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News Link • Gold and Silver

What is Money? (Part II)

• Silver Underground
For those of you who didn't catch Part I, here is is again: In order to serve as a medium of exchange, a unit of account, and a store of value, money must have certain characteristics, or it will not work. It must be: 1. Scarce - Money must be relatively scarce in order to function as a medium of exchange, a unit of account, and a store of value. It would be impractical to use something like soil or sand as money because it is not scarce enough. It is so easily accessible to anyone that you would need vast amounts of it to exchange for other products, making it a poor medium exchange. To exchange the surplus of one's labor for sand and store that surplus value as sand would also take an impractical amount of time and resources to measure out and store the sand. This illustrates why money must be scarce in order to function practically. 2. Portable - Money must also be portable. If it's going to be used as a medium of e

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