Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Gold Is Money: It’s Elemental!

  by    0   0

Gold is money. That’s one of the main reasons you want to own gold.

Gold possesses all of the characteristics of money Aristotle listed 2,000 years ago. The philosopher said sound money must be durable, portable, divisible, and have intrinsic value. You can check off all four of these characteristics for gold. You can also add a fifth characteristic to Aristotle’s list. Sound money cannot be easily manipulated by central bankers – i.e. created out of thin air. That’s why the yellow metal has held its value over time while fiat currencies have fallen in value.

But a chemistry professor at University College London said there is an even more elemental reason gold is money.

Gold is boring. Chemically speaking that is.

In a 2013 BBC article, Andrea Sella argued that its chemical makeup makes gold the perfect element to function as money.  It is stable. It doesn’t react with other elements. It doesn’t break down over time.

In fact, gold was chemically destined to be money.

Sella points out that you can eliminate large swaths of the periodic table right off the bat. Take the gases for instance.

 A gas is never going to be much good as a currency. It isn’t really going to be practical to carry around little phials of gas is it? And then there’s the fact that they are colorless. How on earth would you know what it is?”

Then you have the room temperature liquids – mercury and bromine. They will poison you. You can mark a number of other elements off the list for the same reason. You can’t have money that kills you.

Moving on, we can rule out the alkaline metals on the left side of the periodic table. They are too reactive.

Many people will remember from school dropping sodium or potassium into a dish of water. It fizzes around and goes pop – an explosive currency just isn’t a good idea.”

And of course, we have a whole swath of radioactive elements. Those are out as well.

There does exist a category known as the rare-earth metals. These are misnamed because many of them are actually more common than gold. They are also difficult to distinguish from each other.

This leaves us with the “transition” and “post-transition” metals. These include  iron, aluminium, copper, lead, silver, and gold. But most of these have problems of their own. It takes extreme temperatures to smelt titanium and zirconium. Iron is too plentiful. Aluminum is too flimsy for coinage. Copper and many of the other metals in this category tend to corrode. As Sella points out, “A self debasing currency is clearly not a good idea.”

So, out of 118 elements, we have whittled the list down to just eight candidates to serve as money —  the so-called noble metals: platinum, palladium, rhodium, iridium, osmium, ruthenium, gold, and silver. They are all very stable and quite rare. In fact, most of the metals on this list are too rare.

When all is said and done, we’re left with silver and gold — the metals most commonly used as money.

Of the two, gold gets the slight advantage, as Frank Holmes explains in a Forbes article.

What gives gold the edge over silver, however, is—once again—its chemical inertness. Unlike its white cousin, gold doesn’t tarnish. It’s nonreactive to air and water. Add to this its softness, and it easily emerges as the perfect currency. Ancient peoples recognized this, and I don’t think anyone now would have any problem coming to the same conclusion either.”

Sella offers one more reason humans have valued gold for millennia.

Gold is unbelievably beautiful.”

TaxFreeGold.Banner.1000x285

Get Peter Schiff’s latest gold market analysis – click here for a free subscription to his exclusive monthly Gold Videocast.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

World Gold Council Report: Fed Shift to Neutral Interest Rate Policy Historically Good for Gold

Historically, a Federal Reserve shift from interest rate tightening to a neutral stance has boosted the price of gold, although the effect has not always been immediate, according to a report released by the World Gold Council this week. It wasn’t long ago that the Fed was talking about multiple rate hikes in 2019 and […]

READ MORE →

West Virginia Legislature Approves Measure to Repeal Sales Tax on Gold and Silver Bullion

The West Virginia legislature has approved a bill that would take an important first step towards treating gold and silver like money instead of a commodity by repealing sales and use taxes on bullion. Related

READ MORE →

Consumer Debt Breaks Yet Another Record in January

Total consumer debt broke another record in January, according to the latest report by the Federal Reserve. Borrowing increased by $17.05 billion in the first month of 2019. The increase pushed overall consumer borrowing to a new $4.03 trillion record. That compares with $3.84 trillion in January 2018. That represents a 5.1% annual increase. Related

READ MORE →

China Increases Official Gold Reserves for Third Straight Month as Anti-Dollar Push Continues

the country of china shown on a globeChina added to its official gold reserves for the third straight month in February as the country continues efforts to minimize its exposure to the US dollar. The People’s Bank of China added 10 tons of gold to its horde last month. It has accumulated an additional 32 tons of the yellow metal since the […]

READ MORE →

Powell Pause for the Masses: Fed Chair Talks to 60 Minutes

Federal Reserve Chairman Jerome Powell took his dovish message to the masses during a recent 60 Minutes interview. Powell continued to talk about “patience” and reiterated that the Fed “does not feel any hurry” to push rates any higher. He also said the interest rate is “roughly neutral” at this point, calling the current 2.25-2.5% […]

READ MORE →

Comments are closed.

Call Now