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Considerations on Gold as Currency

The world has marched its way through the trial and use of various forms of medium of exchange. The question should be asked from time to time; Does the currency form in use benefit our world? This is not a simple question to answer.

Who will benefit? How are they to benefit? What culture, society, and world will be encouraged as the result of the form of the medium of exchange? This article is not targeted to propose solutions to these questions. They are complex and require on-going debate. The article will point out some negative impacts to the use of gold, or any monetary metal, as the prime currency for our world.

Empire Building:

Gold occurs naturally in the environment. It is scarce and at the same time abundant, occurring through all levels of the earth, the rivers and oceans, even in the skies. It’s called scarce as it is spread like a fine dust, at times more concentrated and grouped, at times less so.

Gold is expensive to collect and concentrate into a mass of metal. The gold mining industry is built upon this art. Miners seek to know where the gold is, to know what level of concentration exists, and to know the cost of getting that gold into an saleable bar of golf. It is not all knowing in these fields, yet in 2021 a fair idea is had of where gold is located and of the costs of extraction. New discoveries are made across the world, exploration proves higher grade areas, and new technologies make previously unfeasible occurrences feasible to collect.

Given the knowledge of gold provided above, when gold is money the land on and under which gold exists in forms that can be extracted in more inexpensive ways, become desirable to peoples. This occurred through history; the mines of South America, of Australia, of America. Perpetual wars were fought to win, to re-gain and to maintain control of these mineral resources. Thus, having a medium of exchange of rare earth metals encouraged, at the most primal level, the development and perpetuation of war and Empire.

Environmental Cost:

The environment was often exploited and abused in order to get at these metals. This cost to environment in some years increased as deposits became harder to mine and larger scale operations became required. Greater volumes of petroleum fuels, steel manufactured machinery and equipment, and all manner of operational support chemicals and plastics were required to support the mining operations. Chemicals such as cyanide and mercury were introduced and quite often ended up in the environment. Furthermore, exposing mined rock can lead to natural leaching and the release of destructive chemicals to the environment. Offsetting this increasing environmental degradation trend was technological advancement in mining methods. At times we did attempt to reduce our impact on the environment.

As this article began, one must ask themselves for what purpose were we venturing the world over, fighting wars as we went, in order to destroy the environment? Today, with gold not as a medium of exchange, jewellery accounts for the use of around 45% of mined gold, bullion accounts for around 40% and industrial uses much lower at 15%. These were and still are the major reasons supporting demand for gold. Of the bullion, the majority sits in vaults and seldom circulates.

Human Cost:

Mining is not and never has been a clean, safe, wholesome industry. There are long hours, hard work, remote living as well as the strain on relationships that oftentimes goes along with this mix. At times through history, captured populations were put to use in the mines. At other times mining attracted by more voluntarily means those of society who were looking to improve their lot in life, and willing to make the sacrifices in order to do so. There are, of course, those who love the life and some families who have worked the mines for generations, even following work across continents.

When gold is money, or as it becomes more significant in its purchasing power, the motivation to start up small scale artisanal operations increases. The damage to life in these operations is sizeable. Death in some operations is commonplace. Mercury poisoning from long-term exposure can and does occur. There can develop exploitation of labour and in some operations it is children, due to their size, that are valued labourers. On the positive side, oftentimes quite comprehensive and structured communities establish themselves around the mining operations. Providing jobs, food and comforts for all those involved in supporting the small scale operation.

Sungai Aikwa, Papua. Approximately 90 kilometres down river of the active mine site.

Humans desire to provide for their families, to improve their life and their children’s lives, and to have some comforts. No blame can be apportioned to any individuals or communities from this article. Not to the empire builders, the mining magnates nor to the artisanal miners. Nor is apportioning blame in any way a goal of this article. It is to reflect on the choice of the medium of exchange.

Conclusions:

As was set out to be done, some of the negative impacts resulting from the use of gold as the medium of exchange for society have been presented. A large percentage of any newly mined gold, once mined, even today when gold is not a medium of exchange, will sit stationary in vaults around the world. With gold as currency, history tells us that empires will form, as man desires to secure the currency wealth of certain lands. What’s more, the environmental and human costs can be severe in this quest. Today we know where the gold is in our world. We know how to mine it. It comes down to cost, in the broadest sense of that term, whether we set out to mine the earth for this metal.

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