A Matter of Faith

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.



5 Responses to A Matter of Faith

  1. Raymond May says:

    Have you seen this video? and they are running ads on cnbc! wonder how much this has to do with the “scare” in the market – this should be banned!
    Talk about snake oil!

    stansberryresearch.com [hh: Search for it if you really have a masochistic streak. I’ll save you the time by saying he claims to know how to hide your money from the gubmint and help you buy gold and silver without paying commissions. Oh, yes, and you can subscribe to his newsletter. Does that about cover it?]

    • hhill51 says:

      That’s 40 minutes of my life I wasted and can’t get back…. I’m going to save other readers that cost by editing your comment so the link no longer works. I’ll leave the name so they can go find it themselves if they really want to waste their time.

    • latitude38 says:

      your comment about poter-stansberry is dead on mark ! snake oil

  2. RoberB says:

    There will always be a way for people to obtain the things they need or want: it’s called the black market, which is the real market. When economic conditions allow the movement of goods and services to their destination, there is no black market.
    When conditions, whether economic or legislative hinder the movement of goods the black market flourishes.
    Even in the US today, consider the minor black market for toilets that flush, or cleaning supplies that work – both items that have been banned in certain jurisdictions and yet still obtainable for a price despite the fact that they are illegal.
    In harsh economic times, all the food or luxuries that people may want will still be obtainable, for a price. How they pay for them will be up to the counerparties at the time of the transaction. Only the interference of government could destroy such an efficient system of supply. One is reminded of the government’s efforts to allocate gasoline in the 1970s and realize how well they’d do with the food supply.
    And you only have to witness a mob, which can gather in minutes or hours, to realize that the great majority of people don’t take the time to sort things out together for the benefit of all, especially if they haven’t eaten for a couple of days and everything they can steal is ‘free’. As witnessed in London recently and the US and Canada in the recent past, living in a city is no protection, and those events were just warmups – times are still good.

  3. […] Hill on has been arguing with gold bugs: I know that some readers are going to say “Wait. The gold market is saying inflation, not […]

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