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"Gold is money, and has been considered money by all civilizations on earth for thousands of years." Actually, no - the Inca's used textiles and animals for cu

by roel_v 15y ago

"Gold is money, and has been considered money by all civilizations on earth for thousands of years." Actually, no - the Inca's used textiles and animals for currency, and gold was used for ceremonial purposes (that last part iirc, it's been a few years since I was in Peru). The reason was that gold was plentiful for them, so its main reason for using it now and elsewhere didn't exist for them. Apart from that, 'gold is money' doesn't even make sense. 'money' is something that has value, and 'value' is in the eye of the beholder. If you want to argue that gold has a longer historical track record as a holder of value than paper money or any other economic theory about gold, fine - but you sound like a crackpot gold bug, and if that is really the case, please take your intellectually dishonest nonsense elsewhere.

david927 15y ago
So a paper dollar bill has "value"? Scarcity provides value. Read this and let's talk some more: http://johnlaw0.wordpress.com/2011/08/23/why-the-global-financial-system-is-about-to-collapse-2006/ http://johnlaw0.wordpress.com/2011/08/23/why-the-global-fina...
yardie 15y ago
Gold is a fungible item but it is definitely not money. You can't walk into a supermarket and buy a weeks worth of groceries with it. You can exchange it with someone, possible the store manager, for what he thinks it's worth. This will be far less than the gold market because now he has to find a way to exchange or store it. And the cycle continues.
- illumin8 15y ago
  You can walk into a bank anywhere in the world and convert it into local currency. That's as close to money as you're likely to find. Edit: I should have said "coin dealer." To the reply below in Cork Ireland - I see you have a convenient merchant in your very town that will be happy to convert gold coins into cash: http://www.dublincoinauction.com/index.php?page=index http://www.dublincoinauction.com/index.php?page=index
  - jtbigwoo 15y ago
    I'm not sure what world you're living in, but none of the banks in my (medium-sized middle-American) city buy or sell gold. I have to go to a coin dealer, pawn shop, or one of those "WE BUY GOLD" places. A used guitar would be just as easy to convert to cash.
  - handelaar 15y ago
    I'm in Cork, Ireland. Second-largest city in the country. I'm gonna bet you €10 right now (or an equivalent value of the element of your choice, if you insist) that there's not a bank within 20 miles of here where I can walk in with gold and walk out with cash.
  - mikeash 15y ago
    You can walk into a pawn shop anywhere in the world and convert anything into local currency. That doesn't seem to prove very much.
illumin8 15y ago
The Incas had vaults and palaces full of gold. Just because the peasants of Inca times couldn't afford any, and bartered with textiles and animals, doesn't mean the gold wasn't valued by the ruling class. Please take your intellectually dishonest opinion somewhere else. The fact is that gold can be converted into any currency in the world, in any country in the world. I can walk into a bank in Zimbabwe with a gold eagle and walk out with several $trillion Zimbabwe dollars in fiat currency. As we speak, Gold just reached $1900 USD an ounce today. Which would you rather have stuck in a safe back in 2009? A gold eagle, or a $1000 in US currency?
- anamax 15y ago
  > The fact is that gold can be converted into any currency in the world, in any country in the world. That wasn't true in the US from the early 1930s until the 1970s.
- roel_v 15y ago
  Inca rulers and the upper class used gold for decoration and to make things like tableware from - the point of this discussion is whether it was used as currency, which it wasn't. How are you going to call something a currency when it's only hanging on the wall of the upper 2% of society? I'm not sure what point you're trying to make, but you said that gold was used by all societies of the last 1000's of years as a currency, but it flat out isn't. Most societies, yes, but not all - and that's important, because it shows that in places where there is a relative abundance of gold, it's not good as a currency (the non-use of gold in Inca times was not solely because of high supply, I'm not interested in arguing details on Inca culture and economics here because frankly I don't know much more about it than what a couple of tour guides told me). Anyway, let's go back to 2007. A house in Phoenix that sold for 250k in 2004 just reached one million. Which would you have rather bought back in 2004? That house, or a gold eagle? My point - it's easy to make a 'case' with perfect hindsight. There are several drivers to the current high price of gold; people diversifying their portfolios into precious metals, Chinese millionaire who have limited options for storing value, increasing demand from emerging markets for jewelry. That's not the point; the point is that you are claiming that gold has 'intrinsic' value ('Gold is real money that holds it's value over time.'). That's bullshit, plain and simple. Yes, gold has historically been a relatively constant value store, but there is nothing intrinsically valuable about it, and (the vast majority of) those claiming it is are alarmist nutcases with little grasp of economics.

by roel_v 15y ago

david927 15y ago

So a paper dollar bill has "value"? Scarcity provides value. Read this and let's talk some more: http://johnlaw0.wordpress.com/2011/08/23/why-the-global-financial-system-is-about-to-collapse-2006/ http://johnlaw0.wordpress.com/2011/08/23/why-the-global-fina...

yardie 15y ago

Gold is a fungible item but it is definitely not money. You can't walk into a supermarket and buy a weeks worth of groceries with it. You can exchange it with someone, possible the store manager, for what he thinks it's worth. This will be far less than the gold market because now he has to find a way to exchange or store it. And the cycle continues.

illumin8 15y ago
You can walk into a bank anywhere in the world and convert it into local currency. That's as close to money as you're likely to find. Edit: I should have said "coin dealer." To the reply below in Cork Ireland - I see you have a convenient merchant in your very town that will be happy to convert gold coins into cash: http://www.dublincoinauction.com/index.php?page=index http://www.dublincoinauction.com/index.php?page=index
- jtbigwoo 15y ago
  I'm not sure what world you're living in, but none of the banks in my (medium-sized middle-American) city buy or sell gold. I have to go to a coin dealer, pawn shop, or one of those "WE BUY GOLD" places. A used guitar would be just as easy to convert to cash.
- handelaar 15y ago
  I'm in Cork, Ireland. Second-largest city in the country. I'm gonna bet you €10 right now (or an equivalent value of the element of your choice, if you insist) that there's not a bank within 20 miles of here where I can walk in with gold and walk out with cash.
- mikeash 15y ago
  You can walk into a pawn shop anywhere in the world and convert anything into local currency. That doesn't seem to prove very much.

illumin8 15y ago

The Incas had vaults and palaces full of gold. Just because the peasants of Inca times couldn't afford any, and bartered with textiles and animals, doesn't mean the gold wasn't valued by the ruling class. Please take your intellectually dishonest opinion somewhere else. The fact is that gold can be converted into any currency in the world, in any country in the world. I can walk into a bank in Zimbabwe with a gold eagle and walk out with several $trillion Zimbabwe dollars in fiat currency. As we speak, Gold just reached $1900 USD an ounce today. Which would you rather have stuck in a safe back in 2009? A gold eagle, or a $1000 in US currency?

anamax 15y ago
> The fact is that gold can be converted into any currency in the world, in any country in the world. That wasn't true in the US from the early 1930s until the 1970s.
roel_v 15y ago
Inca rulers and the upper class used gold for decoration and to make things like tableware from - the point of this discussion is whether it was used as currency, which it wasn't. How are you going to call something a currency when it's only hanging on the wall of the upper 2% of society? I'm not sure what point you're trying to make, but you said that gold was used by all societies of the last 1000's of years as a currency, but it flat out isn't. Most societies, yes, but not all - and that's important, because it shows that in places where there is a relative abundance of gold, it's not good as a currency (the non-use of gold in Inca times was not solely because of high supply, I'm not interested in arguing details on Inca culture and economics here because frankly I don't know much more about it than what a couple of tour guides told me). Anyway, let's go back to 2007. A house in Phoenix that sold for 250k in 2004 just reached one million. Which would you have rather bought back in 2004? That house, or a gold eagle? My point - it's easy to make a 'case' with perfect hindsight. There are several drivers to the current high price of gold; people diversifying their portfolios into precious metals, Chinese millionaire who have limited options for storing value, increasing demand from emerging markets for jewelry. That's not the point; the point is that you are claiming that gold has 'intrinsic' value ('Gold is real money that holds it's value over time.'). That's bullshit, plain and simple. Yes, gold has historically been a relatively constant value store, but there is nothing intrinsically valuable about it, and (the vast majority of) those claiming it is are alarmist nutcases with little grasp of economics.