Gold Standard – Myths and Facts

Historically… gold as a currency has had all the problems of Fiat Money. Aside from the fact that it has no intrinsic value… more of it can be mined and is continually mined. The organizations mining it have an advantage and have historically manipulated the supply to their advantage. The US government at one point confiscated all the gold (a crime). It made itself the sole legal purchaser of gold in the US. That only shifted and further centralized control of gold rather then disperse it. Few people know, that when the US govt went on the Gold Standard, YOU the individual, where no longer allowed to own it. Executive Order 6102 required U.S. citizens to deliver by May 1, 1933 all their gold coin, gold bullion, and gold certificates to the Federal Reserve. An exception of $100 in gold coins was allowed. This does not seem fair or constitutional to me.

Gold historically has been subject to scams such as mixing it with other metals. The only system that is not corruptible is a barter system where you trade actual commodities. Problem there is that the barter system is too slow and cumbersome for anything above a “village level” economy.

Why should you own Gold and/or Silver?

In order to answer this question, I’m going to quickly summarise the history of money;

In order to further enrich our lives, people began to trade.  If somebody had , say, 2 goats and another person had 2 chickens, it would make sense for them to trade a goat for a chicken.  One of the problems that sprung up from this ‘free trade’ agreement between two parties, was that somebody may want a chicken, but the owner of the chickens doesn’t want a goat.  To this end, an intermediary (or medium) was needed.  It was (and still is) called money.  It was observed that some products were used mainly to facilitate transactions but had no other real use than that.  Historically this has been gold for large transactions and silver for smaller ones.