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> It's not possible for the value of gold to go to zero The price might go to zero, though. The price of oil, which is arguably more useful than gold, went neg

> It's not possible for the value of gold to go to zero The price might go to zero, though. The price of oil, which is arguably more useful than gold, went negative a couple of years back. Having intrinsic value doesn't necessarily mean it is exchangeable, especially if it needs to be exchanged at a given moment in time.

gizajob 4y ago
The exchange value might fluctuate but the use value remains, in the case of oil and gold. Bitcoin has no use value. Could say that about other financial instruments and derivatives, but they serve a purpose to those who use them. There's a big difference to exchange value and use value though, Marx made a career out of defining it.
- randomdata 4y ago
  Its value is all well and good if you personally have a use for it, but if you are merely stockpiling it in hopes of selling it later then that doesn't help much if the price has fallen to zero. You might be left with something pretty to look at and little more as you hold out for a recovery, if you don't take the bath and end up with nothing. Which could also be said about Bitcoin. I'm sure someone out there would find some kind of academic interest in looking at Bitcoins or enjoy collecting them. There might be almost no value in Bitcoin, but it would probably never erode completely.
  - P5fRxh5kUvp2th 4y ago
    In fiction there's an idea known as 'plot armor'. In essence, it's the idea that causality and realism are suspended for some reasons related to the plot. Your scenario here is plot armor. Sure, if we pretend that gold stops having ANY use outside of being pretty, then when it stops being considered pretty it's value will go to 0. But the fact is, gold has a myriad of uses besides being pretty and those uses give it an inherent value. And when you go to sell it, others' use of it is what sets the sell value, not your personal use of it. It doesn't matter that I'm not personally using it for conductivity if the person I'm selling it to is (or someone downstream of them is). IOW, stop posting fiction.
    - randomdata 4y ago
      > Sure, if we pretend that gold stops having ANY use outside of being pretty I fail to see the purpose of this 'pilot amor'. There is no reason why gold would stop being useful beyond being pretty. This fiction you've come up with doesn't even make any sense and certainly has no relevance to the discussion. However, that doesn't mean there is always a user available. When we saw the price of oil go negative there were still just as many uses for oil as there ever was, but for various reasons there weren't buyers in that moment. Gold is not immune to the same. In case you are still confused, let me be clear: Price and value are not the same thing. > IOW, stop posting fiction. Sage advice.
      - P5fRxh5kUvp2th 4y ago
        inches is not the same thing as length, yet they're indelibly linked.
- P5fRxh5kUvp2th 4y ago
  This happens entirely too often on this website. I used the phrase 'inherent value' to describe what you're referring to as 'use value'. But of course someone decided they had to argue against it by arguing that the trade value between countries went negative at one point (which isn't all that surprising but has nothing to do with the original point). arguably 'use value' is a better phrase, but given the surrounding explanations, the poster engaged in a clear strawman.
w1nst0nsm1th 4y ago
Oil (and gas) are specific cases, not relatable to gold... The point with oil is its extraction can't be stoped overnight, and thus has to be stored in case of excessive production, which has itself a cost. Demand droped significantly when the lockdown occured ; storage facilities where saturated ; and oil was kept in oil tankers which are pretty expensive. The negative price reflected the cost of storage. There is no such issue with gold.
- theGnuMe 4y ago
  You have to store the gold somewhere so you have storage costs which could theoretically exceed the cost of the gold at some point.
dahfizz 4y ago
The price of oil futures went negative. The spot price of oil has never and will never hit zero or negative. You can't use your regular intuition about commodity prices when talking about futures contracts. The negative price was a one-day event, and all it really represents is a higher-than-normal premium on the calendar spread.

gizajob 4y ago

The exchange value might fluctuate but the use value remains, in the case of oil and gold. Bitcoin has no use value. Could say that about other financial instruments and derivatives, but they serve a purpose to those who use them. There's a big difference to exchange value and use value though, Marx made a career out of defining it.

randomdata 4y ago
Its value is all well and good if you personally have a use for it, but if you are merely stockpiling it in hopes of selling it later then that doesn't help much if the price has fallen to zero. You might be left with something pretty to look at and little more as you hold out for a recovery, if you don't take the bath and end up with nothing. Which could also be said about Bitcoin. I'm sure someone out there would find some kind of academic interest in looking at Bitcoins or enjoy collecting them. There might be almost no value in Bitcoin, but it would probably never erode completely.
- P5fRxh5kUvp2th 4y ago
  In fiction there's an idea known as 'plot armor'. In essence, it's the idea that causality and realism are suspended for some reasons related to the plot. Your scenario here is plot armor. Sure, if we pretend that gold stops having ANY use outside of being pretty, then when it stops being considered pretty it's value will go to 0. But the fact is, gold has a myriad of uses besides being pretty and those uses give it an inherent value. And when you go to sell it, others' use of it is what sets the sell value, not your personal use of it. It doesn't matter that I'm not personally using it for conductivity if the person I'm selling it to is (or someone downstream of them is). IOW, stop posting fiction.
  - randomdata 4y ago
    > Sure, if we pretend that gold stops having ANY use outside of being pretty I fail to see the purpose of this 'pilot amor'. There is no reason why gold would stop being useful beyond being pretty. This fiction you've come up with doesn't even make any sense and certainly has no relevance to the discussion. However, that doesn't mean there is always a user available. When we saw the price of oil go negative there were still just as many uses for oil as there ever was, but for various reasons there weren't buyers in that moment. Gold is not immune to the same. In case you are still confused, let me be clear: Price and value are not the same thing. > IOW, stop posting fiction. Sage advice.
    - P5fRxh5kUvp2th 4y ago
      inches is not the same thing as length, yet they're indelibly linked.
P5fRxh5kUvp2th 4y ago
This happens entirely too often on this website. I used the phrase 'inherent value' to describe what you're referring to as 'use value'. But of course someone decided they had to argue against it by arguing that the trade value between countries went negative at one point (which isn't all that surprising but has nothing to do with the original point). arguably 'use value' is a better phrase, but given the surrounding explanations, the poster engaged in a clear strawman.

w1nst0nsm1th 4y ago

Oil (and gas) are specific cases, not relatable to gold... The point with oil is its extraction can't be stoped overnight, and thus has to be stored in case of excessive production, which has itself a cost. Demand droped significantly when the lockdown occured ; storage facilities where saturated ; and oil was kept in oil tankers which are pretty expensive. The negative price reflected the cost of storage. There is no such issue with gold.

theGnuMe 4y ago
You have to store the gold somewhere so you have storage costs which could theoretically exceed the cost of the gold at some point.

dahfizz 4y ago

The price of oil futures went negative. The spot price of oil has never and will never hit zero or negative. You can't use your regular intuition about commodity prices when talking about futures contracts. The negative price was a one-day event, and all it really represents is a higher-than-normal premium on the calendar spread.