The Gold Standard: Why the World Still Adores Gold

by | May 3, 2023 | economy, history | 0 comments

The California gold rush in Gerald Brence’s book, The Ox in the Culvert, plays a major part as it also did in the real world, where its impact is still felt today.

When James W. Marshall discovered gold in Sutter’s Mill by the Río de los Americanos (the American River) during the winter of 1848, he inadvertently began a global craze of fortune seekers rushing to California in the hopes of discovering gold and making it big. The California frontier back then was not as populous as it is now, and the news of gold brought in a third of a million people to the largely unpopulated territory. 

Although the supposed wealth of the Californian mines and rivers would eventually become nothing more than a trend of the times, the consequences of what happened still reverberate, especially to the millions of people now living in the State of California. The massive migrations of hundreds of thousands of migrants from across the continental United States and the globe directly led to the construction and establishment of schools, banks, churches, towns, and infrastructure to a once sparsely-peopled territory, which quickly gave it the momentum to petition for a successful statehood in 1850, only a mere few years after the land itself was given by Mexico.

The California Gold Rush brought about political and social upheavals not only in the soon-to-be-state nor in the United States of America, to whom it eventually joined, but to the world as a whole.

And all because of a tiny piece of shiny rock. While the majority of world banks no longer hold gold as collateral for the money they keep, there are still plenty of individuals that store them for a number of reasons, both personal and financial. 

While gold is not as practical to the average person as holding stocks (since gold by itself does not provide anyone earnings), gold is still very valuable. 

Consider that a mere ounce of gold, roughly about the size of a sugar cube, is worth more than a thousand dollars. Remember also that gold has been the human standard for wealth. There is a reason why it is called the gold standard.

But why? What makes gold so valuable to humans that history bends when a cache of it is discovered?

  1. The simplest reason that gold is extremely valuable to human eyes is that it has the most aesthetic appeal. While diamonds may be considered a girl’s best friend, gold has been and always will be the dream for most people. Gold is synonymous with wealth, opulence, and nobility, making it a timeless material for showing off and more.
  2. The properties of gold make it a very practical metal. Unlike glass, gold does not easily shatter. Unlike paper, gold does not burn into ash. Time, at least time according to how humans reckon with it, does not have much effect on gold either. Storing gold does not require any specifications and only needs proper security. And as a metal, it is malleable to shaping, ductile, attractive, and appropriately rare, unlike iron.
  3. Although gold might not seem like a worthwhile long-term investment, its stable value makes it extremely resistant when the worst occurs. It is great insurance against inflation and similar economic crises.

The Gold Standard Conclusion

People love gold. That’s what makes it extremely valuable. Since time immemorial, its intrinsic value has never waned–it has been the symbol of wealth and prosperity for more than three millennia, and while it is no longer the bedrock of the banking system, its value as a long-lasting commodity has never vanished, and it doesn’t look like it will anytime in the near future. 

Read more about life during the California gold rush in Gerald Brence’s book, The Ox in the Culvert, a historical thriller set in the true Wild West.

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