Of all the elements in the periodic table, gold is the only one that can be reused without any loss. It can be fashioned into jewelry, gold teeth, electric wiring, coins, bars, etc. Then, after serving its purpose, it can be melted down and fashioned into something else. Gold, once dug out of the ground, never disappears unless lost at sea or through some other accident. Gold is eternal.
The above ground quantity of gold is constantly increasing, due to its eternal quality. At present, there is more readily available gold in the world than there is readily available steel. If pressed, many thousand tons of gold can be made available over night. Yet, gold is far more expensive than steel. This is because it takes much more effort to get gold out of the ground than it takes to get iron ore out of the ground. Given enough time, much more steel can be delivered than gold.
In financial terms, gold moves like lightning. It is the most financially liquid of all commodities. It is also the most stable of all commodities because it is never consumed. It is merely transformed. This makes gold perfect as money. The fact that it is relatively plentiful is not a problem, but an advantage. Anyone can own a bit of gold. There is plenty to go around. Divided equally among everyone on the planet, every child and old person included, there is about 20 gram for each.
The quantity of above ground gold has grown pretty much in line with the population. Gold is therefore just as rare today in relative terms as it has been before. This means that its value has remained relatively stable as well, even though its value swings considerably. At times, it is possible to buy a house for less than a kilogram. At other times, it takes more than sixteen kilograms to buy a house. But this is to be expected in a world full of financial booms and busts. With people chasing easy riches through debt, as promised by Saturn, prices are bound to swing dramatically from one extreme to another.
In my book on gold oriented investing, I point out that gold is in fact the perfect measure of value. By relating prices to gold, rather than fiat currency, trends become clear and sensible investment decisions can be made. Gold is in other words the perfect money. It is God's money, provided by nature itself. In fact, it is by many perceived to be the only money that has ever and will ever exist. As testified by JP Morgan before the house of congress in 1912: "Money is gold, nothing else."
This is how it has been throughout the ages. Alternatives to gold as money have come and gone, but only gold has remained. This is so ingrained in society that our language is full of references to it. We talk of golden opportunities, gold plated deals, being as good as gold, having a heart of gold, etc.
The only danger with gold is that it can make us greedy and fearful. This is mentioned in the bible: "For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs."
It should be noted that while some people fall into this trap, most people do not. Money is not the root of all evil, as some claim, it is merely a possible source of evil when greed and fear leads us astray. On the whole, money is good, it provides us with a means to transact. It allows us to withhold and defer spending for later. It gives flexibility and freedom to those who hold it. That's why treasures tend to be full of it.
Gold is eternal. It is also a measure of value, superior to all other types of money. It is no coincidence that the alchemists of old believed gold and eternal life to be derived from one and the same substance.
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