To measure is to assess the size, amount or degree of something. Gold allows both buyers and sellers to measure their perception of the amount of value of a good or goods. All buying and selling revolves around this process.
Most confusion around money stems from the notion that its only role is in these marketplace exchanges. The reality is that this is money’s secondary function, one that can be temporarily filled by all manner of media of exchange. Money’s primary and irreplaceable function is as the store of stable value.
One should not need to be a metrologist to understand that all measures are via the utility of the most stable value.
At the other end of the stability of value spectrum lie fiat currencies. These are constantly being measured, and not just by Gold. Even goods tend to more stability of value than currencies.
The most obvious goods against which currencies are measured include silver, real estate, works of art, diamonds, commodities and stocks. The value of all these tends to be more stable than currencies. Today we are in the midst of a growing worldwide depression, yet stock markets are generally rising. This should be viewed in the light of a perception of falling currency values, rather than the investment merit of most companies.
No one wants to hold a currency that a/ has a volatile value and, b/ pays little to no interest. Everyone wants to exchange them as fast as possible for something further along the spectrum of stability, or at least, for a speculation that might appreciate faster than the currency depreciates – thus stocks.
Where else can currencies flow right now? Real estate has rarely looked more ‘toppy’.
Eventually, at some unknown point, the movement will be toward Gold. At the moment, most of those who accumulate Gold are in the Gold bug camp; they see gold as an investment, to be used for gaining profits in paper money. There are incipient signs however of a less whip and buggy approach – the slow illumination of light bulbs.
The ‘anything but fiat’ rush is at the starting blocks. Though unknown still to most, the ultimate destination is Gold. Most won’t make it.