Gold: Real Money and Why You Need It Now

Gold: Real Money and Why You Need It Now by Bill Bonner

TDC Note – Gold is money and everything else is credit.

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In these volatile times, gold is more important than ever. And in this two-part essay from my dad, you can see exactly why gold is such a critical part of our family’s investment strategy. We’ll have more information about our gold-investing plans next Tuesday, November 29… For now, though, please enjoy an extra helping of the Diary for the Thanksgiving holiday.

– Will Bonner


Real Money and Why You Need It Now

Many years ago, before the invention of modern money or capitalism, people still had wealth – although limited. And they still had ways of keeping track of it. The principle of “fair trade” seems to be in our DNA.

If you give something to your neighbor, you don’t expect him to hit you over the head. You expect him to give you something back. And if you give him a whole cow and he gives you half of a rabbit, some instinct tells you it isn’t “fair.”

Small communities could keep track of who owed what to whom. But as civilization evolved, a new kind of money was needed.

In a group of related people in an isolated valley, you could remember that your cousin should give you something roughly equal in value to the wild pig you gave him… and that you should offer your son or daughter to the family from which you had gotten your wife… and so on.

But as the group grew bigger, people needed a way to settle transactions without having to trust the people they were doing business with or remember who owed what to whom.

When Aristotle described “money” he had our modern money in mind – something that is not wealth but acts as a placeholder for wealth. It is information; it tells you how much real wealth you can command.

For the last 5,000 years, the best money has been gold (and to a lesser extent, silver). Gold is very useful as money. With it, you can do business with complete strangers. It can be used to stand in for almost any amount of wealth. Later, paper money – representing units of gold or silver – made commerce even easier. Without this modern money, an advanced economy wouldn’t be possible.

Real money permits an elaboration of the division of labor, and it provides the whole system with the information it needs to operate. You can’t build an automobile, for example, without an extensive network of inputs – labor, steel, batteries, glass, rubber – from all over the world.

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Bonner and Partners

Bill Bonner founded Agora Inc. in 1978. Since then, it has grown into one of the largest independent newsletter publishing companies in the world. Bill also co-wrote two New York Times bestselling books, Financial Reckoning Day and Empire of Debt, In his latest book, Hormegeddon, Bill describes what happens when you get too much of a good thing in the sphere of public policy, economics and business. This new newsletter is unlike anything else published in America today. Now in this industry, Bill Bonner has agreed to share his secrets and insights every month. It’s like having a super-wealthy uncle share his best ideas, insights and wisdom about business, relationships, investments, trends, developments, ideas and more.