Gold and silver as a replacement for value is just as artificial, maybe more, than a trusted governments paper money. - RW
Not true. Over the course of millenia with millions of free market participants, gold and silver has repeatedly become the standard for commerce over many other potential currencies. I've read a lot of history about gold and silver's use in commerce as part of my economics background in graduate school. During those times when precious metals have been used, or when IOUs redeemable for precious metals have been used, economies have done remarkably well. It is usually when governments come in and convert the paper IOUs to government specie and either devalue the convertability or make it completely non-convertible as in fiat currencies, that we begin to see systemic currency devaluation relative to all other goods, which acts as a giant tax on the populace.
Let's face it. Governments love fiat currencies for one reason only: they can print as much as they want, to spend more than they are able to tax from the populace. Currency devaluation always has one goal: to enable deficit spending through the enactment of a stealth tax, called inflation or currency debasement.
Currencies fully redeemable in gold, by law, or gold and silver itself, are not as readily subject to manipulation by a fiscally irresponsible government or a monetarily irresponsible central bank. That is why over many millenia, people always gravitate towards precious metals. It really is as simple as that. |
