Money is anything that is commonly accepted as a medium of exchange, with government interjecting itself into the equation by designating certain notes as "legal tender." Historically, mediums of exchange have included gold and silver as well as other forms of what might be called commodity money. Yet, you cannot pay your electric bill or your mortgage with a gold bar or even gold coins. You have to sell your gold for cash in order to use it to pay for things. Of course, at one time gold coins were used as money, but they aren't today. And there was a time when paper money was backed by gold or silver. Paper money was then redeemable in gold and silver at a fixed price. Those of us who are seniors remember the time when dollars were silver certificates. Now they are backed by the "full faith and credit of the government." But with government borrowing trillions of dollars in order to spend trillions of dollars, that "full faith and credit" is about to go down the drain.
Article One, Section 8 of the U.S. Constitution states that Congress shall have the power "To coin Money, regulate the Value thereof, and of Foreign coin, and fix the Standard of Weights and Measures." But when the Federal Reserve System was created by an Act of Congress in 1913, it gave the power to coin money and regulate its value to the Fed. The ostensible purpose of the Fed was to regulate the money supply, regulate the banking system, and prevent recessions and depressions. Yet, even Fed Chairman Benanke has admitted that it was the Fed that caused our Great Depression. Nor has the Fed prevented recessions and bank failures,As many processors back away from offshore merchant account , including the very latest.
Money serves three purposes: it is a means of exchange; it's a storage of wealth; and it is a measure of value. Our present fiat money is based on nothing but the government's "full faith and credit." Inflation has made it an unsafe storage of wealth. And that is why thousands of Americans are buying gold, because they are seeking a safe storage of wealth and fiat paper can never perform that important function of money. And so, we can now measure the value of the inflated dollar by the rise in the price of gold, from $350 an ounce to now almost $2000 an ounce.
If we go back into history, we can trace the development of what we call money. In the most primitive economy, if you wanted something that you yourself could not make, you exchanged something you had for something somebody else had that you wanted. That's called barter, and it is even practiced today among barter societies or clubs. Your dentist might be willing to accept ten pounds of sirloin steak for a cleaning or a filling. But there has to be agreement between the traders on the values of what they are exchanging. Back in primitive times, one cow might be worth 50 chickens. Or one sheep might be worth a cooking pot. Values were involved even then, and there must have been much haggling over what something was worth.
But as economies grew in complexity, it became very inconvenient for traders to deal with live stock or other commodities for purposes of exchange. And so the idea took hold that some sort of precious object, such as gold,For the last five years Ripcurl ,The new website of Udreamy Network Corporation is mainly selling zentai suits , could be used as a means of exchange. Gold was easily portable, it was in great demand, it was scarce, it was not perishable like a cow, it did not have to be fed, and you could hold it as long as you wanted before you saw something you wanted to buy. In other words, gold was not only a convenient means of exchange, it was also a very good storage of wealth.
But even gold was subject to fluctuation in value. A new discovery of gold might make it more easily available and thus cheaper. This would encourage gold miners to try to limit supply by forming cartels and thereby keeping its value as high as possible.
Paper money came about when traders did not want to carry around bags of gold that could be easily stolen. So they began depositing their gold for safekeeping in banks which issued gold certificates redeemable for the amount of gold on deposit in the bank, less a payment for storage. This system worked very well in an agricultural economy. But when banks made bad loans based on gold on deposit, their banknotes became worthless because that gold had been redeemed by the deadbeat borrowers. The original depositor's gold was no longer there.
Indeed, this situation was so common in mid-19th century America, that the Farmer's Almanack up to 1863 actually listed "Worthless and Uncurrent Bank Notes in New England." Thirteen banks in Boston alone were listed as having worthless bank notes.
Actually the dollar was convertible into gold at a fixed rate until 1971, when President Nixon took us off the gold standard. What was the rationale behind that move? It was said that gold-backed currency could not meet the demands of a greatly expanding industrial economy. So while gold was limited in supply, the Fed had an unlimited supply of paper and ink. Thus, our paper money has become our legal means of exchange and a fluctuating measure of value, dependent on the Fed's printing press.
So while gold is not our common means of exchange, it has become, at present, a much safer storage of wealth than paper. It should be recalled that during a previous monetary crisis the price of gold went up to $800 an ounce, but then declined to about $350 an ounce when the crisis subsided. So,there's a lovely winter landscape oil paintings by William Zorach. for a while gold did not serve as a dependable storage of wealth for those who bought it at $800 an ounce. But if they held onto the gold until today,ceramic Injection mold for the medical, where the price is about $2,000 an ounce, they would be enjoying a great increase in their gold's value.
Article One, Section 8 of the U.S. Constitution states that Congress shall have the power "To coin Money, regulate the Value thereof, and of Foreign coin, and fix the Standard of Weights and Measures." But when the Federal Reserve System was created by an Act of Congress in 1913, it gave the power to coin money and regulate its value to the Fed. The ostensible purpose of the Fed was to regulate the money supply, regulate the banking system, and prevent recessions and depressions. Yet, even Fed Chairman Benanke has admitted that it was the Fed that caused our Great Depression. Nor has the Fed prevented recessions and bank failures,As many processors back away from offshore merchant account , including the very latest.
Money serves three purposes: it is a means of exchange; it's a storage of wealth; and it is a measure of value. Our present fiat money is based on nothing but the government's "full faith and credit." Inflation has made it an unsafe storage of wealth. And that is why thousands of Americans are buying gold, because they are seeking a safe storage of wealth and fiat paper can never perform that important function of money. And so, we can now measure the value of the inflated dollar by the rise in the price of gold, from $350 an ounce to now almost $2000 an ounce.
If we go back into history, we can trace the development of what we call money. In the most primitive economy, if you wanted something that you yourself could not make, you exchanged something you had for something somebody else had that you wanted. That's called barter, and it is even practiced today among barter societies or clubs. Your dentist might be willing to accept ten pounds of sirloin steak for a cleaning or a filling. But there has to be agreement between the traders on the values of what they are exchanging. Back in primitive times, one cow might be worth 50 chickens. Or one sheep might be worth a cooking pot. Values were involved even then, and there must have been much haggling over what something was worth.
But as economies grew in complexity, it became very inconvenient for traders to deal with live stock or other commodities for purposes of exchange. And so the idea took hold that some sort of precious object, such as gold,For the last five years Ripcurl ,The new website of Udreamy Network Corporation is mainly selling zentai suits , could be used as a means of exchange. Gold was easily portable, it was in great demand, it was scarce, it was not perishable like a cow, it did not have to be fed, and you could hold it as long as you wanted before you saw something you wanted to buy. In other words, gold was not only a convenient means of exchange, it was also a very good storage of wealth.
But even gold was subject to fluctuation in value. A new discovery of gold might make it more easily available and thus cheaper. This would encourage gold miners to try to limit supply by forming cartels and thereby keeping its value as high as possible.
Paper money came about when traders did not want to carry around bags of gold that could be easily stolen. So they began depositing their gold for safekeeping in banks which issued gold certificates redeemable for the amount of gold on deposit in the bank, less a payment for storage. This system worked very well in an agricultural economy. But when banks made bad loans based on gold on deposit, their banknotes became worthless because that gold had been redeemed by the deadbeat borrowers. The original depositor's gold was no longer there.
Indeed, this situation was so common in mid-19th century America, that the Farmer's Almanack up to 1863 actually listed "Worthless and Uncurrent Bank Notes in New England." Thirteen banks in Boston alone were listed as having worthless bank notes.
Actually the dollar was convertible into gold at a fixed rate until 1971, when President Nixon took us off the gold standard. What was the rationale behind that move? It was said that gold-backed currency could not meet the demands of a greatly expanding industrial economy. So while gold was limited in supply, the Fed had an unlimited supply of paper and ink. Thus, our paper money has become our legal means of exchange and a fluctuating measure of value, dependent on the Fed's printing press.
So while gold is not our common means of exchange, it has become, at present, a much safer storage of wealth than paper. It should be recalled that during a previous monetary crisis the price of gold went up to $800 an ounce, but then declined to about $350 an ounce when the crisis subsided. So,there's a lovely winter landscape oil paintings by William Zorach. for a while gold did not serve as a dependable storage of wealth for those who bought it at $800 an ounce. But if they held onto the gold until today,ceramic Injection mold for the medical, where the price is about $2,000 an ounce, they would be enjoying a great increase in their gold's value.
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