make thee no molten idols

And the Lord said unto Moses, Go, get thee down;
For thy people, which thou broughtest out of the land of Egypt, have corrupted themselves:
They have turned aside quickly out of the way which I commanded them:
They have made them a molten calf, and have worshipped it.
Exodus 32:7-8

Well gold's rise has certainly been fascinating, if not irrational. Gold worship is not a universal trait of homo sapiens, though Western culture has certainly long been enamored. Gold has little intrinsic value, but you can hold it in your hand, and even more importantly it is shiny, and anyone who's played with an infant knows we do like shiny things. Yet many people, people who consider themselves serious, still believe we should tie the value of all money to gold. And as global currency markets become increasingly unstable, gold is still considered a "safe haven," because, well I guess because, you can hold it in your hand and it's shiny.

Whatever else one thinks about Keynes, his destruction of any rational notion behind the gold standard was quite complete. As he wrote in the 1920's, "In truth, the gold standard is already a barbarous relic." Yet, barbarism continually reasserts itself. While the economic value of gold is limited, its political power as a monetary standard can be quite high. Simply, gold is a relatively rare element, thus if you make it essential to all economic activity, those who control gold have inordinate power. Gold is an undemocratic monetary medium.

Now, the American monetary system today is fairly undemocratic. The banks remain the prime instruments of money creation and the Fed acts, or does not act as the case may be, as the unelected governor of this process. Now, it is true the government could simply print money, but this is basically frowned upon by the Lords of Finance who insist the money creation process be limited to the banks, and thus for the most part kept in their control. This process drives the even more aristocratic gold-bugs up crazy, they claim, "How can you simply create money out of thin air, everyone knows it needs to be mined! And well, while you can hold paper money, it's not shiny."

While you can fault the gold-bugs for their standard, the idea that money must be upheld to some sort of standard is not as easily dismissed. However, what that standard is or how it operates is certainly a difficult and essential question. For example, the for six decades, the US dollar has represented the standard of US global economic and military dominance. The underlying deterioration of this power in the last couple decades preceded the present questioning of the dollar's value. And as the United States is the foundation of the last decades corporate globalization experiment, it is not simply a questioning of American power, but of the entire globalization process.

Now one thing for sure, historically, times in which the reigning monetary standard come into question are turbulent. The most serious such period in American history was the Populist era -- the final stand of America's yeoman farmers. They had no love for the gold standard, banks, or Wall Street. They devised a very serious democratically controlled money process know as the sub-treasury system. Money creation would be predicated on crops, which not only you can grow and hold, but you can eat, though for the most part crops aren't shiny.

Our global monetary system is to say the least strained. Our government's policy is deliberately devaluing the dollar. They are unwittingly forcing a dialog on money itself. We should engage it.