Business Insider columnist, Joe Weisenthal , recently published an opinion piece directed at the "gold bulls" and the "gold bugs". To say the least, Weisenthal and many of the mainstream "financial gurus" who regularly write pieces about gold and the economy lack the fundamental grasp of sound monetary theory.
The 1oz South African Krugerand Bullion Coin is
one of the most recognized coins in the world which
was designed to circulate as currnecy
Here are Weisenthal's primary arguments.
- No country has ever lasted very long and neither has a monetary system based on a gold standard
- "Greece has a gold standard [currency] of sorts"
- "Going off the gold standard helped us out of our mess"
Let's start out by recognizing Weisenthal ignores the basic axiom individuals act to satisfy their ends by certain goals and means.
History and Austrian economic theory illustrates how individuals in a free society (as shown throughout history) voluntarily seek a gold standard. This runs contrary to the current situation where individuals are forced through coercion to accept "legal tender laws" which cause bad money to chase out good money, known as Gresham's Law.
"Money" is actually a commodity like any other good that derives out of barter as a means of indirect exchange. An example of this activity is when fisherman who wants to trade his surplus of fish for other goods such as wheat, corn, or other consumer goods.
Pat Barron, an Austrian economist, lecturer at the University of Iowa, and guest expert for the Cedar Rapids Examiner adds:
Only the gold itself is money, whether in the form of bullion, dust, or minted into coins. All the rest are money substitutes; i.e., supposedly redeemable in gold. Gold bugs, as the author calls us, make the important point that a return to a gold standard must include a return to using gold coins in some way.
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