Doug Casey on Why Gold Is the Best Money

Guest Post by Doug Casey

It’s an unfortunate historical anomaly that people think about the paper in their wallets as money. The dollar is, technically, a currency. A currency is a government substitute for money. But gold is money.

Now, why do I say that?

Historically, many things have been used as money. Cattle have been used as money in many societies, including Roman society. That’s where we get the word “pecuniary” from: the Latin word for a single head of cattle is pecus. Salt has been used as money, also in ancient Rome, and that’s where the word “salary” comes from; the Latin for salt is sal (or salis). The North American Indians used seashells. Cigarettes were used during WWII. So, money is simply a medium of exchange and a store of value.

By that definition, almost anything could be used as money, but obviously, some things work better than others; it’s hard to exchange things people don’t want, and some things don’t store value well. Over thousands of years, the precious metals have emerged as the best form of money. Gold and silver both, though primarily gold.

There’s nothing magical about gold. It’s just uniquely well-suited among the 92 naturally occurring elements for use as money… in the same way aluminum is good for airplanes or uranium is good for nuclear power.

There are very good reasons for this, and they are not new reasons. Aristotle defined five reasons why gold is money in the 4th century BCE (which may only have been the first time it was put down on paper). Those five reasons are as valid today as they were then.

When I give a speech, I often offer a prize to the audience member who can tell me the five classical reasons gold is the best money. Quickly now – what are they? Can’t recall them? Read on, and this time, burn them into your memory.

Money

If you can’t define a word precisely, clearly and quickly, that’s proof you don’t understand what you’re talking about as well as you might. The proper definition of money is as something that functions as a store of value and a medium of exchange.

Government fiat currencies can, and currently do, function as money. But they are far from ideal. What, then, are the characteristics of a good money? Aristotle listed them in the 4th century BCE. A good money must be all of the following:

  • Durable: A good money shouldn’t fall apart in your pocket nor evaporate when you aren’t looking. It should be indestructible. This is why we don’t use fruit for money. It can rot, be eaten by insects, and so on. It doesn’t last.
  • Divisible: A good money needs to be convertible into larger and smaller pieces without losing its value, to fit a transaction of any size. This is why we don’t use things like porcelain for money – half a Ming vase isn’t worth much.
  • Consistent: A good money is something that always looks the same, so that it’s easy to recognize, each piece identical to the next. This is why we don’t use things like oil paintings for money; each painting, even by the same artist, of the same size and composed of the same materials is unique. It’s also why we don’t use real estate as money. One piece is always different from another piece.
  • Convenient: A good money packs a lot of value into a small package and is highly portable. This is why we don’t use water for money, as essential as it is – just imagine how much you’d have to deliver to pay for a new house, not to mention all the problems you’d have with the escrow. It’s also why we don’t use other metals like lead, or even copper. The coins would have to be too huge to handle easily to be of sufficient value.
  • Intrinsically valuable: A good money is something many people want or can use. This is critical to money functioning as a means of exchange; even if I’m not a jeweler, I know that someone, somewhere wants gold and will take it in exchange for something else of value to me. This is why we don’t – or shouldn’t – use things like scraps of paper for money, no matter how impressive the inscriptions upon them might be.

Actually, there’s a sixth reason Aristotle should have mentioned, but it wasn’t relevant in his age, because nobody would have thought of it… It can’t be created out of thin air.

Not even the kings and emperors who clipped and diluted coins would have dared imagine that they could get away with trying to use something essentially worthless as money.

These are the reasons why gold is the best money. It’s not a gold bug religion, nor a barbaric superstition. It’s simply common sense. Gold is particularly good for use as money, just as aluminum is particularly good for making aircraft, steel is good for the structures of buildings, uranium is good for fueling nuclear power plants, and paper is good for making books. Not money. If you try to make airplanes out of lead, or money out of paper, you’re in for a crash.

That gold is money is simply the result of the market process, seeking optimum means of storing value and making exchanges.

After 8 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.

-----------------------------------------------------
It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can't do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. [Burning Platform LLC - PO Box 1520 Kulpsville, PA 19443] or Paypal

-----------------------------------------------------
To donate via Stripe, click here.
-----------------------------------------------------
Use promo code ILMF2, and save up to 66% on all MyPillow purchases. (The Burning Platform benefits when you use this promo code.)
Click to visit the TBP Store for Great TBP Merchandise

7
Leave a Reply

avatar
  Subscribe  
Notify of
ottomatik
ottomatik

Yes it is, there should be a bit about counterparty in there but I guess it overlays all listed. In a world of counterparties PM’s and certain crytos stand alone, well lead too.

Glock-N-Load

Isn’t money whatever TBTP tell you it is?

James the Wanderer

CURRENCY is whatever TBTP tell you it is; MONEY has Aristotle’s characteristics as listed above. Learn the difference, and have something to trade with when the paper currency goes to zero value (as it MUST, eventually).
Everyone should start with the characteristics listed above as an education in economics; the law of supply and demand, the basis of capitalism (produce more than you consume and trade the surplus for whatever you cannot produce), and Adam Smith’s _Wealth of Nations_ would be a good addition. Ignore fractional reserve banking, socialism and communism, and MMT; they are all false, and lead to darkness.
Now figure out how you’re going to deal with TSHTF problems, as they are coming high and fast.

mark branham
mark branham

Gold as money is a crutch. It presumes a civilized society cannot govern it’s own monetary affairs; needs an artificial structure to guarantee it’s use.

Gold was, currency is.

Maybe with a civilized monetary system we’ll learn to be a civilized society… I have assumed it would be just the opposite. I think ideally it would be, but that seems very far off. So let’s try it now and hope for the best.

Treasury issued money SPENT by the government and budgeted to the states as needed. No debt, no interest, and no banks. And NO financial oligarchy.

Have we learned nothing since Aristotle?

James the Wanderer

You haven’t even learned Aristotle, apparently.
Your “civilized monetary system” appears to assume restraint and honesty from politicians; they must not try to game the monetary system to finance their pet projects, their friends’ pet projects and their retirement funds above their salaries. Dream on.
Further, they must not put their friends in charge of budgeting, or the only projects that get funded will be the ones that line their pockets in some way. Double dream on.
Sounds money makes cheating impossible; unsound money leads to – – what we have now.

mark branham
mark branham

No ya fucking idiot, that’s what “civilized” means.

James the Wanderer

I find your faith in politicians disturbing. And the only proof you have that I’m an idiot is that I respond to your nonsense. Which stops, now.

Discover more from The Burning Platform

Subscribe now to keep reading and get access to the full archive.

Continue reading