The Measure of Money

The Measure of Money 2min read

Units of measurement are some of the earliest tools invented by humans, as we saw the need for fundamental measures to ensure fairness and transparency. Those measures have since been standardised by convention and ultimately legislated by governments.

"In trade, weights and measures is often a subject of governmental regulation, to ensure fairness and transparency."

As to the measure of value, natural economic forces will soon root out unsound (soft money). Adopting instead, sources of money that hold their value across space and time. Over time, Gold's economic forces were selected and was naturally adopted to measure value due to its hardness.

In that Gold is:

  • Relatively indestructible holding it's value over time,
  • A rare commodity in the earth that requires a lot of effort refine, holding it's value over time

Ironically, it is because of it's hardness that we moved away from Gold to Government back money (fiat). That despite the lessons of history, Governments can not resist the temptation to manipulate and create money. Something that can not be done when backed by Gold

We have lost the understanding of the value of hard money. That by adding more money into circulation (soft money) you reduce the value of the money currently in circulation by debasing it. Forcing people to look for returns in inflating assets.

Without a fix (hard) measure, it is hard to know if the tape is measuring the table or the table measuring the tape. Making it difficult to plan for the future, shortening your time horizon to today. This is true for assets as well, without a fixed measure of value, it is hard to know the real value of an investment. Instead, it becomes a race to borrow the most money from our future selves and in so steal from our future selves.


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