You know, of course that paper money is just a symbol.Â Although considered “legal tender” paper monies, called bank notes,Â merely represent the real assets of the issuing country.Â It is cheaper to make paper money than it is to mint coins, plus paper money is a whole lot lighter and easier to carry around — but not so easy to lug that we haven’t also devised a system of checks and plastic cards.Â Almost nobody carries “real” wealth.
Should a government fail, then all of the symbolic monies of that government fail as well.Â That coffee can of paper money grandpa buried in the backyard is only as safe as the government’s economic standing.Â If he instead used that money to Buy Gold, the gold price may indeed rise and fall but the metal itself will not lose its real value even if the government that minted the coin should fail.
People have been hording gold for 6000 years, not as a “get rich quick” investment, but as a hedge against total poverty. My parents kept solid silver dollars. Some folks like to save Swiss francs. As for me, the only gold I have squirreled away is a couple of pieces of jewelry, but after Amoeba’s post today, I may just be rethinking that.