4 ms·

Why does 500 years matter? Again, that's the survivor bias. "Gold is great because we all decided it was valuable for a long period of time, but based on no spe

by moate 8y ago

Why does 500 years matter? Again, that's the survivor bias. "Gold is great because we all decided it was valuable for a long period of time, but based on no specific usage". It's desirable because it's scarce and has a historic usage as currency. To assume that will continue to be valuable because of those (arbitrary) points seems like a flawed assumption. Gold is valuable because there's a perception of gold's value. It works as a currency. Like Salt, or tea bricks, or gems, they have some applications, but were being used as trade goods because of the perceived value. My point is simply that people in the 1400's didn't know that petroleum would become as important as it is or that high purity sand reserves were magnitudes more valuable than "regular" sand or that pounds of sugar would only cost a fraction of a laborer's hourly wage. If the worry is "inflation/devaluation of a currency without without the complete collapse of modern society" SOMEBODY will have a valuable currency. You could just as easily say that instead of storing gold you could store bank notes from several different nations. You could also store bitcoins, or bricks of drugs, or all sorts of things that carry value in the current climate. Hoarding wealth in the form of non-useful items is a gamble. You're assuming someone will want your currency. It's plausible they won't. Wealth, as opposed to trade goods, is only worth how much someone else wants it.

lixtra 8y ago
> Why does 500 years matter? Again, that's the survivor bias. If you compare why in the last 10k years the Himalaya and Venice Beach did not reach the same altitude you may say that's survivors bias. But it's not. One thing has different characteristics from the other and they lead to different outcomes. If it is survivors bias, then starting with a homogeneous cohort, over time fewer and fewer samples survive under some stress. So all I'm asking for is that homogeneous cohort that gold started with and that it accidentally survived. There should be something vanishing each 100 years. I don't see that. I think gold has very specific characteristics that made it survive and yes, I agree, today the myth of gold is also one of them.
- moate 8y ago
  Currency is a product of culture. There is no homogeneous culture. You can't design a perfect experiment here. It's not an accident, that's not what survivor bias is, it's just that it's also not "gold is valuable because god himself ordained it and therefor it always will be until the end of all time". Gold is valuable because we decided it's valuable. Other things have been used as currency, but people simply decided that gold is a good thing to use as a basis of an economy. The fact that our current culture says gold is valuable because in the past it had been repeatedly valuable and therefor it will be valuable in the future is an illogical statement because of the part at the end. You can't predict the future. You can't actually know that the train of thought that made gold valuable in the past/present will keep running in the future. Maybe we move to away from capitalism and skills are more useful. Maybe a giant meteor full of gold is found and it becomes less valuable than silver or platinum or uranium or any other semi-rare stable element. The point is, trade goods have their value tied up in need instead of perception and currencies are the opposite. Hoarding gold has shown to work in the past when. This has less barring on it's value in 100 years than you're trying to say.
  - claydavisss 8y ago
    > Gold is valuable because we decided it's valuable Only one notable historical figure thought the opposite - Lenin wanted to line urinals with it. Otherwise the perception of gold's value is practically universal and enduring. > The fact that our current culture says gold is valuable because in the past it had been repeatedly valuable and therefor it will be valuable in the future is an illogical statement greed is not logical! gold endures because greed endures.
ggferghghff 8y ago
Gold is not valuable because we “decided” it’s valuable. This gets repeated a lot, but it’s wrong. Gold is an amazing element with very many applications. Due to its rarity on the mantle and difficulty in extracting it we use inferior, still expensive, but far more affordable alternatives (I.e. copper for many, but not all, applications). Othewise your mobo manufacturer wouldn’t have blown it’s margins putting gold traces. And a Chinese “recycler” wouldn’t give up their health to recover it. And this is without going into the aesthetics of gold. As engineers I guess many of us are uncomfortable with something as hard to quantity as aesthetics, but Au is almost universally considered pretty. Few metals aren’t off grey, and those that are tarnish. So no, there wasn’t a council of info-Europeans and African tribes 10k years ago to decide that Au is worth a lot just because.
- moate 8y ago
  I mean, most of the historic value in gold is not related to conductivity and almost entirely on aesthetics and scarcity (and the fact that you can mint gold into coins without lose an infinite number of times, but silver and copper also work there). "Pretty" is cultural. It's made up. It isn't objective. The industrial applications of gold come pretty recently relative to the cultural valuation of gold. The fact that everyone, everywhere thought gold was pretty 10,000 years ago AND it's elemental AND it has chemical properties that make it useful for applications now is why it's valuable. But it's still survivor bias and retconning that the Mayans and Romans had any clue what future applications there would be for gold.
claydavisss 8y ago
> You could also store bitcoins, or bricks of drugs, or all sorts of things that carry value in the current climate Thats true and every investor, even a disaster investor, should diversify. Except for cryptocurrency...they are barely useful during peacetime. In a disaster, people will want something they can put in their hands. Most of your responses seem to suggest that there are people who are so crazy about gold that it is all they own. Only in James Bond movies...

by moate 8y ago

lixtra 8y ago

> Why does 500 years matter? Again, that's the survivor bias. If you compare why in the last 10k years the Himalaya and Venice Beach did not reach the same altitude you may say that's survivors bias. But it's not. One thing has different characteristics from the other and they lead to different outcomes. If it is survivors bias, then starting with a homogeneous cohort, over time fewer and fewer samples survive under some stress. So all I'm asking for is that homogeneous cohort that gold started with and that it accidentally survived. There should be something vanishing each 100 years. I don't see that. I think gold has very specific characteristics that made it survive and yes, I agree, today the myth of gold is also one of them.

moate 8y ago
Currency is a product of culture. There is no homogeneous culture. You can't design a perfect experiment here. It's not an accident, that's not what survivor bias is, it's just that it's also not "gold is valuable because god himself ordained it and therefor it always will be until the end of all time". Gold is valuable because we decided it's valuable. Other things have been used as currency, but people simply decided that gold is a good thing to use as a basis of an economy. The fact that our current culture says gold is valuable because in the past it had been repeatedly valuable and therefor it will be valuable in the future is an illogical statement because of the part at the end. You can't predict the future. You can't actually know that the train of thought that made gold valuable in the past/present will keep running in the future. Maybe we move to away from capitalism and skills are more useful. Maybe a giant meteor full of gold is found and it becomes less valuable than silver or platinum or uranium or any other semi-rare stable element. The point is, trade goods have their value tied up in need instead of perception and currencies are the opposite. Hoarding gold has shown to work in the past when. This has less barring on it's value in 100 years than you're trying to say.
- claydavisss 8y ago
  > Gold is valuable because we decided it's valuable Only one notable historical figure thought the opposite - Lenin wanted to line urinals with it. Otherwise the perception of gold's value is practically universal and enduring. > The fact that our current culture says gold is valuable because in the past it had been repeatedly valuable and therefor it will be valuable in the future is an illogical statement greed is not logical! gold endures because greed endures.

ggferghghff 8y ago

Gold is not valuable because we “decided” it’s valuable. This gets repeated a lot, but it’s wrong. Gold is an amazing element with very many applications. Due to its rarity on the mantle and difficulty in extracting it we use inferior, still expensive, but far more affordable alternatives (I.e. copper for many, but not all, applications). Othewise your mobo manufacturer wouldn’t have blown it’s margins putting gold traces. And a Chinese “recycler” wouldn’t give up their health to recover it. And this is without going into the aesthetics of gold. As engineers I guess many of us are uncomfortable with something as hard to quantity as aesthetics, but Au is almost universally considered pretty. Few metals aren’t off grey, and those that are tarnish. So no, there wasn’t a council of info-Europeans and African tribes 10k years ago to decide that Au is worth a lot just because.

moate 8y ago
I mean, most of the historic value in gold is not related to conductivity and almost entirely on aesthetics and scarcity (and the fact that you can mint gold into coins without lose an infinite number of times, but silver and copper also work there). "Pretty" is cultural. It's made up. It isn't objective. The industrial applications of gold come pretty recently relative to the cultural valuation of gold. The fact that everyone, everywhere thought gold was pretty 10,000 years ago AND it's elemental AND it has chemical properties that make it useful for applications now is why it's valuable. But it's still survivor bias and retconning that the Mayans and Romans had any clue what future applications there would be for gold.

claydavisss 8y ago

> You could also store bitcoins, or bricks of drugs, or all sorts of things that carry value in the current climate Thats true and every investor, even a disaster investor, should diversify. Except for cryptocurrency...they are barely useful during peacetime. In a disaster, people will want something they can put in their hands. Most of your responses seem to suggest that there are people who are so crazy about gold that it is all they own. Only in James Bond movies...