Christopher Monckton, 3rd Viscount Monckton of Brenchley, who advised Prime Minister Margaret Thatcher, wrote for the Yorkshire Post, was managing editor of the Telegraph Sunday Magazine, has lectured at faculty level on currency theory and is now a columnist for WND, has long given warnings that the over-borrowing governments of the West are on a course to bankruptcy, from which recovery will not be possible.

Monckton has now come out with his personal plan to sideline the collapsing dollar and rescue western markets: a sound and fully asset-backed currency called the Texas Talent. Users of the Talent would trade in their dollars for electronic Talents backed by gold, silver, real-estate, and shares in blue-chip companies. Using the Talent will eliminate the risk of global runs on the dollar and protect foreign investments in the United States. 

The Talent will bring all these benefits without stepping on the questionable legal authority of the Federal Reserve, for it is not, strictly speaking, a currency at all. It is “beyond currency.” It is a savings instrument that you can also use for buying goods and services.

Monckton is widely known as a foremost expert in currency matters, and has given numerous interviews on the subject. In a recent commentary, he wrote that dollar collapse is not a matter of “whether but when.”

More than two years ago, he told the publication WorldNetDaily (WND) that the financial collapse of the West was plausible based on its path at the time. He then adjusted the forecast from “plausible” and “likely” to “imminent.”

Specifically, he believes President Obama’s financial policies of unprecedented borrowing and spending, trillion-dollar deficits, and massive outlays for social engineering are an “existential threat.”

“The gravy train has now tipped into the gulch. The cash for such criminal indulgences has run out. It is now time for governments everywhere to get a grip on the costs inflicted upon taxpayers by governmental employees at every level. Unless this is done, and very soon, the West will fail,” he said.

In a recent column, Monckton penned, “for the dollar, the end is nigh.”

In 2013, Monckton advocated a dollar ‘reset.’

“There is a more dirigiste solution, which I prefer much less than the free-market solution. … It is possible simply to cancel all public and private debt and tell everyone to start again. One takes a deep breath, presses the RESET button and reboots the entire system,” he said.

Monckton now has explained the form he thinks this “reset” should take. Lord Monckton has developed a serious proposal, not yet published and currently being reviewed by Texas officials and select legislators. It is entitled, “The Talent: Beyond Currency.”

The proposal calls for the creation of a digital unit of exchange, which would convert dollars, pounds and other currencies into a basket of real assets held by professional fund managers and audited daily.

According to Monckton’s proposal,

“Soon you can get paid, save, shop, spend and invest without using currency at all. The Talent replaces worthless paper with real assets. The Talent is an ingenious innovation in personal, corporate, public and international finance. Thanks to the Talent, the reign of the ever-depreciating fiat currency – sterling, the dollar, the euro and other paper currencies not backed by real assets – is at last over.”

How does the Talent work?  

“One Talent is one unit share in the Talent Fund, a professionally-managed investment fund administered by experienced fund managers. But there is one important difference: you can use your Talents for your day-to-day transactions. You can invest, save and spend using the same simple, secure account. As the Fund grows, the value of your Talents grows with it,” Monckton writes.

Monckton subsequently provides an illustration to assist in reader comprehension: 

“Over the past 25 years Ms Foolish Virgin has kept $1000 in her current account to pay day-to-day bills. At the end of the 25 years, dollar inflation measured by the Consumer Price Index has halved the value of her $1,000. Ms. Wise Virgin has kept her account at the Talent Bank. If the Talent Fund had kept pace with the Dow Jones Industrial Average over the period, after the Talent Fund’s 1% annual charge Ms Wise Virgin has $5175 in her account.

“Once we go live, you will be able to follow the step-by-step instructions to open an account in Talents at the Talent Bank online. You can deposit funds in any major currency at that day’s rate of exchange. The value of each Talent, determined by dividing the Talent Fund’s total asset value by the total number of Talents in issue, will be updated every few seconds on the talentbank.com ticker.”

Among its most practical elements, the notion of backing ‘Talents” or dollars circulating in Texas, with natural gas or barrels of oil would give real, tangible capital value to any cash held by world investors, including the trillions of dollars in U.S. Treasuries and other dollar-denominated assets retained by Russia and China.

The latter aspect of Monckton’s proposal is significant, according to some, since it could create the preconditions for the biggest financial coup in history, by giving Texas – a state – leverage over the total debt of the United States in the event of a dollar collapse. U.S. debt, which has doubled during the Obama administration, now totals $18 trillion, collectively claiming its entire GDP.

The face value of the dollar will plunge in seconds after any run on the dollar, say economists. The trillions of debt owned by Russia and China (among other prominent nations, like Saudi Arabia) would be at risk in such a scenario, possibly leading to mass dumping of dollar assets. “Think 2008, but with no recovery,” says Kevin D. Freeman, author of The Secret Weapon, a book dealing with the notion of economic warfare in recent booms and busts.

“There’s no doubt that Russia and China are developing financial infrastructure to displace the American dollar as reserve currency. The timing and speed with which it happens are yet to be determined. But the infrastructure is almost ready to launch," says Kevin Freeman.

“Texas does have unique opportunities and should look at contingency plans in case of a dollar collapse. The Constitution even provides provision for states to issue currency if backed by hard assets (gold and silver)," Freeman continues. 

Freeman agrees with Monckton concerning the US Dollar's current status, saying, “No reserve currency is afforded permanent status. The American dollar has survived a long period, especially without any backing other than ‘full faith and credit of the U.S. Government.”

“With almost $20 trillion in Federal debt and maybe ten times as much in unfunded Federal liabilities, we are in completely uncharted territory. If the American dollar fails, we could see a financial crisis of unprecedented proportions.”

Freeman agrees with Monckton on the size and shape of the problem with the dollar, and is looking forward to studying the proposal for the Talent. He said: “There are a number of securities laws both at the Federal and State level that will play into an asset-backed currency.”

Monckton responds that since the Talent will not be a currency no Federal or State currency laws are relevant. The Talent will, however, be regulated like any other financial-services product. At national level, the SEC will be the relevant authority. And it is entirely accustomed to regulating asset-backed financial products.

Indeed, Monckton sees advantages in being regulated by the SEC: “If we want to be taken seriously, we have to show we are running an honest ship.” He says the total assets in the fund and the total number of Talents in issue will be updated on the Talent Bank’s website minute by minute, so that everyone can see what his Talents are worth.

Freeman says: “There are several critical attributes that many look for in good money in a challenging environment. It must have a degree of scarcity to have value (shouldn’t just 'grow on trees'.) It should be generally accepted. It must be easy to use and store. It has to be durable and have 'intrinsic consistency.' It also must have simple divisibility. And ideally, it either has intrinsic value or is backed by other assets for pricing and exchange. Gold has many positives but it’s hard to buy a cup of coffee with a gold coin. Bitcoin can be easy to use and is scarce but has no intrinsic value or asset backing," claims Freeman.

Monckton says the Talent addresses all of these issues: “You will be able to make purchases on your credit card, just as now, and you can link your card to an account in Talents. Shopkeepers will love it, because the Talent won’t inflate: it is backed by real assets.”

In other interviews, Monckton has explained the catastrophic risk of dollar collapse to foreign investors with large dollar portfolios.

As Monckton contends, America’s present position is that of foreclosure, and the bank is repossessing.

“The mandarins of Peking know that there is a growing likelihood – make that a near-certainty – that any money they now lend to the United States will never be repaid. In the commercial world, when it becomes clear that a debtor may never be able to repay, the creditor demands a debenture by way of fixed and floating charge over the entire assets and undertaking of the debtor. Has Obama granted to China a debenture over the assets and undertaking of the United States?”

The Chinese central bank already is taking action, forming bilateral currency swap arrangements with other trade partners, drastically reducing the number of dollars that will be used in global commerce.

Russia also has been reducing its reserve holdings of dollars for some time and is publicly advocating, along with China, international control of the dollar’s value, or that some international monetary unit be devised to replace the dollar.

Total net American liabilities to the rest of the world now stand at more than $80 trillion.

Several publications have reported that China now owns significant public infrastructure in the contiguous United States and has requested public land and “special economic zones” free from U.S. labor controls as collateral on future loans.

Texas Governor Abbott has given clear signs that he might approve a plan like the one Monckton has presented. Abbott recently repatriated all of the gold Texas held in trust with the federal government.