As Good As Gold And Other Arbitrary Notions

David Krueger MD

A newspaper columnist asked me recently, “In your book, The Secret Language of Money, you use the phrase ‘as good as gold.’ But isn’t the value we place on gold and ‘precious’ stones arbitrary?”

Of course it is. Same with tulip bulbs, Beanie Babies, IPO’s. For any stock, the value is very arbitrary—it’s based on what another bidder is willing to pay at that moment.

The stock market isn’t really a market, it’s an auction—which activates the variables of mind and brain. The stock doesn’t even know who owns it any more than war bonds knew about the war.

Here’s a brief, unofficial history of money. Before money, two goats were exchanged for five bags of rice. Then, coins enter as a symbol of value—a tangible equivalent, a unit of exchange. Paper bills replaced coins. Then paper checks. Then plastic. Then a pure abstraction of numbers stored and traded as configurations of electrons.

Gold coins are tangible, real—you can hold them, bite them, wear them—even hide them, and they’re still there. And gold glitters. (Call me a mind reader, but not one of my readers wants an iron Rolex).

Madoff and Stanford didn’t do their sleight-of-hand with gold coins. They used symbols of symbols—derivatives of little-understood equities.

The vast majority of our money management occurs not through our hands, or even our broker’s hands, but inside our minds, in a complex interplay of thoughts, emotions, and neurological wiring.

As money becomes more abstracted, transactions are easier, but our understanding of money fades. And our relationship with it changes.