Gold Is Money While Currencies Today Are ‘IOU Nothings’

The comments above & below is an edited and abridged synopsis of an article by Mark O’Byrne

This is an article by ex-New York Fed Vice President John Exter first published in the May 22, 1972 issue of Barron’s, and he asks, “What is money anyway?”

Gold Is Money While Currencies Today Are ‘IOU Nothings’ | BullionBuzzFirst, it is a means of payment or medium of exchange, for paying bills, for buying goods and services. We also accept money when we sell. Second, it is a standard of value. We quote values of goods and services in terms of it (prices). Third, it is a store of value. We hope to avoid loss by holding it. Money holds its value if it is scarce and remains scarce. Scarcity is the keystone of store-of-value money.

Today, says Exter, there is no money in the world that fully performs all three services. The article discusses commodities as money; relative rates; Gresham’s Law; and inflation.

Exter’s view regarding fiat currencies, the modern monetary system and the importance of gold will be seen as prophetic in the coming years.

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  1. Pingback: Broken Markets and Fragile Currencies | BMG

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