The legend of El Dorado, or “The Golden Man,” tells the story of a muisca cacique (native village in Colombia), who were bathing in powdered gold, such as the abundance of the precious metal in the area.
This account was responsible for the greed with which Spanish conquistadors such as Francisco Pizarro planted their flags in the Andean region. Despite the legend, it was soon discovered that gold wasn’t exactly the most valuable metal in the area. In fact, there was very little of it.
Here we have a habit of inflating the value of gold in history, thanks in part to our grievances with the Portuguese who explored the Minas Gerais area, but the truth is that for most of history silver has played a role in prominence.
Pizarro and the Spanish did not find gold, but they did find silver in abundance. Located at an altitude of 4,000 metres, the Bolivian city of Potosi has become known as the first cosmopolitan city in the world. From the “Silver Mountains,” and thanks to Spanish technology for producing the metal (which added mercury separation technology to the local work), the region supplied the world with money for centuries.
Silver became an integral part of Spanish wealth. He was responsible for naming our neighbor Argentina (Land of Silver in Spanish), where the mineral flowed, in addition to real 8the first currency used worldwide.
Real de 8, in turn, had another nickname. After the coin also made of silver, which was most widely used in the Germanic Holy Roman Empire, originating from the Joachimsthal mines in the Czech Republic and which would acquire the name of Thaler, Daler or Dollar, the Spanish currency would be known as the “Spanish dollar”.
In this coin, the rednecks responsible for defeating the British Empire and creating the United States of America were inspired to create their “dollar”.
And in the United States, too, in 1873, silver died as a store of value.
The Coinage Act of 1873 expressly prohibited silver holders from minting so-called “silver dollars”. By default, the law established a “gold standard”.
The idea of the gold standard, which meant that dollars could be converted into gold and thus subject to a state limit on the metal’s stockpile, was a bit older.
When Sir Isaac Newton was in charge of the UK Mint, he had already implemented something similar, but at a period when the pound sterling was not yet a world currency.
Europeans followed America’s imposition, and gold eventually became synonymous with money…
The world has lived a large part of its history by attaching money, or means of exchange, to something materially limited.. First grain, then salt, cattle, silver and gold. Since 1971, through the dollar, we have come to rely on what is called “fiduciary” money, a word derived from the Latin word “fiducia” or “trust”.
The dollar has no physical backing, which in turn means that the United States can simply create money and exchange it for physical goods from other countries. It is a privilege that no other country in history has had.
And it is the continued abuse of this privilege that begs the question: Will the dollar continue as a global currency?
The simple answer is: …
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