“At this juncture, with massive debt and economic contraction, deflation, and social chaos looming, many people ponder the purchase of precious metals solely in terms of whether such metals will be worth more or less fiat debt in the future. Precious metals should instead be evaluated in terms of their exchangeability for real goods and services, come hell or high water. Here the barbarous relics’ record is quite good, far better than that of fiat debt. There are fluctuations in real money prices due to fluctuations in the supply and demand for it, but those are driven by organic developments in a market economy, not the whim of government officials and central bankers.”
Here’s a definition of money that will be rejected by conventional economists of all persuasions, but will clear up analytical confusion for those outside the dismal science. Money is that which serves as a medium of exchange, a store of value, and a unit of account, has intrinsic value, and which is not a liability of an individual or entity, including that of a government. The immediate objection to this definition is that it does not describe anything that currently functions as a medium of exchange. Something must be wrong with a definition of money that excludes everything that people now think of as money.
Perhaps it’s not the definition of money that’s flawed, but present monetary arrangements. Everything that now serves as a medium of exchange, a store of value, and a unit of account has minimal or no intrinsic value and is somebody’s liability. Even the US currency…
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