Why don’t humans use gold
coins as Money?
The answer is
quite simple: because they don’t want to, under present circumstances.
The attachment of humans
to gold is remarkable; I
suspect there is something metaphysical about
gold that attracts human beings. Perhaps gold is part of the natural order of things, part of the Rerum
Natura, and the relationship
of humans to gold is
human nature, like sexual attraction. I won’t
insist upon this, but I think about it.
But getting back to the question and
the answer I give. The next question is: Why don’t humans choose to use gold coins
as money, under the present
The answer is
equally simple: because we humans value gold so highly (the most significant material gift a man can give a woman he loves is gold in some form) we
will use anything
else available to make a payment, rather than part with gold.
If you have dollars, you will use dollars instead of gold. If you have
euros, you will use euros
instead of gold. British pounds, Russian rubles, Chinese yuan, Japanese Yen, and
even that unlikely monetary unit, the Zambian kwatcha, any one of these will be used
for payments rather than giving up a gold coin.
I read that
the Swiss are thinking
about allowing gold to have a
monetary role. Someone has quipped that this is
like wanting to re-hydrate water. The Swiss will achieve exactly nothing with this measure.
Do they want to use gold
as money? For that to happen,
there would have to be no other currency
available to the Swiss.
Gold will once again
be used as money (it actually is
money) when nobody will take anything
else in payment or when there isn’t
anything but gold (or silver)
available with which to make payments. That was the
situation back in the 19th Century and before. Gold
was used because there was no alternative but silver,
and that situation would
have continued except for
the fact that the ratio
of silver to gold was a fixed ratio, and
was not allowed to fluctuate with the market.
present fiat-money madness
in the world has run its
course, when no paper of any country can pay for its imports, then imports will be paid in gold. It may be a long wait.
I should add:
if people were able to use 100% gold-backed redeemable banknotes as money, people would
use those banknotes for payments rather than their gold coins. And they would use fiat-money banknotes for payments rather than tendering
their gold-backed redeemable banknotes.
The gold coin beats the gold banknote because a gold coin is a
tangible fact but a redeemable
banknote is a promise,
and a promise can never be equal to a fact, in the eyes of any human. This is why women
like engagement rings.
If the ancient representation
of gold has always been the Golden Sun, the equally ancient representation of silver has
been the Moon, the Silvery Moon.
For practical purposes,
we can state that silver has always been the money of the people. It is a precious metal, but it does not enjoy the high regard
People naturally save
silver coins; they will do so all the more if the
coins are given monetary status. Mexicans used the silver peso in parallel with paper money until 1946 because they had no alternative: the one-peso banknote
did not exist until 1946. Americans used silver half-dollars,
quarters and dimes until
1965 because they too, did not have any alternative; in 1965, the rise in the price of silver forced that coinage out of circulation
and coins of base metal took
their place. In our inflationary times the tendency
will be to use paper money for daily
transactions and save the monetized
silver coins; only rarely will they
be used in commerce.
There are now four countries in
the world where individuals
are trying to convince their governments to monetize a silver coin, which people will use to build savings. In a world which is going bankrupt
at an alarming rate, savings not subject to devaluation from inflation are going to make a life-and-death difference to millions of
The plan we espouse
is simple: issue a silver
coin with no stamped monetary value. Give it a quoted monetary
value slightly over the value of the silver contained in the coin. Raise the quote as the price of silver rises.
The plan is terribly
simple. Anything that is going to be
used by millions has to be
simple. Nature does not like
complications. Sex is not
complicated and that’s
why it does its job of producing people. Nature will
eventually wipe out all those worldly-wise men and women who are dealing in complicated junk like Interest
Rate Derivatives, Collateralized
Debt Obligations and all sorts of clever fiat-money nightmares.
We have been proposing the monetization of a silver ounce
coin for Mexico since 2003. Our contacts in our new Congress are stronger than ever – we’ve been educating Congressmen for 9 years now, on the subject of the monetized silver coin, and now have many friends in more influential positions in the Mexican
Congress. Plus the idea
of the silver coin with a
quoted value is now familiar to Mexican politicians; it makes sense
to them and they find nothing strange about it. We are preparing a Bill, once again. Maybe this time it will be voted
for the best in 2013. Monetizing
the silver ‘Libertad’
ounce is a great challenge and a great
objective to live for. Which of four countries will be the first to offer its people silver coins as money?