4 ms·

It's infinitely easier to print money at will, which is what keeps happening. Gold has intrinsic value for practically all of human existence.

gruez 6y ago
>Gold has intrinsic value for practically all of human existence. The intrinsic value argument hardly makes any sense because it's almost always lower than the actual value. Someone interested in intrinsic value would be buying copper, not gold.
tudorconstantin 6y ago
Nothing has intrinsic value
- hyko 6y ago
  Obviously a statement like that requires some explanatory notes? When talking about money, the term intrinsic value means the market value of the commodity the money is made from, versus the face value of the money. This is very real and has been exploited in the past, with people effectively melting down large quantities of money and selling it as a commodity.
rpz 6y ago
Coming from a gold bug: you can still create an infinite number of IOUs on gold. Thats what the dollar was before Nixon closed the gold window. The fed was running a fractional reserve on their gold. Believe it or not they still are today, despite folks and major nations no longer have the ability to trade their dollars for some amount of the US treasury gold. Look into the market value of the gold certificates that the fed has on its books. The fed hasn't marked their gold position to the market since the 70s. Very peculiar if you ask me. Also consider why each of the federal reserve banks trade these certificates amongst one another. On top of that you can read the treasury's website and find that the policy states that the treasury gold plays an important role as collateral on the dollar https://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx https://www.treasury.gov/resource-center/faqs/Currency/Pages... "Congress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. This collateral is chiefly gold certificates and United States securities. This provides backing for the note issue. The idea was that if the Congress dissolved the Federal Reserve System, the United States would take over the notes (liabilities). This would meet the requirements of Section 411, but the government would also take over the assets, which would be of equal value. Federal Reserve notes represent a first lien on all the assets of the Federal Reserve Banks, and on the collateral specifically held against them."
- gher-shyu3i 6y ago
  > you can still create an infinite number of IOUs on gold This is why Islam, Judaism, and Christianity prohibit interest. That closes the door on exploits like this.
- jkhdigital 6y ago
  Yeah... sometimes I think Mises should be required reading for anyone commenting on HN threads about money. If anything, his descriptions of money and money substitutes are even more relevant in the modern financialized economy, where substitutes (i.e. derivatives) now exist for every imaginable asset class.
imtringued 6y ago
The intrinsic value of gold is an answer to whether gold will stay relevant 5000 years from now. It will guarantee that gold will always have some residual value, it doesn't guarantee that its current valuation is correct. Compare this to Bitcoin which can be replaced by any competitor. Compare this to the US dollar which is required to pay taxes. You will still see a use case for the dollar in a hundred years.

gruez 6y ago

>Gold has intrinsic value for practically all of human existence. The intrinsic value argument hardly makes any sense because it's almost always lower than the actual value. Someone interested in intrinsic value would be buying copper, not gold.

tudorconstantin 6y ago

Nothing has intrinsic value

hyko 6y ago
Obviously a statement like that requires some explanatory notes? When talking about money, the term intrinsic value means the market value of the commodity the money is made from, versus the face value of the money. This is very real and has been exploited in the past, with people effectively melting down large quantities of money and selling it as a commodity.

rpz 6y ago

Coming from a gold bug: you can still create an infinite number of IOUs on gold. Thats what the dollar was before Nixon closed the gold window. The fed was running a fractional reserve on their gold. Believe it or not they still are today, despite folks and major nations no longer have the ability to trade their dollars for some amount of the US treasury gold. Look into the market value of the gold certificates that the fed has on its books. The fed hasn't marked their gold position to the market since the 70s. Very peculiar if you ask me. Also consider why each of the federal reserve banks trade these certificates amongst one another. On top of that you can read the treasury's website and find that the policy states that the treasury gold plays an important role as collateral on the dollar https://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx https://www.treasury.gov/resource-center/faqs/Currency/Pages... "Congress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. This collateral is chiefly gold certificates and United States securities. This provides backing for the note issue. The idea was that if the Congress dissolved the Federal Reserve System, the United States would take over the notes (liabilities). This would meet the requirements of Section 411, but the government would also take over the assets, which would be of equal value. Federal Reserve notes represent a first lien on all the assets of the Federal Reserve Banks, and on the collateral specifically held against them."

gher-shyu3i 6y ago
> you can still create an infinite number of IOUs on gold This is why Islam, Judaism, and Christianity prohibit interest. That closes the door on exploits like this.
jkhdigital 6y ago
Yeah... sometimes I think Mises should be required reading for anyone commenting on HN threads about money. If anything, his descriptions of money and money substitutes are even more relevant in the modern financialized economy, where substitutes (i.e. derivatives) now exist for every imaginable asset class.

imtringued 6y ago

The intrinsic value of gold is an answer to whether gold will stay relevant 5000 years from now. It will guarantee that gold will always have some residual value, it doesn't guarantee that its current valuation is correct. Compare this to Bitcoin which can be replaced by any competitor. Compare this to the US dollar which is required to pay taxes. You will still see a use case for the dollar in a hundred years.