Time to poke holes in the frontrunner, and hopefully build it up a bit too! The audience of this newsletter I think is about 90% Christian and probably has some knowledge of Catholic social teaching, so I understand the pull towards the natural resource Gold when it comes to picking a currency. I will wait until next week to divulge my pick(s) but
read these pro and cons with an open mind and let me know your thoughts!!
The Pros...
- GOD GIVEN = NOT MANIPULABLE- The number one reason people prefer gold over BTC, and a fiat currency is because we tend to think gold,
being a natural resource, limits manipulation by man. This of course is only true if a standard backing is kept.
- TIED TO LABOR- To mine Gold takes a lot of work and can be costly. We must work the land in order to obtain it and this in some ways helps us keep the marriage of labor and compensation intact. Of course, it does take forms of
work to produce BTC and a Fiat currency, but the tangible nature of Gold puts it above its two counterparts in the idea of productive labor. (Forgot to mention in a direct ay last week that the ridiculous amount of energy consumption it takes to mine BTC should absolutely be considered a negative.)
- LIMITS ON GROWTH- Gold was abandoned as the standard of money some
50 years ago because it was incapable of integrating into the Global society in which we found ourselves. We needed a means of exchange that could constantly grow as industry boomed. The Christian goal of having nothing global except the Gospel while keeping our communities tight knit is why this "limitation on Power" is a pro and not a con. Some of my opponents in the stock market debate think that limiting growth would be catastrophic for society. Questions such as; How will we ever get
anything meaningful done? How will we go to mars or create fortune 500s? My typical reply to these questions is the word cooperation. If something like colonizing Mars really needs to be done than we ought to work together despite currency and speculative investing. The stock market, and a form of currency that funds never-ending growth are just mechanisms that put our greed to a use that ends up hurting us. We should not create systems that perceptually leverage our vices, instead
we ought to use God's gifts to pursue virtues.
- WE LIKE IT, ITS HEAVY, AND ITS HERE TO STAY- Gold is extremely dense, virtually indestructible and everyone wants it. In short, people all over the world see value in this glittering natural resource that is hard to steal and impossible to destroy. These properties are great attributes in a means of
exchange.
The Cons...
- GLOBAL IMPOSSIBILITY- The world we live in probably doesn't have a place for Gold as the standard of exchange. Getting the growth for growth's sake global economy to agree on a set price per ounce
for Gold and then sticking to that price while actually using it as backing for money would be such a major change to our current state of affairs that no one will be on board. A one world government would have to take over and implement the gold standard and force people to predominantly operate within their designated communities, which sounds problematic to say the very least. Or we all become on fire Christians who adopt and apply true Catholic social teaching, which just seems
unlikely.
- WHO'S IN CHARGE?- Gold would need to be set at a price per ounce, but the trillion-dollar question is who sets the price? Sure, we can point to various calculations and global metrics but at the end the government/organization leader gets to set the price. What could possibly be put into place to stop a repeat of 1933-34 when Pres. Franklin D. Roosevelt
increased the price per ounce to $35 from $20.67? The temptation to increase commerce, which brings benefits to banks and major corporations while hurting middle- and lower-class families, remains constant and is an easy choice to make. This temptation will always weigh heavy on the authority that is tasked with keeping the gold standard consistent. Fiat currency as we know it --has lasted about 50 years but the gold standard for the US did not last much longer in its original form, 1870-1920's.
The gold standard that existed in ebbs and flows from 1932-1971 was not the uniform thing most people think it was, e.g. FDR inflation the value.
- OUR PLANET MAY SUFFER- Anyone who has read this newsletter and my site for any length of time knows I am no green energy advocate. However, if Gold was adopted as the standard in our current economy, then bad mining
practices and bad actors coercing people to give up their gold jewelry would be tough to keep in check. I admit this argument is weak, but it should still be considered.
- WE WOULD STILL BE DIGITAL- No matter what currency we pick we will still be living in the digital age. Almost no one carries cash anymore and we certainly won't be carrying gold coins around. This
is not a particular argument against Gold but make no mistake no matter what currency we choose we will be paying with digital wallets and plastic cards.
See you next week when we wrap up this short series.
