Thursday, March 30, 2017
WHY IS GOLD A HEDGE AGAINST CHAOS?
WHY is gold a Hedge against Chaos?
The fact is that though gold is not accepted as money in the retail stores of the world, gold is still money in the sense that over time it holds its value. Gold holds value not for any use value but simply as a thing in itself. Ding an Sich as the German philosophers like to say. It is the thing that holds its value throughout human history. That is its function. That has always been its function.
You can ask why should it hold its value? Just as you can ask why a beautiful melody is beautiful? You can argue that in some cultures the criterion for beauty changes. You can argue that in some cultures objects that store value change. But the fact is that humans are quite similar in what they respond to and what they value. Humans all over the world respond to a beautiful melody. You can use an Indian scale or a Western scale or an Arabic scale, but if the melody is beautiful, humans respond.
Humans all over the world respond to gold as an intrinsic store value.
Thus has it always been.
Which brings us back to Chaos - or the lack of Order. Humans also respond to Order. As long as things remain orderly humans tend to have confidence that things will remain orderly. In orderly times any type of currency that is condoned by the forces of Order - The Government - will be able to act as a store of value. Simply because the forces of Order proclaim it. By Fiat. In times of Order Fiat Currencies work well. But as Order breaks down, the Fiat or Will of the forces of Order lose their power. People lose confidence that Order can be maintained. They lose confidence that fiat currencies will hold their value.
And as people lose confidence in the force of Order they look for time honored stores of value to hedge against the impending Chaos. Gold is not the only store. Any object of Beauty will do. But gold is the most time tested store of value.
It certainly appears we are on the brink of a massive loss of confidence in the Order of our Governments and our Institutions.
And as Chaos grows and Order diminishes, gold flourishes.