Old gold is still gold.

The UK Telegraph reports that a couple of treasure hunter enthusiasts used their metal detection equipment to find buried treasure in a farmer's field (something that apparently happens quite a bit over there).  The article states that the find, which consists of several bracelet style pieces, dates "to around 400–250 BC, and is probably the earliest Iron Age gold work ever discovered in Britain".  Imagine if you had found some kind of paper money that old.  What would it be worth?  Of course we already know the answer to that.  It would have zero intrinsic value if it even survived at all.  It might have some historical value and it might fetch a lot of money in that sense.  But that valuation would be no different than any other old document deemed of historical value.  The monetary value would be zero.  You can buy lots of old paper notes online for very little money if they don't hold special historical value.

But gold is different.  Those bracelets could be melted down today and would have significant value simply based on their gold weight.  That's because gold was money back in 400BC and its still money today.  No I'm not saying that someone should melt those beautiful pieces down.  Not only would they lose their art value but their historical value as well.  But if we want to compare apples to apples by removing art and historical value from old paper money vs old gold money, the paper money would lose 100% of its spending power today whereas the gold would still be worth its weight in, well, gold.

• Gold is money.
• Paper currency is not money.
• Paper currency is essentially a claim on goods and services within an economy.
• Claims/promises such as this are honored until they are not and then boy aren't they.
• Humans have a long track record of making promises they cannot meet and then breaking said promises.  Its difficult to know exactly when humans will decide to stop honoring their promises but it generally occurs when the payment comes due.  The chart below shows the growth of the national debt.  At some point in the not distant future, payment will come due.

 

• No it won't be different this time.   There is nothing new under the sun except the history you don't know.