Is Gold Money?

I saw a very interesting article online quoting J.P. Morgan, during a testament to the US congress 1 year before the creation of the Federal Reserve, saying "[Credit] is not the money itself. Money is gold, nothing else."

There's something very powerful about that quote being that this guy is the founder of one of the biggest banks in the world. It makes it easier, in my opinion, to make a mainstream case for gold when a household name like J.P. Morgan adds credibility to it (especially to those who take no interest in learning more about monetary policy).

But does money really have to be gold and gold only? Of course not. It just so happened that it has
Example of  a Kinebar guarantee certificate
qualities that make it very ideal to be a medium of exchange: it is divisible, portable, recognizable, can't be counterfeited* and most importantly it is scarce. When thinking about these qualities, silver and other precious metals also fit the criteria.

It doesn't also mean that you have to carry gold coins or other metals around for trading. You may have certificates or notes issued by your competitive storage facility of choice. These notes could have serial numbers and other forms of unique tagging, sort of like a finger print, that is also almost impossible to counterfeit. But again, it doesn't have to be only gold or other precious metals...

Price of Bitcoin over time
Very recently, Bitcoin, a form of digital currency, has been surging since the whole Cypurs crisis that has further exposed the failures of the Euro dream. It literally takes more resources and efforts to produce more Bitcoins. Just as with gold mining, processing, and minting, supercomputers need to generate information in order to create new Bitcoins. They are, therefore, backed by something solid unlike the discretion of central bankers to print money supply at will.

So in the end, for something to be called money or medium of exchange, there are desirable qualities and preferences and this is decided ultimately by the market. For States to impose burdens on the trade of these market-determined commodities is monopolized and legitimized coercion.

It's not really some conspiracy theory. In fact, many of those who back monopolized money think they are doing a noble job. As much as the moral argument will not pass through their minds, the economic arguments will reveal themselves and eventually they can't be in denial anymore.


*it could be faked but easily and objectively validated, guaranteed, and verified


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