• Gold Money
    05/26/2016 - 14:27
    Here’s a question that might have you pondering: Is gold a commodity? More importantly, are we doing a disservice to the gold industry by calling gold a commodity? These may sound like silly...

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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Wed, 05/02/2012 - 16:16 | 2392056 SheepDog-One
SheepDog-One's picture

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

Wed, 05/02/2012 - 16:18 | 2392058 Pladizow
Pladizow's picture

Because there is no better alternative!

Wed, 05/02/2012 - 16:22 | 2392070 slewie the pi-rat
slewie the pi-rat's picture

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

get real PM coinage, BiCheZ!

Wed, 05/02/2012 - 16:26 | 2392074 Badabing
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!   

Wed, 05/02/2012 - 17:42 | 2392306 The Proletariat
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.

Wed, 05/02/2012 - 17:51 | 2392334 downrodeo
downrodeo's picture

good answer!

 

Wed, 05/02/2012 - 20:35 | 2392595 HungrySeagull
HungrySeagull's picture

And it costs less than you think to pan me.

Wed, 05/02/2012 - 20:08 | 2392564 Beam Me Up Scotty
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.

Thu, 05/03/2012 - 01:09 | 2393049 Beam Me Up Scotty
Beam Me Up Scotty's picture

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

Wed, 05/02/2012 - 16:18 | 2392061 niktamere
niktamere's picture

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

Wed, 05/02/2012 - 16:22 | 2392067 SheepDog-One
SheepDog-One's picture

LOL niiiiice!

Wed, 05/02/2012 - 16:28 | 2392082 Pladizow
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.

Wed, 05/02/2012 - 17:07 | 2392199 e_goldstein
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."

Fri, 05/04/2012 - 18:20 | 2398443 ManOfBliss
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?

Wed, 05/02/2012 - 16:23 | 2392069 WeekendAtBernankes
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

Wed, 05/02/2012 - 16:34 | 2392087 Pladizow
Pladizow's picture

You forgot - unit or measure of account.

Wed, 05/02/2012 - 17:08 | 2392206 TheFourthStooge-ing
TheFourthStooge-ing's picture

...and fungibility.

 

Wed, 05/02/2012 - 17:11 | 2392219 akak
akak's picture

Fungibility being the characteristic of being prone to fungus?

Wed, 05/02/2012 - 17:16 | 2392238 TheFourthStooge-ing
TheFourthStooge-ing's picture

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

 

Wed, 05/02/2012 - 17:20 | 2392248 akak
akak's picture

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

What can brown do for you?

Wed, 05/02/2012 - 17:31 | 2392280 TheFourthStooge-ing
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!"

 

Wed, 05/02/2012 - 19:56 | 2392548 TheFourthStooge-ing
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.

 

Wed, 05/02/2012 - 21:28 | 2392706 akak
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.

Wed, 05/02/2012 - 21:43 | 2392743 TheFourthStooge-ing
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.

 

Thu, 05/03/2012 - 04:53 | 2393160 e_goldstein
e_goldstein's picture

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

Wed, 05/02/2012 - 21:15 | 2392685 A Nanny Moose
A Nanny Moose's picture

Fun Guy

Thu, 05/03/2012 - 01:54 | 2393084 FrankDrakman
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.

Thu, 05/03/2012 - 04:55 | 2393161 e_goldstein
e_goldstein's picture

You forgot portability, but yeah.

Wed, 05/02/2012 - 16:20 | 2392062 SeverinSlade
SeverinSlade's picture

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

Wed, 05/02/2012 - 17:09 | 2392209 e_goldstein
e_goldstein's picture

Brilliant business idea! 

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

Wed, 05/02/2012 - 16:31 | 2392095 PrintingPress
PrintingPress's picture

They were called gold certificates.  http://en.wikipedia.org/wiki/Gold_certificate

Wed, 05/02/2012 - 16:36 | 2392105 vast-dom
vast-dom's picture

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

Wed, 05/02/2012 - 20:36 | 2392598 HungrySeagull
HungrySeagull's picture

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

Wed, 05/02/2012 - 16:48 | 2392129 dark pools of soros
dark pools of soros's picture

yes they CAN print gold coins..

http://cubify.com/cube/

just add tungsten

 

Wed, 05/02/2012 - 17:36 | 2392293 skepticCarl
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.

Wed, 05/02/2012 - 17:54 | 2392341 css1971
css1971's picture

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

Wed, 05/02/2012 - 19:03 | 2392462 WhiteNight123129
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.

 

 

 

 

Wed, 05/02/2012 - 20:37 | 2392600 HungrySeagull
HungrySeagull's picture

bitcoin?

WTF?!

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

Wed, 05/02/2012 - 21:22 | 2392695 fnord88
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. 

Wed, 05/02/2012 - 22:47 | 2392846 TeMpTeK
TeMpTeK's picture

Silver...

White Gold Bitchez!

Wed, 05/02/2012 - 16:20 | 2392065 scatterbrains
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 ?

Wed, 05/02/2012 - 16:22 | 2392068 ffart
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.

Wed, 05/02/2012 - 17:05 | 2392138 AL_SWEARENGEN
AL_SWEARENGEN's picture

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.  

Wed, 05/02/2012 - 17:41 | 2392303 Jendrzejczyk
Jendrzejczyk's picture

Excellent bio Al. Glad you made it here.

Wed, 05/02/2012 - 16:48 | 2392130 SWCroaker
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...

 

 

Wed, 05/02/2012 - 17:01 | 2392163 akak
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.

Wed, 05/02/2012 - 17:41 | 2392302 Rynak
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.

Wed, 05/02/2012 - 17:11 | 2392222 Quinvarius
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?

Wed, 05/02/2012 - 18:47 | 2392436 Marco
Marco's picture

Transaction taxes.

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