For the past few thousand years, gold has seen a lot of competitors
try to become the “ultimate form of real money.” Folks
have used everything from cigarettes to butter, stones, livestock,
salt, and seashells to store their wealth and trade for goods.
But when crisis hits... when wars break out... when bank runs
grip a nation... when it’s really time to just “grab the money and
run,” humans keep coming back to gold as the ultimate form of
money.
Gold beats the competition so easily for six reasons...
1) Gold is easily transported. Land is a good store of wealth,
but you can’t take it with you if you have to get out of
Dodge.
2) Gold is divisible. If I owe both Peter and Paul and I have
just one piece of gold, I can split it in half.
3) Gold does not rust or crumble. Folks have used cattle as
money, but cows don’t survive long in a locked vault.
4) Gold is consistent all over the world. I’ll accept the pure
gold you mined in China just as easily as I’ll accept the
pure gold you mined in South Africa.
5) Gold has intrinsic value. Gold has wonderful conductivity,
it’s super malleable, and it doesn’t break down... so it has
lots of industrial uses. Seashells lose big on this one.
6) Gold cannot be created by the government. People who saw
their wealth disappear in the great inflation of the 1970s
know that holding lots of paper money can be disastrous.
Most of the “requirements of money” were laid down by
Aristotle over 2,000 years ago. The great investor Doug Casey is
the world’s best at reminding us why gold is still the ultimate form
of real money.
And now that America is inflating its money supply in an
attempt to pay for all kinds of wars, mortgage bailouts, social
programs, infrastructure buildouts, and green-energy boondoggles,
it’s vital to own a chunk of real wealth.