Why Did Gold Become Money?

Tyler Durden's picture

With increasing chatter about extreme monetary policy, the chaps at Santiago Capital reprise their previous discussion with a look at why gold became money. With many calling for a return to a Gold-Standard, understanding why there was ever a gold standard to begin with, why has it been used as money dating back over 5000 years, and what makes gold so special (aside from its personality).

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SheepDog-One's picture

Gold is money because banksters cant print an oz gold coin.

Pladizow's picture

Because there is no better alternative!

slewie the pi-rat's picture

paper gold and silver to the moon!  L0L!!!

get real PM coinage, BiCheZ!

Badabing's picture

Back in the day 10,000 years or so gold could be found in the ground as is. No refining or smelting it could be hammered into a knife or tool and became very desirable.

Trade you some gold for some food still applies today.

Oh and one more thing GOLD BITCHEZ!   

The Proletariat's picture

Fiat:  Who are you?

Gold:  All the ways you wish you could be, that's me. I look like you wanna look, I fuck like you wanna fuck, I am smart, capable, and most importantly, I am free in all the ways that you are not.

HungrySeagull's picture

And it costs less than you think to pan me.

Beam Me Up Scotty's picture

2012 ASE's on sale for 2.25 over spot any quantity on Providentmetals.com. And no I don't work for them.

Beam Me Up Scotty's picture

Someone junked me for pointing out a sale? Sad...

niktamere's picture

Do you even know the difference between money and currency? :D

Pladizow's picture

The defenition of Money vs. Currency vs. Wealth differs depending upon author.

You must be alluding to Mike Maloney's defention of the first two.

e_goldstein's picture

or John Adams

"All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation."

ManOfBliss's picture

Yeah I actually disagree with Michael Maloney's distinction.

Shouldn't it really be the difference between fiat currency and market currency?

WeekendAtBernankes's picture

Money can be used as a medium of exchange (transactionary motive), a store of wealth (precautionary motive), or an investment instrument (speculative motive).

/Keynes 101

Pladizow's picture

You forgot - unit or measure of account.

akak's picture

Fungibility being the characteristic of being prone to fungus?

TheFourthStooge-ing's picture

Yes. It's a condition one gets when walking barefoot along a Chinese citizenism roadside.


akak's picture

Suchlike as American US Citizenism corporation slogan stolen by Chinese Citizenism citizens:

What can brown do for you?

TheFourthStooge-ing's picture

Oppressed Tibetan asks Chinese citizenism citizen, "why do you not at least crap in a can, instead of openly crapping on roadside?"

Chinese citizenism citizen responds:

"What? Can??!! Brown doo for you!"


TheFourthStooge-ing's picture

That's a good idea based on proven concepts. It turns a source of pollution into useful energy and fertilizer products.

If it could do with politicians and bankers what it does with pig shit, it would be a glimmer of hope for the future.

If Chinsese citizenism citizens could be convinced to leave their droppings at a collection point instead of just squatting in public parks, they could become energy independent.


akak's picture

If Chinsese citizenism citizens could be convinced to leave their droppings at a collection point instead of just squatting in public parks, they could become energy independent.


Anonfucius say:

A roadside turd in the hand is worth two in the bushes.

TheFourthStooge-ing's picture

Anonfucius say:

A Chinese citizenism turd placed at main entrance of public park with much prideful is worth two being in two hands clutched with forcefully appreciation.


e_goldstein's picture

Sorry, Akak. This dude won. He almost gave me a heart attack with his last comment.

FrankDrakman's picture

"Money has these functions four: a means, a measure, a standard, a store" - A means of exchange, a measure of relative value, a standard of account, and a store of value. If the store of value concept is working - i.e. the money is not losing value, like our fiats are, then money is not an investment instrument per se.

e_goldstein's picture

You forgot portability, but yeah.

SeverinSlade's picture

Sure they can.  Just print a .jpeg of a gold coin or bar.  Duh.  Ha

e_goldstein's picture

Brilliant business idea! 

Use them as wrappers for tungsten bars then sell them to CBs.

vast-dom's picture

bacause all the paper was used to wipe everyone's asses with. 

HungrySeagull's picture

And the French, a time or two drank Liquid Gold with predictable results.

dark pools of soros's picture

yes they CAN print gold coins..


just add tungsten


skepticCarl's picture

Sheep, you mean to say "gold should be money".  It is doing better than money right now, it is appreciating!  I like that.

css1971's picture

Yes they can. Fractional reserve banking was originally based on gold.

WhiteNight123129's picture

British Empire Style Gold standard is much better than today´s system but it is inferior to Bimettalism where money is neither deflationary like the post 1873 demonetization of Silver until 1896. Bimettalism and a central bank ready to coin either Silver or Gold depending on what people prefer is closer to denationalization of money than forced monometallic standard of Britain. The best is to let people choose whatever money than want even fiat if they like, or private money or Silver or Gold. Gold standard and demonetization of Silver is manipulative in favor of bond holders and against the farmers. Money should be as free as possible and bimettalism is freer than Gold Standard, down with fiat and down with manipulative Gold standard. Bimettalism at least or free money, that is no legal tender law at all, you pay with bitcoin, silver, Gold whatever is more convenient.





HungrySeagull's picture



It's already in Binary as they stopped printing and started digital numbers.

fnord88's picture

Exactly. Government controlled Gold Standard is almost as big an ass fuck as fiat. NO FUCKING STANDARD YOU MORONS. STANDARD IS JUST ANOTHER WORD FOR CONTROL. Let people spend and save in whatever the fuck they like. Hell you could even spend fuck if you like. 

TeMpTeK's picture


White Gold Bitchez!

scatterbrains's picture

So far the Fed/CIA/CFTC/GS/JPM have only waged a silent battle against hard money. When it gets to a breaking point what does an open declared war against hard money look like ? Or should we assume they will just surrender ?

ffart's picture

They're not gonna surrender. THey'll go down kicking and screaming and they'll take as much of us with them as they possibly can.


They wont have to surrender.  The legal tender laws are already in place, the cocksuckers already dominate what money can be.  Their main and arguably only tactic to effectively enforce these unjust laws is by managing public perception.  Just think, I bet 90% of Americans have never even considered owning any precious metals in a monetary capacity or wondered why they ought to.  Once that changes economic law will again forcefully exert reality back into commerce.  Valuations will swing wildly until a fixed weight is attached to the circulating currency and banks become buyers at daily set prices.  

Jendrzejczyk's picture

Excellent bio Al. Glad you made it here.

SWCroaker's picture

You should assume that they are planning on rescuing all of us from the ills of fiat currency abuse by the expedient of introducing us to a "gold standard" that they devise, control, and run to their benefit.  It won't be for your benefit, nor mine.  The names of the players may change, and there will be a great opportunity to roll the whole thing into a massive power grab on a global scale.  If letting a good crisis go to waste is a sin, then certainly it must be even better to create and manage a crisis to spec.


Any "gold standard" other than 100% pure convert-able is ripe for abuse by the fallible humans who manage it.


You do know that the central banks of the world "own" most of the above ground bullion?  That isn't really something that happened by habit, or tradition...



akak's picture


You do know that the central banks of the world "own" most of the above ground bullion?

That is patently and grossly untrue, and is a lie maliciously and repeatedly propagated by that raging statist and monetary wolf-in-sheep's-clothing bastard, Bill Still the Fiat Shill.

In actual fact, world central banks own less than 25% of the world's aboveground stock of gold, and if GATA is to be believed at all, they hold less than 15% due to leasing gold over the years to hold down its price.

I agree with all your other points, however.

Rynak's picture

Even if they own only 10%, that still leaves "some" issues:

- 10% for a fraction of a percent of the population?

- With the current means of extortion available, they could at least double what they own

Yes, that still would not make them hold the majority of gold. Yes, a gold standard would still fix a whole lot of issues, as long as it is properly implemented (just look at current abuse of ETFs.... and NO, society will not get away with "physical only"... this from a plain usability POV is not feasible, just as it isn't feasible to do *ALL* transactions in cash).

Still means, that a gold standard will not instantly undo the current wealth and therefore power distribution. Yes, in the mid- and longterm, the changed gamerules may be important, but in the shortterm, it would not fix the ***** up power-(in)balance.

Things like a gold-standard offer mechanics for things to work right, when society is ALREADY fixed... they do not fix it themselves. And: As long as there are certain types of people in power, with certain motivation - no matter what kind of mechanic you introduce, it will be perverted - because "tool" and "purpose" are two different things: You can have the best intentions, but without the right tool, they will fail. And you can have the best tools, yet without the right intentions they will be abused and perverted.

Quinvarius's picture

In the end, they will be the ones pushing for gold.  It isn't about paper or gold.  It is about power.  When the dollar is done going to zero, would they want to use Yuan or gold?