Money – An “Assay”

Ever heard of “fools’ gold”? It actually does look a lot like Gold – until you examine it closely and see that what you thought was Gold is actually a bunch of small, square crystals – often found with quartz. If you don’t examine it closely, you might think it really is Gold, until you take it to an assayer.

But mistaking “fools’ Gold” (iron pyrites) for real Gold is comparatively harmless. Most people only do it once. Besides, iron pyrites are a useful mineral in their own right.

There is a much more serious – and foolish – mistake; one that seems impossible to make. That is mistaking Gold for paper! Or, to put it another way, mistaking paper for money! An assayer, or anyone who has ever seen real Gold in its natural state, would never mistake it for any other metal. Unfortunately, the only people who have seen Gold as money in its “natural state” are very old indeed. In the U.S., no one has carried Gold in his or her pocket as spending money since 1933. That memory grows dim.

What is urgently needed is a new kind of “Assayer”, not one that can tell the difference between fools’ gold and real Gold, but one that can tell the difference between paper (or plastic) and money. The need becomes obvious when we consider the “modern” attitude to Gold – and money.

Gold As Money – What A Ridiculous Notion!

  • There’s not enough of it!
  • It doesn’t allow for the “flexibility” so necessary for modern monetary policy to be utilised properly.
  • There’s not enough of it!
  • It is too rigid to meet the often rapidly changing needs of business and trade.
  • There’s not enough of it!
  • It would confer an inordinate and unacceptable amount of economic “power” upon those nations which are lucky enough to have large deposits within their borders.
  • There’s not enough of it!
  • It would stifle “economic growth” by drastically interfering with and even curtailing the present finely-tuned lending practices of Central and commercial banks.
  • Besides – there’s not enough of it!

Gold – The Barbarous Relic

See! There is no place for Gold in the modern financial system. The most frightening thing about this argument is that it is true! There really is no place for Gold – in the modern financial system. That leads us, however, to a further question:

What does that say about the modern financial system?

To answer that, we are going to have to examine one of the greatest intellectual breakthroughs in human history, the discovery of the concept of money. History has shown conclusively that the physical substance best suited to be used as money is Gold (and silver). Yes, Gold IS money. But why has it proven itself to be the best substance to translate the idea of money into physical reality?