No paper currency in the world has ever survived.

They've all eventually become worthless.

Gold has not. It just shot up over $900.

Dear Friend and Reader,

For most of the 20th Century gold has been under assault. A war against it has been waged for the last seven decades. The struggle has gone back and forth... with gold gaining ground in some years, losing it in others. Never has there been any doubt about the final outcome. No paper money has ever endured over the long run... nor has gold ever disappeared, or ever lost value against paper money over an extended period. But something extraordinary happened in the last two decades of the 20th century... something that never happened before: For a period of 20 years the Midas metal retreated... while paper currency, primarily the U.S. dollar... rose in value against it. As a result, gold fell far from grace in the eyes of governments, politicians, bankers, economists, Wall Street and Main Street as well.

But there was a time when Presidents, bankers, economists and philosophers spoke of gold with respect and awe, not just as money, but also as a protector of wealth and freedom.

Paper money is a great aid to politicians. It makes it possible for them, said President Herbert Hoover, to confiscate 'the savings of the people by manipulation of inflation and deflation.'

'We have gold,' Hoover added, 'because we cannot trust governments.'

During The Great Depression, those who wanted a safe harbor for their wealth, turned to gold. Now it appears that deflation, secular recession, runaway inflation and perhaps another depression are on the horizon. And gold once again is coming to the center of the financial arena.

While gold represented a haven of financial safety during the great depression years it was a haven that was difficult to reach. On March 8, 1933 at his first press conference, Franklin Roosevelt assured the nation that the gold standard would remain. On March 9, he pushed the Emergency Banking Act through Congress -- giving him the power to regulate or prohibit gold ownership. And less than a month later, the leader of the free world made it illegal to hold gold.

Just two months later, Roosevelt even abrogated all contracts in which payment was stipulated in terms of gold -- including obligations of the U.S. government.

Anything so popular that the government declares it illegal is bound to be a good investment.

Politicians and bankers have been fickle about gold, changing their tune as easily as they change their ties, depending on current fashion and their professional ambitions.

Take, for example, former Fed Chairman Alan Greenspan, once a defender of real money and now it's worst enemy.

'In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold,' wrote Greenspan in 1966 for Ayn Rand's Objectivist magazine. He continued, 'Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.'

Remarkably, this same Alan Greenspan -- an ideological opponent of central banking and paper money -- later became the most central banker the world had ever seen, as chairman of the Federal Reserve System. Not only that, he also issued more new paper money than any man in history.

Not that long ago, I was sitting with Lord Rees-Mogg in his library on Bloomsbury Square, London. Under a gray sky, red double-decker buses passed the window and we discussed the fragile state of the world economy. The U.S. dollar has fallen against the euro by 22% in the last 12 months, we noted.

'But I think the future could be even worse,' said Lord Rees-Mogg. 'The logic and principles that govern valuation of currencies have been stretched to their limit with the almighty dollar. Gold has just begun to rise like the Phoenix from the ashes of a 20-year bear market. Something dangerous and exciting is going on today,' he continued. 'And if you don't understand it, you are in danger.'

Gold, a subject that has fascinated both of us for decades took center stage. We recalled the gold's golden era after Nixon cut the dollar loose from the artificial constraints. We reveled in the gains made back when gold rose from $35 to $850 per ounce. Of course, since then, it fell back below $250 per ounce and stayed so low for so long people began to think it was finished for good.

Lord Rees-Mogg explained why he believes that gold's comeback today isn't due to fears of war, failure in the stock market or investor's fears. 'It's inevitable,' he said. His reasoning came from a deep historical perspective.

'The Irish banker, Richard Cantillon,' he explained, 'was the first modern economist, not Adam Smith as so many people assume. And he was the first to document how paper money, inflation, gold and supply and demand work. And he made a fortune because of it.'

'Cantillon was opposed to the inflationist theories of John Law. But he understood Law's monetary schemes and created a substantial fortune wisely applying his insights during Law's Mississippi Scheme, which bankrupted France. He profited again during the similar South Sea Bubble in England -- because he understood the enduring value of gold.'

'In the wake of the economic chaos 300 years ago, Cantillon wrote his groundbreaking Essay on the Nature of Trade in General. In it he savaged the muddleheaded Mercantilist thinking of his day to make a dramatic contribution to our knowledge of economic method, theory, and policy. Mysteriously murdered, after writing the Essay, Cantillon's work remained unpublished for more than twenty years. And although he was among the few people acknowledged in Adam Smith's, The Wealth of Nations, Cantillon was almost forgotten for centuries.' Then William added with a sly smile, 'I intend to change that.'

I asked my friend how he came to know so much about such a relatively unknown figure.

Lord Rees-Mogg told me that he'd just finished editing a historic collection of the premiere writings concerning gold, including Cantillon's brilliant Essay. I sat up straight and leaned forward to get the details, admiring the handsome set of books as he explained to me the grand reception these volumes have received in the world of prestigious university libraries, stately collections in the Embassies and among bibliophiles around the world.

He recounted the sum of the 20 different authors included in the elegant three-volume set; from Gerard de Malynes, 'A Treatise of the Canker of England's Commonwealth' (1601) through David Hume, John Locke, David Ricardo, John Stuart Mill and Karl Menger, all the way up to the more modern writings of Murray Rothbard.

'If looked at as a written history of the battle for gold as money against fiat currencies -- written by the heroes of the war -- you will see their impeccable logic. We can much learn from them today,' he said.

The historical perspective of most people today barely stretches back past the Clinton Years. Most haven't a clue of the contributions made by giants of philosophy and economics like Locke and Mill, let alone the more obscure geniuses in this collection.

Nor do they understand the crucial role that gold has played in world economic history.

Let me just put it to you straight. How many times have paper currencies -- unbacked by gold -- become worthless?

Answer: every time.

And how many times has a gold currency lost its value?

Never.

There is just something inherent in man. He cannot resist the temptation to destroy a paper money. It is just too easy to print more and more.

On the other hand, gold cannot be created easily. Each ounce is hard to come by. And it is such a durable metal that almost every single ounce that has ever been mined is still in circulation today. Compared to paper money, it goes up in value and it goes down, but it never goes away.

Then Lord Rees-Mogg read me the review that Edward Chancellor penned in the Prospect.

'Over the last thirty years, we have witnessed runaway inflation, a variety of speculative bubbles and a succession of currency crises. Is there no way to escape this mayhem which spreads its misery from the day-labourers of Buenos Aires to the pensioners of New York? In fact, one solution offers itself; an idea so unpopular that only a handful of cranks nowadays even dare consider it. In order to rid the global economy of its chronic instability, we must return to our golden fetters.... In an introduction to a recently published collection of historic writings on gold (The Case for Gold, three volumes, published by Pickering & Chatto), William Rees-Mogg lays out the case.'
- Edward Chancellor, Prospect

'Well, I've been accused of being a crank,' I duly noted. 'And accused of being a gold bug too, although so far I haven't been convicted.'

We both laughed. And then I proposed to buy whatever copies remained of the first edition press run that he would allow. That way I was certain to have it for my own library and I could offer them to book lovers and history buffs among my Daily Reckoning readers. (It's not the first time I gave in to this impulse. I bought his whole inventory of the great Classics in Austrian Economics set... and when I offered it to readers, it sold out almost immediately.)

Gold is hot now. The Chinese are buying. The Japanese are buying. Daily Reckoning readers are buying. I like gold because we cannot predict the future. But we know that eventually and always, paper currencies disappear while gold remains.

Unusually and unnaturally, the world's most ubiquitous paper currency -- the dollar -- rose against gold for the last 20 years of the 20th century. It is not likely to do the same for another 20. The Case for Gold lays out the reasoning for this inevitable trend with unparalleled clarity.

The Case for Gold contains perhaps the greatest insights ever written about gold and it's the most comprehensive collection ever compiled in one place. You'll grasp gold's value as real money and the role it plays in our freedom. Each time you remove one of these beautiful volumes from your library shelf and open it, you'll have at your fingertips knowledge and wisdom that's been largely overlooked for years -- left to gather dust in research and reference libraries in Europe and America.

As you turn the pages of these volumes you'll open the door to a remarkable resource, the history and hidden logic behind gold's enviable position in the monetary systems of the world. You'll deepen your understanding of the principles of money and the logic of gold. You'll take in wisdom that will serve you well for as long as you remain financially active... unlike the vast majority of today's investment 'information'... information that evaporates as soon as you look at it closely.

Unfortunately, I was only able to secure 47 copies of this special edition of The Case for Gold... out of a total print run of 400. And those sold out almost immediately after I mentioned the book in the Daily Reckoning.

After begging the English, who were reluctant to go back to press with such a heavy publishing project, we managed to get an additional second impression which has been set aside exclusively for our friends and customers, most of which have already been promised!

Of course, those who get them have a huge knowledge advantage. Other investors -- even if they are George Soros or Warren Buffett -- will have to go to the Library of Congress or perhaps the library of the London School of Economics if they want to read this collection.

Pickering & Chatto isn't an ordinary publishing company. This 180-year-old venerable institution doesn't publish popular fiction for the benefit of the Lumpeninvestoriat. It's established a name for itself in the most important libraries of the world. It publishes important works, like the complete writings of famed biologist Charles Darwin in 29 volumes. It publishes elegantly bound limited editions destined to last for centuries.

The Case for Gold is more than just a fount of economic knowledge. It is also a prized product in its own right.

Each volume in this essential trilogy is lovingly hand-bound in rich gold library buckram with classic gold-detailed spines using centuries-old techniques. Crafted by master bookbinders that only Pickering & Chatto and a handful of European publishers can afford to commission, each volume is almost a work of art in its own right. The materials exceed the standards set by American National Standards Institute.

They use only the finest 100% wood-free pulp available, laced with micro-fibers to prevent tearing. The paper is better than simply 'acid-free.' It's neutral pH paper with an alkaline reserve, or buffer, in the finish of the pages. Barring accident, they should last hundreds of years and be treasured for their outward beauty as well as the wisdom contained inside.

Even before you begin reading this remarkable collection of wisdom, you stroke the luxurious bindings and feel the silk-smooth pages, you'll understand and appreciate that you're the owner of something exceptional.

Several years ago, Pickering and Chatto issued the first in a series of collectible first editions: a collection of the writings of the key Austrian economists. This beautiful three-volume set has gained much attention by collectors worldwide. If you have the Austrian Economics set, The Case for Gold is an ideal addition to your growing collection.

One of the nice things about these books is that they are almost eternally valuable. Not just the ideas -- even though they contain the wisdom of many generations -- but the books themselves. They are designed to last nearly as long as the essential ideas they contain -- that is, for hundreds of years. And since they are very limited print runs, they typically become hard to find after a few years -- and often more valuable. Thus, Lord Rees-Mogg promises me that if you ever choose to part with your set of The Case for Gold, Pickering and Chatto will buy it back. All the while, it will enhance your personal library and be a lasting symbol of who you are and what you believe.

In 1997, economist Robert Mundell predicted, 'Gold will be part of the international monetary system in the 21st century.' In 1999 while accepting his Nobel Prize Mundell said, 'The main thing we miss today is universal money, a standard of value, the link between the past and the future and the cement linking remote parts of the human race to one another...The absence of gold as an intrinsic part of our monetary system today makes our century, the one that has just passed, unique in several thousand years...'

He's right. And the good news is that recently there's been a change in investor's sentiment.

Mundell continues, 'We are seeing a gradual but marked change in investor sentiment toward gold and a simultaneous return of gold to its 2000-year old status as a reserve asset... It will be desirable to select as the standard of value that appears likely to continue to exchange for many other commodities in nearly unchanged value.'

Like gold -- that sits at number 79 in the Periodic Table and never moves -- the wisdom in this three-volume set is immutable. It will hold fast and true for the rest of your life, for your children's and grandchildren's lives and for the generations that follow.