Currencies are arbitrary. Gold has some industrial value, but essentially no utility to own.
Imagine the global economy collapses, and you have 100 tons of gold - what good will it do you?
Currencies have value based on what you can exchange them for - that is why dollars (and euros and all fiat) are valuable. People will give me things I want if I give them some paper. Gold as a currency is the same, but only as long as people value it. Exactly the same as fiat. It being limited only affects the per-unit PRICE assuming some value, it doesn’t give it value to begin with.
Again, you stopped your logical analysis before you got to the end of the logical chain.
Gold differs from fiat currencies in that it cannot be inflated away by politicians and central bankers.
That’s it.
It’s everything as you wrote AND gold’s value over the mid and long term isn’t really controlled by politicians or central bankers because they can’t issue more of it, which they can with fiat currencies - since the end of the Bretton Woods system, Gold in average just putters along losing 1.2% of value a year, not really caring about the quality of politics in any country.
So holding Gold rather than EUR, USD, GBP or so on is really just trying to protect oneself from Economic mismanagement of currencies.
Everything as you wrote applies and anybody thinking that Gold will hold value if society collapses is a fool.
You could do the same protection against political mismanagement in your own native currency by holding your savings in other currencies, but that comes with the extra work of having to track the quality of politics and Economic management in the countries issuing those currencies (as by holding those currencies you’re now exposed to the political fuckups there), plus main currencies tend to be highly positivelly correlated during big Economic Crashes (like in 2007 when all main currencies suffered and maybe only the CNY didn’t suffer as much), whilst Gold is not and just does its thing.
As it so happens putting my savings in Gold has already done exactly that: when I lived in Britain I put my savings in Gold and then Brexit came and the British Pound crashed 20% and suddenly my Gold would buy me 20% more British Pounds. It wasn’t really Gold going up in value, just the pound going down. Mind you, my savings in EUR did the same, but that wasn’t a major international Crash, were the EUR would suffer as much as the GDP or the USD.
Just like there was no Brexit effect on Gold, there is no Trump Effect on Gold or Realestate Bubble effect - the price of houses in GLD has actually been pretty stable, might even have fallen a little bit.
That’s the point of it, nothing else. All the bollocks about Gold replacing fiat currencies and so on is just fanboyism from goldbugs - Gold is just an investment class that has less correlation with the quality of Economic management in the largest nations than the currencies of those nations or anything listed in those currencies (such as stocks or realestate).
Gold differs from fiat currencies in that it cannot be inflated away by politicians and central bankers.
Citation needed. You’ll find that not only can this happen, it has. Arguably this is currently happening. They can’t just make more appear, but if that were the only thing driving it’s value up, again, it’s price over time would go down as we continue to extract more of it than we realistically need.
If you’re worried about the collapse of currency, gold is a particularly bizarre investment. If the currency isn’t worth anything, you wouldn’t buy any of it with your gold. The people with currency aren’t going to want gold, they will want things like food, and shelter.
Notably, during the several hyperinflation crises we can point to to study, at no point in any of them did citizens resort to using gold. They bartered with common crap that everyone needed.
That’s assuming the worthless paper you have that says you own gold could ever actually be traded for gold in such a situation. Unless you have the physical actual factual gold in your possession, you just have a gold backed currency. Which is doubly worthless in an inflation crisis.
You do at least have the paper right? You don’t just own numbers in an app?
You are talking about prices, I am talking about value. While you have clearly read plenty of libertarian monetary policy primers, you aren’t prepared to discuss this topic beyond that level.
Value does not come from rarity. It comes from utility - what a thing can do - and desire - how much other people want it.
Gold has a small amount of utility and a large amount of desire. Fiat currencies have a small amount of utility (namely paying taxes to avoid jail time) and a large amount of desire.
You rail and rail against inflationary monetary policy as if it is some inherent evil of fiat currency. The money supply can be reduced, just as it can be increased, just the supply of gold can change. It doesn’t change the source of value, only the price.
Fiat currency has no value because it’s literally useless to do anything with and gold has a tiny bit of utility value due to its industrial uses.
Fiat currency has value from its utility as a trade value token and wealth store, whilst gold has value as a wealth store, both only because and as long as people are willing to exchange them for things which do have a more utilitarian value.
I’m talking within the second value framework, so where trade tokens and wealth stores only have valuable as long as people think they have value and their value only is as much as people think they are worth - in other words their value derives from people’s trusting them to have value.
My point is entirely that there are more people in this world capable of reducing and even destroying the trust (and hence how much people are willing to exchange for them) on fiat currencies than there are of gold - fiat currencies are issued and controlled by governments, hence are a lot more subject to political interference than gold which is not issued or controlled by any government.
(My entire perspective is basically a financial risk exposure analysis on fiat currencies and gold as if they were assets just like all other assets, which concludes that gold has smaller political risks than even the major and most stable currencies. Whilst for major currencies usually the difference is too little to matter, in times like now with a bunch of bubbles - like the AI bubble - at the brink and the US Economy in a consistent downwards trajectory, that higher exposure of fiat to such risks is a lot more important - mismanagement of the crash or even as we see now with Trump of international confrontations is likely to hit fiat currencies much harder than gold)
One can think within the first value framework, but that’s pretty useless in modern society because that’s not how humans are operating, though it would make sense for a society with bartering only.
My talk about inflation was just an attempt at providing a mathematical perspective on it because I have some experience in Finance and a background in Science hence tend to see and explain via the perspective of Mathematics, but I guess that only made things more confusing.
Currencies are arbitrary. Gold has some industrial value, but essentially no utility to own.
Imagine the global economy collapses, and you have 100 tons of gold - what good will it do you?
Currencies have value based on what you can exchange them for - that is why dollars (and euros and all fiat) are valuable. People will give me things I want if I give them some paper. Gold as a currency is the same, but only as long as people value it. Exactly the same as fiat. It being limited only affects the per-unit PRICE assuming some value, it doesn’t give it value to begin with.
Again, you stopped your logical analysis before you got to the end of the logical chain.
Gold differs from fiat currencies in that it cannot be inflated away by politicians and central bankers.
That’s it.
It’s everything as you wrote AND gold’s value over the mid and long term isn’t really controlled by politicians or central bankers because they can’t issue more of it, which they can with fiat currencies - since the end of the Bretton Woods system, Gold in average just putters along losing 1.2% of value a year, not really caring about the quality of politics in any country.
So holding Gold rather than EUR, USD, GBP or so on is really just trying to protect oneself from Economic mismanagement of currencies.
Everything as you wrote applies and anybody thinking that Gold will hold value if society collapses is a fool.
You could do the same protection against political mismanagement in your own native currency by holding your savings in other currencies, but that comes with the extra work of having to track the quality of politics and Economic management in the countries issuing those currencies (as by holding those currencies you’re now exposed to the political fuckups there), plus main currencies tend to be highly positivelly correlated during big Economic Crashes (like in 2007 when all main currencies suffered and maybe only the CNY didn’t suffer as much), whilst Gold is not and just does its thing.
As it so happens putting my savings in Gold has already done exactly that: when I lived in Britain I put my savings in Gold and then Brexit came and the British Pound crashed 20% and suddenly my Gold would buy me 20% more British Pounds. It wasn’t really Gold going up in value, just the pound going down. Mind you, my savings in EUR did the same, but that wasn’t a major international Crash, were the EUR would suffer as much as the GDP or the USD.
Just like there was no Brexit effect on Gold, there is no Trump Effect on Gold or Realestate Bubble effect - the price of houses in GLD has actually been pretty stable, might even have fallen a little bit.
That’s the point of it, nothing else. All the bollocks about Gold replacing fiat currencies and so on is just fanboyism from goldbugs - Gold is just an investment class that has less correlation with the quality of Economic management in the largest nations than the currencies of those nations or anything listed in those currencies (such as stocks or realestate).
Citation needed. You’ll find that not only can this happen, it has. Arguably this is currently happening. They can’t just make more appear, but if that were the only thing driving it’s value up, again, it’s price over time would go down as we continue to extract more of it than we realistically need.
If you’re worried about the collapse of currency, gold is a particularly bizarre investment. If the currency isn’t worth anything, you wouldn’t buy any of it with your gold. The people with currency aren’t going to want gold, they will want things like food, and shelter.
Notably, during the several hyperinflation crises we can point to to study, at no point in any of them did citizens resort to using gold. They bartered with common crap that everyone needed.
That’s assuming the worthless paper you have that says you own gold could ever actually be traded for gold in such a situation. Unless you have the physical actual factual gold in your possession, you just have a gold backed currency. Which is doubly worthless in an inflation crisis.
You do at least have the paper right? You don’t just own numbers in an app?
You need a citation for the Physics of the creation of elements in the Periodic Table?!
I’m not the person you were arguing with before.
You are talking about prices, I am talking about value. While you have clearly read plenty of libertarian monetary policy primers, you aren’t prepared to discuss this topic beyond that level.
Value does not come from rarity. It comes from utility - what a thing can do - and desire - how much other people want it.
Gold has a small amount of utility and a large amount of desire. Fiat currencies have a small amount of utility (namely paying taxes to avoid jail time) and a large amount of desire.
You rail and rail against inflationary monetary policy as if it is some inherent evil of fiat currency. The money supply can be reduced, just as it can be increased, just the supply of gold can change. It doesn’t change the source of value, only the price.
Either:
I’m talking within the second value framework, so where trade tokens and wealth stores only have valuable as long as people think they have value and their value only is as much as people think they are worth - in other words their value derives from people’s trusting them to have value.
My point is entirely that there are more people in this world capable of reducing and even destroying the trust (and hence how much people are willing to exchange for them) on fiat currencies than there are of gold - fiat currencies are issued and controlled by governments, hence are a lot more subject to political interference than gold which is not issued or controlled by any government.
(My entire perspective is basically a financial risk exposure analysis on fiat currencies and gold as if they were assets just like all other assets, which concludes that gold has smaller political risks than even the major and most stable currencies. Whilst for major currencies usually the difference is too little to matter, in times like now with a bunch of bubbles - like the AI bubble - at the brink and the US Economy in a consistent downwards trajectory, that higher exposure of fiat to such risks is a lot more important - mismanagement of the crash or even as we see now with Trump of international confrontations is likely to hit fiat currencies much harder than gold)
One can think within the first value framework, but that’s pretty useless in modern society because that’s not how humans are operating, though it would make sense for a society with bartering only.
My talk about inflation was just an attempt at providing a mathematical perspective on it because I have some experience in Finance and a background in Science hence tend to see and explain via the perspective of Mathematics, but I guess that only made things more confusing.