Quien es mas machos? Gold Bugs or Paper Bugs
Paper Bugs like to ridicule Gold Bugs. If you are new to the Paper Bug / Gold Bug fight, perhaps you don't know this. On the Internet, Paper Bugs are on the run. The Motley Fool is no exception.
I don't cry over the disappearance of Paper Bugs. Just a short time ago, anyone wishing to discuss sound money, free market currency, gold standards, or even the prospects of gold miners was subject to constant ridicule and humiliation at the hands of Paper Bugs.
The arguments of Paper Bugs were always the same. Gold was a fetish, a useless, stupid, shiny object that mesmerized the Gold Bugs. Paper Bugs talked and dreamed just like Plato, just like Thomas More, just like Fourier and Saint-Simon. Gold is worthless and one day, they predicted, even the Gold Bugs wouldn't be able to deny it..
The future is Paper, they declared. Preferrably paper with pretty colors on it, perhaps some purple and um, teal is quite nice. Maybe with a picture of a benevolent servant of the people on it. Yes, that would be perfect. Once the perfect artistry is presented in the most appealing way, everyone will see the superiority of Paper to all other forms of money.
No matter that a piece of Paper with a 1 on it is exactly the same weight and cost to produce as a piece of Paper with a 10 on it or a 20. The first piece is a 1, the second is 10, and the third is a 20 because someone - an Authority on the matter - said so. That person knows better. He knows better than a Paper Bug, and certainly Paper Bugs know better than ancient relic-worshipping Gold Bugs.
They let the Gold Bugs have it. Ignorant Gold Bugs just don't understand money, they said. Gold Bugs don't get it. Money is merely a unit of account. Paper Bug Hero, Soviet Admirer, Exalted Better-Than-Thou Intellectual, and all around economic genuis Paul Samuelson once declared people desire money simply for the purpose of getting rid off it.
Well that might have been a round about way to say that money's value derives from what it can be used to purchase. This is the Paper Bug's understanding of money, and how dare anyone think that a shiny yellow object can be more useful in this endeavor than nearly identical pieces of paper with bright colors on them.
The Gold Bugs, on the other hand, believe that money is a commodity, not just a "unit of account." And the commodity of money has a value of its own, determined by the subjective evaluations of market actors. This archaic notion is true because money came into existence out of the voluntary transactions of people willing to exchange things they value less for goods they value more. Sometimes, the good they value more is the commodity money itself. Paper Bugs call this hoarding. Gold Bugs call this saving.
It seems to be an impossible gulf separating the Paper Bugs from the Gold Bugs. But there is one important difference that I want you to consider before you decide quien es mas machos:
Freedom vs. Slavery
Gold Bugs are free men and women.
Paper Bugs are slaves.
Gold Bugs believe that the best money is the money chosen by market participants voluntarily. The market chose gold and silver. Free men and women, free to choose, came to the conclusion that the best money to meet their needs, was gold and silver. Free men and women believe that the value of commodity money is determined by the needs of the market's participants. That value can be high or low, it does not matter. What matters is the freedom of the people to make that determination.
Paper Bugs believe that the best money is the one forced upon the people at the point of a gun by an official representing the banking cartel. (Athough, Paper Bugs actually believe that this person works for the government and is, somehow, a representative of the people.) Paper Bugs believe that someone else knows better than them what is the best money for all us. Paper Bugs believe that you are incompetent, incapable of choosing what works best for you. Only a Gold Bug would have the arrogance to think for themselves. On matters this important, an unelected bureaucrat working with the banking cartel is the best judge on the subject of money. And if he puts pretty colors on the paper, that settles it.
Paper Bugs can have their paper. Today, one ounce of gold buys only 1,300 pieces of paper. That's way too much to pay for paper, pretty colors or not.
David in Qatar