Wednesday
I just listened (30secs) to yet one more bloke (Michael Gayed) from the long queue of pundits denying that Gold is a store of value. His logic was that “A store of value has to be something that’s predictable in all time frames – that basically keeps up with the cost of living.”
By that reasoning, a measuring tape would only be a valid measure if everything being measured stayed the same length.
It is the measuring tape that must be stable, not what is being measured.
How could something be the measure of value were it not a constant value – a store of value? Gold is not just a store of value, it is a store of stable value (and thus predictable in all time frames).
Stating that Gold has a stable value definitely does NOT mean that it will buy the same basket of goods over any period. The value of goods constantly changes; the value of the measure does not. Gold, like all measures, remains stable*. That is the prerequisite for being the measure of value.
Gold being a store of stable value is the one and only reason that it is, was and will always be, the only money. To deny that is to deny that Gold can measure value and thus denies its whole monetary history.
What about that is not bleedin’ obvious?
* That stability if value comes from Gold’s ‘Stock-to-Flow’ ratio (my original c2009 thesis is from a website long gone, but the link is a 2016 update). It is the stock-to-flow ratio that ensures that Gold is, and will always be, a store of stable value.