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Is Gold Money, Alan?

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To quote Alan Greenspan after being asked for a comment on golds recent gains. The gains are "strictly a money phenomenon" :rolleyes:

I'm sure I heard Peter Munk, as he left the building, explaining that the potential losses at Barrick's were "strictly a money phenomenon" as well.

Does he know Alan, Alan.

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To quote Alan Greenspan after being asked for a comment on golds recent gains. The gains are "strictly a money phenomenon" :rolleyes:

http://www.321gold.com/editorials/cook_b/cook_b091509.html

Perhaps he meant that gold hasn't increased in value but had increased in price because fiat money had decreased in value ie a money phenomenon - well thats how I would understand it.

Greenspan was a goldbug in his youth.

What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible. More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term "luxury good" implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron......

..........In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

Alan Greenspan 1967 Edited by dr ray

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Of course it is. Just ask yourself why are US / UK special forces given sovereigns when on overseas missions.

If I had to barter for my like I would rather offer gold than Sterling, that is for sure.

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