The Missing Gold Economy

While most people missed it, there was a thriving gold economy in the early 2000s. It was centered around e-gold (a system for trading digital gold) and it involved billions of dollars per year in transactions. It was also a magnificent adventure.

In just a moment I’m going to quote a passage from the forward to Carl Mullan’s book on e-gold, called Better Money. (At Carl’s gracious request, I wrote that forward.) But before I do, I want everyone interested in silver and gold to know that their metals could be the doorway to excitement and prosperity… right away and not someday. It was done then and it could easily be done again.

Now, here’s that passage:

I am one of the lucky few who stumbled upon e-gold in the late 1990s, as it was bursting upon the world, empowering small commerce, allowing person-to-person international transactions and creating, for lack of a better description, a planet-wide party for the motivated but unprivileged.

The e-gold economy led me to bands of brothers – talented, fascinating and often wise bands of brothers – secretly meeting on tiny Croatian islands, in the back rooms of bars, in glitzy hotels and in dark corners of the Internet. e-gold led me to raw, potent and invigorating business deals and dealers. It brought me into a wide variety of international experiences, for both better and worse, that I wouldn’t have imagined otherwise.

The e-gold era was, to me, the life of high adventure, and I loved nearly every minute of it.

I am, of course, a thoroughly committed Bitcoin advocate: I want it to be used everywhere and all the time, starting yesterday. But that doesn’t mean I dislike gold and silver, or that I want them to do badly. On the contrary, silver and gold are decentralized money, which I love; my only complaint is that most of their advocates never actually use them.

Apocalypse Money Isn’t Good Enough

Let’s be honest and admit that a huge percentage of gold and silver advocates are frozen in place, waiting for an apocalypse of one sort or another. That’s when they plan on using their metals, and not before.

Waiting for an apocalypse, while it can be wonderfully dramatic, is a horrible strategy in the here and now. You wait and wait and wait and eventually die waiting for the apocalypse to come, which it never does. Beside, in a real apocalypse (depending upon which version you favor, of course) gold will be some of the last money that would be used. We’d all use barter (or Bitcoin) or even outmoded forms of cash before purchasing a bag of groceries with a 1 ounce gold coin.

The fact is that gold and silver can be exciting. All you have to do is use them. (As far as I know this is quite legal, though you can check with whatever professionals you prefer.)

Please understand this:

Gold and silver remain neutered until you use them in daily commerce.

The excitement and the price increases come when we start using our metals at the corner store, to buy a used car, and so on. For one thing, everyday use would almost instantly generate a commercial infrastructure. Local exchangers, assayers, and other businesses would spring into existence to service it all. The exchange of millions of ounces on a daily basis requires support, and it would spell opportunity for anyone motivated and reliable.

How can I know the support system would spring into existence? Because that’s precisely what happened with e-gold, just two decades ago. Self-appointed and self-motivated dealers jumped up and began exchanging e-gold for anyone who could pay. They developed their own pricing mechanisms and all that went along with them. It was unfettered commerce… profitable commerce… and I’m telling you, it was a gas.

The Secret Appeal of The Apocalypse

Please understand that I’m not trying to condemn anyone by saying this. I like gold and silver advocates: In my experience they are earnest, thoughtful and reliable people. They’re the kind of people I’m pleased to have as friends and neighbors. Nonetheless, I think this needs to be pointed out:

One of the great appeals of an apocalypse is that it takes you directly to clarity and freedom, without having to take any risks along the way.

Using a Sermon on The Mount metaphor that I think is quite fitting, buying into the apocalypse drama gets you the kingdom of heaven without having to suffer for righteousness’ sake.

Progress requires difficult decisions, it requires acting in the face of established authority and expectations. But it’s deeply satisfying and rewarding when it works. People shouldn’t go through life without this, and if you’re a gold and silver advocate, it’s sitting right at your feet.


Paul Rosenberg

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6 thoughts on “The Missing Gold Economy”

  1. Theory about money tells that people spend bad money first and keep good money for bad times. But we don’t need a nuclear apocalypse to see people making transactions with sound money, all we need is dollar loosing value so fast that sellers of goods won’t accept it anymore. Unpredictable prices are a huge cost for running a business. In countries experiencing financial crisis (high inflation) only everyday products can be bought with local currency, other goods are priced in stable currencies.

    I call crypto the poor man’s money because it allows ordinary people to protect their tiny savings. 1oz of gold in many countries is equivalent to one year salary.

  2. Back in the day, I both earned, and spent, in e-gold. And it was magnificent.

    I’m glad crypto came along to solve a couple of e-gold’s weaknesses — the vulnerability of a system’s operators to abduction/extortion, and the vulnerability of physical assets stored in a verifiable/auditable manner to theft.

    But I still miss knowing that the money I was using was backed by a physical commodity.

  3. Hello, I heard about your ‘article’ via the Brian Hyde podcast (March 6).
    Excellent. I’ve purchased both Au and Ag for some time. I also have a ‘retail’ service business.
    I’ve ‘thought’ about doing busienss accepting these as payment. the issue I come up against
    is ‘the logistics’ . how does one do this ‘exactly’? is there a guide or additional detail?
    is their an e-gold group of ‘retailers/businessman who are currently ‘doing this’ to provide
    some ‘do’s and don’ts’?

    as for bitcoin. it’s still an area which ‘scares me’ as a boomer, this era of ‘digital anything’
    is water I’m uncomfortable in. but… willing to explore.

    1. Apologies that I’ll have to be brief, but here are some quick answers:
      Scary: Very common, but remember, you can send small amounts to begin with. You get used to it.
      Start: Bitcoin Magazine has a “how to buy Bitcoin link,” but the very best way is simply to sell things and take BTC as payment. You can start with a wallet on a phone. I like the Exodus wallet for that. And Udemy has a Crypto for Business course so you can do it properly.

  4. While gold is certainly a long recognized medium of exchange, there are other hard currencies. I’ve seen ammunition used as cash. It’s small enough to be easily portable. It’s practical; one can either exchange it for other goods or services or use it.

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