Joe Weisenthal says he has changed his mind about gold.
If you poke around on the internet, you'll find a lot of people who have criticized me for being a "gold hater." Here are two different pieces that took me just a few seconds to find. There are plenty of tweets out there saying the same thing.
These people have been basically right. Over the years, I've said a lot of bad stuff about gold -- how it's a lousy currency, how it's just a rock that shouldn't have any value, how love of it is primitive and irrational, how it has no justifiable basis in the economy.
But I'm changing my mind, and it's all due to Donald Trump.He goes on to make my head spin by saying that Trump has made him understand that gold is about power and that:
[T]o get and hold gold, kings and empires had to build complex global supply chains and wield military might.
In other words, gold is a physical and visual manifestation of raw power. To have gold was to have power. It follows, then, that gold would make for a good basis for currency. If you knew that a kingdom had the ability to produce vast quantities of gold coins, then you could assume that it was a powerful and stable kingdom that had military might and wide influence.Which means Weisenthal still does not understand how gold came to be a money---by way of free exchange---and he seems to not understand the significance of the fact that an individual can legitimately accumulate gold by providing goods and services that others want in exchange for gold.
It is only because gold has become a medium of exchange, outside of government, that governments coercively take it from their citizens and those they conquer---so that they can have such a globally recognized instrument of exchange.
Weisenthal isn't looking deep enough into the nature of gold. The militarily powerful desire gold because of its exchange value which, as Ludwig von Mises taught us, came about in non-coercive exchange.
Gold as a medium of exchange preceded government desire for it. It is not coercive government power that is at the fundamental core of gold as money. Gold came before government desire for it and it would survive, as a medium of exchange. even if there were no governments.