The Gold Myth; the Longest Running Delusion in History

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Richard William Posner
Activist Post

“Belief is the death of intelligence. As soon as one believes a doctrine of any sort, or assumes certitude, one stops thinking about that aspect of existence.” — Robert Anton Wilson

Can someone please give me a sane reason why anyone would pay over fifteen hundred dollars for an ounce of shiny metal that has virtually no intrinsic value?

Or, better still, how about scientifically verifiable proof that gold is actually worth significantly more than a steaming pile of dog shit.

It’s my guess that most people who read this article will go ballistic, call me names, insist that I’m simply ignorant, have no understanding of “economics” and that the gold standard is the only possible solution to our economic woes. Yet not a single one will be able to offer any real reason why gold is actually “valuable”.

That’s because it isn’t.  It must be valuable because they “believe” it is.

No society or culture in history has ever found any actual, practical or essential use for gold. Aside from being foisted on a delusional populace as a valuable commodity, its only uses have been decorative. It has never been a substance that was essential to the survival of the species like, oh I don’t know, something inconsequential like food or water.

Gold is too soft to be used for tools or weapons. It has no significant verifiable medicinal use. It can’t cure AIDS, cancer, heart disease, or anything else as far as I know. It can’t practically be used in construction beyond the usual decorative applications. It’s not suitable for making functional, useful clothing. It won’t keep you warm when it’s cold, cool when it’s hot, or dry when it’s raining. It certainly can’t quench the thirst or sate the appetite. It has never even been very useful as money. It’s too heavy and cumbersome to carry around in quantities sufficient to be used in commerce. That’s the reason paper money was created in the first place — convenience.

Gold never had any practical application until more modern times when it found its way into the cavities in people’s teeth. It’s rarely if ever used for that purpose any longer.

Later it was useful in electronics in small quantities and still is to some extent. Not enough to make it worth over fifteen hundred dollars an ounce.

It has only a single unique characteristic: it stays shiny and pretty for a very long time with minimal maintenance. Wow! It must have magical, supernatural powers! Well, at least that’s what some ancient societies believed.

Simply put, at no time and in no way has gold ever been a vital necessity for human survival. It has nearly always served only one purpose: to enrich those who hoard it and manipulate its pretended “value” in order to take real wealth, unearned, from people who actually do productive work benefiting society.

And yet today, members of modern, ultra-high-tech societies respond to gold like a horde of drooling, mindless, idol-worshiping troglodytes at the yearly sacrifice of the virgins.

People have been indoctrinated for centuries and today still continue to perceive gold as some magically invaluable commodity. They do this without any substantiation or justification whatsoever. They simply “believe”, much like we’ve come to believe in paper money or stocks.

This enables individuals in the “financial industry”, a non sequitur if there ever was one, to steal vast amounts of unearned wealth by manipulating the imaginary value of a worthless rock.

Gold is really not different from all the worthless paper and “financial instruments” that are used as chips in the Wall Street casino every day. Like gold, they are make-believe commodities. Unlike food crops, oil, ore and minerals or other real assets that are actually useful; they are not resources vital or even beneficial to the survival of society and have no intrinsic value.

Gold: The Emperor of Funny Money

Commodity money is useful only to those who lust for wealth but are unwilling to earn it. By fraudulently assigning intrinsic value to something essentially worthless, whether “precious metals” or specious financial “commodities”, they have created a monetary system based on lies.

Because powerful ancient tribal leaders, pharaohs, emperors, and kings prized gold for its seemingly immortal beauty, its fictitious “value” was of necessity accepted by their subjects. Eventually the myth became an accepted truism that has been passed on through the ages leading to a modern, highly developed, scientifically informed and technologically advanced society that nevertheless clings to a primitive belief in a “barbarous relic”.

Gold is not vital to human existence; it has, in fact, relatively few practical uses. Yet its chief virtues—its unusual density and malleability along with its imperishable shine—have made it one of the world’s most coveted commodities, a transcendent symbol of beauty, wealth, and immortality. From pharaohs (who insisted on being buried in what they called the “flesh of the gods”) to the forty-niners (whose mad rush for the mother lode built the American West) to the financiers (who, following Sir Isaac Newton’s advice, made it the bedrock of the global economy): Nearly every society through the ages has invested gold with an almost mythological power. 

Humankind’s feverish attachment to gold shouldn’t have survived the modern world. Few cultures still believe that gold can give eternal life, and every country in the world—the United States was last, in 1971—has done away with the gold standard, which John Maynard Keynes famously derided as ‘a barbarous relic.’ — National Geographic

Gold, having no intrinsic value, is just as much a fiat currency as any paper instrument printed by any government.

It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one fattens the usurers and the other helps the people. If the currency issued by the Government was no good, then the bonds would be no good either. It is a terrible situation when the Government, to increase the national wealth, must go into debt and submit to ruinous interest charges at the hands of men who control the fictitious value of gold. — Thomas Edison

Unless made subject to legal regulation, gold is useless as a stable medium of exchange. Gold has no value in-and-of itself and therefore, when used for that purpose, should be treated as what it is; fiat money. Therefore, if it is to be used as money, its exchange value must be set by law and not subject to speculation and manipulation by the gamblers of the imaginary “financial industry”. Only in this way could it become a stable and useable currency.

Was it ever Feasible to Use Gold for Money?

Aside from going counter to the true nature of money as an abstract legal power, there is a very practical matter that supporters of Gold money can’t address: There is never enough supply of gold sufficient for such a money system. The Gold supply has not kept pace with the growth of population and commerce. This periodically increased the real value of gold. 

Money systems usually solved this problem by cheating – pretending to be operating a gold based system but really mixing private bank paper into the money supply, pretending it was convertible; leveraging the amount of gold in the system through fractional reserves of one type or another. Because this bestowed great power and unearned wealth onto bankers, there has never been a shortage of apologists for such mixed systems – we call them ‘economists!’  — Stephen Zarlenga, Director, The American Monetary Institute.

It should also be kept in mind that, as a matter of historical fact, the use of gold as money is what set us upon the road to the current disastrous financial state we now find ourselves in.

The Birth of a New Religion

Overvaluation did not depend on coinage. Banking is one form of such representative money. In the ancient empires of Egypt, Babylon, India and China, the temples and palaces represented important centers of production and they quickly became the centers of storage of grains and the precious metals, typically under the control of palace administrators and the priesthood. When commodities were thus accepted in the centralized warehouses, it would have been natural for the stewards of the palaces to issue some kind of certificate of deposit that would certify the evidence of debt. Probably these certificates from the temple-banks would be readily accepted in generally payments and could circulate as a form of (overvalued) money. — Columbia University (PDF)

So, the obscene, debt-based fractional reserve banking system actually has its beginnings in very ancient times. The evidence is much clearer for the goldsmith bankers of seventeenth century England.

Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920s, speaking at the University of Texas in 1927:

The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. 

The goldsmith bankers quickly succumbed to the temptation to issue ‘extra’ notes, (unbacked by gold). Why? Because the ‘extra’ notes enriched the bankers by allowing them to buy property with notes for gold that they did not own, gold that did not even exist.

This is where the illusion known as the “financial industry” really began in earnest.

Congressman Wright Patman of Texas:

In other words, the goldsmith wrote receipts for people who were not depositing gold. These receipts too circulated as money. So receipts for more gold than the banker actually had in his vaults were circulating. The goldsmith had only a fraction of the amount of gold needed to meet the claims [receipts] against him. They were issuing $10 in receipts for each $1 in gold. This is the fractional reserve system…

So, there we have the probable cause for centuries of deceit, fraud and exploitation that have led to the rise of psychopathic corporate “persons”, a monolithic international banking cartel, globalized predatory capitalism and all the rest of the deep “economic” shit we now find ourselves in up to our collective nostrils. The stench has finally become insufferable. Much of it arose directly from the use of the make-believe commodity; gold.

Mike Montagne on People for a Mathematically Perfected Economy writes:

A gold standard or silver standard or any other finite, alternate “standard” akin to a precious metal monetary standard therefore can only fail altogether to sustain commerce requiring a greater circulation, to endow the circulation with truly consistent value, and to avert catastrophic failure as an inevitable consequence of interest:  The finite quantity of any honored such standard cannot sustain industry requiring a circulation greater than available monetary reserves;  

Inevitable deficiencies regularly compromise/degenerate the purported standard into a fractional reserve.  

There is no fixed linkage between circulation, the potential value of existent property or services, and the declared monetary value of currency;  

Thus the purported standard imposes perpetual inflation and deflation in fluctuations of the ratio of circulation to wealth, much like the very improprieties it purports to address.  

Alternate standards such as the gold standard have no power whatever to arrest multiplication of debt by interest.  

As only eradication of interest arrests artificial multiplication of debt by interest, the gold standard is even wholly redundant to this purpose.  

In the first two cases then, the gold standard is actually an obstruction to the very thesis of monetary propriety; and in the third it is wholly redundant.  

Thus, not only is there no need or use for a gold standard whatever; in the first and second cases the gold standard is substantially damaging, and in the last it is nothing but a delusion that it can protect us from the worst calamity of all.

For centuries, a small minority of avaricious individuals have been manipulating “economies”, conjured out of nothing but their own greed. The fabricated “value” of gold, the pretty, shiny, worthless metal that was once believed to be a possible source of immortality, has been one of the primary weapons in their perpetual class war against those who work and produce to create real wealth for all of us.

Today we are confronted with psychopathic, virtually immortal, “corporate persons”. They behave in much the same felonious manner, but with nearly infinite resources and are unconstrained by any governing agency.

Today, instead of impacting only a few villages, townships, and perhaps several hundred or a thousand people, they are laying waste to most of Earth and bringing poverty, suffering and death to millions. For the first time, feudalism has attained global proportions.

Few people seem willing or able to accept or even acknowledge the magnitude of the possibly irreversible damage being done in the name of profit.

“When money is made useless and I have food and water while you have gold, come to me then and offer your gold in exchange. Unless I am feeling exceedingly benevolent, you will go your way hungry and thirsty” — Richard William Posner, May, 2011