John Kay Makes Sense of Money

"The transition from the world in which money is valuable because it is valuable to one in which money is valuable because it is money could happen only because centuries of experience had established confidence that such money would be accepted. There are two commodities-paper money and gold- whose price permanently exceeds fundamental value. But only two. But with gold looking as volatile as Bitcoin, perhaps only one." John Kay  

Stopping The Gold Thieves

Reading through this article on the rise of burglaries and robberies that affects South Asians resident in the United Kingdom just got me thinking about the burdens of  wealth and the advantages of fiat money. That story highlights the rise of thefts among families from south asia who are known to keep substantial amounts of gold as savings.  This form of saving is attributed to the preference by these families to save through precious metals with a known record for keeping its value over generations.

It is unsurprising that when the owners of commodities in great demand may face the risk of theft especially when the price of gold has appreciated remarkably in recent times. To a thinking robber, it is probably less risky to steak jewelry from a family house than attempt a bank robbery or other goods. In addition, the package would be valuable and yet manageable both in terms of ease of hiding and the ability to convert the items into cash with minimum risk of detection. However, I am unsurprised that the owners of the property are unable to find either safe boxes in banks or  to insure their property. This does not make sense to me especially since the vulnerability to theft and conversion of gold would lead to equally ingenious ways for ensuring its safety. Thinking about the fact that a family that claims to live modestly owned that much gold suggests that a bank would offer to keep the property for a fee. In my sympathy for the loss of property keenly acquired over generations, I think a fee-based repository for the jewelry is missing from the market. In my estimation, it will not be long before it is available. This would be a good problem for a crowd sourcing solution.