Tuesday, November 9, 2010

Thomas Edison on Gold

In this New York Times article published back in 1921, Edison talks about paper money and gold.

"Now, as to paper money, so called, every one knows that paper money is the money of civilized people. The higher you go in civilization the less actual money you see. It is all bills and checks. What are bills and checks? Mere promises and orders. What are they based on? Principally on two sources - human energy and the productive earth. Humanity and the soil - these are the only real bases of money.

Don't allow [the bankers] to confuse you with the cry of 'paper money'. The danger of paper money is precisely the danger of gold - if you get too much it is no good. They say we have all the gold in the world now. Well, what good does it do us? When America gets all the chips in a game the game stops. We would be better off if we had less gold. Indeed, we are trying to get rid of our gold to start something going. But the trade machine is at present jammed. Too much paper money operates the same way. There is just one rule for money, and that is, to have enough to carry all the legitimate trade that is waiting to move. Too little or too much are both bad. But enough to move trade, enough to prevent stagnation on the one hand and not enough to permit speculation on the other hand, is the proper ratio." - Thomas Edison

A sufficient amount of currency to facilitate trade, invention, and other productive activities is needed.

Nothing more.

Adam

Related posts:
-Grantham on Gold: The "Faith-based Metal"
-Buffett: Forget Gold, Buy Stocks
-Gold vs Productive Assets
-Grantham: Gold is "Last Refuge of the Desperate"
-Why Buffett's Not a Big Fan of Gold

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