Mind on Money

A Matter of Faith

August 20, 2011 at 11:43 am | Posted in wall street | 5 Comments

As my cyber-bud Bob Moriarity’s readers from123gold have been quick to point out, those who hold US Dollars are relying on faith in the US Government.  They also point out that gold does not rely on faith in any government for its value.

But the value in gold does rely on faith.  Faith that someone will give you what you really need when you really need it in exchange for your gold, and that they won’t demand so much gold that you’re going to starve or freeze next week instead of this one.

We can blather all we want about exchanging gold or “useless” paper, or .22 long cartridges or toilet paper, for food and heating oil.  More than half of humanity lives in cities now, and human beings as a group won’t choose to turn half the world’s population into bipedal locusts without trying at least a few alternatives to complete anarchy and starvation.

In other words, I believe that no matter how screwed up fiscal or monetary policy becomes, there will be an economic system that manages to let food producers deliver to food consumers without those consumers becoming hordes of foragers.  I also believe that any “successor” system will have money.

More later this weekend as my co-author George Ure and I put out just one of the radical ideas we argue about in our forthcoming book.  It will be in Sunday’s edition of Peoplenomics, George’s unconventional guide to all things economic for the outside-the-lines set.  Kind of a teaser/spoiler, guaranteed to irritate gold bugs, preppers, liberals, conservatives, Austrian school economists, Keynesians, and maybe even you.

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