Zero Hedge published an article on Canadian Bullion Services (CBS) last week. Other sites ran similar articles. The common thread through these articles, and in the user comments section, is that CBS is committing criminal fraud. Or, if not, then it’s a conspiracy by the Canadian government to confiscate gold. Terms like fractional reserve and re-hypothecation were dusted off for the occasion.

I don’t know anything about this company other than what I read that day. I am writing today to make a different point, not to address or defend CBS.

My point is: a company offers interest on gold, and the gold community goes ballistic. Why so visceral a response? To answer that, we need to look at the backdrop of today’s bizarre financial world.

Interest rates have been falling for well over three decades. This has caused endless asset bubbles in which to speculate to make a fortune (or lose one). And now, in the terminal stage of our monetary disease, there is scant yield to be had even in the US. Negative yields already prevail in several other countries.

We have become accustomed to it. We’re trained to not expect to earn interest, to not even think about it. Instead, we’re like Pavlov’s dogs who know to salivate at the sound of a bell. Only we’re not after food, but opportunities to speculate. All we want to know is, what’s going up next. Mainstream folks prefer to speculate on mainstream assets like stocks and real estate. Gold bugs would rather bet on gold and silver. Either way, it’s the same: seek capital gains by the rising dollar price of an asset. Yield is as dead as the rotary dial telephone.

And, we’re beyond merely accustomed. People demand speculative bubbles. It feels right as rain—or the next dose of opiate painkillers. Besides, speculation is how you get rich quick. Especially with leverage. Interest is boring and slow.

As those articles I mentioned earlier show, many people who are accustomed to demand speculative capital gains are actually offended at the very promise of a yield. It’s cognitive dissonance. If speculation is how we are supposed to make money, then interest is a vestige of the old normal. It’s like a thorn under your skin that you can’t get rid of, an annoying reminder.

This touches on a point I frequently make: gold does not go up or down. It’s the dollar that goes down or up. However, if this is true, then there’s a problem: how can you speculate on gold? I think so many people are so insistent on measuring gold in dollars for a simple reason. They want gains.

They want gold to go up, so they can get rich. This requires something to use to measure gold. If gold is going up, then compared to what? The dollar!

Perversely the fiat dollar suits the gold bugs as well as it suits the Federal Reserve (though for different reasons). Both believe that if everyone is forced to use the dollar as the unit of account, then they benefit from rising asset prices.

After the fiat dollar, what comes next? There are two possibilities. One is a normal world where gold is used as money, and people can earn a return on their gold. The other is collapse into a new dark age. Even in a dark age, gold is money all right. It’s just that no one wants to risk getting killed for his metal.

There’s nothing intrinsically wrong with borrowing, lending, or earning interest. In fact, the loan is a win-win deal. It benefits the business who borrows in order to produce the things that people want. And it benefits the saver and retiree who lend to earn an income on their savings. Productive lending is an integral part of the gold standard.