Gold is real money and has been so for 5000 years.
" 'The gold unit represented originally simply the conventional value of the cow as the immemorial unit of barter,' wrote Ridgeway, who conjectured that 130-135 grains was selected partly because it fit conveniently into the palm of the hand.
This institutionally determined convention or standard appears to have been adopted around the Mediterranean for several centuries. Simple gold rings found in Egyptian ruins weigh 128 grains. Similar gold jewelry found by Schliemann at Mycennae, Agamemnon's home, weighed 130-135 grains, as well as rings found on the island of Aegina, just 20 miles off Athens.
GOLD WAS AN EARLY FIAT MONEY
The 130 grain convention would, over time, confer or identify a monetary value on that amount of gold as equal to a cow. Supply and demand would not be a major factor, as the temples had ample supply, the power to hold it off the market, and the power to create a demand for gold by requiring it for their services.
This would make gold one of the early fiat moneys used by man. A fiat money is one whose value is decreed and fostered by institutional decision. The process of monetization confers value on the symbol to be used as money.
Gold also has commodity value. With gold these two attributes have always been confused, so that people speak of gold money as being 'intrinsically' valuable. They are referring to its commodity value. But in reality this commodity value is only responsible for a part of the price of gold. Perhaps a larger portion of its value is due to its designation as money, because this assignment caused vast amounts of gold to be held off the market in various treasuries."
Zarlenga, "The Lost Science of Money," p20, citing William Ridgeway, "Origin of Metallic Weights and Standards," 1892, pp155-156. |
