Beauty and Avarice
A Romantic History of
Precious metals
I first made this presentation in 2010 at the International Precious Metals Institute. I have changed my mind since then about some economic concepts and as such is education, I have revised it. However, one thing that has not changed is, as any metals trader or merchant knows that this history encompasses two things and these are in the title Beauty and Avarice.
The story of precious metals stretches way back past the recorded history of man and continues through to modern times. It is a global history and one that shows no preference to race, creed or sex. It is one that holds the good and evil of the world for all to see. It is one that’s depth is so profound it can only be told as related to man itself.
Hence this presentation is not a timeline history that you may expect from a professor or some methodical study of the uses and or discoveries related to the precious metals. This is about the metals and their relation to mankind and the effects it has had on society.
The great history of precious metals starts off with gold and silver. As far back as 5,000 years ago it has been discovered that both were traded for by the Sumerians who would offer grain and other food stuffs in exchange. They would use the metals for their temples and as ornaments. Believe it or not silver was considered more precious than gold at the time because it was scarcer.
In ancient Babylon, King Hammurabi’s Code, a written text of 282 laws clearly set silver as a standard value by defining the value of other commodities against it. Silver and grain were the two basic commodities used for a media of exchange. But by the year 1370 BC there was a shift due to the voracious demand of Kurigulzu 1st for decoration of his new capital. The tablets where prices for goods were quoted were now changed to reflect exchange versus gold instead of silver.
Gold and silver were easy to work with and were predominantly used for religious practices, held by rulers or as jewelry. It was very rare for the public to own gold in any scale. The people found no need for gold since it was generally useless in their eyes. But gold’s radiance and malleability made gold the perfect thing for objects of worship and adornment. The fact that gold doesn’t tarnish, it remains the same; no matter how many years pass, and is the easiest of all the precious metals to work with and can be stretched and beat to cover large areas made it useful for the arts. It has something of the eternal and after all is that not what everyone wants, Eternal Life?
Gold jewelry was a high art lavished upon dead monarchs as well
as the live ones. The Egyptian’s called gold the tears of god. They traded
large volumes of goods for the metal from Nubians where gold was found in
streams in alluvial form. It is still found to exist to this day in this form
in many parts of the world of which I have seen firsthand in the jungles of
Colombia.
Eventually the Egyptians invaded and took control of Nubia around 1400 BC. In fact, the Egyptian word for gold was Nub, for obvious reasons. This takeover and their extraordinary gold production would lead the Egyptians to become one of the most powerful kingdoms. Foreigners believed that gold was plentiful in Egypt. Unfortunately the truth is that their demand for gold became so high because of trade with the rest of the known world that they had mines in hot desert regions and used slaves and prisoners in the harshest of conditions to continue to meet their demands.
One Greek myth tells the story of the gods. This story takes place in Phrygia a kingdom ruled by King Midas. It happens that a gardener of the king comes upon a drunken satyr. A satyr is half goat, half man mythical creature and follower of the god Dionysus (the god of pleasure). The satyr is bound and brought to the King. When the drunken creature awakens he tells Midas glorious stories of Phrygia and beyond. Midas pleased by the satyr decides after a few days to set it free and have it escorted back. Dionysus who had been worried about the satyr goes to Midas and asks him what he would like to receive as a reward for his good deed. He quickly replied that all he touches turns to gold. But when he realizes that everything he touches, even his daughter is turned to gold he asks to be released from this gift now turned curse. The god grants his wish and tells him to go wash his hands in the Pactolus River. And it is said that from that day forward gold was found in that river which lies in the kingdom of Lydia.
In another Greek myth we hear about Jason and the Argonauts and their quest for the Golden Fleece. This was a dangerous quest with lots of trials and tribulations to come back with this grand prize. (By the way, golden fleeces were real since the fleece of lambs was often used to reclaim alluvial gold.) Again in this story just as for Midas, when Jason was at the height of his power and wealth and was to wed his bride, she died wearing a gift that was a poisoned clock of gold.
I mention these myths because already we see early on the understanding of the dangers of the greed for such power and control of beauty. These tales warn us of the dangers of a voracious appetite for this beautiful yet deadly metal when put to the wrong purpose.
In ancient Lydia a great kingdom, wherein lay the Grand River Pactolus, circa 635 BC the King created what was believed to be a new novelty. They invented the coins. The coins were stamped and marked and of a standard size, they were called staters. The supplies again of the metals were alluvial in nature. The concept of the coin spread quickly throughout the region making Lydia wealthy and they were able to trade something that was plentiful for them for goods and commodities that were useful. However what made the coin work was the fact that the King decreed its value.
In other words the King would announce that a specific coin was worth 15 head of cattle and basis that all other transactions were then easily negotiable.
The first coins however were made of a metal known as electrum, a naturally occurring alloy of silver and gold. They later learned how to separate the metals and so King Croesus launched a bimetallic system for gold and silver which would prevail for most of recorded history. The ratio of gold to silver was set at 10 to 1, a standard that had been common in the known world. This was to be the first readily acceptable currency.
Then Croesus would attack Persia on an ill-conceived notion that to defend the kingdom they would have to prevail over this growing populace. However they woke a sleeping giant and the Persians prevailed. The Persians kept the coinage system going with great success.
Meanwhile silver was being mined in what is now known as Andalusia, Spain and being used in Greece. The Greeks had a monopoly from the Lourium mines. This financial power enabled them to finance their battles and defend themselves until they were finally defeated by Xerxes of Persia about 480 BC. The Greeks also developed their own coinage after the fashion of the Lydians.
At about the same time Abraham the founder in faith of the Jewish and Christian religions is said in the bible to have been rich in gold and silver. We also read about King Solomon’s’ temple which was believed to have been covered all in gold and filled with golden vessels and ornaments. When the Queen of Sheba visited Solomon as a gift he received nearly 40 million dollars’ worth of gold at today’s prices. The tabernacle, built for their great God by Moses, was constructed under direct instruction by the Almighty and was covered in gold. Let’s not forget the Wise men with their gold and that Jesus Christ was betrayed by Judas for 30 pieces of silver. In the bible there are over 460 references to gold and silver.
The story of Solomon would still be remembered when in AD 532 the Byzantine emperor Justinian would claim “Solomon I have surpassed thee” after the construction of the great Hagia Sofia (Holy Wisdom) Basilica in Constantinople, now modern day Istanbul.
Reverting back to King Croesus in Lydia, there was a fundamental shift in the known world which stretched as far as Asia. Gold and silver which though often sought after as a thing of beauty and for trade were now on a new pedestal. The new position as currency or money as we call it these days turned the tide and demand. Those people who found gold would easily become wealthy in real goods. This apparently natural demand for gold and silver coins, which were acceptable worldwide, opened a can of worms. There was a new way to acquire wealth and power. Prior, land and livestock were more important. Now the mind of men changes their perception from only the beauty of the metal itself to a thing to gain power and wealth.
The Roman Empire which had encompassed much of the globe at one point had also brought with it the monetary use of precious metals. The Romans gave us the monetary denomination of the pound, in Latin; the Libra and this is why pound sterling is associated with the L symbol. After Caesar conquered Gaul they imported 100,000 slaves to work the mines in Italy to feed their demand for precious metal coinage. They also used slaves to exploit the mineral industry of Spain at what is recorded to have been a level of cruelty and disregard for human life that matched that of the Egyptians. The Roman greed was inexhaustible. They decorated their bodies, homes and collected coins out of pure pride not caring how much blood was shed for this metal.
There is a story of two competing Romans, Crassus and Pompey, who competed for power and accumulation of wealth. Pompey died at the hands of enemies having his head chopped off. Crassus wanting to prove his power rivaled even Caesar picked a fight with the Parthians in Mesopotamia. He set out with 44,000 troops mostly foot soldiers. He was unprepared as they countered his attack with ten thousand archers and one thousand camels. The Romans were no match and only 10,000 escaped with their lives. The Parthians had a strong disdain for the money crazed Roman civilization. When they captured Crassus they gave him a taste of his own medicine. They poured molten gold down his throat. Not a pretty way to go.
The Byzantine Empire, which followed the Roman Empire, was much improved. During their reign their economy flourished due to the effectiveness of a regular supply of the gold coming in from African mines. The stability they had and created was centered on their gold coin the bezant. The coin became renowned all around the known world for its quality and consistency. This made them powerful and the center of trade. As the US dollar is to the world economy today so was the Bezant in that time. But of course there is one major difference it was not a fiat currency.
Eventually the Egyptians invaded and took control of Nubia around 1400 BC. In fact, the Egyptian word for gold was Nub, for obvious reasons. This takeover and their extraordinary gold production would lead the Egyptians to become one of the most powerful kingdoms. Foreigners believed that gold was plentiful in Egypt. Unfortunately the truth is that their demand for gold became so high because of trade with the rest of the known world that they had mines in hot desert regions and used slaves and prisoners in the harshest of conditions to continue to meet their demands.
One Greek myth tells the story of the gods. This story takes place in Phrygia a kingdom ruled by King Midas. It happens that a gardener of the king comes upon a drunken satyr. A satyr is half goat, half man mythical creature and follower of the god Dionysus (the god of pleasure). The satyr is bound and brought to the King. When the drunken creature awakens he tells Midas glorious stories of Phrygia and beyond. Midas pleased by the satyr decides after a few days to set it free and have it escorted back. Dionysus who had been worried about the satyr goes to Midas and asks him what he would like to receive as a reward for his good deed. He quickly replied that all he touches turns to gold. But when he realizes that everything he touches, even his daughter is turned to gold he asks to be released from this gift now turned curse. The god grants his wish and tells him to go wash his hands in the Pactolus River. And it is said that from that day forward gold was found in that river which lies in the kingdom of Lydia.
In another Greek myth we hear about Jason and the Argonauts and their quest for the Golden Fleece. This was a dangerous quest with lots of trials and tribulations to come back with this grand prize. (By the way, golden fleeces were real since the fleece of lambs was often used to reclaim alluvial gold.) Again in this story just as for Midas, when Jason was at the height of his power and wealth and was to wed his bride, she died wearing a gift that was a poisoned clock of gold.
I mention these myths because already we see early on the understanding of the dangers of the greed for such power and control of beauty. These tales warn us of the dangers of a voracious appetite for this beautiful yet deadly metal when put to the wrong purpose.
In ancient Lydia a great kingdom, wherein lay the Grand River Pactolus, circa 635 BC the King created what was believed to be a new novelty. They invented the coins. The coins were stamped and marked and of a standard size, they were called staters. The supplies again of the metals were alluvial in nature. The concept of the coin spread quickly throughout the region making Lydia wealthy and they were able to trade something that was plentiful for them for goods and commodities that were useful. However what made the coin work was the fact that the King decreed its value.
In other words the King would announce that a specific coin was worth 15 head of cattle and basis that all other transactions were then easily negotiable.
The first coins however were made of a metal known as electrum, a naturally occurring alloy of silver and gold. They later learned how to separate the metals and so King Croesus launched a bimetallic system for gold and silver which would prevail for most of recorded history. The ratio of gold to silver was set at 10 to 1, a standard that had been common in the known world. This was to be the first readily acceptable currency.
Then Croesus would attack Persia on an ill-conceived notion that to defend the kingdom they would have to prevail over this growing populace. However they woke a sleeping giant and the Persians prevailed. The Persians kept the coinage system going with great success.
Meanwhile silver was being mined in what is now known as Andalusia, Spain and being used in Greece. The Greeks had a monopoly from the Lourium mines. This financial power enabled them to finance their battles and defend themselves until they were finally defeated by Xerxes of Persia about 480 BC. The Greeks also developed their own coinage after the fashion of the Lydians.
At about the same time Abraham the founder in faith of the Jewish and Christian religions is said in the bible to have been rich in gold and silver. We also read about King Solomon’s’ temple which was believed to have been covered all in gold and filled with golden vessels and ornaments. When the Queen of Sheba visited Solomon as a gift he received nearly 40 million dollars’ worth of gold at today’s prices. The tabernacle, built for their great God by Moses, was constructed under direct instruction by the Almighty and was covered in gold. Let’s not forget the Wise men with their gold and that Jesus Christ was betrayed by Judas for 30 pieces of silver. In the bible there are over 460 references to gold and silver.
The story of Solomon would still be remembered when in AD 532 the Byzantine emperor Justinian would claim “Solomon I have surpassed thee” after the construction of the great Hagia Sofia (Holy Wisdom) Basilica in Constantinople, now modern day Istanbul.
Reverting back to King Croesus in Lydia, there was a fundamental shift in the known world which stretched as far as Asia. Gold and silver which though often sought after as a thing of beauty and for trade were now on a new pedestal. The new position as currency or money as we call it these days turned the tide and demand. Those people who found gold would easily become wealthy in real goods. This apparently natural demand for gold and silver coins, which were acceptable worldwide, opened a can of worms. There was a new way to acquire wealth and power. Prior, land and livestock were more important. Now the mind of men changes their perception from only the beauty of the metal itself to a thing to gain power and wealth.
The Roman Empire which had encompassed much of the globe at one point had also brought with it the monetary use of precious metals. The Romans gave us the monetary denomination of the pound, in Latin; the Libra and this is why pound sterling is associated with the L symbol. After Caesar conquered Gaul they imported 100,000 slaves to work the mines in Italy to feed their demand for precious metal coinage. They also used slaves to exploit the mineral industry of Spain at what is recorded to have been a level of cruelty and disregard for human life that matched that of the Egyptians. The Roman greed was inexhaustible. They decorated their bodies, homes and collected coins out of pure pride not caring how much blood was shed for this metal.
There is a story of two competing Romans, Crassus and Pompey, who competed for power and accumulation of wealth. Pompey died at the hands of enemies having his head chopped off. Crassus wanting to prove his power rivaled even Caesar picked a fight with the Parthians in Mesopotamia. He set out with 44,000 troops mostly foot soldiers. He was unprepared as they countered his attack with ten thousand archers and one thousand camels. The Romans were no match and only 10,000 escaped with their lives. The Parthians had a strong disdain for the money crazed Roman civilization. When they captured Crassus they gave him a taste of his own medicine. They poured molten gold down his throat. Not a pretty way to go.
The Byzantine Empire, which followed the Roman Empire, was much improved. During their reign their economy flourished due to the effectiveness of a regular supply of the gold coming in from African mines. The stability they had and created was centered on their gold coin the bezant. The coin became renowned all around the known world for its quality and consistency. This made them powerful and the center of trade. As the US dollar is to the world economy today so was the Bezant in that time. But of course there is one major difference it was not a fiat currency.
The Empire was powerful for many hundreds of years but started to lose its power when it lost its control of the gold. The Mohammedans had taken much of Africa and had made agreements with the Nubians essentially cutting off the supply of gold to the Byzantines. Though they still were able to acquire some metal from other areas of the globe the supply was weak and affected them in turn. They stimulated export of their own goods and restrained imports in their attempt to build wealth. Their expenses were high as they had to pay off friends and allies to supply protection. It was only a matter of time before things totally unwound. This shift in wealth was fundamental to their decline and would eventually bring them to their knees.
In 1204 Constantinople fell to the Crusaders. The new powers began debasing the bezant, by reducing the metal contained and as a result it was losing its worldwide acceptance and a short fifty years later the great traders of Florence, Genoa and Venice began issuing their own gold coins. Later these markets would start developing a paper system for the transfer of wealth via promissory notes. These notes were being backed by gold and silver.
Around the same time we read in the tales of the travels of Marco Polo how the Great Mongol ruler Kublai Khan had already begun to issue paper currency. In fact they had developed a vast communication network in which paper money and credit facilities were central to their expansion. Marco claimed that it was the people’s great respect for their ruler that enabled the success of the paper money and he was totally in awe. A quote from his book makes it quite clear “With these pieces of paper they can buy anything and pay for anything. And I can tell you that the papers that reckon as ten bezants do not weight one." Of course the populace was forced to accept this under threat of death. This is an interesting reminder of the current value of our paper currency against gold.
Remarkably China was probably one of the countries with the largest gold reserves with about 5 million ounces but never had their own true gold coin at the time. They were to be the only major region to be wedded to a silver standard up until 1935.
In Arab domains at the decline of Byzantium they had begun the issue of the dinar gold coins and minted them in great quantity. These coins at first were imitations of the bezant and later the portraits and religious figures were replaced with quotes from the Koran. Because of their reliable gold content these became the new international currency and also circulated in Christian Europe.
The gold still had to come from somewhere and Africa was the major provider. The famed African city of Timbuktu grew rich simply by taxing the huge volume of business that crossed its borders. Together with a group of other interior towns they enclosed much of the mining area. All this trade was for barter for salt and other useful commodities and would not have been possible if not for the Camel. This creature is what made possible the linking of the gold regions to the Mediterranean.
The English in the middle ages primarily traded in the white metal and became masters of silver coinage. Silver now being the more plentiful of the precious metals was by far the primary metal for small transactions and would stay that way until the twentieth century. Gold coins had such a high value the common people rarely saw them. They were used by this time only by merchants and traders involved in foreign trade.
Its beauty and the fact that gold would remain the same even in exposure to the elements is what made it the currency of choice for mankind. It is the open and free market that determined the value of gold. It was not something that was merely dictated, which is the current problem facing the global currencies of this day.
Sadly, the Europeans would eventually grow their sailing fleets and start to travel worldwide in search of gold and silver. At the same time that Christopher Columbus set his sights on the Indies; the Portuguese were exploring Africa.
I am now going to jump around history. Not because I am a scatter brain, though that may be true. But because it is the easiest way to make heads or tails of what I see was going on in the past.
The burning hunger for the power of gold was critical to the discovery of the New World. First the Spaniards and the Portuguese followed by the English, Dutch and French scoured the world. Meanwhile in the name of God they pursued many things but this was conveniently forgotten when precious metals would come to play. Greed or the hope in wealth has a way of corrupting man.
Christopher Columbus even wrote to the King Ferdinand about the
conversion for a great number of peoples to the Christian faith and the
acquisition of all their inhabitants for Spain and not least the gold that was
surely contained therein.
But the Portuguese also set their sights on Africa and the search for the River of Gold that was always thought to exist. Now with their growing naval ability and determination to find the metal they set off. Suddenly in their quest they did not see other humans as free men but began enslaving people to work for them specifically the indigenous blacks but also anyone that may be available, they believed in equality in slavery. This was an evil betrayal of their Christian faith, and all for the great quest of riches in gold. They were not the only Christians to go this path. Obviously slave labor is cheaper than wage labor and searching for these precious metals is laborious work.
In the midst of these explorations there is an interesting and funny story. There was a merchant from Venice whose name was Cadamasto who in exploring West Africa for the Portuguese went to great depths inland. He came upon a petty Tyrant King Budomel. He ruled over many villages and had countless wives, each of who was waited on by young women as well. He wrote that the king customarily would sleep with any of these women with no insult taken by the wives. Budomel had told him this was hard work. Finally given that he believed that Christians knew how to do many things. He asked Cadamasto if he could give him the means by which he could satisfy many women and for this he offered a great reward. Cadamasto did not record a response to this inquiry by the king. But I have a suggestion of my own that works, offer to do the cooking and cleaning……
Let’s go back to the quest for precious metals. Now the Europeans are invading all parts of the world. There are many stories that can be told such as the quest for “El Dorado” where Captain Hernando de Alvarado and his troops circa 1500s were searching for the lost city of gold in Southern California region. One Indian told them that there was a city covered with gold. Where the men and women used gold for every menial task and it was abundant. Alvarado believed and they followed his direction to all different parts of what is now known as the state of Texas. They spent years and were exhausted. Meanwhile the whole time the Indian was leading them on a wild goose chase. He had sacrificed himself to lead them away from his people.
But still many Spaniards did find gold. They found it in South America in what they called then Nuevo Granada and is now known as Colombia. They pushed through and as they exhausted streams that they had uncovered in one zone then moved to another. There were incredible amounts of gold and silver that were shipped back to Spain. Sir Francis Drake the English naval hero or Pirate, the Dragon as named by the Spaniards, was the cause of major losses for them in the region. Notwithstanding this activity by the end of that century the stock of gold and silver in Europe was still nearly five times what it was in 1492.
Spain needed the metals to support their thirst for luxuries and power. Their expansion was a huge cost and all eyes were on the prize. The men that were sent for gold were told to make converts and at the least get gold.
So it was with this same mandate that they would arrive in Peru. It would be the famed conquistador Francisco Pizarro who would change the world of these indigenous people. He would meet the emperor Atahualpa of the Incas who had recently conquered and destroyed another Indigenous nation and was the king of the mountain. When Pizarro approached these men, he and his men stunk to high heaven, were clad in metal and on horseback, this struck fear in the Incans.
But the Portuguese also set their sights on Africa and the search for the River of Gold that was always thought to exist. Now with their growing naval ability and determination to find the metal they set off. Suddenly in their quest they did not see other humans as free men but began enslaving people to work for them specifically the indigenous blacks but also anyone that may be available, they believed in equality in slavery. This was an evil betrayal of their Christian faith, and all for the great quest of riches in gold. They were not the only Christians to go this path. Obviously slave labor is cheaper than wage labor and searching for these precious metals is laborious work.
In the midst of these explorations there is an interesting and funny story. There was a merchant from Venice whose name was Cadamasto who in exploring West Africa for the Portuguese went to great depths inland. He came upon a petty Tyrant King Budomel. He ruled over many villages and had countless wives, each of who was waited on by young women as well. He wrote that the king customarily would sleep with any of these women with no insult taken by the wives. Budomel had told him this was hard work. Finally given that he believed that Christians knew how to do many things. He asked Cadamasto if he could give him the means by which he could satisfy many women and for this he offered a great reward. Cadamasto did not record a response to this inquiry by the king. But I have a suggestion of my own that works, offer to do the cooking and cleaning……
Let’s go back to the quest for precious metals. Now the Europeans are invading all parts of the world. There are many stories that can be told such as the quest for “El Dorado” where Captain Hernando de Alvarado and his troops circa 1500s were searching for the lost city of gold in Southern California region. One Indian told them that there was a city covered with gold. Where the men and women used gold for every menial task and it was abundant. Alvarado believed and they followed his direction to all different parts of what is now known as the state of Texas. They spent years and were exhausted. Meanwhile the whole time the Indian was leading them on a wild goose chase. He had sacrificed himself to lead them away from his people.
But still many Spaniards did find gold. They found it in South America in what they called then Nuevo Granada and is now known as Colombia. They pushed through and as they exhausted streams that they had uncovered in one zone then moved to another. There were incredible amounts of gold and silver that were shipped back to Spain. Sir Francis Drake the English naval hero or Pirate, the Dragon as named by the Spaniards, was the cause of major losses for them in the region. Notwithstanding this activity by the end of that century the stock of gold and silver in Europe was still nearly five times what it was in 1492.
Spain needed the metals to support their thirst for luxuries and power. Their expansion was a huge cost and all eyes were on the prize. The men that were sent for gold were told to make converts and at the least get gold.
So it was with this same mandate that they would arrive in Peru. It would be the famed conquistador Francisco Pizarro who would change the world of these indigenous people. He would meet the emperor Atahualpa of the Incas who had recently conquered and destroyed another Indigenous nation and was the king of the mountain. When Pizarro approached these men, he and his men stunk to high heaven, were clad in metal and on horseback, this struck fear in the Incans.
Atahualpa treated them courteously and offered them gifts of
which included gold and silver. As they had entered the great city they had
noted they saw precious metals everywhere. They knew they had uncovered a great
find and would make quick work of betraying their friendship. He would use the
name of God to enable this, claiming that their rejection of the faith made
them enemies. But this was only a rouse for him to enslave the people. At one
point he had ransomed Atahualpa and received as much as he asked for which was
to fill a large room from floor to ceiling, but in the end he would never
release him alive. In a move of fate Pizarro, the founder of the city of Lima,
would die at the hands of betrayers as well.
Meanwhile back in Colombia in a region called Chocó, while some other Spaniards were busy searching for gold and silver they kept coming across a funny white metal. They couldn’t figure out what to do with it, so in most cases they threw it back. The crazy part about this is they threw it back because they thought it was un-ripened gold! But it was only a matter of time before some thought to save it and see if it can be put to any good use. This metal the Spaniards named Platina, which simply means small silver; of course we would later call it platinum.
The Spaniards did start collecting it and sending it back. At that point they wanted to get it all to avoid the possible debasement of their gold coins with the cheap platinum. Oddly since they had no use for it and it was hard to work with the only idea that most people had was to steal the gold by making counterfeit debased coins with this metal. So platinum, a very useful and most actively demanded metal for industry today, was originally considered worthless.
There have been discoveries that platinum was used by Indigenous in that area of the Americas as jewelry but not in large quantities since gold was much easier to work. Jewelry would also be the first use of platinum in Europe. That would change once scientists began to discover its properties, primarily its use in heat resistant applications. But major efforts didn’t get underway until the late 1700s and useful discoveries were to be made in the next 100 years. When Russia became a primary producer in the early part of the19th century that is when the flame was really turned up on this metal.
Since this metal was abundant in Russia, they began to issue coin of the realm of this specie. But its acceptance was not to become widely popular and it would end there.
Meanwhile back in Colombia in a region called Chocó, while some other Spaniards were busy searching for gold and silver they kept coming across a funny white metal. They couldn’t figure out what to do with it, so in most cases they threw it back. The crazy part about this is they threw it back because they thought it was un-ripened gold! But it was only a matter of time before some thought to save it and see if it can be put to any good use. This metal the Spaniards named Platina, which simply means small silver; of course we would later call it platinum.
The Spaniards did start collecting it and sending it back. At that point they wanted to get it all to avoid the possible debasement of their gold coins with the cheap platinum. Oddly since they had no use for it and it was hard to work with the only idea that most people had was to steal the gold by making counterfeit debased coins with this metal. So platinum, a very useful and most actively demanded metal for industry today, was originally considered worthless.
There have been discoveries that platinum was used by Indigenous in that area of the Americas as jewelry but not in large quantities since gold was much easier to work. Jewelry would also be the first use of platinum in Europe. That would change once scientists began to discover its properties, primarily its use in heat resistant applications. But major efforts didn’t get underway until the late 1700s and useful discoveries were to be made in the next 100 years. When Russia became a primary producer in the early part of the19th century that is when the flame was really turned up on this metal.
Since this metal was abundant in Russia, they began to issue coin of the realm of this specie. But its acceptance was not to become widely popular and it would end there.
An interesting thing as well was happening during this time
there was arbitrage between Europe and Asia. At that time India and China
valued silver higher than gold, so often the gold would be sold for silver,
with that same silver they could buy commodities in Asia and bring it back
turning it again. This was to last for decades until pricing came in line with
the rest of the known world.
As I abbreviate history, years pass the Spanish exhaust their mineral wealth from their colonies having not only mined but stripped all the tombs, jewelry and any other precious metals works they could have laid their hands on. So by the end of the 17th century they would lose not only their money but power. After all the work, savage enslavement of peoples, thievery and wealth the joys of ownership left the Spaniards little to be grateful for. So ends the first gold rush to the Americas.
Obviously during this time The United State of America is born. During its birth its suffered tremendous economic setbacks primarily because of the war but more so because of the method in which it was financed which was through issuance of banknotes or fiat currencies which were constantly devaluing and causing strife to the common man. The situation was so bad that many people did not want to accept them for payment. At that point some states such as Rhode Island made laws forcing the acceptance of their notes. But it was not to last as the laws were quickly thrown out.
As I abbreviate history, years pass the Spanish exhaust their mineral wealth from their colonies having not only mined but stripped all the tombs, jewelry and any other precious metals works they could have laid their hands on. So by the end of the 17th century they would lose not only their money but power. After all the work, savage enslavement of peoples, thievery and wealth the joys of ownership left the Spaniards little to be grateful for. So ends the first gold rush to the Americas.
Obviously during this time The United State of America is born. During its birth its suffered tremendous economic setbacks primarily because of the war but more so because of the method in which it was financed which was through issuance of banknotes or fiat currencies which were constantly devaluing and causing strife to the common man. The situation was so bad that many people did not want to accept them for payment. At that point some states such as Rhode Island made laws forcing the acceptance of their notes. But it was not to last as the laws were quickly thrown out.
In the early years of our nation it was the return to using gold
that actually brought stability and peace. The founding fathers did not believe
in fiat currencies and at the time of the writing of the constitution George
Washington had wrote the following on the subject of paper money:
We may one day become a
great commercial and flourishing nation. But if in pursuit of the means we
should unfortunately stumble again on unfunded paper money or similar species
of fraud, we shall assuredly give a fatal stab to our credit in its infancy.
But Alexander Hamilton was of another opinion and wrote:
No Society could succeed
which did not unite the interest in credit of rich individuals with those of
the state. A national debt, if it is not excessive, will be to us a national
blessing.
This argument would continue for some time. Meanwhile the US
boundaries are constantly expanding. It was only a matter of time before the
big fever hit. The first gold rush believe it or not was in the North Carolina
in 1803 when someone stumbled on a chunk of gold which was being used as a door
stop for many years and realized there had to be more where that came from. But
we don’t hear about this much because since this occurred in an already well-established
area with strong government and all the amenities of a peaceful society, there
just wasn’t enough to make for an exciting story.
The Big Gold rush which everyone knows about through the movies is the California rush of 1849. It was in 1848 when James Marshal a partner at Sutter’s Mill discovered alluvial gold sitting in a river. This was the beginning and also the end. The end of Sutter’s mill and all that gentleman’s businesses as men would come from all over taking what they could. Why did they come from all over? It’s simple. This time they were not working for king or a slave driver. This time they were working for themselves. Here every person had an opportunity to strike it rich and keep it. All they had to do was stake their piece of land. This was just what the government ordered for the continuing expansion and growth of these United States. Some claim that this was providential.
However for many this was a disaster. The hardships endured by families just to get to California were enough to break the back of the strongest. Often they would abandon goods on the way that they just couldn’t take one more foot. Then finally many would die poor and or succumb to alcoholism from the desperation from all the hard human efforts put forth in their attempts to acquire gold.
The Big Gold rush which everyone knows about through the movies is the California rush of 1849. It was in 1848 when James Marshal a partner at Sutter’s Mill discovered alluvial gold sitting in a river. This was the beginning and also the end. The end of Sutter’s mill and all that gentleman’s businesses as men would come from all over taking what they could. Why did they come from all over? It’s simple. This time they were not working for king or a slave driver. This time they were working for themselves. Here every person had an opportunity to strike it rich and keep it. All they had to do was stake their piece of land. This was just what the government ordered for the continuing expansion and growth of these United States. Some claim that this was providential.
However for many this was a disaster. The hardships endured by families just to get to California were enough to break the back of the strongest. Often they would abandon goods on the way that they just couldn’t take one more foot. Then finally many would die poor and or succumb to alcoholism from the desperation from all the hard human efforts put forth in their attempts to acquire gold.
There were some that became rich and the cities did grow and
develop but at what human cost? This rush actually only lasted about four
years. Then there were to be to other rushes in these United States first to
Colorado then to Alaska. But silver would be the big find in Colorado and
become the most abundant precious metals resource in the country during that
time.
Before I go off this region there is the story of the Black Hills of South Dakota which I found very interesting. The Black Hills were an Indian reservation. When precious metals were found there suddenly the U S government reneged on its promise to allow them to live there peacefully. This was unfortunately for the Indians, a frequent occurrence. The American Indians did not wish to move but the government wanted to force them to out to get at the treasure. Do you know they sent their best? His Name was General Custer and that was his Last Stand.
Soon after there is a gold rush to Australia followed by the big finds in South Africa in 1854. Now the finds in South Africa were large but difficult and more complicated to access. This became big business and industry, one the British were very fond of. The reason it was so important for the British was that essentially they were on a gold standard since 1821. Just like the Spaniards they needed to provide more to keep up liquidity.
The local Dutch called the Boers (the Dutch word for farmer) were not so fond of the British owned business’s invasion and there came to be very serious issues and claims on both sides of the argument. The Boers resorted to guerilla war tactics after being agitated by the British and war would break out. This would end up being a long drawn out conflict over many years at which time many lives were lost. One new tactic that the British introduced has been used since repeatedly, it was called concentration camps. They rounded up the wives and children of the rebels and some reports claimed that upwards of 20,000 died of starvation in those camps. This of course is one of the more horrible consequences that surround the history of gold.
But this war is not the only pain and suffering that surrounds the gold standard. In the United States which started as a bimetallic system but was functionally on a silver standard, things were about to change. The US would soon join Europe as the newest member to the gold standard. At that time the United States was much richer in silver than gold. When the change was made in 1890, it caused a major disruption in the economy, creating a squeeze on money. The government however moved forward crushing the silver industry. This led a candidate for the presidency Williams Jennings Bryan in his famous speech in a 1896 make the following statement against the gold standard “You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold.” But it was not the gold standard itself but the management that brought these pains.
Do you know that it is said that the children’s book the Wizard of Oz is in actuality a treatise against the gold standard? If you read it as Dorothy the simple farmer being thrown out and told to follow the yellow brick road (the gold symbol), which only leads to the Wizard who gives false hope and actually sends her into danger you see the parallel of themes at that time. At the end the Wizard, which represents the Bankers and proponents of the gold standard, is forced to admit that he is a fraud. Similarly this claim is now being said about the state of the US dollar which now is only a fiat currency with no intrinsic value except for the good faith of the people of this country.
Whether it was the Wizard, a King or an elected government trying
money management we have learned from history is a dangerous prospect. It is
said that the debt burden on Germany after the First World War, due to their
lack of gold and silver reserves, brought about their economic struggles as
they issued paper money at an alarming rate that led to their uprising against
Europe. The English also suffered trying to bring back the gold standard after
the First World War. Finally even the
Great Depression has been said to be partially caused by claims on US gold reserves
as the Federal Reserve devalued the currency in an effort to support the
economy by issuing more paper currency than sufficient gold supply. Once the
gig was up, the people demanded their gold and consequently it created lack of
necessary liquidity.
A quote from Albert Einstein says “The gold standard has, in my opinion, the serious disadvantage that a shortage in the supply of gold automatically leads to a contraction of credit and also of the amount of currency in circulation, to which contraction prices and wages cannot adjust themselves sufficiently quickly.” (1934)
A quote from Albert Einstein says “The gold standard has, in my opinion, the serious disadvantage that a shortage in the supply of gold automatically leads to a contraction of credit and also of the amount of currency in circulation, to which contraction prices and wages cannot adjust themselves sufficiently quickly.” (1934)
That being said many suspect the opposite is true of fiat
currencies, which in essence Central Bankers generate more currency to cover
holes in their economies and destroy the savings and earnings of the middle to
lower classes while enriching those too big to fail.
A quote from Thomas Jefferson says the following “a private
central bank issuing the public currency is a greater menace to the liberties
of the people in a standing army.” “We must not let our rulers Lotus with
perpetual debt.”
So it is a tremendous debate to be had, the benefits of a gold
standard versus fiat currencies, one that is not currently on the table in the
eyes of our government or World Bank’s for that matter. I’m sure that would be
an interesting presentation for another day.
The Platinum group metals though were never really invited to
that party of monetization and as such do not truly have the same type of
history. Their real usefulness in industry, which exploded with the catalytic
converter for the auto industry in the twentieth century, and their lower
production, do not lend themselves to that opportunity. But in terms of beauty
Platinum has been said to rival gold and in some markets has even conquered
that image.
Of course gold and silver do also have their industrial applications. Yet their beauty and financial power are at present the real drama and action behind the history of precious metals. What have we learned? Well, we know that man in the search for an exchange of value latched onto these commodities. We have learned that out of greed for the power that theses metals afforded, mankind was caused to suffer and horrifically at times. But at the same time the value it has brought in the arts and in jewelry should not be undermined by its infamous past. Is it the metals fault that we have taken the tears of the gods and turned it from a thing of beauty to a tool for self-enrichment and power?
From my point of view Mankind has a problem with perception. Avarice for gold, a metal that brings real happiness in its most impressive property as a thing of beauty, is the root of the evil. It is a device that may be useful still in the economy but only when used to a just purpose. In a time where value is manipulated by Central Bankers and not the free open markets, the search for security has come to the forefront. Gold and silver previously inaccessible to the general populace has now become an important liquid asset with the help of modern technology. It now acts as protection from currency devaluations and economic bubbles. Just like anything of real beauty it’s important to have its great light and beauty shared among all men. I say let the world be bathed in its beauty, for which its purpose had been when it was found sitting in the streams all over the planet
Of course gold and silver do also have their industrial applications. Yet their beauty and financial power are at present the real drama and action behind the history of precious metals. What have we learned? Well, we know that man in the search for an exchange of value latched onto these commodities. We have learned that out of greed for the power that theses metals afforded, mankind was caused to suffer and horrifically at times. But at the same time the value it has brought in the arts and in jewelry should not be undermined by its infamous past. Is it the metals fault that we have taken the tears of the gods and turned it from a thing of beauty to a tool for self-enrichment and power?
From my point of view Mankind has a problem with perception. Avarice for gold, a metal that brings real happiness in its most impressive property as a thing of beauty, is the root of the evil. It is a device that may be useful still in the economy but only when used to a just purpose. In a time where value is manipulated by Central Bankers and not the free open markets, the search for security has come to the forefront. Gold and silver previously inaccessible to the general populace has now become an important liquid asset with the help of modern technology. It now acts as protection from currency devaluations and economic bubbles. Just like anything of real beauty it’s important to have its great light and beauty shared among all men. I say let the world be bathed in its beauty, for which its purpose had been when it was found sitting in the streams all over the planet
I have one more story. In The Maltese Falcon a movie starring Humphrey Bogart as Sam Spade, he plays a detective investigating the murder of his partner. The characters are chasing a famed solid gold falcon around the world that is said to be encrusted from head to toe in jewels. Its value is said unknowable according to the “Fat man” but the value that was placed in human life counts high as anyone that actually came in possession of this item was soon found dead. But in the end Sam Spade brings it all together when a police detective asked what it was all about?, he answers “The …uh..stuff that dreams are made of.”
What are these things?
What are these things?
Yellow and white
They make light glimmer
Bring out the bright
Of what is in sight
There are metals
Of all sorts
But in comparison
To this group
It is no sport
Others don’t have that shine
Others can’t bring the time
That makes the good
Sweet as the finest Wine
A special night
A gift at dinner
A pearl wrapped
In any will be a winner
A painting
Of the finest sort
Is that much greater
When framed
In the precious ore
Glory of God
The world wants to extol
It’s got to be Silver
Platinum or Gold
From the ancient world
To modern times
These illustrious metals
Bring out the rhymes
The precious coins of
Rome, Egypt and Greece
Empires of Spain
And Great Britain
Not the least
Tell the stories of War and Peace
Sometimes love
All wrapped up in the Golden Fleece
The rapper wears
A rather large one
Round his neck
A sister prays a golden rosary
At a sick man’s
Death bed
Many more uses
All can see
But the most precious
That shines like the sun
Eternally done
Is the one that makes
You and me, we
The precious metal
Pulled, Shaped
And twisting
Going round a finger
Always existing
But a tragedy lies
In that Humans
Do not see
The greatest Gift of all
Is actually free
Love is the thing
We should all be expounding
If we all share the gold
The world would be astounding
As happiness would reign from shore to shore
The precious metals
Hence be a symbol of Love
Like a rose petal
A seed of friendship forevermore
Bibliography
Silk Road Foundation, Marco
Polo and his Travels
Bernstein, Peter. The
Power of Gold. Canada
John Wiley & Sons,
Inc. , 2000
Buranelli, Vincent. Gold,
An Illustrated History. Maplewood,
NJ
Red Dembner Enterprises Corp., 1979
Del Mar, Alex. A History of
Precious Metals. London
Book Jungle, 2000 original
1899
Green, Timothy. The Ages
of Gold. London;
GFMS Limited, 2007
Griffin, G. Edward, The
Creature from Jekyll Island, Westlake Village, CA
American Media, 2002
Kassinger, Ruth G. Gold;
from Greek Myth to Computer Chips. Brookfield, Ct
Twenty First Century Books,
2003.
McDonald, Donald. A History of Platinum. London
Johnson Matthey & Co.
Limited, 1960.
Poss, John R. Stones of Destiny. Michigan
Michigan Technological
University, 1975
