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Is gold money?
What does JP Morgan mean by “Gold is money everything else is credit”?
What is the difference between money and credit?
What is the difference between gold and credit?
Aug 3, 2018 · Learn why JP Morgan said "money is gold, nothing else" and how he distinguished between money and credit. Find out how character, trust and counterparty risk affect the value of money and credit.
Mar 18, 2021 · A blog post that explores the difference between money and currency, and how money is created and destroyed by debt. It argues that the fiat money system is unsustainable and unethical, and that gold was a better form of money.
- Commodity Money
- Why Is Gold Valuable?
- Representative Money
- Fiat Money
- The Curse of Inflation
- Where Gold Shines
- What Can We conclude?
Money was invented because of the shortcomings of barter, the act of trading one good or service directly for another one. Commodities – items for which there was consistent, broad-based demand – were particularly sought-after. These special items could be on-traded for a wider choice of goods at some time in the future. Thus, certain commodities a...
Some people argue gold has little or no intrinsic value. It’s undeniable, however, that its relative rarity and beauty has intoxicated humanity for millennia. In The Power of Gold, Peter L. Bernstein, declares: “Gold has motivated entire societies, torn economies to shreds, determined the fate of kings and emperors, inspired the most beautiful work...
The idea of ‘representative money’ emerged in Europe during the 17thcentury. Its roots lay in the receipts issued by goldsmiths to their depositors. Not only could these promissory notes be exchanged for their face value in metal, but they became a convenient way of making payments. In 1694, the Bank of England was the first public bank to issue of...
The new era hailed the predominance of ‘fiat money’. A Latin word meaning ‘let it be done’, fiat is defined in modern dictionary terms as a ‘decree’ or an ‘order’. From this time on, the world’s major currencies were no longer linked to a physical commodity, but to the will (and creditworthiness) of the governments that issued them. Fiat increases ...
History is littered with examples of currencies that have fallen victim to extreme inflation – among them the German papiermark, Hungarian pengő and Zimbabwean dollar which became worthless in the face of rapidly rising prices. Even the mighty US dollar is far from immune from the effects of inflation. Since 1971, the greenback has lost huge amount...
Judged against this viewpoint, fiat currency fails the definition of money and yet even when it becomes almost worthless, continues to be regarded as a unit of account and medium of exchange. On the other hand, gold, which served as money for a long period of time, no longer retains these two characteristics. You can’t easily buy something with a g...
From the above discussion, it’s possible to conclude that: 1. The role of paper money as an easy medium of exchange that is recognised and accepted globally will continue. 2. Inevitably, fiat currencies will remain subject to manipulation and failure. 3. Since 1971 the price of gold has floated against global currencies and as such rises whenever t...
Feb 5, 2024 · Gold is money! Silver is money! Everything else is credit! J.P. Morgan famously said this in his testimony before Congress in 1912: “Gold is money. Everything else is credit.” J.P. Morgan was the founder of JPMorgan Chase & Co., an American multinational financial services company headquartered in New York City.
- Vaulted. Why Do People Say “Gold is Money”? History, economic theory, and empirical evidence: three arguments supporting gold as the purest form of money. In 1912, J.P. Morgan made a bold statement in his testimony before Congress: “Gold is money. Everything else is credit.”
Crucially, gold refused to falter in the face of competition. Quite to the contrary, the metal remained, 50% of the time, the best “money” to secure savings from 1972s onwards. Why? Because, as J.P. Morgan stated in his testimony before Congress in 1912, “Gold is money. Everything else is credit.”
10 hours ago · 1. Bedrock of stability. At the heart of gold’s appeal is its inherent value. Gold has long been considered a stable investment. Fiat currencies, like the U.S. dollar, are not backed by a ...
