THE BASIS POINT

Is Gold Money?

 

In signature instigator style, Ron Paul asked Ben Bernanke last week: Is gold money? Until today, I haven’t seen much more than quips on the matter but this Forbes piece by Josh Brown does a great job of answering the question.

And yes, it’s full of Brown’s signature quippage, my favorite of which is:

So long as the uptrend is intact, I’m happy to be a part of it all, but I’ll lose my religion faster than Michael Stipe should it feel “over-ish”. Gold is a trade, a “play”, a tool to express a popular theme. Not money, but a means of getting more money.

Is Gold Money? (Forbes via TheReformedBroker)

 

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Comments [ 2 ]
  1. Bradley Harris says:
    July 20, 2011 at 6:06 pm

    Interest article.  I like the “gold history” in the first part especially.  

    On a minor point, the writer Josh Brown states “One final point, gold is not money in that where I live (earth), I can’t pay for things with it.”  This is technically not correct.  He and his friends were prohibited to pay for their dinner because of a US law outlawing the use of gold as legal tender passed during the Nixon presidency.  There are parts of the world where you can use gold for payment.

    I believe Dr. Paul understands gold is not money, he was more interested in the follow question of why it was held, and I bet he wasn’t expecting that answer.

    Reply
  2. Dick Lepre says:
    July 20, 2011 at 9:23 pm

    Bernanke answered Paul’s question correctly. Gold is an
    asset. It is not money and neither are diamonds or US Treasuries. They are all
    assets. Paul believes that we should go back to the gold standard. The fact that
    we have fiat currency is what gave the Federal Reserve the ability to purchase
    assets when there was a liquidity crisis.

    Reply

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