When the word money is mentioned, most people imagine paper currencies, and this is due to the fact that most people use money to purchase goods or services for that matter. Most of these paper currency users eventually realise that their currency has been losing value as time goes by due to the fact that they start needing more and more of the currency in order to purchase the same goods and services.
The gold standard was based on a system whereby paper currency was backed with the promise of being convertible to gold at a fixed rate (35 USD and ounce), however for that to happen these days, gold would have to be valued at almost a million dollars an ounce or else, there will not be enough gold to go around and move economies forward. Inflations and devaluations are created by governments to stabilise their economies and with or without a currency that is supported by their gold reserves.
Another factor about money is the fact that it too can be created at the whims and fancies of governments and as we all are very well aware of the fact that the more there is of something, the less it is worth and coupled with the fact that unchecked ‘money printing has been exactly what has been happening over the last few decades, we need more money to purchase goods and services, simply because they have lesser value. In comparison to gold that is limited or rather scarce, between paper money and gold, gold has a much higher tangibility percentage that money has.
A person in 1980 wanting to get some cash for gold for example received a smaller amount of money than a person who wanted to exchange cash for gold with high paying gold buyers in the year 2000 not because gold has gone up in price, but it is the opposite, the currency has lost much of its value over 2 decades. Most people are not too well versed with the mechanics of economy or tangible values, but in order to have a good understanding of it is not very difficult.
It is a fact that the value of gold has not changed much for more than a century although it does seem that the price of gold has gone ballistic from a mere 35 dollars an ounce in 1970 to what it is currently.
To understand this point all a person has to do is take something and value it in both currency (dollars) and gold (ounces), for example the price of a kilo of sugar in gold and paper currency in 1980 and the price of the same kilo of sugar in 2010 in both gold and paper currency as well.
Most would be amazed to find that the amount of gold needed to buy the kilo of sugar in 1980 and 2010 would be almost the same (more or less), but the amount of money needed to buy that kilo of sugar would have changed drastically.
This measuring technique works with almost any product or service and the outcomes that you will derive regardless of which part of the world you are in, would be similar to a significant degree to make the hypothesis plausible.
Thus, if ever there was money that could be considered as ‘real money’ with tangible value, it would be gold or silver essentially, as it was actually the first form of money (coins) that humans used in ancient times right up to this very day.
So although it is essential to have paper currency with us at all times, it would be a wise move to keep some gold in store, just in case, the day comes when paper money is deemed worthless.