Why Debt Is Not Money, by Doug Casey

Doug Casey makes the same case SLL made in “Real Money.” From Casey at caseyresearch.com:

Gold’s main use, contrary to the belief of some, isn’t in jewelry or dentistry—although those uses are important. Its main use has almost always been as money. But gold’s ancillary uses are growing in importance because, given its physical characteristics, it’s a high-tech metal. It’s one of the most resistant to chemical reaction, one of the most ductile, the most malleable of all the elements, and it’s an exceptional electrical conductor.

There are lots of other advantages to gold as money. It’s by far the most private kind of money; gold coins, unlike paper currency, don’t even carry serial numbers. That makes it truly untraceable. At current prices, it’s more portable than cash, even in the form of $100 bills. It doesn’t retain traces of drugs, as does currency, which makes it less liable to arbitrary confiscation. Although efforts have been made to counterfeit gold bars, with tungsten filler and such, it’s much easier to authenticate than currency.

Until quite recently, 90% of the world’s people were either flat-out prohibited from owning gold (Russia, China, and the rest of the ex-communist world) or simply too poor to consider it (most Indians and other residents of the Third World). But these people are now allowed to own gold and have a fast-increasing ability to buy it. And they’re rapidly doing so. Their cultures have long histories with the metal and recent histories of living in a police state; they understand the value of real money. Although common people are now the biggest gold buyers, their governments and central banks are accumulating it as well.

To continue reading: Why Debt Is Not Money


One response to “Why Debt Is Not Money, by Doug Casey

  1. Reblogged this on The way I see things … and commented:
    No debt is very liberating! I don’t have much but I don’t have debt either 🙂
    Governments, however, are not the only ones who think that debt is money. It seems that many people who get a bunch of credit cards, enabling them to spend beyond their means, imagine that they have money. And they also think that owning the debt of others – like government bonds – means they have money. A bank deposit isn’t really cash; it’s a debt of the bank. There are about three trillion dollars in money market funds; 100% of that money is invested in the short-term debt of banks, corporations, and governments. I would be very leery of these things. Debt is not always repaid. Money, however, simply “is.” That distinction is lost on almost everyone. Don’t be among them.

    So you should own gold because it’s money, because of its security, and because it’s an excellent speculation. If you think of your gold as cash, and the dollar as a merely temporarily fashionable means of exchange, you’ll find yourself loading your portfolio with much more gold and gold proxies. That will protect you against the very rapid loss of value the dollar faces in years to come. Inflation is going to truly get out of control.

    Editor’s note: Gold stocks offer leverage to the price of gold…meaning when gold prices rise, gold stocks can shoot up much higher. The returns can be spectacular. And there’s a once-in-a-lifetime opportunity setting up right now to profit off one publicly traded small cap…


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