Title: IS GOLD MONEY? Source:
[None] URL Source:[None] Published:Jul 14, 2011 Author:Ron Paul Post Date:2011-07-14 13:07:59 by socalv8 Keywords:Paul, Ben, Good Question Views:75230 Comments:131
Money serves two purposes -- a medium of exchange and a store of value.
Gold evolved as the most widely acceptable form of money over history because of it's characteristics -- it's scarce and durable.
The pieces of paper that we pass around today are a lousy store of value because the government purposefully inflates the money supply to hand out to special interests. The only reason that they are accepted as a medium of exchange is because the government has decreed them to be so.
The pieces of paper that we pass around today are a lousy store of value because the government purposefully inflates the money supply to hand out to special interests.
The same thing happened with gold and silver based money. We saw deflation and inflationary periods with gold. In fact, just finding new gold mines would lower the value of your purse. We have had gold and silver bubbles before.
As soon as people start to 'cash' in their gold holdings the price of gold will start to fall. That's what happened to the stock market and real estate bubbles. People bought the things and as more people bought the more the price went up but as soon as the tipping point was reached for people selling the stuff back the values collapsed.
The same thing happened with gold and silver based money
Dumb ass, the only way you can increase the supply of gold is by mining it. Historically, the gold supply has increased an average of 2% a year. On the other hand, there is no limit to how much fiat money a government can create and how quickly it can create it.
This is why gold is a good store of value and fiat money is not.
This is why gold is a good store of value and fiat money is not.
It's a commodity like orange juice. And unlike most commodities it took only one man to keep the price of gold down for 15 years.
And now it's become the next bubble, so please.... buy lots of it while the price is high, even invest your kid's college money while you are about it.
