Saturday, October 29, 2011

Gold Is Money

   Global Currency
All of today currencies are fiat currencies. Fiat currency is defines as not represent anything tangible but are only worth something due to government decree (namely legal tender laws). In the book "Principles of Economics" written by N. Gregory mention that Fiat money, such as paper dollars, is money without intrinsic value: It would be worthless if it were not used as money."
"We have gold because we cannot trust Governments."
-          President Herbert Hoover

On the other hand, gold are the currency which not created and controlled by governments. Gold was once the main currency in most of Europe, Asia and Americans for the past few thousand years which up to 1971. Gold which evolved independently as money in the word's main civilization due to the following reasons:
1.  Rare
The amount of mined gold has increased only slowly, rarely more than 2% per year. 
2. Durability
Gold won't rot, break, crumble, decay, corrode or tarnish. Gold is unaffected by air, water, and even most acids.
3.  Compact
If all the gold ever mined were made into a single cube. Its edge would be 20 meters. Not quite enough to cover a single tennis court. (http:goldnews.bullionvault.com/node/259/print)
4.  Divisibility
Easily reshape it, flatten it, and divide it into tiny pieces.

"The modern mind dislikes gold because it blurts out unpleasant truths."
-          Joseph Schumpeter (1883 - 1950)

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