In many ancient civilizations beautiful works of art where made of gold. The Egyptians, Minoa and Syrians amongst others; used gold as a form of exchange as payment for goods and services, this was the first form of money. To kings gold has become a measure of power, wealth and prosperity.
The reason for gold being such a valuable metal is its durability. For example when King Tutankhamen tomb was discovered in 1992 his solid gold coffin was in perfect condition withstanding the ravages of time and the environment.
History has shown that gold drives human emotions with the effect that actions and decisions do not include common sense. For example suppose you where stranded on a disserted island with no water or food but a ton of gold. Would you survive? Would it be worth anything? No, gold has no intrinsic value except what we have given it over time. In sharp contrast some civilizations have given great monetary value to carved images, skins, ivory, stones and even animals which has been used effectively as a form of exchange.
Gold is the most well know non ferrous metal and has served as inspiration for literature. To most of us gold bring images of the Californian gold rush or gold mining in South Africa. But what importance does gold have in our world of today?
Gold as a last resort is used to settle debt among countries no matter religion or political denomination
Our present monetary system is based on Gold that is held in treasuries or Central Banks. Simply gold is money and money is made up of gold, credit and cash. For this reason one may debase credit or cash but not gold. Gold forms a standard by which governments are prevented from creating destabilising monetary policies to either prevent deflation or escapes Debt commitments.
In 1944 Gold constituted 99% of total Worlds Central Bank International Monetary Reserve assets from which the United States owned 90% of the gold. For this simple reason the dollar has become a key currency in the International Monetary System. World Central Bank gold holdings remains constant at 900 million ounces but the US component has decreased to only 28% with the Euro-zone and Japan increasing their holdings.
For the individual gold forms an important asset against inflation and natural disasters. It may be stored easily and will not degrade through environmental conditions or time. In the correct form it may be accepted as a form of payment.
In conclusion
Essential gold forms an important part of the World Monetary System. Without gold governments will not be able to function efficiently. The individual will not be protected against unpredictable disasters. For South Africa the constant demand creates sustainable jobs in gold mining and industry which we cannot do without.
