning votes will the middle parties ally with the left
or move back to the right? This will be decisive for the general
heading of Swiss politics in the next years.
Bell: Are you a fan of the European Union?
No. Power corrupts, and centralization always means more power.
I am a federalist, ideally down to every individual.
Is Switzerland growing closer to the EU? Should it?
Polls show 80 percent oppose joining the EU. The majority of the
politicians and almost all bureaucrats want to move closer and eventually
join the EU but they have to move carefully today. There is always
the threat that the voters will rebel, and with our direct democratic
system we can vote on any and every issue if the politicians overdo
Why is a gold franc needed?
Why not? Freedom of choice is always beneficial. There are many
potentially great advantages and the worst that can happen is ignorance,
that is nothing.
is the issue of the future of todays monetary system. I have
my personal thoughts on that but I want to stress that there is
no need to agree with me on this to support the creation of a gold
franc. There is, for example, the moral issue of the fractional
reserve system, which means some people create money out of
thin air, and the general public pays via inflation. Then
there is the pretense of knowledge that Hayek talked
about: there is simply no way the authorities can know all they
need to know to make decisions for the whole economy.
Last but not
least, there is another question I havent been able to answer:
if the monetary authorities want positive inflation, this means
that the money supply must grow faster than goods and services
and this monetary growth is, in todays system, all backed
by an equivalent amount of debt. But whom can you impose an ever
increasing amount of debt onto? Isnt that an insane idea?
As far as the road to change, I like what Hans Sennholz said in
a 1984 speech at the Mises Institute: Only in freedom, only
through a parallel standard, can there ever be a just monetary reform.
What would the gold franc do?
An easily understandable and useable commodity coin-money would
give people a sensual experience with real money. People
who feel and possess gold francs immediately and intuitively understand
the difference between real and fiat money.
For them the monetary world would never be the same again.
On the practical
level, gold franc coins could be produced as a bimetallic coin,
starting with as little as 0.1 grams of gold in the center. This
coin would cost about $5 and give many people access to gold for
the first time. This will open up huge new markets for gold in and
outside Switzerland. The legal protection from taxes makes gold
francs attractive for life insurance companies, pension funds, etc.
By one estimate the additional demand for gold in Switzerland alone
will raise the gold price by 11 percent.
What will it force other countries to do?
Depending on the developments in Switzerland, I can imagine different
scenarios. They are all positive but it is too early to speculate
What gave you the idea?
To be honest, the healthy currency group of some SVP
parliamentarians. Their concern then was the safeguarding of the
remaining gold in our national bank, which I think is a nice idea
but doesnt address the issue at heart. Originally, I wanted
to use this remaining gold as the base for a parallel gold franc
currency. After the huge losses the national bank incurred last
year this became increasingly utopian, and I concentrated on todays
Are you an Austrian someone who believes in Misesian Human
Absolutely. But since this is a political proposal it could be distracting
to get into these discussions.
What is your position on silver?
Once the gold franc is introduced I expect it to be easy to do the
same for silver and eventually separate money from the state.
Is there a new world order or a financial elite determined to create
I follow your discussions with much interest and sympathy but I
simply dont know.
Would the gold franc have an impact on globalization? If so, in
The gold franc is the name for a weight of gold and therefore immediately
a world money. It will have practical and psychological impacts;
just where and how much I dont know yet.
Why did Switzerland give up the gold link?
It is even hard to define just when give up took place.
Fact is the Swiss people have always clung to gold much more than
the politicians and still do. In 1948, for example, the voting public
forced the authorities by way of a referendum to get gold-backing
of the Swiss franc back into the constitution. In the 90s
it was the national bank and politicians who wanted to get rid of
the gold. The constitutional change this required was sold to the
people as part of a complete overhaul of the constitution with
purely formal changes. Even one of the responsible federal
councils admitted later that this was probably misleading, to put
it mildly. The initiative to safeguard the remaining gold and get
a minimum of 20 percent of gold backing into the constitution should
get launched any day now. It promises to be popular and put the
issue of gold and money onto the media and political agendas.
What is Switzerlands future without a gold franc?
Worse than with one. After all, we are talking about freedom of
choice, which is always beneficial.
Have the Swiss forgotten about sound money?
Not the Swiss people. Sometimes it seems some politicians and monetary
Has the banking community?
They play the game according to the rules as best they can, I suppose.
Is Credit Suisse a Swiss firm or a globalist one?
By what standard? Turnover, profit, owners, laws they abide by?
The answers would probably differ.
Does Switzerland need to focus more on private banking?
I like private banking for the accountability it (used to) mean.
I dont know what Switzerland should do.
Is the dollar reserve system failing? We think it is virtually dead.
I can follow your arguments but really dont know.
Do you think the world will end up with a basket currency and an
IMF central bank?
Conceivable and tragic.
Are the IMF and World Bank a good idea?
They are the ultimate political centralization short of a world
government. Centralization means power and power corrupts.
Should Switzerland stick to itself or try to become more and more
an international country?
Economically international, politically independent. Goods should
move freely and without restrictions, the gold franc of course being
part of it.
Where do you go from here?
On vacation for one week.
Any other comments you wish to make?
The speed of the political process depends on public pressure, in
this case on publicity and the means to threaten the politicians
with an immediate and efficient popular initiative. For those readers
interested in becoming part of this historic project, we can gladly
supply them with our investors plan.
Thanks and congratulations!
Thanks for speaking to us. Good luck.
We thank Thomas
Jacob for sharing his "inside" views of Switzerland. And
we wish him and his associates well in their attempt to introduce
a new competing gold currency into the Swiss market. We do not doubt
that it would be incredibly popular, both within and outside of
would rather have monetary systems that had no government involvement
at all and a true free-banking environment.
though, why would politicians who are incapable of restricting their
desire to make never ending promises, and who require an inflatable
currency in order to facilitate the illusion, ever permit an "honesty
check" to enter into legal existence? The answer is that they
do not want such a restrictive monetary system because they are
in the business of creating entitlement and war-driven monetary
inflation and do so in the service of an international banking cartel
who control the world's central banks and its money supply.
So as much
as we wish things were different, they are not. People in general
still want to believe in the false welfare dreams being peddled
by politicians and are willing to sell short their freedoms and
liberties in the process. Until a market imposed wakeup call is
delivered, one that seems to be imminently approaching, we do not
see much hope in the status quo changing with respect to Western
governemnts permitting private money issuance and competition.
In the future,
it is possible. But not until the Internet Reformation has run its
course and even then, only if the general public are willing to
live within their means and construct a decentralized republic
that respects the rights of an individual to live their lives the
way they see fit.
We agree with
Jacob that the EU is a failed concept. We also agree that an IMF
managed global currency is also a toxic recipe. In fact, we believe
the current monetary crises are providing ample ammunition for the
gloablist enterprise to use its chaotic nature as a springboard
to implementing such a global monetary system. Undoubtedly they
will try and are in fact already working diligently to bring that
is a country comprised on a citizenry who have a long tradition
of using gold and silver as a store of value. They are perhaps the
most steeped population in the world when it comes to understanding
the true nature of central banking, the pitfalls of central planning,
and the problems associated with an unrestrained monetary unit.
For those who
would like to read one of the finest books ever written on this
topic, we highly recomment Ferdinand Lips "Gold Wars: The Battle
Against Sound Money As Seen From A Swiss Perspective."
Gold Wars deals
with gold's history, and especially the abandonment of gold-as-money
under the modern welfare/warfare state. It shows how governments,
fearing the affinity of free people for gold, fight it, thereby
helping to destroy countries and the gold-mining industry.
We wish Thomas
Jacob well in his attempt to try and institute a competing gold
Swiss franc. Perhaps the move, should it be successful, will be
a beacon of inspiration for other countries populations whose faith
in their domestic fiat currency systems is rapidly eroding.
with permission from The
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