A House Built On Sand

 

Richard (Rick) Mills

Ahead of the Herd

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As a general rule, the most successful man in life is the man who has the best information

 

Warning, I'm not a licensed financial planner, a broker, an analyst, a geologist nor an economist. And I'm also not, as you so often tell me in your e-mails regarding my articles, an English professor. I'm also not a doom and gloomer nor am I a gold bug.

 

I'm just an investor who believes precious metals are the only financial safety net worth owning and need to be the cornerstone of any generational wealth building program.

 

Everyone should own gold and silver bullion in the form of coins and bars.

 

The Incas believed gold was the "Sweat of the Sun" and silver was "Tears of the Moon."

 

Sweat of the Sun

 

Early Greeks thought gold was a combination of water and sunlight.

 

In ancient Egypt, gold was considered the skin or flesh of gods, in particular the Egyptian sun god Ra. Gold was unavailable to anyone but the pharaohs. The Egyptian word for gold was "nub," taken from gold-rich Nubia - shown on the Turin Papyrus as a major gold producer in antiquity.

 

The first true coins in Western civilization were issued, about 640 B.C., by King Ardys of Sardis. They were small round lumps comprised of electrum (a naturally occurring amalgam of silver & gold) - they were not of any standard weight & purity of metal or size.

 

The Greeks would not accept the electrum coins in trade so the coins were outlawed by King Croesus (560-546 B.C.) and gold or silver coins were issued. When the Lydians were captured by the Persians in 546 B.C., the use of gold coins began to spread.

 

"Gold, measured out, became money. Gold's beauty, scarcity, unique density and the ease by which it could be melted, formed, and measured made it a natural trading medium. Gold gave rise to the concept of money itself: portable, private, and permanent. Gold (and silver) in standardized coins came to replace barter arrangements, and made trade in the Classic period much easier...

 

A monetary standard made the world economy possible. The concept of money, (i.e., gold and silver in standard weight and fineness coins) allowed the World's economies to expand and prosper.

 

Money had been invented. Its name was gold." ~ A brief History of Gold, onlygold.com

There are more than 400 references to gold in the Bible, including specific instructions from God to cover furniture in the tabernacle with "pure gold."

 

"By the late 13th century it was the city state of Venice that controlled trade throughout the Mediterranean. And the Venetians knew that if they wanted to consolidate and further increase their power and influence that they needed a coin that would be accepted by all nations. For such a coin would allow trade to flow freely and easily and greatly facilitate payment for goods.

 

Many references list Giovanni Dandolo as the originator of the Venetian ducat in 1284. But it was actually in 1274 when the Doge of Venice, Lorenzo Tiepolo, began minting a gold coin with the image of the Doge kneeling before St. Mark on the obverse and the figure of Christ on the reverse - and thus the gold ducat was born. It was a coin weighing 3.5 grams and struck in .986 gold. These specifications for the ducat would remain the same for the next 700 plus years. It continues to be struck even today. Not since the Roman Empire, had a coin of gold been struck that would capture the trust of all nations and be as enduring as the ducat.

 

The popularity of this coin quickly spread throughout Europe and even beyond to most areas of the Middle East and including India, Egypt and Africa. For here, at last, was a coin that allowed any nation of the world to trade with another and have a uniform method of payment. In all cases, the specifications of the coin were the same - 3.5 grams of .986 gold. In later years, the ducat was also struck in fractions and multiples - from as small as 1/32 ducat to as large as the extremely rare 100 ducats...

 

Today, the US dollar is the currency that is accepted worldwide; and before the dollar it was the British pound. But the gold ducat stands out above all other coins as having achieved acceptability over the known world based on its reputation and specifications. For centuries the ducat held the position of being the world's currency. No other coin can make that claim." ~ The Ducat, Doug Prather winsociety.org

 

The world's first hallmarking system, scrutinizing and guaranteeing the quality of precious metal, was established in 1300 at Goldsmith's Hall in London - where London's Assay Office is still located today.

 

In 1422 the Venice Mint struck a record 1.2 million gold ducats using 4.26 tonnes of gold from Africa and Central Asia.

 

Gold was one of the gifts of the Magi and almost all of the gold that has ever been mined still exists.

 

Sixty-five percent of all gold in circulation has been extracted since 1950. Seventy-five percent of all gold in circulation has been extracted since 1910. Over 90 percent of the world's gold has been mined since the California Gold Rush.

 

The annual worldwide production of gold is approximately 2,810 metric tons or 90 million troy ounces per year - the world pours more steel in an hour than it has poured gold since the beginning of recorded history.

 

U.S. Dollar Better Then Gold

 

In July 1944, delegates from 44 nations met at Bretton Woods, New Hampshire - the United Nations Monetary and Financial Conference - and agreed to “peg” their currencies to the U.S. dollar, the only currency strong enough to meet the rising demands for international currency transactions.

 

Member nations were required to establish a parity of their national currencies in terms of the US dollar, the "peg", and to maintain exchange rates within plus or minus one percent of parity, the "band."

 

What made the dollar so attractive to use as an international currency was each US dollar was based on 1/35th of an ounce of gold, and the gold was to held in the US Treasury. The value of gold being fixed by law at 35 US dollars an ounce made the value of each dollar very stable.

 

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