The alt right likes to parrot the destructive Russian propaganda lie that gold has a 5000 year history of being money. This is simply not true. Money has always been credit – or put another way money has always been debt. The motivation for Russian propagandists disseminating this dangerous untruth (and other money myths) is to breakdown the trust between individual citizens and between citizen and monetary authorities – so as to cause chaos and disruption to the efficient functioning of the economy.
The oldest known (among scholars and archaeologists) example of money is clay accounting tokens from Susa (modern day Iran) circa 3300 B.C. These early examples of a faith based (backed by central authority edict (fiat)) money pre-date the first known examples of silver coinage (Lydia 700 B.C.) by over 2500 years.
The world’s first (known) money has been dated to 3300 B.C. One was equivalent to one sheep. Others represented a jar of oil, a measure of metal, a measure of honey, and different garments. Clearly the system is credit based as a small piece of clay does not have the same value as a sheep. It is also the consensus view among scholars that the system was backed by a central authority who issued the tokens and enforced anti-counterfeiting law.
During the time of the Babylonian empire (1900 B.C. – 539 B.C.) the monetary system operated without tokens and was purely a ledger system, recorded on clay tablets. This is the origin of the still common phrase “put it on my tab”. This system proved to be the most stable monetary system in all of history as the risk of a liquidity crisis (due to token hording) was eliminated. The central authority was always able to increase or decrease the credit/debt (money) supply to match prevailing economic conditions by calling in the tablets and balancing the ledger. This incredible 1000+ year stability is what our modern monetary authorities plan to achieve through the elimination of cash (tokens) in favor of a purely digital ledger system.
The credit theory of money states that even once metal coins appeared, in antiquity, they were always only tokens (i.e. the monetary value was higher than the metal value) and there was never a metal weight/value standard. One of the clearest evidence of this is that the fractional coins never added up to equal the unit coin in weight. The reason that gold and silver were used to make the tokens was that by 700 B.C. metallurgy had developed far harder and stronger alloys for tools and weapons – there wasn’t a lot of use for such soft metals as gold and silver except for objects of art and beautiful tokens.
The idea that a commodity could be money seems to have gained favor with the publication of Adam Smith’s The Wealth of Nations. He uses the example of the early Newfoundland cod fishery (1500 CE – 1650 CE) where he claims that the salted cod was the money. This notion is clearly ridiculous for many reasons, not least what would one use to buy cod.
The mistaken belief that a commodity can be money, rather than the correct understanding that money is a credit/debit unit of account backed by a central authority, has caused untold chaos ever since. Commodity money is inherently unstable as authorities are unable to counter irrational hording and bank runs. A liquidity crisis due to a run on gold lead directly to a breakdown in trade, and relations, between the major powers and resulted in the tragedy of the First World War. It is clear why an aggressive Putin wants to spread these money lies in the West.