Will Gold Be Monetized Again? Can it? Should it?

Originally Posted by (Name Removed) I seriously doubt that gold will ever be monitized again. There isn't enough gold, and there are way too many people on the planet.

Why wouldn't there be? There's an assumed 1.7 billion ounces of gold held in global reserves with 6.7 billion people. That means there's reasonably 1/4 ounce of gold for every person alive sitting in reserves right now. 


The SUPPLY of gold doesn't change significantly. IIRC, about 50 million ounces a year are mined, meaning inflation of the gold supply is about 3% (what the banks and governments would LIKE you to believe is the rate of inflation for their fiat ponzi scheme).

There are LOTS Of historical precedents where gold's supply and demand dynamics lend themselves to gold being monetized. One of the best ones I have heard is that in Rome, a gold aureus was a coin about 8 grams or .25 troy ounces (about the size of a toonie) and was worth about 25 silver denarii - roughly the monthly wage of a Roman foot soldier or a day labourer.

A Private in the Canadian Forces makes about $2663. With minimum wage in Alberta being $9.40, with a 40 hour work week - the monthly salary for a labourer would be around $1504. Using these two examples as equal to 1/4 oz of gold (the precedent set in the Roman Empire), gold could be fairly valued today at between $6016 and $10,652 / oz.

You say "There isn't enough gold, and there are way too many people on the planet." When you subtract people's liabilities from their assets, how many people in the world actually have saved $6016 to $10,652? Not very many - including in Canada. In fact, given the various levels of debt Canadians have, I'd say most Canadians are worse off than most people in the developing world and there's a good chance it will get much, MUCH worse in the near future.

In other words, there "isn't enough fiat currency, and there are way too many people on the planet" to legitimize or substantiate fiat currency as a viable global monetary system. 

The BIG appeal to gold, though, is that once you "spend" it, it's gone. This means there's a finite cap to how much anyone can spend. Many argue this would create deflationary shock and stifle economic growth, but they fail to consider that such a system also FORCES fiscal responsibility for all parties. Most importantly, it constrains the government whose interventions into the economy clearly stifles economic growth far worse than a constrained, finite money supply.

Government's can't engage in wasteful social engineering experiments and unsustainable wars of aggression if they have to pay in gold, since if gold was money, them doing so would deplete their treasury and bankrupt them. Instead, governments would be FORCED to be very prudent in their spending initiatives which would allow the free market to create real wealth. The free market of course is the most efficient and fair system to distribute goods and services.

In addition, having a gold standard creates incentives for people to act responsibly. Where a debt based fiat system rewards irresponsibility (recklessly spending), a gold standard rewards responsibility (prudently saving). That alone would solve most problems societies in the world face, not just economic ones, but social and political problems too.


Will gold be monetized again?  I don't know.  I sure hope so.