Why has Gold and Silver been used as money for over 5000 years
The answer is quite simple. They are the only things on this earth that meet all the requirements to ensure that financial transactions are carried out in an honest and trustworthy manner. What we use in North America is called Fiat Currency. Fiat, which is a Debt-Based Currency is not money. In a Fiat system, currency is expanded any time the government decides to create more of it, or any time a bank creates a loan for a client. So the more money a country spends on itself, the more currency it creates. This works for a while, until the rest of the world decides enough is enough, and they are done with us living like Kings and Queens because we have the money printer, and they go further into poverty, because they don't. It's complete dishonesty and theft, and if we consider this situation in our own lives, we would soon stop dealing with a neighbor if they were able to just keep printing money every time they wanted something from us. In very short order, they would own everything, and we would own nothing, which is exactly what North America has been doing to many other nations for decades now. Here’s why every single Fiat-based financial systems in history has failed, and why all current Fiat systems will fail as well.
To best understand things, let’s start with the most basic of questions. Why do we need money in the first place? Well, it’s mainly because when we’re wanting to get something that someone else has, we most often don’t have anything that they need at that particular time. For example, let’s say you need some bread, so you go to your baker to get 4 loaved of bread. But you being a plumber, have no services or items that he requires at that time. So you need to have something that you can give him, that he knows he’ll be able to come to you one day, and use it to pay you for something you have, or a service you can provide. This is where money comes into use, as a medium of exchange. The reason we need something as a medium of exchange, is because to do commerce with other people, we require something that is consistent in value, so that both parties can have confidence in knowing that the value of the item they are giving up, is equal to the value of what product they’re receiving. For thousands of years, gold and silver have been the instruments that have fit all the requirements to be classified as “real money”. In a non-corrupted society, your time and effort are able to be stored in gold and silver as money. Then later on when you need to convert that money into someone else’s time and effort or assets, you will be able to do that by trading in your money(gold or silver), which will still be worth the same amount of time and effort your put into it the gold or silver coins at the start.
Compare this to the dishonest debt-based Fiat currency systems, where the value of the currency is devalued every day through inflation. It’s a simple truth to understand, that we are losing value every single day we hold onto currency in a Fiat system, but most of us were never taught this concept. No matter what the inflation rate is, every single day, the purchasing power of the currency is losing its purchasing power or value. Sometimes slowly, at 5% per year, but other times very quickly, which is what we’re experiencing today.
Where as for Silver for example, throughout history, 1 ounce of silver has always been equal to roughly 1 to 2 hours of labour, and 1 ounce of gold will sustain a family of 4 for about a month. And this remains constant, whether you look back to 1895 or today in 2022. A 1 ounce silver coin is $40, and a 1 ounce gold coin is $2400. In times of social unrest, the values become worth much more, but once calm returns to a society, the values(purchasing power), slowly return to their normal amounts.
In order for something to have world-wide acceptance and be used as real money, it must pass all the following tests:
1. It must be TANGABLE - something that is real that both the buyer and seller can touch and hold onto.
2. It must be PORTABLE – it must be small enough to be carried on a person so to be used in daily trading activities, but not too small that it gets lost easily. Silver works excellent for day-to-day transactions, and gold provides for much larger amounts of wealth to be easily carried on one’s person for major purchases or long-term travel need.
3. It must be RARE - the supply of it must be limited, and not easily attained. This will act as a naturally occurring “throttle” on the supply, ensuring there is never a flood of supply in the market place. And the control of supply amount must occur naturally in nature and not by humans or anything that humans can control. This way there is now way for it to be manipulated, either intentionally or unintendedly. Fiat (debt-based paper) currency is produced in any amount nowadays, at the press of keystroke. And since most currency is now digital, no work must be done to create it, and there is no limit as to how much can be printed. Therefore, no Fiat currency can ever be considered to be Rare, whereas the metals of gold and silver are by nature alone, Rare commodities.
4. It must be UNIVERSALLY AVAILABLE - in order to be a world-wide monetary instrument, it must be present naturally in every country on every continent. One, or a small group of countries must not have a monopoly on it, which would not allow other nations the ability to produce it, if it is not available in their countries. Gold and silver are available as a natural resource in every country in the world. The harder a country works to attain gold and silver, the more money they will have to be used in trade with other countries.
5. The process of attaining it must take into account ALL ASPECTS OF THE ECONOMY. This way, as the costs increase in any one sector, the price of the monetary instrument will go up accordingly. If not, this would render the process of attaining it not cost-effective, and the process would cease….. this will lower the supply over time, and then in turn, the rise in demand would force the price upwards to a point where, once again make the process of attaining it feasible once again. The sectors include, but are not limited to: Prospecting, Surveying, Permitting, Machinery, Labour, Food, Fuel, Housing, Energy, etc
6. It must be DURRABLE – it must be strong enough to be able to withstand being passed from person to person, several times a day, and be identifiable for many years to come. Fiat currencies often rip and crumble, and if exposed to fire, are completely destroyed and all value is lost. Whereas in the case of gold and silver, a vast majority of coins last for hundreds of years, and if exposed to even the most extreme fire, they maintain over 95 % of their value, even if they turn into an unrecognizable lump of metal.
7. It must have INTRINSIC VALUE – the monetary instrument must have value because of what it is, not just because of what it’s used for. This is what gives the instrument its most important virtue… it’s actually worth something all on its own. All paper money ever printed, Crypto Currencies, Digital Currencies, and all coins made since the silver was removed from them.(1968 in Canada and 1964 in the USA) do NOT have Intrinsic Value.
8. It must be DIVISABLE – the instrument must maintain it’s value, when it is divided. If one, is cut into two pieces, the values of the each of the two pieces must add up to the value of the original whole piece. No matter what size each piece is, the corresponding value must no be worthless, and must maintain its value, relative to its size. True money is never destroyed, it is only divided or added to. When Fiat(debt-backed paper) money is used, all value is lost as a trading instrument if the note is cut into 4 pieces. If you try to spend one of these quarter pieces, you will find that it by itself is useless and has lost all its value. On the contrary, when gold or silver are divided, each piece is still worth the value of the metal, so virtually no value is lost. Fiat currencies are not Divisible.
9. It must be FUGIBLE – this means that if you have 4, one-quarter forms of the money, they must be worth the same as One whole form. Gold, Silver, and Fiat currencies are considered Fungible.
10. It must have UNIVERSAL VALUE - real money must have the same store-of-value, world-wide. The value of it must be able to be accepted anywhere in the world, so that it can be spent anywhere you go, without having to worry about its acceptance or exchange rates. The amount of time and effort it took to attain an amount of real money, should be able to be turned into that same amount of time and effort value, anywhere you go. There is no paper Fiat currency that is accepted world-wide, but again, gold and silver are valued and accepted in every single country on planet earth.
The number one reason that the USA’s financial system is collapsing, is the same that every powerful nation throughout history has collapsed. They all ended up printing far more currency than they should have, without putting in the time and effort to back it up, resulting in the rest of the world being taken advantage of. The rest of the world send the USA their goods and services, and in return, the USA send them dollars that no one in the USA actually worked for. Eventually the rest of the world come to the point where they have a whole bunch of US dollars, and the USA has all their goods that they didn’t work for. The rest of the world is fed up with this dishonesty, and they are now pushing their US dollars back to the USA, hoping to get as many assets as they can before the USA financial system collapses. And that’s the real reason we’re seeing very high inflation, it has nothing to do with the factors the government or media are telling their people. They speak these narratives in hopes that the people are fooled, and wrongfully blame other world entities for all the hardships that a collapse will bring.
The US Dollar supply is simply flooded in the world marketplace, and the rest of the world is now looking for a new system or country to deal with who would treat them fairly. These cycles over the last 500 years tended to last between 50 and 110 years, so it would appear that corrupt human nature has once again repeated itself, and we are seeing the transfer from the USA Dollar dominance and being the World Reserve Currency of choice, and moving towards something else. What it will be? Is the world going to go to a global Gold-Standard and several countries are working on right now? Are Crypto-Currencies here to stay? Will China or Russia take over as the financial leaders of the world? I don’t know what will happen, but for me, I’m thinking it’s time to do something to prepare for the collapse of the current financial systems and protect my wealth as best I can. Let’s not be caught off-guard.