Saturday
Gold is a store of stable value over time. That quality, and only that quality, is what can bring about a level of general prosperity.
Once that stable value is crafted into coins or bars of a known weight and fineness (purity), then we have money. Money transforms Gold’s stable value into a known stable value.
With the ability to stably store a known value, came the impetus to create surplus goods and thus accumulate profit. The modern world was up and running.
Production boomed, goods were exchanged, more investments were made, more jobs were created and more production happened. It was the ultimate virtuous cycle and it took the world from scrabbling for survival to iPhones.
In 2021, the stock market is booming and the coffee has never been better. What’s not to like?
Well, what I don’t like is that I can’t see the production to justify it. Bitcoin, as the most egregious example, has made people millions, some billions. What is the product? Bugger all of diddly-squat. It is the ultimate non-product. It is not the “new Gold”; it is the anti-Gold.
Bitcoin is a speculation. Much of the modern economy is just a speculation – betting that the price of some sort of asset class will go higher. There is a good reason that speculation is no part of the ultimate virtuous cycle mentioned above. Yes, it can make some people very wealthy, but there is no production and, thus, no rise in the level of general prosperity. Does that make speculating wrong? Absolutely not; it is what is encouraged by our overwhelmed central bankers. Lacking the circulation of real money and with a grossly over-regulated economy, speculation is all that is available.
But surely it is clear that without an increasing production, we cannot support an increasing population. Absent the reintroduction of Gold into circulation, our world is in big trouble.