Initial Setting of Value

We need to address how the original value of Gold came to be set. Since all the Gold that has been accumulated did not appear at once from a vacuum, it is evident someone had to do something to extract it from the earth. This requires resources be spent in extracting Gold. It is possible that one of our ancestors came upon a nugget of Gold attracted by its shiny and yellow beauty, picked it up and took it with him. It was not until another individual saw the nugget and decided he wanted it for himself, and barring violence, he decided to trade something for the nugget of Gold; thus establishing the first trade and value of Gold in reference for some other commodity or service. Having established that some individual is willing to trade a certain commodity for Gold, it flows that someone must have began to mine for the metal in order to exchange it for any other desired commodity or service. In order to mine for Gold an individual must spend resources, the most fundamental being his time.

In order to make prospecting and mining for Gold profitable, an individual must receive enough compensation to cover his needs for survival with some left over. That is to say, he must get enough from the Gold mined to cover his basic needs like, food, shelter and protection. For example, if he was to find an ounce of Gold in one month, he would need to receive enough for that ounce of Gold to obtain enough food and other necessities to warrant his effort of mining for Gold. Every moment that an individual spent mining Gold, it was a moment lost from doing something else, like planting, hunting or gathering food. It must now be understood, that the Gold that came into circulation came from someone’s effort, labor and time.

As we go along, it will become evident how the perversion of these fundamental facts in reference to Gold shows how our economy is corrupted to the detriment of the many for the benefit of the few. Furthermore, we will come to understand how the fundamentals are perverted and why the perversion of the fundamentals leads to cycles of boom and bust in the economy.