Thursday, June 24, 2010

Why Gold.

Periodically, it’s worth restating why it is that gold is considered good money, right around the world, as it has been for going on 7,000 years. It is not some mystery, but based on gold’s very tangible characteristics. And those are….

• It is durable, which is why we don’t use strawberries as money;
• It is divisible, which is why artwork isn’t practical;
• It is convenient, which is why lead isn’t very good;
• It is consistent, which rules out real estate; and
• It is useful in itself, which is why paper is such a weak choice.

And one more – given the nature of politicians, money should not be able to be created out of thin air. Which is definitely not the case with gold.

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