QUESTION: Mr. Armstrong, My spouse insists that I write to thanks for making me spend money on shares moderately than gold. We cut up the cash, and my spouse invested within the Dow together with your 2015 ECM flip, and I saved the gold. She beat me on the Dow because it closed in 2023, up about 250%. After studying your enter into historical past, am I appropriate that this argument of fiat forex is faulty? It looks like civilizations have risen and fallen, regardless of the cash system on the time. Might you elaborate on whether or not that is true or false?
Upset goldbug.
ANSWER: Not many males would admit their wives beat them in investments. Many issues have been used for cash, from bronze and clam shells to emergency paper forex. Those that insist that one way or the other gold is the one factor that’s cash have no idea their historical past, and within the course of, they’ve been misled critically, which really prevents them from seeing the actual drawback. Bitcoin isn’t cash nor a medium of trade as a result of not everybody will settle for it. A medium of trade needs to be one thing that everybody accepts.
There’s a frequent theme that runs by ALL types of cash, and it has NOTHING to do with what’s getting used because the medium of trade.
If we’re goal, even steel has various. Bronze was useful as a result of it might be used to make a software or a weapon – therefore the Bronze Age. It was first utilized in an ingot kind. Nevertheless, it was forged within the form of an earlier type of cash – sheepskins. Thus, the story of Jason is searching for the golden fleece.
The Romans forged bronze into ingots, and the worth was equal to 1 head of cattle. The primary cash of Rome are additionally bronze, starting with simply lumps after which taking the standardized weight and form. In Turkey, they started with what was often known as electrum, which was a pure alloy combination of gold and silver discovered within the riverbeds.
The official first cash have been struck in Lydia, modern-day Turkey. This was the primary “fiat” cash because it was declared a regular worth by the king, who utilized the picture of a lion. This was his badge, certifying its worth and weight.
For instance, there was a steel that was second to gold, which was actually simply brass. Orichalcum was the legendary steel of Atlantis, whose buildings have been stated to have been clad on this uncommon steel that seemed just like gold. Orichalcum was mined in Atlantis in historical instances, however by the point of Plato, this steel was unknown. Orichalcum was a legend by Plato’s time when he talked about it in his story of Atlantis within the Critas of Plato.
By the Julio-Claudian time, Orichalcum was once more being mined. Nero experimented with issuing the normal bronze coinage in Orichalcum (brass). To render the Dupondius distinguishable from its half-denomination, Roman As a radiate crown was added to this denomination, leaving the normal laurel wreath fashion portrait for the Roman As. The Dupondius reform prevailed till the tip of Dupondius’s common points, whereas the experiment in brass died out following Hadrian (117-138AD).
A gold commonplace is not going to clear up the issue as a result of it’s NOT what’s getting used as cash however the system. If governments issued platinum cash and claimed these are value $100,000 every, that can also be fiat, the place the federal government decrees the worth. This frequent thread that runs by every little thing is the trustworthiness of the federal government. So long as we’ve got socialism, the place politicians promise issues, they may all the time create more cash to perform that. DEBT = MONEY that pays curiosity. Folks additionally level to the Fed and overlook the truth that it’s Congress that creates the majority of the cash by issuing debt that can be utilized as an asset in a mortgage.
Gold is not going to clear up the issue. We’d like political reform FIRST after which fear about constraining authorities thereafter.
