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Entropy arbitrage. Edit: You might as well try to assign a value to gold based on how much you spent on picks and hammers.
by IntronExon 9y ago
Entropy arbitrage.
Edit: You might as well try to assign a value to gold based on how much you spent on picks and hammers.
- AnimalMuppet 9y agoOver time, the price of gold is based on how much people spend on picks and hammers. More generally, it's based on the cost of extraction. That sets the price for the (new) supply curve. (There is also a supply curve from people who hold it being willing to sell it at the right price.)
- IntronExon 9y agoThe price of gold is set by what people will pay for gold, the cost of extraction is only tenuously linked. In short, you have it backwards. http://www.lbma.org.uk/assets/blog/alchemist_articles/Alch75OConnor.pdf http://www.lbma.org.uk/assets/blog/alchemist_articles/Alch75...