Why gold is used as money?

As we all know gold is a metallic yellow metal, this color made him very appealing to the eyes of the first human beings, in fact the metallic sheen is something that has always attracted although the reason for this is not clear. It is also one of the few elements that can be found in its purest on earth. Among them are silver, platinum, carbon and copper. To be honest the silver and copper and are not in a pure state today (perhaps in some remote parts that have not been audited by the man) because since the beginning of mankind have been used to make jewelry. Gold and platinum, which also are used for making jewelry but are scarce and difficult to find and that is the reason why even in the crust are often found in its purest form.

These metals are called “precious metals” not only because of their rarity and beauty, a quality they share something rare: not rust easily. Gold, copper, platinum and silver may remain years if show any corrosion or oxidation. Ultimately become oxidized after the passage of many years, perhaps centuries, depending on the environment they are kept. Now suppose that we are in the stone age and we have a gold nugget we found or have given us. Maybe someone else wants us to exchange for something less “valuable”, say a fruit. As we are attached to that object most likely say no but if we offer many fruits, maybe sheep wool and other things in exchange for the gold nugget you may consider this as a fair exchange. That is the principle of trade and modern economy, where objects are exchanged “fair value”.

Precious metals, especially gold, allowed to take an object of great value and lightweight that could be exchanged for another as food, clothing and shelter to, I guess that’s how it began to melt gold or laminated into smaller pieces that more easily allow the exchange and is the principle of the coins.Today is not unlike the situation. Countries accumulate valuable assets, such as gold, oil, food and the same technology to support their currencies but not so easy either. In the beginning was the richest country which had accumulated more gold and gold backed same paper money and coins until the early twentieth century. By then, the value of gold fell, among other reasons because they found large deposits in the late nineteenth and economic crises that followed the First World War.

The definition of a currency around its value in gold, is what is called the “gold standard”, and cousin of one form or another in the world until this war, which led among other countries to liberalize printing money to finance. The reserve currency in the world is the U.S. dollar, and while there have been and there are alternative proposals in the near future is not that this may change.

Today, no country supports its currency based on the value of gold, but in truth, during war and especially during the great economic crisis of the thirties, people who kept their capital in gold were the soon recovered during such crisis. Today the currency is backed by taking into account the country’s production, the amount of labor that works and other parameters as the same supply and demand so much of what products and services they produce as valuable assets they own.However, for strategic reasons, many countries anyway have large gold reserves, which helps among other factors to support the currency, directly and indirectly.

However, it is common opinion that investment in turbulent times stronger than one can do is to gold as its price, even though there is a large world production thereof, has remained constant or increases profitability today Estimated gold for 10 years is considerable (there are different opinions about it, of course). Few investments have such economy and safety. Of course we are not speculators stock market but guess where would my savings?


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