Gold as a Historically Stabilizing Factor

Proven, valuable and consistent over generations: Gold!

Currencies can crash and become worthless; central banks and finance ministers follow a policy that is not necessarily in the best interests of their citizens and investors. Alternative currencies have their charm but also their shortcomings while the digitization and international interconnectedness of our banks and payment methods makes them and our accounts susceptible to attack and even total system breakdown.

These are the disadvantages, the dark side, as it were, of a system that generally works, especially in times of prosperity. But how can you prepare yourself for situations when it doesn’t work so well, such as a crisis?

We hope they never come, but it is a part of life to prepare for rainy days. How will I pay if the ATM is on strike, my account has been cleaned out, whole bank systems have been shut down by foreign governments or criminals or the value of my currency has been brought to its knees?

Here we will take a look at how such a system could work. However, you might feel about the current economic situation: if you ever need an alternative cur- rency, you want something that is going to be accepted, approved and valued—and ideally all over the world and throughout the gen- erations. I can only think of one: gold.

Gold is a precious metal and a resource; it’s both jewelry and a commodity; it is a historical means of payment and an anchor for currencies. Gold fascinates and beguiles—whether you are wearing a golden wedding band, watching a Bond film or are distracted by glittering teeth—almost everybody uses gold; and even those who don’t, or can’t afford it, believe in its value. Most people value it for its banal physicality: gold is heavy, has an appealing color and is plain and simple a symbol of wealth. Gold is one of a kind.

For millennia, gold has not only been the object of desire and several world conquests. The search for Eldorado, the mystical land of gold led to the submission of a whole continent and millionfold suffering. Gold was a means of payment and, up until 40 years ago, an anchor for currencies, fluctuating in value as well—though tied to a currency of doubtful value. For more than 2000 years, its fundamental and intrinsic value has been recognized. It is also a part of many aspects of our modern life, even with the unromantic nota- tions of Au, the atomic number 79, E 175 or XAU.

To many of us, it is just pretty and practical, something valuable; it’s survived crises, distortions and dictatorships, united newlyweds at the altar and helped us sleep better in times of a banking crisis, inflation or stock market fluctuation.

It started gold rushes, in 1849 in California and in 1897 on the Klondike River in Alaska, and was responsible for the creation of entire settlements on the American West Coast.

We find gold in opulent chandeliers and as flakes in “goldwater liqueur.” This liqueur is easily digestible because, amongst other things, gold is non-toxic and insoluble. In addition to its digestibility, it has some very practical properties: the chemical element with the atomic number 79 can be mechanically processed easily and is non-corrosive. Unlike silver, its luster is constant. In spite of it prev- alence, it is relatively rare and heavy. It was used in rituals, such as burial gifts, as early as 4,600 B.C. and can be found, today, in your teeth, as simple dental gold, or kitschy decoration on pralines.

The amount of gold in the world is finite. You cannot make it or fake it and if you try you may invent Meissener porcelain—like the alchemist, Johann Friedrich Böttger, in 1708 in Saxony—it wasn’t gold, but it was just as precious.

According to legend, the Argonauts journeyed to find the golden fleece, the coat of the golden ram that could fly and speak. The Torah speaks of the golden lamb. Massive Buddha statues in East Asia are made of gold, for the most part; the Golden Buddha in Bangkok contains gold valued at 250 million dollars, and gold was one of the presents the three wise men brought to baby Jesus.

Gold has found its way into religion, mythology, our slang and our culture—including blockbuster films: in 1962, James Bond fought against the villain, with the same title as the movie—Goldfinger, who wanted to contaminate all the gold stored in Fort Knox with radiation to increase the value of his own gold.

Gold represents the paying of homage, but also greed, idolatry and robbery. Man adorns himself with gold, to show the world he is married—or uses it to kill people: Goldfinger punishes his unrelia- ble assistant, Jill Masterson, by painting her entire body with gold, which leads to her suffocation. Probably one of the most beautiful deaths in movie history.