Why Gold Has Little Intrinsic Value ( RL stuff )
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by 2503830
I never understood the gold standard obsession of the libertarian movement, which if you are an american you know is VERY vocal in this country. (Actually, there were a lot of other things I never understood.) It is based upon a kind of paranoia that the government is just itching to devalue the currency to impoverish the money of rich people. That's a shocking claim when you consider the the government is run by a bunch of rich people. And that's even more true of the Federal Reserve. In theory, it is supposed to maximize employment and minimize inflation. In practice, it minimizes inflation.
There is another side to the gold standard obsession—one that is a lot harder to understand. These people think that the value of gold is fixed. I think this is standard conservative thinking that the way things have long been is the way things ought to be. You see this all the time with the "under God" phrase in the Pledge of Allegiance. Many conservatives I've talked to will simply not accept that it is a fairly recent addition or that if it wasn't always there, it should have been. In other words: whatever the world was like when I was a kid is what is right. So with gold, conservatives have this idea things must have been perfect in the long ago past because currencies have "always" been based upon it.
The truth is that gold is not that useful a metal. And its supply can certainly be manipulated. I remember reading about a king of what is now more or less Chad. This is many hundreds of years ago. He took a trip to the Middle East. In the process, he spread so much gold around the it created a years-long inflation shock. But we don't have to go back that far to show the instability of gold. Since August, the price of gold has gone down 25% (most of that in the last week). In that same time, the dollar has been quite stable and inflation has been moving at about 2% annually.
The fundamental problem is that a gold-based currency is valuable only in as much as people think that gold is valuable. And this is the same thing as for so called fiat money. Think about it this way: what would you rather have: part ownership of Samsung that is actively exchanging products for other valuables or gold that very few people want? The truth is that gold is not much more valuable than tulip bulbs. In the end, you can't build houses with gold and you can't burn gold for energy and you can't eat gold. So the belief that gold has intrinsic value is just wrong.
If you were preparing for life after some horrible event, would you hoard gold? Of course not! You'd hoard food and batteries. I just don't get why the goldbugs don't see that this fact destroys their arguments that gold has some intrinsic and stable value.
I'll do a few more articles debunking libertarian myths and as always everyone is free to chime in and debate it with me, for all the good it will do 🙂
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Should've sold it when it was $1900 an ounce
hm, i should have shorted it, i never like to own rocks. i can get a few in my back yard 🙂
what!?!? how
well i can get rocks in my back yard, but not gold,
shorting a commodity is selling it when you have none, most margin commodity accounts allow a person to do that.
the reason for shorting is so people can buy more gold then there actually is and then prices can go higher than they should. especially when the people who sold have to buy.
The thing about goldbugs is their panic over the Fed printing more and more money out of thin air.
Yet even with billions newly printed, inflation is fairly flat. The thing they forget is that it's not the mere existence of new money that makes existing money less valuable - it's the competition of more dollars (or euros or giant stones or gold coins) chasing fewer goods.
And when you look at the economy since 2007 IRL (and I'd argue even before that), all of the wealth (actually, MORE than all of it) has been created in a very narrow segment of the population. So there might well be inflation in the cost of paintings by Picasso, new yachts, or investment vehicles like stocks - but there's not when you look at the cost of bread or orange juice - things that ordinary people (who aren't seeing any of these new dollars) buy. A billionaire can only make use of so much steak; and if the price of filet mignon goes up, it doesn't matter all that much to the consumer of hamburger.
If trickle down actually worked (Hi, RGR), we'd see inflation in the greater economy after five years of non-stop new-money printing. We don't. Because money doesn't trickle down. It always accumulates at the top.
libertarian, is about the freedom of the citizens from over bearing government control.
only one entity the federal reserve, can print money, well ok it is not controlled by the government but it is rather closely linked.
without usd, then what would people use? why not something valuable. gold is highest cost per ounce per ounce avilable. like we could use loafs of wheat bread. but i am sure you brining a truck load to the car dealer would make bread as a currency extinct. or platinum well everyone would have a pin head size.
people just need something to use to trade, and libertarians wan the government not to be in control of that, you know capitalism, markets control the currency, instead of socialism the governments control the currency. gold was used because generally it is good for currency, paper is now used because it gives more economic control to the governments. there by potentially giving the government more tools to help its citizens.
me being a average citizen, i would not hoard anything, either i would die in the disaster, or someone would drive over from someplace and hand me water bottles.
gold does have value, it has one of the lowest resistances per meter. and it looks shinny doesn't tarnish very easy good for jewelry (anyone who has ever had a successful relationship with a female knows golds value!)
I'll address the exact points of libertarian concept of 'freedom' 'free market' and ' others in a future issue.
Historically, silver was currency far moreso than gold. Mainly because it comes in a convenient value ratio. In today's prices, a 1933 dime (about the same size as today, but made of 90% silver) is worth about $1.56 today in its metal value. A gold coin of the same size would be worth a LOT more. Too much, in fact, to be usable everyday.
When we had gold coins in the US, they were typically 21.6 karat. At that purity, a dime made of gold would be worth $84.55. Good luck buying a $5 footlong with that. Actually, that's the easy part - it's getting change that's a challenge.
You make many generalizations and assert your opinion as fact in this article. It is nothing more than an opinion piece. Many of your statements could easily be shown as incorrect, just as some could be shown to have merit.
The above aside, I get enough of RL political opinions in RL. On TV, radio, the internet and on campus. Having articles like this intrude in my gaming, is something I certainly prefer to avoid. This means you'll be free of my comments for any future articles you publish, as I won't be reading them.
I don't know this for fact, but I find it difficult to believe that I am the only player who finds this type of intrusion into our choices of entertainment, as a poor decision on your part. There are so many other appropriate outlets for this type of thing.
I can't please everyone, nor do i aim to.
If my articles are not to your liking, more power to you.