Gold and Silver Pull Back — Smart Money Buys When Others Wait 
For thousands of years, civilizations have turned to gold as the ultimate store of wealth. But is it because of some mysterious “intrinsic value”? Alan Hibbard argues that the real reason gold has endured isn’t mystical at all — it’s practical. In his latest video, he explains why gold has remained money while countless other forms of currency have faded away.
Rethinking “Intrinsic Value”
Many people — from Aristotle to modern economists — have claimed that gold’s role as money comes from its “intrinsic value.” After all, it’s a tangible metal with uses in jewelry, art, and technology.
But as Hibbard points out, having intrinsic value doesn’t guarantee something will remain money. Feathers, beads, shells, and even cigarettes once circulated as currency, yet none of them survived the test of time. Their usefulness didn’t disappear; they simply stopped serving as money.
The lesson: something can hold value without holding its place as money. To understand gold’s staying power, we have to look deeper.
The Problem Money Solves
Money exists for one essential reason: to store the surplus of our time and energy. When you earn more than you immediately need for food or shelter, you want a way to save that surplus for the future.
Not every object performs this role equally well. Some lose value quickly or can be reproduced too easily, eroding the trust people place in them. Good money must keep its purchasing power over time — and that requires durability, portability, divisibility, and, above all, scarcity.
Lessons from Failed Currencies
History is full of examples where money lost its status because its supply became too easy to increase.
- Wampum beads once served as currency among Native Americans and early colonists. But when new drilling technology allowed factories to mass-produce wampum, its value collapsed.
- On the island of Yap, huge limestone “rai stones” were prized as money — until Europeans arrived with better tools, quarrying and transporting the stones far faster than islanders could.
In both cases, inflation destroyed the trust in these forms of money, proving that scarcity matters more than any other feature.
Gold’s Edge Over All Competitors
Unlike wampum or limestone, gold’s supply has remained difficult to expand. Mining it requires significant labor, capital, and technology. Even with modern equipment, new gold enters circulation only slowly relative to the existing stockpile.
That built-in resistance to rapid inflation makes gold uniquely stable. You can’t “print” gold the way governments create new dollars or euros, and you can’t mass-produce it in a factory like beads or paper bills. As Hibbard notes, unless someone finally cracks the code for alchemy, gold will remain the hardest money to inflate.
Why Gold Still Matters Today
We may use paper bills, bank transfers, and digital tokens for transactions, but the same forces that undermined wampum and rai stones are at work in our modern economy. Central banks can expand the money supply at will, weakening the value of every dollar.
Gold remains a safeguard because it resists those pressures. Its rarity, durability, and centuries-long track record make it a dependable hedge against inflation and monetary decay.
If you want to preserve the fruits of your labor — your surplus time and energy — gold deserves a place in your portfolio. That’s why it has been, and continues to be, the world’s best money.
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People Also Asked
Why has gold remained money for thousands of years?
Gold has stood the test of time because it’s incredibly difficult to inflate its supply. Unlike paper currencies, beads, or shells, gold can’t be mass-produced or printed at will. Mining it requires enormous effort, which keeps new supply low compared to the existing stock. That scarcity makes gold a reliable store of value across generations.
What’s wrong with the idea that gold’s value comes only from its “intrinsic worth”?
While gold does have uses in jewelry, art, and technology, its role as money isn’t about “intrinsic value.” History shows that many objects with practical uses — like feathers, beads, or cigarettes — once served as money but eventually failed. The real reason gold has lasted is its ability to protect stored value over time, thanks to its rarity and stability.
How do inflation and easy reproduction destroy the value of money?
When a currency becomes too easy to create, its supply grows faster than demand, eroding its purchasing power. This happened with wampum beads when factories mass-produced them, and with Yap’s limestone “rai stones” once Europeans mined them more efficiently. The same principle applies to paper currencies today — rapid money creation leads to inflation and loss of value.
What lessons do failed currencies like wampum and rai stones teach us about money?
Both wampum and rai stones were once trusted stores of wealth, but they collapsed when new technology made them easy to produce. These stories show that good money depends on scarcity and resistance to inflation, not just on tradition or usefulness. Without those qualities, a currency eventually loses people’s confidence.
Why is gold considered a hedge against monetary decay?
Gold is one of the hardest assets to inflate, which makes it a powerful defense against the erosion of purchasing power caused by overprinting or excessive money creation. Its scarcity, durability, and long history as a medium of exchange give investors confidence that gold will hold its value even when paper or digital currencies falter.
