Gold is Not Money
- Thread starter Luker
- Start date
To claim gold is not money is not to be anti-gold.
Understand what money really is, how it is created and by whom, and its role in modern monetary systems... and you will (hopefully) start to see the value in holding gold and silver.
Don't fall for the confidence-trick perpetrated by governments that causes people to conflate money and currencies with stores of value.
And money is fundamentally a confidence-trick, a contrivance, since at its heart it is an IOU, a promise that relies on trust backed by a state's power to tax (see link below, Money Interpreted as an IOU, for more on the tax connection).
See:
* Money is just an IOU - summary of BOE paper
* BOE paper: Bank of England - Money creation in the modern economy [27 page PDF]
* Money Interpreted as an IOU
* What Is Money And How Is It Created?
The last article is very interesting in terms of nailing down a present-day definition of money:
Understand what money really is, how it is created and by whom, and its role in modern monetary systems... and you will (hopefully) start to see the value in holding gold and silver.
Don't fall for the confidence-trick perpetrated by governments that causes people to conflate money and currencies with stores of value.
And money is fundamentally a confidence-trick, a contrivance, since at its heart it is an IOU, a promise that relies on trust backed by a state's power to tax (see link below, Money Interpreted as an IOU, for more on the tax connection).
See:
* Money is just an IOU - summary of BOE paper
* BOE paper: Bank of England - Money creation in the modern economy [27 page PDF]
* Money Interpreted as an IOU
* What Is Money And How Is It Created?
The last article is very interesting in terms of nailing down a present-day definition of money:
mmissinglink
Active Member
Snoopy said:
Depends on what you mean by long time....but yes, my $$$ has been a store of value at times (years ago when just leaving it in the bank with high interest rates earned me nice gains) and can be compared to other currencies and commodities some of which (commodities) actually haven't been a good store of wealth over the last several years.
But you are not suggesting that something which is a good store of wealth automatically makes it money, right? Because that would be a very silly thing to assert. An asset is not the same as money.
The important thing that I think many gold bugs are not understanding is that we don't live in the 2nd Century B.C. and this is not the early 19th Century. Things have changed radically since then. Gold is not money today for the vast majority of people on earth. Exceptions to the rule do not make it the rule.
That's not to say that gold will never function as money in the future...it could....stranger things have happened in the past.
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SilverPete said:
It depends upon who issues the money and for how long they can maintain the confidence of the consumer. An IOU is only a false promise when issued fraudulently, however there have been many examples historically where IOUs (scrips) have been issued and traded with confidence. Prior to Federation banks, companies and honest individuals issued their own currencies, the majority were accepted and traded with confidence.
Edit to add: in regards to the link about IOU's, I'd agree it is a confidence trick, if we weren't forced to use AUD we'd probably find our own currencies.
Ray Dalio, founder of the world's biggest hedge fund firm, Bridgewater Associates, net worth $15.4 Billion.
Ray Dalio: "Gold is a currency" "If You Don't Own Gold, You Know Neither History Nor Economics"
https://youtu.be/wK6mUl3YMwU
Ray Dalio: "Gold is a currency" "If You Don't Own Gold, You Know Neither History Nor Economics"
https://youtu.be/wK6mUl3YMwU
Alan Greenspan
"Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It"
https://www.youtube.com/watch?v=JlM6kNNz0G8
"Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It"
https://www.youtube.com/watch?v=JlM6kNNz0G8
mmissinglink said:
No, I am not suggesting that. I am suggesting Gold IS Money. Unique Art can be a good store of value but is not Money. Baloney stated currency is lacking the store of value property. Gold has that long term store of value property and therefor makes it true Money altho it is currently not in circulation.
I agree, altho for some, if not most Central Bankers it is Money. The question is if Gold is not money, then why on earth do Central Bankers keep it in the vaults ? I know tradition.... right ?
sterling-nz
Well-Known Member
I am curious as to what "for the vast majority of the planet" means to you.mmissinglink said:
Having done a wee bit of travel in my days i would say that for the "vast majority of the planet" i have seen would trade gold.
If you are talking only about UK, USA , AUST, NZ and the like then i accept gold is not considered money by most.
IF HOWEVER you are talking about China , India or the middle east i would say they do accept gold as money.
The western side (which many consider to be the whole world) holds less than half of the planets population.
I not trying to have a dig but FAR FAR to many people think "the world" is based around European countries , the truth in fact is THE OPPOSITE>
mmissinglink
Active Member
Porcello said:
My gov't has a vested interest in seeing to it that the U.S. $ remains strong and viable. The value of commodities like silver or gold can be sent to near oblivion as well....remember how many things including pretty sea shells were once considered very valuable?
The only value gold has is the value we collectively or individually attach to it.
$$ can buy me silver and gold any time and any place....the places I normally shop do not accept commodities to buy commodities...cash is still king in that respect.
I like polished silver...it's shiny!
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mmissinglink
Active Member
monopolize said:
Interesting how so many gold bugs have called a person like Greenspan a trash talker....until the day he says a sentence or two they just happen to agree with.
Just funny how that is.
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mmissinglink
Active Member
sterling-nz said:
I have never been to China or India but have been to many parts of Europe. I do have friends who either are Chinese and Indian or have been to one or both countries and they tell me that in most places there, a blob that looks like silver or gold (whether it is or not is irrelevant) would not be treated as a legitimate form of payment (does not function as money).
That's how I've drawn my conclusion.
Thus far, no one here has provided any good evidence to the contrary....if you have good evidence to the contrary, please share otherwise I will simply treat your claims as anecdotal evidence....just like my claims about the lack of most of the world treating blobs as money is.
I like precious metals and they serve a purpose for me...but that doesn't mean they are magical and therefore that they are everything some people want them to be.
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mmissinglink
Active Member
Askari said:
My point is, the only thing I had heard from stackers about Greenspan was that he talks trash....until years after his stint as Chairman of the Federal Reserve when he said a couple of sentences that stackers just happen to agree with. As if by some miracle, just now he became worthy of praise.
Just funny how that is.
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mmissinglink said:
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.
###
Alan Greenspan
[written in 1966]
volrathy said:
if you thinks its money I will buy all your gold coins for face value then
if you dont accept my deal you dont think it is money
mmissinglink said:
the only country I know of where gold is GENERALLY traded and used as currency for the purchase of goods and services is Zimbabwe, even there the US$ is still king , since their currency collapse. Whilst in other countries around the world you might find someone to barter your golds for their goods with it is not the GENERALLY accepted thing.
Gold is not Money any more and will not be again any time soon.