Money must meet the following criteria:
Paper like the dollar, euro, or pound are used as units of account, but they are not true measures as they are inherently transient. The dollar, euro, pound, and any other paper will eventually not exist. It is a truth as real as the passage of time, and therefore paper is only a current unit of account, not one that transcends time. This is evident in the many regime changes of the monetary unit that man has witnessed through the decades. A unit should be consistent, and the damning truth of paper’s reality is that we must constantly adjust for the increase in the supply of money (inflation) to understand the unit over time.
Gold, in contrast, is a universal unit of account. Civilizations, empires, and nations can come and go and create their own forms of paper, but one thing will stay true forever: 1 oz will always be 1 oz. This is not at the whim of anyone; it is a physical manifestation.
Paper’s redeeming quality, if you can say that, is that it can be used to buy goods and services. If you go to the store and hand the cashier a ten-dollar bill, they are commanded by the government to accept it as a form of legal tender. The issue, however, is that it is not a natural and voluntary medium of exchange. In the example, the only reason the purchaser and the cashier are transacting in paper is because the government has mandated its use and acceptance. A true medium of exchange should be one that is of the people and by the people, not a coercion-based form of exchange.
Gold, however, is the money of no one and for everyone. It is the native medium of exchange due to its physical properties, which cannot be controlled or manipulated by any entity or individual. If gold is used in exchange, it is because both parties understand and have accepted that it is the superior tool for their transaction. A superior medium of exchange does not need to be made so, it simply is, and gold is that. While paper is a medium of exchange, it has an expiration date.
While most Keynesian economists will purport that a store of value is any form of money that maintains relative stability and that day-to-day fluctuations do not deteriorate its use (short of hyperinflation), it is not. Firstly, paper is a store of value only so long as it is the paper in use during the paradigm. Many types of paper have come and gone, and their existence beyond the paradigm they exist within becomes void. A store of value inherently needs to be forever. Paper, as it seems, will eventually always be manufactured into oblivion. It may be a store of value for a period of time, but beyond its expiry date it goes rancid.
Gold is forever. A piece of gold from the Roman period to now is still the same piece of gold. It is exposed only to the natural physical rate of inflation that the universe can provide. Gold does not rely on any government or entity to decree its value; it is decentralized by nature and will go on to exist beyond any king or president who may try to manipulate or control it.
These self-evident truths can only lead to one conclusion, and that is that paper is and can never be money. It can be used to represent money, but it will never be so on its own.
Gold is money and therefore we must measure in money. Paper provides the illusion of wealth, gold stabilizes wealth.