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<p>[QUOTE=&quot;InfleXion, post: 1704427, member: 29012&quot;]It&#039;s just a matter of definitions. By real money I mean sound money, and only metals are sound money because they can&#039;t be created out of thin air, and they are the only things in the universe that meet the requirements of both a unit of account and a store of wealth - fungible (any oz = any oz, unlike gems), divisible (cut in half or melt it, no value lost), durable, and portable. Metals are not circulating as currency but government coins do have face value as well and are still technically money by every definition.</p><p><br /></p><p>Fiat currency is also money, but it&#039;s not sound money. The lack of durability is it&#039;s main drawback, which applies not only to it&#039;s physical existence but also to it&#039;s buying power which is the primary drawback in that it is not a reliable store of wealth having lost over 98% of its value in the last century since the Federal Reserve took over that responsibility, back when gold was cheaper than silver is today. Having dollars in the bank over that period vs. gold is no contest.</p><p><br /></p><p>Since metals cannot be created out of thin air they are supposed to be protection against currency inflation. As the amount of currency increases the amount of goods and services it represents are allocated a larger slice of the monetary pie, and resources that do not increase at the same pace as currency expansion will rise in price as the percentage of the currency supply they represent remains largely unchanged. I say &quot;supposed to&quot; because they are not allowed to function in their role as supply and demand dictates when the metal exchanges can create faux supply with paper contracts as well as divert demand into these paper contracts and away from the physical metal they represent, so it&#039;s a double whammy in that regard. But in the battle of man vs. nature we can only postpone the inevitable.[/QUOTE]</p><p><br /></p>

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