Anthem Blanchard - CEO Anthem Vault

Anthem BlanchardAnthemVault CEO Anthem Blanchard discusses first monetary principles.


AnthemVault Review: Interview with Anthem Blanchard

Trace Mayer:  Welcome back.  We have an awesome interview with Anthem Blanchard.  He's CEO and founder of Anthem Vault, been a long-time friend of mine even before bitcoin even existed.  His father played a major, major role in International Monetary Law.  Welcome to the podcast, Anthem.

Anthem Blanchard:  Thanks for having me, Trace.

Trace Mayer:  So let's start with your father, like, how you, kind of, were born into this very monetary family?

Anthem Blanchard:  Yeah, I know.  My father is known as the original gold block by some.  He helped to push for the re-legalization of gold ownership in the U.S., which had been prohibited since 1933 through an executive order by FDR and so through tireless advocacy smuggled gold even illegally from Canada.  He could have been thrown in prison for many years and fined hundreds of thousands of dollars minimum.  He basically crusaded for a matter of about 3-year period and during that time, gold actually became legalized so.  About 40 years ago, actually January 1st was the first day that a U.S. citizen could again own gold in over 40 years.

Trace Mayer:  Wow.  Yes.  See, a lot of people don't really understand just how deep Satoshi's understanding a monetary history and monetary law are all the way from Isaac Newton, who developed the gold standard and set in order a new age of money to Satoshi choosing the birthday on his Ning account and the birthday was April 1975.

The April date was actually the date that Franklin D. Roosevelt issued Executive Order 6102 prohibiting the ownership of gold.  And 1975 was the year that your father helped get gold re-legalized for American citizens to own.  So Satoshi was very well aware of these events that had happened.

So to really understand bitcoin, I would assert that you have to understand gold.  So what are some of these secrets of gold?  Because, I mean, if you want to learn the truth about money, you're going to have to learn it on your own.  Well, what are some of these secrets that have -- you could say -- have been passed down in the family?

Anthem Blanchard:  Sure.  So, I mean, I would say maybe most importantly of all is that gold is the most beautiful wearable art.  It's got the lowest melting point.  It's the most malleable.  It's the most bendable without breaking.  Lowest melting point means it takes the least amount of energy.

Prior in history before we had technological advancements that made it less costly to verify because of its unique color, it was very easily recognizable from any other metal on earth and because it was still equally found roughly around the world but still scarce enough to still have a relatively high concentration of value and density that those very simple qualities have made it very good money over time.

Trace Mayer:  You know, this equidistribution in the earth's crust, in a way you could say it's kind of like an analog blockchain.  And that's really what Isaac Newton's Gold Standard did.  It helped balanced payments between nations and settle up balance sheets and things of that nature, the international balance sheets of states.  It's an interesting thing like when the Navy pilots have their emergency pack packed, gold sovereigns are included in there.

And that's because at all times in an all circumstances, gold remains money for thousands of years even.  So it's got this incredible history.  It's outlasted every government, every fiat currency.  There's thousands of them in the fiat currency graveyards.  We had actually done a podcast earlier a couple years ago where we talked about the concept of a numerare

Anthem Blanchard:  Yeah.

Trace Mayer:  And about gold's role as a numerare.  Maybe you can help refresh the audience on, you know, what a numerare is and why gold is so important as a numerare.

Anthem Blanchard:  Now I remember that, Trace.  I actually remember really loving that analogy that you give with the numerare.  And really what we're talking about is relative value and in finance, we call it sometimes, the base 100 or just looking at what is one thing worth relative to another thing.

One of the benefits that gold has had is because it has been held now by billions of people, all central banks do hold it a and because most school is not used for industrial purposes and there is so much of it above ground that creates a lot of liquidity which minimizes volatility.  So it's for all of these reasons why it actually makes for a very good numerare of being able to gauge gold versus all of these other investments that fluctuate much, much more out of pure industrial or commercial supply and demand.

Trace Mayer:  Yeah.  Because, I mean, we're talking about numerare like, the unit of account for your financial statements.  Most people, for whatever reason, they use as their numerare, U.S. Dollars, Euros, Swiss Francs, Australian Dollars.  That's the lens through which they see their financial world and situation, but that's not necessarily accurate.  Is that not necessarily a good thing to do?  Does it give them an accurate picture of what's really going on?  I mean, maybe, you can delve into that a little bit.

Anthem Blanchard:  Well, it's an ultimate deception because when we've had all these trillions of dollars over the last 6 years of "Quantitative easing" which is really just a $5 phrase for currency creation by the central banks.  I mean, we've seen that basically what it does is it devalues the value of your currency and we see this in the sense of core goods and services over the last 5, 6 years rising tremendously.

We see that wages have not commensurately risen and ultimately it's a very, very, very subtle, but super destructive form of theft.  And it's very insidious because you don't see it in one fell swoop.  It's not taken from one particular energy.  It's taken from the whole of the populace that gets paid in whatever their currency is.

So it's definitely very relevant.  I think the issue has been, Trace, is that the payment system has been completely predicated on the health of the little banking system.  And really it's been a prisoner's dilemma that Central Banks have been in because they felt compelled the need to bailout the banking system in order to have international payments be able to exist.

Trace Mayer:  This is a much larger problem.  We've talked extensively on the podcast about the counterparty risk and the quality of the banks' balance sheets and all these things.  But when we're talking about the numerare, when we're talking not necessarily about the BANS, or the payment system or like wires and things and credit cards.  Instead when we're talking about the blood, when we're talking about the currency itself, this is where fiat currencies like the dollar, we really have a very tenuous situation.

For example, in the U.S. Constitution, it uses the phrase dollar twice.  And one of those times is in the slave costs, hotly contentious clause in the Constitution.  You would think that before it was adopted that they would have agreed on what the terms meant in the clause, right?  And a term like dollar, which raises the issue: well, what is a dollar.  And it actually did have a definition.

You know in the 1792 Coinage Act, it was defined as 371.25 grains of fine silver.  So it's a weight and a purity of a particular metal.  It was a certain amount of silver.  When you define it as something like that we can now start making conversions, right?  Well, under federal law, under the Constitution, "No state shall emit bills of credit, or make anything but gold or silver coin a tender in payment of debts."

That means that Article 1 Section 8, there is no power given to the federal government to make anything legal tender.  The states are restricted from making anything legal tender except gold or silver.  But somehow our federal government has made Federal Reserve Notes legal tender under 31 USC 5101 through 5118.  Not only that they've made gold legal tender.

So $50 equals 1 ounce of gold, 1 ounce of silver equals $1 under federal law.  Pennies and nickels and dimes and quarters and all these different amounts of zinc and copper and everything, those all equalled dollars.

But last time I checked on the periodic table, 50 ounces of silver did not equal 1 ounce of gold.  That would be unintelligible.  It just wouldn't make any sense.  And yet in our legal code, we've decreed it as such.

Are there problems that come about when we're performing economic calculation when we have unintelligible legal code?  Like, well, what are some of these unintended consequences?

Anthem Blanchard:  Well, I think any time you have the government controlling anything, you know that whether its price, I mean, now you're seeing it even further more with interest rates which is really the price of money.  I mean, ultimately the market isn't setting the price and it's not setting what the value should be.

And so the problem you see again and again with government whenever they're propping up currency or whatever an industry it could be through subsidies, you know, all of a sudden it's kind of like acknowledging the stock market where you take the escalator up and the elevator down and that's what you see happen.  Because you -- the escalator up in the case of government is the artificial support.

But there comes a pain point when there's so much stress so ultimately the government can only pay for something by taking other people's payment ultimately through one form or another whether it's through direct taxation or indirect taxation as we discussed through --

Trace Mayer:  Inflation.

Anthem Blanchard:  -- inflation.  No, it's definitely a very bad thing.  I think what happened, Trace, is that over time really before the age of the internet and certainly before the age of computing, it cost so much to actually process payments that, perhaps you almost needed to have bank accounting established as it is, where perhaps you needed to have the banks making enough money on the credit side of the business to actually be able to pay for clearing just.  Because clearing was done through paper drafts, I mean it's incredibly inefficient.

So and if we think it now to the time of the internet, where the cost of communication is down to fractions of a penny, it kind of almost in a way justifies the past.  But the problem is that in the present, we've now been widely adopted internet for over 10 years now as a general Western society and we don't need to have the credit side of a lending institution to then you have to clear payments for us.  It's simply not necessary, so you can see the cost inefficiency.

I mean, think about it.  We can have a video call with someone completely across the world, Iceland to Australia right now instantly.  It's instant communication.  Yet if I want to send a bank wire right now to someone in Australia, yeah, I can't even do it right now because the banks were closed right now, because it -- we're happen to be doing the interview after hours.

And secondly, it's going to cost me probably upwards of $50 and my time.  And it's not even going to maybe even get there for a day or 2.  I mean --

Trace Mayer:  And you can track it either.

Anthem Blanchard:  Yeah, yeah.  That, too.

Trace Mayer:  You know, you can track a $5-dollar package, but you can't track a $500,000-dollar wire.

Anthem Blanchard:  That's correct.

Trace Mayer:  I mean, we're talking about just this obsolete antiquated system.  And Chief Justice John Roberts, his first report on the state of the Supreme Court, he was talking about there's a constitutional crisis because the federal judges, their salaries aren't keeping up with inflation.  You know Article 3 of the Constitution, they're supposed to be life-tenured.

And their compensation is not supposed to be diminuated, not supposed to be interfered with.  We're not supposed to interfere with the obligation of contracts.  And yet when we change the definition of a term that makes up 50% of every transaction in the economy that's exactly what we're doing, isn't it?

We're interfering with the atomic unit, the actual molecule from which we build our entire economy.  And so when we interfere with that, is it really any wonder that we have buildings falling over, and not being constructed properly and needing to be bailed out.  But all of the bailing out does is just misallocate more capital.  We produce wheat, like, why do we produce wheat?  We produce it to eat, right?

Why do we produce steel?  We produce steel to build bridges.  Why do we produce oil?  We produce oil to fuel things and power things and to build things with.  But why do we produce gold?  We got 160,000 tons in aboveground stockpiles.  Why do we continue digging it out of the earth?

Anthem Blanchard:  It's a great question.  It's a simple answer, in my opinion, and that's human action.  Quite frankly, human history has a pretty clear portrayal of that. At the end of the day anything that's man-made ultimately is fleeting and passing over time.  And the fact of the matter is that gold, that are elements on the periodic table have been around since the creation of earth.

So, I mean, I would argue that anything that's man-made at all will eventually be fleeting and that's why gold and any non-perishable, durable-type commodity that has natural scarcity to it will always be a store of value.  You know, how good of a store value is will depend on scarcity and other attributes, I think, but --

Trace Mayer:  But you were the second employee at GoldMoney?

Anthem Blanchard:  Oh, tech -- technically yes.

Trace Mayer:  You know, I mean, that --

Anthem Blanchard:  Fulltime, equivalent, yes.

Trace Mayer:  So you were -- you were there in the very early days. James Turk, he had patents back in 1993 for digital gold currency, you know, trying to apply information age technology to the concept and the application of money.  You know, our early -- early attempts at this whether it's GoldMoney or DigiCash or Hashcash that Adam Back came up with as, kind of, like a horseless carriage, you could say.  What do we really have with Bitcoin?  You've been around this space for a long time.

Anthem Blanchard:  Uh-huh.

Trace Mayer:  This virtual currency, this digital gold currency space, like, what do we really have with bitcoin?

Anthem Blanchard:  Well, I would say it's a couple fold.  I would say the biggest thing that I think we have is the elimination of credit risk and counterparty risk and settlement risk.  So I think that is definitely by far the biggest thing we had.  So even some of the digital gold currencies or former digital currencies that you mentioned in that case, really the only technological advancement was digitizing into fractional ownership form, really then it was just entries and accounting which frankly in a lot of ways you think would be okay.

I think what some of those companies ran up against was a lot of regulation that had been put in overtime and especially before 2008, and even now I think it's taken a few years for a lot of people to digest 2008 now that there was also kind of a thing perception of a lack of need from a lot of people.

And so I think the combination, I think, bitcoin and blockchain does way more than even that in terms of -- you already touched on this podcast too was the transparency element --

Trace Mayer:  The triple-entry bookkeeping.

Anthem Blanchard:  The triple book entry, which is arguably 200 times more accountable and even more than that since traditional double entry accounting audit will typically have at the end of the fiscal year, which is 12 months.  And even then only typically half of 1% of all the transactions even get audited.

So it's tremendous from that standpoint.  I mean, U.N. experts have talked about, I mean, the applications are endless and we haven't even thought of probably 0.05% percent of them or 1% to 0.01% of them.  It's incredible.

AnthemVault Review

Trace Mayer:  But at Anthem Vault,, you're actually trying to build out these horseless carriages into cars and Ferrari's and airplanes, right?

Anthem Blanchard:  Uh-huhh.

Trace Mayer:  Like, you guys came out with the Independence Coin.

Anthem Blanchard:  Uh-huh.

Trace Mayer:  What exactly was this Independence Coin?

Anthem Blanchard:  Yeah.  So Independence Coin or INNCoin, you can check it out  It was a proof of concept coin that we launched stealth on July 4th of 2014 and we backed it with 100 grams of gold and 10 million coins mineable X11 script which is same as Darkcoin, mineable for a year.  And someone can redeem a hundred thousand of these INN, these Independence Coin for 1 gram of gold.

And they're at the vault account.  So it was a way to introduce our client base, it was a way to introduce our core team and programming team to an actual implementation of cryptocurrency, built out a wallet, start building out mining pools, things like that.  So just to get our feet wet or understanding, also to test the market and it was incredible, Trace.

And we saw our account-size double in a matter of about 2-weeks time, just because we required someone to open up a free Anthem Vault account in order to actually download the miner.  So that was significant.  But what we're doing now is taking that proof of concept and actually making it live so that way our client base can have spendable gold and Anthem Vault that is powered by the power of cryptocurrency.

Trace Mayer:  And potentially not just gold.  I mean, I'd ask you some more questions but then we would be treading into trade secrets, right?  And we -- we don't necessarily want to have you revealing to the public your -- your very innovative plans in this -- the whole area of digital currency, virtual currency and the application of real monetary science and the experience that you and your family have had and gained in this area over the decades.

Why should somebody even care about all of this?  Can't we just go about our life like using whatever everybody else uses?  I mean, why should anybody care?

Anthem Blanchard:  I mean, people should care because you're only going to find the truth for yourself and ultimately to have protect your family and your children and your children's children, for yourself.  I mean, that's just the way life goes.  So --

Trace Mayer:  Yeah.  Nobody really cares about your financial condition, except for you.

Anthem Blanchard:  That's correct.  You have to self-educate and so everyone else, I mean, the central banks around the world, they're acting out of fear of these entrenched interests around them failing and ultimately the populace being very upset because they can't pay.

They're not acting out of benevolence of you as the listener or any of us as individuals.  So their action is predicated on other reasoning, not for you, yourself best interests.  Even if potentially the central bank thinks that.

So it's key to understanding history that no paper currency long-term has ever survived simply because, again, human nature has dictated that the status control of the money, then they will continuously abuse that control.  And we'd see it again and again and again.  And that's why I think we're going to see a renaissance again really and really it's obviously again back to private money.

But I would say now I think you're going to see a full-on private money approach completely nationalization of money across the board.  Because it's going to be so obvious to most people when we do have, and I think this is unfortunate consequence of our over-leveraged system when we do have eventually a complete loss in confidence in currencies and national currencies.

And hopefully this takes decades and it could.  And hopefully, it will into their alternative substitutes.  But there is going to be a big reset.  We've seen this before when there -- when there's been loss in confidence of currency.  This time around, it's a global paper currency.  It was really all of the world's currency, it's really dollars, when you really start boiling it down.

So really there is no asset -- national currency any longer anyone can really go to and the system is all completely -- the world is just completely interconnected from the finance standpoint.  So it's a very perilous situation.  Hopefully, there isn't any mass fallout, at least for us in the U.S. or people elsewhere.  But sadly, that's not the reality of the situation long-term, it's just a timing question.

Trace Mayer:  And, I mean, you're talking about this crack-up boom.  The amplitude of the business cycle has just been greatly exacerbated due to central bank intervention.  I mean, this is what Friedrich Hayek got his Nobel Prize for in economics.  Anthem Hayek Blanchard.  I mean, you're named after this guy, right?  And that's why you've got this Hayek coin that you're coming out with.

Anthem Blanchard:  Uh-huh.

Trace Mayer:  That it's going to help people follow the first rule of panic: do it first.  Because -- what's -- what's the joke?  You sit down at a poker game, and you got within the first couple minutes you got to figure out who the patsy is.  And if you don't know who the patsy is then, well, you're the patsy.

And these currency wars, financial war, the name of the game is to transfer other people's wealth, right?  I mean, that's what the central banks, the bankers, the people, the market -- that's its function is to take the resources from the people, from certain people or institutions that have it and transfer it to someone else.  I mean, that's just the end.

Anthem Blanchard:  But forced transfer.  Forced transfer, and that's exactly the problem because us as individuals we benefit through voluntary transfer --

Trace Mayer:  In trade.

Anthem Blanchard:  -- in trade and ultimately through trial and error.  That allows trial and error because it allows -- competition is ultimately, in a lot of ways trial and error.  So if you have a government monopolizing.  Any entity, it happens the government are powerful.  So monopolizing any situation you lose that element of that businesses we all use to refine our products and services which is trial and error.

You don't have that benefit any longer.  So we benefit as individuals from wealth creation, from value creation.  From value creation through voluntary exchanges, not through mandatory value transfers and --

Trace Mayer:  And price setting.

Anthem Blanchard:  -- yes, yes, and price setting.

Trace Mayer:  And that's ultimately, what happens is when we try to have price controls, when the government tries to set prices or PACs.  Those PACs, those price controls, they will fail to market forces.  They'll fail in the form of shortages and rationing.  They'll fail because they can no longer be maintained like the Swiss National Bank.  There are Euro, Swiss franc PAC that recently failed 40% revaluation in a single day.

Anthem Blanchard:  Uh-huh.

Trace Mayer:  Hyperinflation?  Czechoslovakia, Argentina, Zimbabwe, Weimer Germany.  I mean, you name it.  Like, every area on earth has gone through this.  Continental dollar in the U.S, it will fail to market forces.  If individuals understand the monetary science, the economics, can they actually position themselves to benefit from these things that are happening?  Instead of being a victim, can they actually be a beneficiary of this wealth transfer of this --

Anthem Blanchard:  Sure.

Trace Mayer:  -- of this redistribution that happens?

Anthem Blanchard:  I think they definitely can.  I think the advantages that we have as individuals versus central bank is that we still have choice because we're not binded to a government, let's say that we have to be obligated or some kind of other entity they're obligated to continuously bail them out, or continuously service their debts.

Trace Mayer:  Or this is really large and lumbering and doesn't move very quick?

Anthem Blanchard:  Yeah.  And that, too.  Yeah, exactly.  And it is ultimately not making decisions for individuals and they're making decisions as a collective which ultimately it's very nebulous in terms of anyone benefiting and yet very slow and absolutely.  So we can act quickly as individuals, I think, understanding this trend.

And I'm obviously biased for gold.  I think bitcoin -- I think is -- it is only 6 years old.  I am a big believer in cryptocurrency.  But I still treat it more like a growth investment than long-term value investment.  But that also gives you potential for a lot of multiple -- should it continue to grow in keeping the strongest from a security standpoint peer-to-peer cryptocurrency networks, so.

Trace Mayer:  We're talking about not just an exchange rate garden-variety change.  We're talking about the collapse of a worldwide reserve currency in monetary system, the largest in history.  And the U.S. is going to be and is ground zero for this happening.

It's great that we have innovative entrepreneurs like yourself working on potential solutions, potential ways for individuals to protect and actually thrive and benefit as a result of this change.  Is there anything you'd like to add as we close out the podcast?  I mean, what are your most, kind of, optimistic about in this whole field of money and currency?

Anthem Blanchard:  Well, I'm optimistic that we do have cryptocurrency and blockchain, thanks to bitcoins invention because now even though we're only 6 years in.  We actually have a solution to the systemic contagion, credit counterparty risk, settlement risk.  Once you eliminate all those costs, the amount of value that we get back to be able to put toward productive means is tremendous.

And I think once we get over that hump, once we can get some critical mass adoption into different peer-to-peer cryptocurrency decentralized medium of exchange solutions, then I think we're going to get into a renaissance and then we're going to continue to see more and more services that less and less the government has to do, like, can you see with Uber on a local level in taxis.  And you see some examples already.

I think the more and more that's the private sector can help shed away from the government, then the less worse that the fallout will be ultimately from the hyperinflationary of that.

Trace Mayer:  Or any other type of monetary or currency crisis and chaos?

Anthem Blanchard:  Yeah.

Trace Mayer:  Well, we've had with us the creator of the Independence Coin, the CEO and founder of Anthem Vault, Anthem Blanchard.  Thanks for being with us for AnthemVault review.

Anthem Blanchard:  Always a pleasure, Trace.  Thank you.

Written by Anthem Blanchard on March 30, 2015.