- This won’t sit well with some people: Gold isn’t a commodity. There. I’ve said it.
- – WSJ’s Jeff Opdyke
Wall Street Journal is not some goldbug rag. The idea that the U.S. dollar is no longer the envy of the globe is becoming mainstream. Goldbugs, of course, are way ahead of this trend. WSJ’s Jeff Opdyke can state that “gold isn’t a commodity” but he just can’t bring himself to say “Gold Is Money,” and that’s too bad, because it is. For nearly 6,000 years, gold has been used as a medium of exchange and a store of value. Gold is hated by central bankers, because it is a competing currency to their worthless fiat paper Zimbabwe-like junk that they spew, then steal its value from us by inflating it away through printing.
Gold can’t be printed. When gold’s “price” in dollars rises, it merely means that central bankers’ fiat junk is becoming less valuable. Fiat paper “money” is useful as a medium of exchange, but as a store of value it is becoming more worthless each and every day. The value of those paper “dollars” is directly related to the US government’s ability to pay off the national debt, and anyone who still believes that’s possible is just plain stupid. So, holding “dollars” and assets denominated in “dollars” is becoming a bad idea.
And that’s too bad, really. Our entire economy is in dollars, all of our assets, and most of the world’s trade is transacted in dollars. The ability to manipulate the value of the dollar equals the ability to manipulate commerce, trade, wealth, and our ability to earn a living and save for our futures.
Our Constitution clearly states:
- The Congress shall have Power…To coin Money, regulate the value thereof, and of foreign coin…
- No State shall coin Money…make any Thing but gold and silver Coin a Tender in Payment of Debts…
Congress chose to delegate that responsibility to a private banking cartel called the “Federal Reserve,” which is not federal and which has no reserves.
The tokens we use as money are called “Federal Reserve Notes.” Investopedia says this about “notes”:
- A debt security, usually maturing in one to 10 years.
Uh oh; what’s “debt”?
- An amount of money borrowed by one party from another.
I’m not playing with words here. When you are paid in “Federal Reserve Notes” you are being paid with debt, someone else’s promise to pay. In other words, you risk not being paid in full, since debt carries the risk of default. When the fiat dollar is stable, and when debts are being paid, this is probably an acceptable risk. But when debts are not being paid, and the fiat dollar is being questioned, it becomes a hot potato, a deadly serious kind of musical chairs where no one wants to be the last one holding it.
Gold, on the other hand, has no default risk. Gold is payment in full. Financial contracts used to contain a “gold clause” that allowed the creditor to demand payment in gold, as protection against central bank printing. The gold clause was outlawed in 1934 by FDR, and the fate of Constitutional Money was sealed.
Next: Francisco’s Money Speech
Update: The WSJ article cited was originally attributed to the incorrect author. It now reflects the correct author of Jeff Opdyke.