What is Money?

[mmarotta]

In the topic, 2007 Dollar coin.......Did you know? the venerable 28Plain wrote (on Jul 26 2005, 08:27 AM)

Gold and silver are real money. Paper and pot metal are tokens whose only value lies in legal tender laws requiring subjects of the issuing authority to pretend that they are valuable. Pure nonsense ...

I used to feel the same way. Having come into numismatics from philosophical Objectivism, I was a goldbug through and through. I still believe that gold is an excellent form of money for saving money. However, it is not necessarily the best form of money for spending. For one thing, every pass from hand to hand degrades the coin. In the UK it was a problem in the early 19th century. Harden the coin as you will, if it is gold, it wears.

 

We could encase them in plastic, but that has other problems.

 

We could issue tokens (or paper) backed in gold. That was the solution that worked best in the 19th century: a gold-based economy with silver coins for "tokens" redeemable in gold. Harder metals would be best of all, nickel, cupro-nickel, etc. But this is the electronic age, so I suppose that would mean e-gold.

 

Yet, there is more to money than that. I worked with the "Bay Bucks Committee" in Traverse City to create a community currency. It is not backed in anything and has no legal tender status. Yet, it works. Depression scrip worked, also. Money is a form of bookkeeping. Alone on his island, Robinson Crusoe would be able to use money.

 

(Without anything to BUY, gold is worthless.)

[GDJMSP]

In simple terms it's easy - money is anything that people are willing to accept as money. It doesn't matter what it is - rocks, sea shells, silver, gold, strips of paper, knotted cords, feathers, animal hides or plastic cards. It's all money as long as people accept it as such.

[The PCI Guy]

I used to read the scare monger sites; "the dollar will crash before the year is out, the Third World War is nigh, buy gold and silver from us and you're assets will be safe". Quite amusing, i miss those sites.

 

The matter of fact is, lets say yes World War Three did break out tomorrow and yes the dollar fell next week, and you've converted all your savings into gold and silver. Well that's great ain't it? Well what are you gonna feed yourself on?

 

I very much doubt that people will be rushing to get hold of your gold and silver and hand over their food supplies to you. At the end of the day the most valuable thing will be food, clothing and shelter.

 

I also love the way these gold investment pushers seem to indicate that you'll be quids in after the currency falls. Quids in what though? Your gold won't be worth anything in dollars because dollars will have gone. So did you really make a profit?

 

No you merely preserved your wealth. Interesting though how keen investment companies are on getting you dollars in exchange for gold which they spout as being the only form of currency. Maybe i should ask them if they accept payment in silver (by weight).

 

But it kinda backs up both previous arguments that money is what people are willing to use.

[ageka]

Money is any kind of accepted exchange medium

If you sell a sheep and you want bread it is not practical to take a thousand loafs of bread for your sheep

 

Gold , silver, diamonds will help you in a stabilised situation

I hardly think that a bagfull of gold bought you a life boat seat on the last day of the Titanic

Nor on the first day everybody was pushed into the sea at Dunkirk WWII

 

However it got people out of concentration camps , it bought eggs and cheese and chicken on the black market

And right before the war it bought my grandfather a car and driver and 4 years in the free Vichy regime in France