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?”
First, 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.