TRUST AND MONEY

THE foundation of all economy is trust.   When accepting any form

of money as payment we must trust that the parties involved in the

next transaction will also trust that form of money.  To do so we must

have ultimate trust in either the intrinsic value of the money, or in the ability of 

the issuing institution to provide a safe and stable and enforceable 

environment for the continued value and acceptance of the money.

It is becoming increasingly difficult for many citizens to trust their own

governments.  It is difficult to trust Governments run by officials who 

clearly have only their own personal interests at heart.

It is difficult to place trust in a form of money that charges prohibitive 

fees for the use of the money - such as money that doesn't

provide interest to offset decaying value from over-issuance or actually 

charges the user in absolute terms through negative interest rates.  

This is institutionalized theft, which doesn't foster trust.

Some citizens prefer to place their trust in anonymous issuers using 

mathematical " guarantees" for their money such are bitcoin type currencies.  

This is a sort of  blind trust in technology, which is only possible as 

trust in humans erodes.

This brings us back to the idea of "Intrinsic Value," which may be argued 

is a form of mass delusion over time - but the delusion is academic.  

It's mass acceptance over long periods of time that comprises 

the intrinsic value.  Old master paintings.  Real Estate in popular locations.  

Artifacts related to historically important figures like Julius Caesar 

or Alexander the Great or George Washington, for example.  

These things all hold value over time.  But they

are not divisible so are difficult to use in transactions as money.

This brings us back to gold, which has held its value for over five thousand years. 

There is no need for trust in an issuing authority except as a guarantee of 

weight and purity - which can be easily verified independently.  

And it is divisible into any desired quantity.  Perfect as a store of value.  

Perfect for transactions, even if it means an intermediary step of 

conversion into a local currency.

As trust erodes, gold rises.