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No particular quantity is needed to fulfill that function. If the gold supply were half as big, then each bit would store twice as much value and nothing would
by mikeash 7y ago
No particular quantity is needed to fulfill that function. If the gold supply were half as big, then each bit would store twice as much value and nothing would change other than the vaults being smaller. We have way more gold than is needed to do what it’s used for.
- dahfizz 7y agoYou're being reductive. If supply is the only thing that matters, then why has the price of gold continued to rise even though we mine thousands of tons each year?
- mikeash 7y agoSaying that there’s a glut of oil and a dearth of gold based on their prices is pretty reductive too. It’s a simple thought experiment: what would the world look like if there were twice as much X, or half as much X, than there actually is? For X=oil, there would be profound changes. Half as much would require a totally different looking economy. Twice as much would enable big changes. For X=oil, nothing much changes. The industrial and decorative uses continue as they do now. The “store of wealth” uses just have a ~2x difference in $/kg compared to now. Why does the price of gold continue to rise? Because enough people think they’ll be able to sell it for a good price later.