Money is a medium of exchange that functions in lieu of barter. As a medium of exchange, money comes into existence in two ways: either naturally, from people agreeing that some item or other has value for trade, or money exists as a form of state coercion, meaning that the state uses its power to demand that people accept something as payment. This basic tension informs much of monetary and economic history. Unfortunately, states presume that people will always want their money, or that the government has the power to control all economic transactions. But even in some of the most totalitarian regimes (think Maoist China or Stalinist Russia) exchange occurred naturally outside the state sanctioned system. In many cases, society just reverted back to barter due to lack of confidence in the state's money or economic system.
To some of us, the above lesson seems particularly relevant for today. As an American, I know that most of my fellow countrymen and women have exactly zero wealth apart from government transfer payments, pensions, or the state-supported housing industry (most loans to homeowners today are backed by the government). Even when people have savings, too often it is in paper form—meaning some claim on real assets—and not a real asset itself, such as a farm, oil well, business, or other tangible item. Most people, it would seem, trust the state to take care of them. But at a time of record deficits, and worldwide concern regarding the status of the dollar as the world’s reserve currency shouldn’t people at least be hedging their belief in the ability of the “savior state” to look out for them? The obvious answer, at least to me, is yes.
Rediscovering Real Money
This brings us to the title of this article, is silver money? I’ll answer my own question again in the affirmative. I just recently received an old silver quarter as change when making a purchase (much to my surprise), and U.S. silver eagle coins are still treated as legal tender (however, they can normally only be used for their face value, not their bullion content, though this may be changing). If we go back further in history, according to Article 1 Section 10 of the U.S. Constitution, gold and silver are the only items states should recognize as money, and the first American dollar was made of silver. Leaving American shores, according to Jerome Smith, 51 countries use a word for money that is the same as the word for silver. Two notable examples include “plata” in Spanish and “argent” in French. Most dictionaries refer to money as being standard, divisible, portable, and indestructible. By this definition, silver certainly counts as money.
Silver is also money, in my humble opinion, because silver is a real asset. Going back to the definition of money stated at the beginning of this piece, silver is recognized as having value as a stand-in for barter. Of course, we would all like to have thousands of acres of farm land, or our own oil well, or mine, or vineyard or whatever, but oftentimes this just isn't possible. It is of course a good idea to make sure you own assets that can feed you and keep you warm, but compared to paper forms of wealth, silver (and gold) are far better. They are also portable and indestructible, which I can’t say for food or a house.
If you are a middle class person looking to preserve and grow your savings, you might want to think about vehicles for savings that stand outside a system of banks and governments that—even if they have your best interests at heart—can’t always buffer you from the unfortunate waves of history. No one wants to see a tough future, but then again, many Westerners in particular need to realize how entitled they (we) have all become. Especially on a day where a large chunk of the eastern half of the United States is without power, you may want to re-evaluate just how dependent and complacent you are regarding the health and stability of the world around you. You may also want to start thinking for yourself regarding what money is, and—more importantly—what it is not.
For more on the silver story, see my book, Silver—The People's Metal, with a foreward by David Morgan.
Praise for Silver—The People’s Metal
"Ryan Jordan has written a comprehensive and compelling review of silver from up close and from high altitude...You will likely walk away with information not previously known, from silver history to modern uses for the white metal." Ted Butler, butlerresearch.com
"I think the case for silver laid out by Ryan Jordan is a good reminder for anyone who claims to love freedom and to honor dissent, that the time has come to really start putting your money where your mouth is." David Morgan, silver-investor.com
