There are pros and cons for both gold and paper..
But as far as I can recall, no one engaged in wars of conquest over paper money. If anything, Fiat was issued to pay for wars of conquest to obtain hard assets.
The reality is that money, once obtained through sale of assets, or compensation for services rendered, is nothing more than a medium of exchange for facilitating the transfer of wealth and value from one form of asset to another. I could use that money to buy gold, or buy oil. Or I could buy the debt instrument of another party, feeling secure that the debt will be repaid with interest. I could buy land, certain in the knowledge that they aren't making any more of that.
Money that is stuffed into a mattress gains no return. Money must be invested as it provides the momentum to sustain economic growth. Hoarding assets, and/or money, impairs economic growth and denies credit to entrepreneurial businesses. Likewise, money hoarded in a low-yielding bank CD, or a PM that pays no interest, is not conducive to economic growth.
And the bottom line is, as your suitcase story relates, very hard to transport, and store. And in a world where rule of law is second to economic greed and increasing desperation by the masses, your ability to transport and store that gold will incur substantial security risks/costs that may dilute it's value.
Hawk |
