Embarking on a historical exploration of Gold’s worth
In the expansive tableau of economic evolution, gold stands as an enduring testament to the concept of authentic currency. It is the opposite of “trendy”, but it never is out of fashion or lacks demand. As the globe hurtles towards an increasingly digital and fiat currency landscape, comprehending the historical roots of gold as a palpable form of money becomes imperative.
This investigation not only sheds light on the intrinsic value that gold carries but also underscores its unique role in shaping the economic narratives of ancient civilizations to the complexities of modern economies. It has withstood the test of time. Gold’s historical significance as a medium of exchange predates the complexities of contemporary financial systems. In ancient times, civilizations recognized the intrinsic value of gold due to its scarcity and unique properties. The durability, divisibility, portability, and intrinsic value of gold made it an ideal medium for facilitating trade and commerce.
Save gold… store value
The transition of gold into a symbol of wealth was not an overnight phenomenon; rather, it evolved over centuries, mirroring the development of human societies. The Gold Standard, a monetary system where the value of a country’s currency was directly linked to a specific quantity of gold, played a pivotal role in this evolution. This system, prevalent until the mid-20th century, provided a tangible connection between paper money and precious metal, emphasizing gold’s fundamental role as a genuine currency.
Note, it was the only standard due to its “consensus” value worldwide and its inability to be manipulated. There is no “Diamond” standard. There is no “Ruby” standard. There is only a “Gold” standard. It was measurable and secure. The good news is that regardless of governments’ silly notion to remove the gold standard from their processes, gold as the standard of value remains, and it will always remain as it has for centuries. In other words, fiat currencies come and go. The value of Gold remains. It is the ultimate investment protection.
The Gold Standard: A Pillar of Monetary Stability and a Protection Against Inflation
During the era of the Gold Standard, various countries pegged the value of their currencies to a specific quantity of gold. This alignment served as a stabilizing force in the global economy. The commitment to maintaining a fixed gold value instilled confidence in currencies, preventing governments from engaging in arbitrary money printing (Quantitative Easing)—a practice that has become the default condition in today’s fiat currency systems. One of the key advantages of the Gold Standard was its ability to curb inflationary pressures.
Since the supply of gold is limited and its extraction a meticulous process, the monetary base grew at a relatively stable rate. This restrained expansion helped maintain price stability, a crucial aspect for any currency aspiring to be a store of value. It’s a basic principle of supply and demand. The less there is of something, typically the higher the demand. If this process is stabilized by natural means, so is the value of the underlying product. Gold is a perfect demonstration of this. However, as the printing presses roll on, the dollar or any fiat currency loses its value. Once the gold standard was no longer in play, the dollar consistently lost its value against the precious metal.
Gold’s Enduring Role Economically in Trade, Commerce, and Investment
The historical roots of gold as real money and holding permanent value are deeply intertwined with the importance & of trade and commerce. As ancient civilizations engaged in cross-border transactions, gold emerged as a universally accepted medium of exchange. Its inherent value, recognized globally, facilitated international trade without the complexities and uncertainties associated with fluctuating exchange rates.
The Phoenicians, renowned maritime traders in the ancient Mediterranean, recognized the universal appeal of gold. They utilized gold coins as a medium of exchange, laying the groundwork for the broader adoption of gold in trade across diverse cultures and geographies. The enduring value and universal acceptance of gold made it the de facto currency in the arena of global commerce.
Gold’s Transition: From Currency to Symbol of Wealth
While gold’s intrinsic value and historical role as real money persisted, its symbolism underwent a transformation over the ages. As economies evolved and financial systems became more sophisticated, gold transitioned from being a mere currency to a symbol of wealth and prosperity. The opulence associated with gold became evident during the Renaissance, when monarchs and aristocrats adorned themselves with elaborate gold jewelry and accessories. The symbolism of gold expanded beyond its utilitarian purpose in trade to encompass notions of luxury, power, and prestige.
Modern Implications: Gold = Safety
In the modern-day banking systems, all dominated by fiat currencies and digital transactions, gold’s historical roots as real money are increasing in importance. The lessons from the Gold Standard era underscore the importance of a stable anchor for currency value—a role that gold continues to play, especially in times of economic uncertainty. Gold’s status as a safe-haven asset, a store of value immune to the fluctuations of fiat currencies, is a direct legacy of its historical role. Investors flock to gold during times of economic turmoil, seeking refuge from the uncertainties of financial markets. The enduring trust in gold’s value, rooted in centuries of historical significance, positions it as a reliable asset in times of crisis. In 2000, Gold was $300 per ounce. As of December 1st, 2023, it now sits at over $2050. This represents a 700% increase. This rivals many top investments and should definitely be considered a part of anyone’s long-term investment strategy. As government spending spirals out of control, and year after year increased debt makes the yellow metal an excellent option to protect the fruit of one’s labor.
The Unbroken Thread of Gold’s Significance
The historical roots of gold as real money weave an unbroken thread through the fabric of human economic evolution. From its utilitarian role in facilitating trade to its symbolic stature as a marker of wealth, gold has traversed diverse realms of human civilization. The echoes of the Gold Standard era continue to resonate, reminding us of the stability and intrinsic value that gold brings to the complex and dynamic world of finance. In understanding and appreciating these historical roots, we gain insights into why gold remains a rock-solid long-term investment in the ever-evolving landscape of global economics.
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