There’s not Enough Gold? Nonsense!

Some people believe that we can’t use sound money because they’re supposedly “not enough gold.” But they couldn’t be more wrong. Claims that gold can’t be used as money because there’s not enough of it reveal a fundamental misunderstanding. There’s always enough metal to support the money supply. It’s just a question of price. While it would be impossible to support the economy at the current price per ounce, the market would simply re-price the metal higher to make the system workable. Some people estimate a gold price between $9,000 and $10,000 per ounce would do the trick for a worldwide gold standard. This might sound like a lot, but you have to remember that gold is divisible. You can split gold to fractions of an ounce for transactions. As the dollar price per ounce rises, people use smaller and smaller fractions for everyday transactions. More importantly, the finite amount of gold isn’t a flaw, it’s a feature. It’s what makes it ideal for backing a monetary system. The limited amount of metal keeps governments from artificially inflating the money supply and stealing your wealth. There is no way to turn on a printing press and create gold and silver out of thin air. That’s why central-planners hate sound money – they can’t easily manipulate the system. So contrary to the claim that gold and silver can’t be used as money because there’s a limited supply, it’s actually the opposite. It’s the ideal basis for a monetary system because it’s finite and divisible.

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