The Phaserl


The Myth About Money, Credit & Gold

by Chris Mayer, Laissez Faire Books:

The standard version of how money came to be goes like this: First, there was barter. (A handful of nails for a pint of ale!) Then, along came various forms of money. An evolutionary derby eventually crowned gold and silver as the supreme money. And finally, credit (or debt) was born. This is the apex of man’s ascent from knuckle-dragging barterer to tie-wearing mortgage holder.

It’s a nice little story… except it’s completely wrong.

“Our standard account of monetary history is precisely backward,” writes David Graeber in Debt: The First 5,000 Years. “We did not begin with barter, discover money and then eventually develop credit systems. It happened precisely the other way around.”

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1 comment to The Myth About Money, Credit & Gold

  • Jim H

    Mayer says, “When Nixon took the U.S. off the gold standard in 1971, it was in part to help finance the war in Vietnam. (Think, too, about what this means for gold. It is no more “real money” than the ink-stained paper governments turn out. If this is right, gold became money only because states once stamped it and made it money and accepted it to settle debts and taxes. Otherwise, it’s just another commodity.) The U.S. debt made possible a huge military-industrial complex.”

    totally wrong. Gold never stopped being money.. Central banks continued to hold it as an asset, and of course as all who follow the scene know, they have been net buyers over the last few years. Gold will not become just another commodity because of it’s function as a form of money whose scarcity integrity is absolute. This function, this inviolable scarcity integrity, is why Gold will never go out of style as money.. until the greed in human nature can be restrained.., until bankers can be restrained.. Gold will always reassert it’s role as money one way or another.

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