Yesterday, Federal Reserve Chairman Ben Bernanke got all confused when asked whether gold is money and why central banks hold gold instead of diamonds. Watch the last 32 seconds of this youtube clip:
I know I am not the Chairman of the Federal Reserve, but at least I’ve heard about fungibility. Heck, even wikipedia mentions:
Diamonds are not fungible because diamonds’ varying cuts, colors, grades, and sizes make it difficult to find many diamonds with the same cut, color, grade, and size.
In contrast to diamonds, gold coins of the same grade and weight are fungible, as well as liquid.
If the Fed Chairman needs more information about why gold is money, he should google “why gold is money.” Now, I just need a good answer as to why pieces of paper with pictures of Presidents on them are considered money.
Michael E. Newton 
Michael, are you suggesting that “The Full Faith and Credit ” of our green -backs is less than inspiring? If Bernanke had two brain cells working, he would resign and sail off into the sunset while he still can.
Nor are diamonds divisible. Currencies need to be fungible, divisible and scarce. Got that, Ben?
LOL. Thanks for reminding me that it’s all about fungibility. I didn’t think about it when I heard this clip yesterday. See, I can admit that I didn’t think of it, b/c its not my job, cuz I’m not chairman of the Federal Reserve Bank or anything . . . .
Wonder if these people ever embarrass themselves.
cheers
Linda