I attended my daughter’s dance class at a historic Appalachian opera house this week… and I was struct by its design. A local Masonic Lodge commissioned construction of the building, and it opened its doors in 1906.
The theatre was originally known as the Mason Hall and Opera House of Clifton Forge. Today it’s known locally as the Masonic Theatre. Here’s a shot I took from the balcony.
I’ve never been to a play or a musical of any kind – I suppose I’m about as uncultured as one can be in that regard. So I didn’t know those elevated opera boxes were really a thing.
I read through a little bit of the theatre’s history as I waited for the dance session to start. Old Western movie icons Lash LaRue and Tex Ritter once performed on this stage. And apparently William Jennings Bryan gave a speech there during his final presidential campaign of 1908.
Then I found my way to the underground level out of curiosity – and I was equally impressed. It seems the building was built directly over top of a creek that flows into the Jackson River, which snakes through the region. Check this out:
Here we can see that the old brick building sits on multiple concrete pillars – including some that rise directly from creek.
I’m amazed to think about this being constructed nearly 120 years ago. I don’t think we build buildings to last for centuries like this today.
Getting back to the world of finance…
Yesterday we talked about how the fiat money system created a fantasy world. But we noted that there’s been a shift in the wind… and some strong breadcrumbs point towards gold being remonetized.
For starters, an economist named Judy Shelton is out on a book tour right now talking up her latest title: Good as Gold – How to Unleash the Power of Sound Money.
Shelton’s book proposes a return to sound money by backing the US dollar with America’s gold horde. The US government still owns over 261 million ounces of gold – curiously valued at $42.22 on the balance sheet. This is the largest known gold reserve in the world.
There are some modern nuances to Shelton’s proposal, however.
She recognizes that a return to the old gold standard where each dollar is fully backed by gold would be difficult in the current climate. So instead, Shelton suggests introducing “Treasury Trust Bonds” that are redeemable in gold.
This would restore a degree of dollar-to-gold convertibility. It would also create a new class of sovereign bonds that could attract serious investment capital in the markets – almost certainly at lower interest rates compared to Treasuries not backed by gold.
As we know, US Treasuries are currently the de facto reserve asset of the world. All central banks and large financial institutions hold them and use them as collateral.
As such, introducing gold-backed Treasuries would also make gold something of a foundation for the global financial system once again. And here’s the kicker…
President Trump nominated Shelton to the Federal Reserve (the Fed) Board of Governors during his first term. He knows who she is and generally supports her views. Which means this idea is likely on the Trump administration’s radar for consideration.
And about America’s gold reserve…
I’ve heard that new Treasury Secretary Scott Bessent asked Fed Chair Jerome Powell to revalue the government’s gold horde at current market prices. This would raise its book value from $11 billion (at $42.22/oz) to $749.4 billion. Talk about recapitalization…
Now, I haven’t seen this confirmed anywhere. It appears to be just a rumor that’s floating around out there. But it dovetails perfectly with Shelton’s proposal and what is perhaps the largest breadcrumb…
Did you notice how Trump floated the idea of replacing the Internal Revenue Service (IRS) and the income tax with tariffs a few times out on the campaign trail last year?
He always presents tariffs as a tax on foreign countries – which is not at all the case. American consumers pay the tax when they purchase tariffed goods. Tariffs are simply a consumption tax.
However, Trump is absolutely correct that the US government largely funded itself with tariffs and excise taxes prior to the creation of the IRS in 1913. Sure, Americans had to foot the bill for those consumption taxes… but they didn’t have to pay income tax. That’s a trade I would make in a heartbeat.
I don’t know that anybody thought Trump was sincere about going back to that system when he brought it up on the campaign trail last year. The more skeptical among us suggested that the most likely outcome would be that we got his tariffs but the income tax remained in place.
Suddenly it’s starting to look like the guy might really be serious…
Trump brought up the idea again at a Republican policy retreat last month shortly after his inauguration. Several prominent senators have since put out tweets suggesting that we abolish the IRS.
So the idea is gaining steam. But is it practical?
According to economist Peter St. Onge, replacing the income tax with tariffs would reduce federal tax revenue by roughly $1.5 trillion. Which means you would need to cut federal spending dramatically to pull it off.
Six months ago that seemed like a non-starter. But not so much today…
The Trump administration and DOGE (Department of Government Efficiency) just dismantled the USAID and offered buy-outs to millions of government employees – including the entire CIA. They also ended all federal funding for DEI programs, cancelling 121 contracts in the process.
Now they are now combing through the $1.5 trillion budget of the Centers for Medicare and Medicaid Services (CMS) – which is apparently plagued by massive instances of fraud.
At the same time, they are putting together a plan to dismantle the Department of Education. Then they intend to comb through the Pentagon’s budget for fraud and waste as well. And we should note that the Pentagon hasn’t passed a budget audit in nearly ten years.
DOGE claims that these efforts have already cut $365 billion a year from the federal budget… and they haven’t even got to the big money yet. That’s at the CMS and the Pentagon.
So I don’t know… the dominoes seem to be falling into place. And I can’t help but imagine a world where we have sound money and no income tax…
The plague of perpetual inflation would be over and our money would maintain its purchasing power over time.
Yet, our income would increase dramatically – because we would keep 100% of what we earn. That number we see on the top line of our paychecks would be what hits the bank account each pay period.
In that world we would all have more surplus income, yet our cost of living wouldn’t constantly rise. In fact, our cost of living would likely fall if they successfully dismantle the regulatory state and remove restrictions on domestic energy production.
That would mark the end of the rat race. The days of maximization would be behind us… and we could get back to focusing on those things that truly matter in life. We could get back to reality.
Does this sound too optimistic? Too far-fetched? Too much of a fantasy?
Maybe. But then I remember that the forces who received all their funding from USAID told us that men could have babies a few years ago. Apple even created a pregnant man emoji—it looked a lot like Bill Gates.
Yeah… abolishing the income tax seems reasonable enough.
-Joe Withrow
P.S. According to St. Onge, this scenario is entirely feasible. All it would take to abolish the income tax is to repeal the Revenue Act of 1913. That would take a simple majority vote in Congress to accomplish.