Ray Dalio: “Gold Is the Safest Money”

Writes Bill Madden

Aristotle defined money and included the phrase “store of value” as one of its required characteristics.  Over time, many assets possessing value and Aristotle’s other requirements for money have served as money but none suited Aristotle’s definition of money as well as precious metals, especially gold.  J.P. Morgan said that only gold is money.  Everything else, he claimed, was credit.  Now, Ray Dalio states that gold is the safest money.  Our dollar is not money.  It is fiat currency which Voltaire said always returns to its intrinsic value of zero.

Jim Rickards’ recent advisory featuring his current thoughts on gold is attached.  According to Jim, most financial advisors and hedge fund managers don’t mention precious metals as part of a diversified portfolio although they do use it for diversification in their own portfolios.  Please remember that the increasing dollar price of gold is not an indication of gold’s value increasing but it is an indication of the dollar’s value falling.

Historically, governments have converted from money to fiat currency to remove the discipline forced on them by backing the currency with something of value.  Fiat currency may be printed from nothing and it will temporarily hype business activity for those owning the government and the country’s industrial capacity.  Eventually, the fiat currency will fail causing the economy to contract and the country to implode.  Wars are sometimes used as a financial antidote for a collapsing currency and a depressed economy. 

Real money and, in our case, a total return to the Constitution are the only correct remedies for us.