"Mr Waffler, Voltiare was a philosopher - can you not see the irony implied by his sentance"(?) It is truly a smart quote: "Paper money eventually returns to its intrinsic value -- zero." 1) "Paper money": it leaves in the air that there is another kind of "money" not losing its intrinsic value. 2) "Returns": talks about an origin of it 3) "Intrinsic value" refers to what is its base of value. 1) Gold is that other money not losing its own value. When the world was bankrupt the price of gold was $20.67 per ounce (1934). It reflected the price of extracting and refining it at workers wages and costs in a very "basic" economy with no inflation and almost no-existent speculative financial instruments. Paper money is just debt and is generated and disappears when debts are assumed or paid. If in 1934, company A asked a credit of $2 million to ABC Bank for producing calculators, the latter would go to the Central Bank of its country (Federal Reserve) ask the two millions at 1% against the lending contract and related obligations and lend the money to company A for 2%, thus "money" came into circulation, was created. With the product of the sales, company A pays the bank and in turn it pays the Central Bank recovering the lending obligations of company A, giving it them back... thus "money" disappears of circulation. Up to now this is the way money is created... with the perverse intervention of the state who directly asks the Central Bank for 200,000 billion against a promise of payment (bonds) without the least intention and obligation of paying back (the state is "sovereign"). Nothing backs the recurrent promises of payment so the national currency is debased and it loses its value eventually reaching zero. This is clearly reflected in how many dollars are needed to buy the very same ounce of gold as of today March the 4th, 2012 : $1,712 = 83 times more. The price of gold has not gone up per se, au contraire, the currency used to buy it has gone to the pit. So one dollar is one dollar and it will ever be but one dollar of 2012 is equivalent to 1 cent of one 1934 dollar (20.67 / 1,712)... almost zero. 2) The origin of money is DEBT and can only be originated that way. National cracks and bankruptcies have all that same, peculiar mystery: "where is the money?" or "there's no money!" In their evolution money disappears because nobody takes new loans and so no "new money" is created; besides that the one who can pay his obligations does so for not losing his assets, thus money returns to the banks and finally to the central bank deepening the scarcity of money; finally millions of obligations disappear for ever when individuals, companies and banks enter in bankruptcy. As the "origin" of fiat paper money was a government promise worth nothing, its real value finally comes back to its origin: zero. 3) Much related to point 2: its real value is not dependent on gold but to nothing. By December 2010, the total amount of gold held by governments around the globe was 30,807.6 tons and the public debt of the top 20 debtors (the US, Japan, Germany, Italy and India at the very top) was 36,822 $billion. The correlation would be 30,807.6 x 1000 (kgs) x 1,000 (grs) / 28.3495231 (ounces) = 1,086,706,111 ounces of gold against 36,822 x 1000 x 1000000 = 36,822,000,000,000 one dollar paper money (the math is yours). Gold in their reserves is the unique serious asset that governments around the globe can offer as a substitute payment of their debts