This writer seems to think so. He states:
Gold's 'value' is embedded in human history and collective psychology.
derives its economic value from the basic human urge to possess it. It
is this natural ability of drawing human possessiveness that makes gold
as the natural currency of the world, and helps gold display
characteristics quite similar to that of 'ordinary money'.
The first statement is a bit confusing. I don't see how gold's "value" can be "embedded in human history"....unless the author meant to say that 'at specific moments in time (in the past) some individuals chose to value gold as money.'
There is also no such thing as a "collective psychology." Individuals think...Individuals act.
But I think the second statement deserves further scrutiny. Do humans have a "basic human urge" to possess gold? And does this urge make gold "the natural currency of the world"?
My answer to both questions is No.
To say that all people have a "basic human urge" for a commodity is to say that all people value that commodity. But values are subjective. Some people value gold, some can care less, and others (the authoritarian types) actually hate it. So a person's individual value scale determines whether or not he/she values gold.
If a "basic human urge" for gold does not exist, why (for thousands of years) did individuals choose to use gold as money?
The answer is because gold fits every quality suitable for a money commodity:
- Gold is relatively scarce.
- Gold is transportable.
- Gold is imperishable.
- Gold is easy to store.
- Gold is easily divisible.
- ....and most importantly, gold is marketable.
It is because gold meets the above requirements (better than any other commodity) that it has been used as money throughout history. It is also the reason that many people today protect themselves financially by owning gold. When the 'fiat era' comes to a close someday, gold will still meet all of the above requirements....and it is already accepted throughout the world.
Even Mr. Alan Greenspan said before the U.S. House Banking Committee in 1998: “The U.S. should hold on to its gold stock…Gold still represents the ultimate form of payment in the world...Fiat money, in extremis, is accepted by nobody. Gold is always accepted.”
Aug 20 2008, 04:25 PM