Excerpts from a column I wrote 06-6-2003
In describing the Garden of Eden, the Bible says at Genesis 2:10-12, “A river flowed out of Eden to water the garden, and there it divided and became four rivers. The name of the first is Pishon; it is the one which flows around the whole land of Hav-ilah. Where there is gold; and the gold of that land is good.”
Gold is the first metal mentioned in the Bible, before iron, silver, copper, or even stone or sand. It is the first inorganic material specifically referred to by name. Gold was first used as a primitive ‘money,’ or a store of value, long before coins and bars were even thought of, in other words. Gold beads have been found in Sumerian excavations, dating back to 4,000 B.C. When King Tut’s tomb was uncovered, his remains were encased in a casket of solid gold, which weighed in at 2400 pounds, or about $70 million in today’s prices. That gold still exists, as does virtually all gold ever mined.
The Babylonians were possibly the first civilization to use gold in a monetary form, by making the “Shekel.” This was about 2,000 B.C. The shekel was used as a method of fixing prices and value, and was probably responsible for Babylon’s commercial success. In the succeeding 25 centuries or so, billions of coins and bullion bars have been struck out of gold and silver. Why gold and silver? Because they are items of enduring value, and have been recognized as actual money, for almost 5,000 years.
Gold is a beautiful and noble metal, and its luster and deep yellow color, have made it irresistible for thousands of years. Gold is an almost indestructible, ductile metal. A single ounce can be drawn into a wire 35 miles long without breaking; or it can be hammered into a sheet as little as 1/250,000 of an inch thick. It is heavy, and a cubic foot of gold weighs more than a half ton. Gold is totally immune from the effects of oxygen, and will not tarnish, rust, or corrode. Gold is expensive, difficult to mine, has to be worked for, and capital expended, to obtain. Gold has a real cost to own, mine, manufacture, and distribute.
Lenin is said to have predicted that the free world will eventually self-destruct, by debauching its own currency. He was an astute observer of history, because that’s the way it has always happened. Engravings on pieces of paper, bookkeeping and computer entries, promissory notes and other pieces of paper with ink on them, are abstractions. Abstractions, which are like soap bubbles. They can be popped, and when this is done, nothing remains. The same exact thing can happen with computer crashes, or burned documents. The same thing happens in all nations on Earth now, with un-backed paper ‘money.’ There is virtually no cost to endless printing of currencies to pay bills, and reckless spending to keep political hacks in office. Politics is what it is all about. If no one had to be elected, it is doubtful there would be ‘legal tender laws,’ un-backed currencies, and the mess we now find ourselves in, with inflation threatening to become hyper. Please note that North Korea as well as other nations are developing ‘hyper’ missiles, of which there is no defense. That word ‘hyper’, has all sorts of threats, doesn’t it?’ Gold and silver are defenses against ‘hyper-inflation.’
The same hyper-inflation occurred in Germany after WW l. under Hitler. He lost the war, and the last war America won was WW II. That win was in 1945, or 76 years ago. America wasn’t forced to pay its former enemies for the destruction it caused, like Germans was forced to do. If America had been forced to pay for the damage it caused in Vietnam, Korean, Iraq, etc., we would have been in the same condition as was Germany after being forced to pay for the damage it caused. They had no assets, lost the war, so the presses ran, and within a very few years, it took a wheelbarrow of money to buy a loaf of bread. In America, in the last 76 years, a pickup has gone from $1,000 to $70,000. You figure how long it will take to need a wheelbarrow of dollars to buy a loaf of bread. Not in the immediate future, but the ultimate end of the dollar becoming worthless, will eventually happen. I am certain that when the reichsmark became worthless, gold must have been hundreds of trillions of dollars per ounce.
Zimbabwe, formerly productive Rhodesia, went the same way as did Germany, and I have in my hand, as I write this, a “twenty trillion dollars” note, from the Bank of Zimbabwe. Speaking of Rhodesia being ‘productive,’ how ‘productive’ is America, with over 100 ships in Los Angeles Harbor, awaiting their time in port to un-load trillions of dollars worth of mostly Chinese merchandise, bound for Walmarts, Hobby Lobbys, and practically every business in America? I carry a hundred-dollar bill in my wallet now, and as a kid, I had never seen one. A hundred dollars was impossible for me to even imagine, since Hershey bars were a nickel, as were Coca Colas. At age 16, gas was 20 cents a gallon, tires were $9.95. Yes I’m old, but those memories still remain. I store surplus assets in gold and silver, not in fake money.
Don Stott- don@coloradogold.com