When J.P. Morgan, a powerful American banker and businessman, was before the US Congress in 1912, he was asked about the control of money and credit, and whether both were the same thing.
Morgan flatly said, “Money is gold, nothing else.”
In other words, gold is the only thing on earth that (1) has inherent value all by itself and (2) is a medium of exchange. Everything else is a representation of value or a promise of value.
Morgan is often somewhat misquoted as saying, “Money is gold. Everything else is credit.” This misquote is actually clearer and has more punch. Regardless we all get the gist of what he was trying to say.
Most people nowadays take it for granted that the bills in their wallets and the digits on their computer screens have inherent value. They do not. They only have value because other people believe and perceive they have value.
For example, the paper currency we all hold isn’t backed by anything except people’s faith in the government that printed and issued it. When that faith goes away, guess what happens to the value of that currency?
In contrast, throughout human history and across virtually all nations and cultures, gold has withstood the test of time and space. The ancient Egyptians wanted it and so did the Aztecs and Mayans who lived half way around the world.
It would seem we human beings are genetically attracted to gold. How else can we explain a shiny object that we don’t truly need for life sustenance yet we covet it like it is.
Therefore, the rich might stockpile dollars, stocks, bonds, and — God forbid — derivatives (a promise of a promise). But the rich-rich are more focused on gold.