Wednesday, August 03, 2011

Why we don't use gold as money....

Why would anyone buy gold?

Why would anyone buy a Van Gogh? Or race horse, dumpy houses, diamond,etc?

Gold is an ancient commodity that holds some value throughout history. It's advantage is that it can be converted into any sovereign currency so, like the American dollar, it "travels" well unlike most anything else used as money, except, perhaps, precious gems.

Unfortunately for many, gold is a long term investment as there are sales commissions involved in the conversion upon sale so it's conversion to a currency is at a loss.

So the caveat about using commodities as a money for our system is that it's difficult to make a short term profit on it. Which is to say, unlike a currency which can be lent out literally overnight at a profit and receiving the return of your principal, we have no way maintaining a lender of last resort to protect the system during crashes and panics....

Hell, no one even trust the U.S that it has it's gold supply on hand let alone the gangsters on Wall Street. Can you imagine giving these guys our money supply if it was in physical gold?

And best of all, when the gold miners go on strike or
run out of reserves, everybody starves or murders the "rich who have all that gold" as the economy collapses destroying the system.

So the next time Ron Paul, a great guy by the way, ask if gold is money, thank your favorite deity it isn't because during panics and crashes the government pushes a few
key strokes and we have our money back maintaining a minimum stability until the crisis subsides.

And besides, can you see all these
"corporate jet owners" and "union bosses" lugging all of that gold to bribe the gang in Washington.

Wait, on second thought, that might not be a bad idea!

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