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Why Did Gold Become Money?
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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Gold is money because banksters cant print an oz gold coin.
Because there is no better alternative!
paper gold and silver to the moon! L0L!!!
get real PM coinage, BiCheZ!
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!
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.
good answer!
And it costs less than you think to pan me.
2012 ASE's on sale for 2.25 over spot any quantity on Providentmetals.com. And no I don't work for them.
Someone junked me for pointing out a sale? Sad...
Do you even know the difference between money and currency? :D
LOL niiiiice!
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.
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."
Yeah I actually disagree with Michael Maloney's distinction.
Shouldn't it really be the difference between fiat currency and market currency?
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
You forgot - unit or measure of account.
...and fungibility.
Fungibility being the characteristic of being prone to fungus?
Yes. It's a condition one gets when walking barefoot along a Chinese citizenism roadside.
Suchlike as American US Citizenism corporation slogan stolen by Chinese Citizenism citizens:
What can brown do for you?
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!"
http://www.huffingtonpost.com/2012/05/02/pig-poo-power-the-answer-_n_146...
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.
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.
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.
Sorry, Akak. This dude won. He almost gave me a heart attack with his last comment.
Fun Guy
"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.
You forgot portability, but yeah.
Sure they can. Just print a .jpeg of a gold coin or bar. Duh. Ha
Brilliant business idea!
Use them as wrappers for tungsten bars then sell them to CBs.
They were called gold certificates. http://en.wikipedia.org/wiki/Gold_certificate
bacause all the paper was used to wipe everyone's asses with.
And the French, a time or two drank Liquid Gold with predictable results.
yes they CAN print gold coins..
http://cubify.com/cube/
just add tungsten
Sheep, you mean to say "gold should be money". It is doing better than money right now, it is appreciating! I like that.
Yes they can. Fractional reserve banking was originally based on gold.
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.
bitcoin?
WTF?!
It's already in Binary as they stopped printing and started digital numbers.
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.
Silver...
White Gold Bitchez!
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 ?
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.
Excellent bio Al. Glad you made it here.
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...
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.
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.
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?
Transaction taxes.
Because we don't break....tradition. Fuck you, Bernanke.
Ben the Barbarian! Shalom, motherfuckers!
I think the "is gold money" argument is a distraction.
Gold is a fantastic investment at the current time because the world has enormous amounts of unpayable debts combined with a purely fiat currency. This means they will try to print money to prevent the ship from going down. Meanwhile, the total amount of debt is still growing.
I have never heard a legitimate argument against owning gold at this point in history.
Unfortunately there has never had to be a "legitimate" one.
The same bankers who control the fiat own most of the gold. Out of the frying pan and into the fire.
Prove it!
Would a link suffice or would you prefer a tour of the central banker's vaults? lololololololol
That is a flat-out lie.
But in it, I smell the disingenuous swill of Bill Still the Fiat Shill.
Car sales are up, platinum prices are down, even below that of gold, therefore gold is in a bubble.
Dandelions are popping up everywhere, and their flowers are golden, therefore gold is in a bubble.
.
...and a week later, they turn silver, so silver will be in a bubble next week.
Car sales up? Compared to what? Try looking at annual light vehicle sales (US) for each year 2006 - 2011 and compare the 2012 trend. You'll see that 2006 and 2007 each topped 16 million vehicles sold. This year? I'll take the under on 13 million if you want the over. But up compared to 2009's total of under 11 million vehicles, so maybe you have a point.
Need more proof that gold is in a bubble? Look at a chart of copper priced in gold sometime. At least copper is useful, unlike relic gold.
Need more proof that gold is in a bubble?
****************
When misinformed people like you finally jump into gold-we'll know it's in a bubble-
http://www.acting-man.com/blog/media/2010/10/Gold-percentage-of-financia...
If you ever get out of your moma's basement and actually link up an XX carrying member of the human race, ask her whether she wants a relic like Au or Cu. You will never get laid with the Cu angle.
Your CPU is part gold.
Dummy.
Where in the FUCK are all those troll-driven downarrows coming from?
If anyone here thinks that Bill Still is an honest advocate of monetary freedom or sound money, then you are as mislead and deluded as all the sheep who hang on every coke-fueled word of Jim Cramer on CNBC.
Bill Still, the shill of swill?
Kill Bill!
.
...and in grand Chinese citizenism tradition, send invoice for cost of burret to famiry.
Blythe and her pals having some afternoon fun, don't let it bother you.
Kind of like when you finish the final early and get 100 they make fun of your shoes and non-designer jeans.
Governments hold 18% of the worlds gold-
There's about 165,000 tons of gold in the world-so governments hold a measly 30,000 tons-
Seems to me governments were selling/dumping it for the last 30 years and have only recently started to buy it back-
You are correct. My original statement was in error.
You don't need a gold standard. You just need to use weight as money. Simple.
Metric of course.
Emulation of the Annunaki.
We are the 7th planet, not the 3rd.
says who Zak Stichen?
Sumarians.
But I dont know if scholars other then Sitchin have translated this.
Because there is this: http://www.sitchiniswrong.com/
We are the hybrid, genetically engineered, slave race created to mine gold, some would say.
Well then, get to work! Here's a shovel -- pay ya $5/Toz... :>D
Robot, is that you?
.
Yeah, but we're about to overtake Neptune and we're gaining on Saturn.
Yo, Uranus! Your ass is ours!
Helga will make big ass for you.
Everything that people trust in, can become money ... mussles, salt, or even numbers on an electronic bank balance sheet.
Or tulips
"could be hammered into a knife or tool and became very desirable.".......might look good but not very lethal.......it would bend or break...and be very heavy and soft....could be used in late night around the campfire sexual games maybe....they mostly made nose rings..ear rings..necklaces...jewerly....not tools or weapons..but a gold sword......like King Arthurs....cool daddy-o
next time you get a chance try hammering a peice of copper, as you hammer it gets harder.
a hammered out gold blade might change your mind if it where held to your neck.
No metalsmith here, but pretty sure all metals get harder when hammered...thus the annealing process in jewelry making.
Well, it would get dull very quickly, and I wouldn't want to sharpen that baby. Sharpening = throwing away gold dust.
Anyways if you made that sword light enough to be wielded it would either end up as a dagger or as a very thin machete-style blade that would probably bend under its own weight. I've worked a bit with gold and hammered 24k is still so much softer than annealed 18k. It basically does not work harden. You won't get far with that.
Badabing, as it happens, pure gold does not work harden; that's why it's possible to hammer gold leaf so thin. Bonus trivia: pure lead doesn't work harden, either.
King Tut was wrapped with a solid gold knife, but it was probably just ceremonial...
I don't want to go back to a gold standard, I only want to go back to gold. Why the need for an inefficient and clueless government to peg a weight of gold to some arbitrary amount of value? Let the market decide that.
going onto gold standard today (when the whole world is in huge debts) would lead to catastrophic results because it would mean total collapse of government sponsored (via fiat printing) welfare system - millions of starving to death people and so on
Interesting.
So you assume that the means to support and feed all those millions of government-dependent people ONLY exist due to the actions of government? And just where is the government growing all those crops, and otherwise producing all that wealth and goods and services, to currently support all those millions?
Rethink your assumptions.
It would mean sailing off the edge of the world, killing everyone aboard.
[quote] We have been brought up by the progressives (liberals) that without stealing from our neighbor, there is no way to help the poor and those that need help. That is the biggest lie every put out there...and most of the American people have fallen for it. [/quote]
And surely that won't happen under a fiat currency standard...
OH WAIT... we're quickly on our way there right now...
gold standard is impossile today for one more reason - people unable to find work for gold will agree to work for any paper/electronic promise that would buy them food and shelter
why not work for food and shelter?
Plus a few silver coins perhaps, sounds like a good system where do I sign up?
You didn't say for how long?
As long as you work you get food and shelter. Oh wait, you need a store of value?
gold standard is impossile today for one more reason - people unable to find work for gold will agree to work for any paper/electronic promise that would buy them food and shelter
***********
You must not understand that gold standard means-
You turn your paper currency into a claimable amount of gold-at whatever price it is locked at-which means if you draw a wage you are being paid in gold and you spend in gold-which means that gold standard is entirely possible and easy to do-
As to your millions starving to death post--lol--are crops going to stop growing?
Thanks JJ, wasn't sure where to even begin with someone who's been here a year and is still at that level of understanding.
Appreciate the correction.
Having "roadside squatting citizenism" takeout for dinner tonight...or just noshing on wolf-nipple chips?
Not so, crunching nowlike being on roasted puppies, fried bear penis and General Tsao's kitten --- oh! the goodness tasting!
Double lucky good.
Today's runchtime soup du jour: fish eye, salamander, and soapstone in umbilical cord broth.
Bring much good fortune and luck overflowing into.
Make you strong! Having much bang bang!
Many babies coming!
Don't forget to add [in bed] to the end of every fortune!
http://www.fortunecookiemessage.com/
Fortunate in bed at end now being of US citizenism eternal nature undeniable.
But hey, it is well known, US citizens are problem solvers.
But hey, it is well known, US citizens are problem solvers.
//////////////////////////////////////////////////////////////
You are indeed strike the nail on his ear!
US Citizen nature in blobbing-up problems is eternal.
Likewise, Chinese citizenism nature in creating brown roadside blobs is equally eternal.
As Great Helmsman himself say in his Petite Pink Publication: "All roadside feces flow from the sphincter of Chinese Citizenism".
.
Time-traveling algebraic coconut milk of Chinese citizenism flows like river of time-traveling algebraic coconut milk.
Of Chinese citizenism.
It's arive!
The Brob!
The Chinese have a phrase for completely useless: "Wolf's heart and Dog's lungs."
Having survived countless famines, you can understand their mindset.
Particularly such centrally-planned famines as "The Great Leap Forward Into Starvation", a perverse but inevitable byproduct of the sociopathic and power-mad backyard industrialization dreams of the Great Stoolman Mousy Tongue, whose dictates sentenced tens of millions of his own (Chinese citizenism) citizens to death.
Ah, ah, but Chairman Mow proved himself of people being one with. Evidence just then being eternal memorialized by glorious Peoples Liberation Roadside Shrines of Fearless Droppings of Great Chairman Mow preserved in state for much vigorous patriotic.
Anonfucius say:
Let he who is without citizenism sin cast the first roadside turd.
Anonfucius say:
US citizenism citizen look at unblemished roadside, sees only unblemished roadside.
Chinese citizenism citizen look at unblemished roadside, sees much potential.
The nature of citizenism being known, US citizenism citizen knows, when footstep is making, if he follows trail already blazed by Chinese citizenism citizens in advancement of him.
bought some more money today
it's all good..
before we get more gold, we need to solve the holy canoe problem,
I keep reading about good people losing all there PM in canoeing accidents, wheres the Coast Guard?, the Navy? can't somebody help these poor people...?
Thank you, vodka cleans my monitor pretty well.
Did he forget hopium?
I think you could buy sex with it in Ancient Babylon.
Scientific reasoning for the "barbarous relic"?
Just don't tell the Keynesians!
A great perspective on reality as well as history; Au is money because the periodic table says so.
Put that in your fiat pipes and smoke it!
I prefer to store some of my gold on the inside.
http://www.drinkswap.com/goldschlager.htm
You can't eat but you can drink it!
Get buzzed and improve your net worth!
The US takes everyone off the standard and now says the world can't go back onto it because everyone's off it. Uh, okay.
Hypocrisy, thy name is central banker!
If we're going to be scientific about it, why limit ourselves to elements? We should consider compounds, and other scarce things such as art or almost extinct species, or precious stones.
And then there's the question of needing something to get beyond barter. Were there ever societies that worked on barter (except in crisis)? Empirical evidence? No, most societies worked on credit and reconciled accounts without actual payment (just like electronic banking today). In fact they often used a unit of grain as the basic unit of money, even though they recorded the amounts: they didn't actually exchange the grain.
In fact, our units of gold (grains/ounces) go all the way back to equivalent measures of barley (not by value) in ancient Babylon.
The excellence of gold is not as a medium of exchange, never has been. Gold is useful for two reaons: [1] to settle accounts between people who do not maintain credit relationships: think foreign trade and soldiers. [2] Gold is a way of measuring value, like rulers measure inches; the exchange value of gold introduces a standard measurement for value (because there's basically a fixed amount of it). You rarely need to exchange gold for anything, as long as it is in principle possible to redeem promises for gold.
The day that a major economy goes onto a gold standard is the day that the largest banks and wealthiest, most powerful people have gotton control of the metal. Be careful for what you wish.
The world has always been/is on a gold standard and always will be. Just because most people are duped into the false paper system does not make it the standard. Try taking some of that gold or its paper representative and see which one gets gets let go of last.
hint: it's the heaviest one.
Be careful for what you wish.
Spoken like someone who owns no Gold. Pity.
Gold is money/wealth because God made it so. In Genesis Ch.2, God provided gold for Adam even before He put Adam in the garden and before He gave him a woman. In Genesis 13, Abraham is credited to be rich in livestock, silver, and gold; not beads, seashells, and FRN's
Gold became money as a consequence of its permanence, scarcity natural beauty, and malleability- it was too soft to use in the craft of weapons, but it was the IDEAL material to decorate weapons and adorn the warrior:
http://insiderobertsbrain.blogspot.com/2011/08/epiphany-for-me-eureka.html
Due to Gold's scarcity, the original Gold market came about as warriors took each others Gold as the spoils of victory. Any warrior adorned with significant amounts of Gold sent the unspoken message to his enemies that he was not to be messed with...
As mentioned in the video, it does not tarnish, decay or react to otherwise naturally occurring deteriorating elements like sea water. Makes sense to me why it was stored in the bulk hold of sailing vessels as ballasts too. Wouldn’t surprise me at all to learn it’s the secret in the hull designs of world class sailing vessels today. Maximum weight, minimum space.
(I know, moving water ballasts, i.e. manipulation of interest rates, are the flavor of the moment, but this is only possible through the manipulation of non-traditional and currently irresponsibly applied judicious determinations. How long this condition will last is highly questionable.)
As ballast on the ship of state it’s equally ideal. Out of sight, but absolutely necessary when setting sails against economic storms of profligate printing, legislative empty promises and illegitimate judiciaries.
What’s old is new again.
Imho.
Power will be restored to the People when they realize they can put themselves on a Gold/Silver Standard whenever they want. The propagandists have convinced the People the must rely on Government to decide what is money. People around the world have been deciding what is and is not money for 5,000 years. Governments just fuck it up.
Been living in Oz for twenty years.The Tory Gov't at the time (late '90's) sold off a third of the gold stockpile,giving some total BS excuse like the costs of security,lack of relevance of Gold in the market,etc. Real "dawg ate my homework " stuff and the journos down under either work for Kerry Packer or the Murdoch empire. I always believed they were told by someone to dump and suppress the price.
I believe it was about $325/troy oz at the time. The Aussie taxpayer truly got reamed on this deal but it is like a non-event in the media.
Don't feel too bad, mate. Gordon Brown gave half of England's Gold away about the same time for $250 per oz. The dumbass even advertised they were going to sell, driving the price down beforehand. Fuckin' moron that Gordy is. Of course the Brits punished him by making him Prime Minister, so you have to question their IQ's, also.
Well at least the Aussie's got lower crime for outlawing guns in their country. Thats worked out great!
http://www.snopes.com/crime/statistics/ausguns.asp
My wife works at a jewelry store and she has at least three people come in everyday to sell their gold and silver. She guesses the average people walk out with is about $1000, and by far most people r bringing in Gold as the main metal. People also bring in silverware as well as trinkets and other objects too. She also guesses that more than half but definitely not all need the money.
This is amazing to me, especially when u consider that the owner only gives them 60-75% of the spot that day. He melts most of it down and then sells the bars. He has over 100#s of gold any given day and probably 500#s of silver. He's an old guy that is about finished and retiring soon, I buy a lot from him because I get a sweet discount from spot.
Anyway, it amazes me that so many people are dumping their PMs at such an incredible rate - I suspect that based on this craziness more people may be selling PMs than actually buying - regular Joes I mean. If they aren't educated by now about the financial situation they will be real sorry very soon. It really is a shame that Americans are so out of touch with reality, at least a large percentage of them anyway. No excuse given the Internet and all the advertising about PMs....
Gold has doubled in price in 4 years. The amount of people selling their gold is holding gold from rising. Once the selling is dried up I'm guessing by the end of this year, the buying will accelerate as the debt grows and more people get educated about the coming colapse. I'm happy if Gold holds above $1500 an ounce for the next little while.
do you think they are purposely keeping the price high to draw it out of the average persons pocket.
Noooooooooo, lol
Who are "they", and what is "high"?
I like Gold, but I like Silver much better
History of Money
http://www.doomsteaddiner.org/blog/2012/04/23/the-history-of-money/
Doomstead Diner Comics
RE
Thanks for posting that
A quick check of some statistics shows about 4.6 billion adults in the world. The amount of above ground gold to be about 4.8 billion ounces. That is all gold, in jewelry, industrial etc... So if all gold was coin we could all have about an ounce apiece. $1600 dollars each. A first glance at world average wage search returned $7030 a year. 4.4 ounces a year.
A years labor represented in a fiat currency of gold. Labor and raw resources are the only real currency. You can represent it in many forms. All of them fiat. It is not what they are represented in, but what controls are kept on that representation that keeps legitimate value for it. The "value" of gold aside from it's purely industrial use can be manipulated and debased just as any representation of labor and raw resources can be.
I judge the value of my wage in relation to my labor versus costs of survival. What ever it is paid in or backed by. Day to day. It is my labor that is being debased. Honesty, fairness and law that is being debased. The fiat currency, whatever it is, merely reflects this.
How silver and gold went from decoration to money and store of wealth is pretty obvious, but what's most telling is that it happened independently in both the old and new worlds. Montezuma didn't have any trouble guessing what Cortes would like.