December 10, 2014
When Karl Marx wrote about the bourgeoisie as the “unproductive class” he was writing from personal experience.
The foremost champion of the proletariat, Marx never actually belonged to the working class himself.
Born into a well-off middle-class family, Marx ascended up the social hierarchy by marrying into Prussian aristocracy.
Seven kids later, a lavish lifestyle, and an unwillingness to hold down a job, he found himself deeply in debt, only to be saved by the generosity of his friend Friederich Engels.
Engels found Marx’s ideology so amusing he offered to pay off his friend’s debts AND give him an annual stipend of £350.
That may sound like a paltry figure in today’s terms, but at the time, this was a sizeable sum.
Back then Britain was on the gold standard, meaning that those paper notes were attached to something with weightier value.
The price of an ounce of gold at the time was fixed at £4.24.
So in gold terms, Marx was offered a lush 82.55 ounces of gold per year. And back then, you could actually redeem paper currency for gold.
So while £350 doesn’t even register a week’s wages anymore, the 82.55 ounces of gold that Marx’s stipend was worth is valued at nearly $100,000 per year in today’s money.
(I wonder if the Occupy movement would have included him amongst their ranks, given that this salary nearly puts him in the top 1% at the time)
As Marx ironically shows, paper does not stand the test of time. Gold does.
This of course defies mainstream thinking. We should all feel excited and privileged to hold paper. We’re told that gold is a barbarous relic.
Ben Bernanke once told Congress that he doesn’t “pretend to understand gold prices.”
There’s not really much to understand. Are your pieces of paper really going to be worth anything 150 years from now? Probably not.
If you want your savings and wealth to actually hold value over the long-term, follow the example from the father of communism and enemy of private property: own some gold.
And then to really be sure it gets to your grandkids, check out where are the safest places in the world to store your gold offshore.