The Gold Paradox

Understanding Gold 1

There is an interesting paradox to gold.  Virtually everyone on the planet inherently understands gold and recognizes its monetary value. There is nowhere on the planet where this is not true.  From the deepest jungles, remote areas of Africa, Asian marketplaces, India jewelry hoards, Middle East bazaars, urban population centers worldwide, home storage and safe deposit boxes of ordinary citizens, across national borders, to the hedge fund salons, centers of international finance, and vaults of central banks, gold’s monetary value is universally recognized and understood.  It is not by superstition or through chance that the inhabitants of the planet have independently recognized gold’s value on every continent since the beginning of society.  Multi-generations have lived through and learned that when governments and societies fall to war, economic collapse, or hyperinflation, gold is the single most important monetary element to own.  In times of chaotic turmoil, gold provides an unwavering, convenient passkey to facilitate safe passage and a new beginning.  When it is time to rebuild, gold provides a monetary foundation.  Individuals are not the sole possessors of this inherent understanding.  Central banks representing global governments—the largest of which described this phenomenon as “tradition”—hold some 20 percent of world gold supply inert as reserves.  Governments, while officially dismissing gold in economic policy, equally understand gold’s value.

What is it about gold that mankind universally understands and elevates gold to the apex of the monetary universe?  The inherent understanding derives from the beginning of the evolution of organized society and it’s financial underpinning.  Gold’s value does not change.  Mankind has learned this through a trial-and-error process over millennium.  The value of fiat currency, property, and business will ebb and flow on financial currents and political whim.  As does degrees of political and economic freedom.  Everything else that is earth centric changes.  But gold’s value has remained stable.  Always.  No matter what.  This is understood.

So why has conventional economic wisdom relegated gold as a barbaric relic and dismissed it as just another primarily useless commodity?  Why do eyes roll when the subject of a gold standard becomes a topic of conversation in polite or otherwise company?  Why do the majority of political representatives shun the subject of gold, despite gold’s history and success in the founding and transformation of our nation into a global economic power.  Why do mainstream financial, popular, and political media denigrate and dismiss gold’s historic monetary role?  If gold’s value is stable—always—why doesn’t gold continue to anchor the monetary universe as it did successfully for centuries?  Why is there no academic understanding and accessible record of gold’s unique monetary properties?  Why is there no organized, university level academic pathway to understand gold’s unique monetary and economic properties and restore gold’s historic monetary role?   Why is mankind’s inherent understanding of gold, ingrained over millennia, today not theoretically or academically understood at any organized level?  Why is what is understood by everyone, not understood?  That is the gold paradox.

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