I'm a little disappointed when I go to someone's blog site and they haven't posted for a week. So apologies to all.

When I wrote about gold I said I'd explain about my concerns for the US dollar. It's pretty simple actually. The dollar has no intrinsic or fixed value. It's worth whatever you can get for it.

Originally, money was gold (or seashells or beads) - something desirable and rare. Using money was the practical alternative to a barter economy. Minting coins from gold has been done for thousands of years, and was a necessary step in developing economic systems. Governments reserved the privilege and responsibilty for minting coins to themselves, and insured a standard weight of gold for their coinage.

During the late middle ages as trade expanded banking houses would accept deposits from merchants and write IOUs for the amount of gold deposited which the merchant could use to make purchases further away than it was convenient to physically move the gold. The selling merchant would accept the IOU and take it to a local affilliate of the issuing bank to get the gold he was due. The bankers also came to realize that they till the IOUs were presented for payment they had gold on hand which they could lend out for the borrower's IOU. (This is essentially what we now call the multiplier effect - the same gold being used to make a purchase far away was being loaned out at home The banker could be in trouble if someone defaulted, which I guess is why Shylock was so upset.)

Then a couple hundred years ago governments started printing currency. Like the bankers IOU the currency represented gold stored in the treasury, and could be redeemed at the treasury for an predefined amount of gold. (For a long time it was $20 for an ounce of gold). One nice thing for the government was they could print currency in excess of the amount of gold they had on hand. I mean not everyone was going to show up all at once and ask to have their currency exchanged for gold. By printing more currency the government could facilitate greater economic activity and greater national wealth.

I wrote a lot more but then I saved a draft and when I reopened t this was all ther was, I'll have "to be continued"