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I am amazed at the hatred for gold among some HN'ers. This is the second thread I have seen where gold was mentioned, and the second time I have seen a vitriol

I am amazed at the hatred for gold among some HN'ers. This is the second thread I have seen where gold was mentioned, and the second time I have seen a vitriolic response about gold. Gold will always be valuable and it will always be part of a sane person's plan for dealing with a "things are going to crap" scenario. Along with some form of food storage to deal with logistic interrruptions and some form of personal defense (mace, pepper spray, knives, guns, etc.)

fallentimes 18y ago
Gold will always be valuable... How do you know? While I'm all for world & class asset diversification, the whole reason is because I/we don't know.
- patrickg-zill 18y ago
  1. It is needed for industrial/electronics purposes. 2. It is internationally recognized as being valuable, regardless of culture. That is, cultures as diverse as India, China, England, Russia, pan-Arabic (i.e. non-Jews in the Middle East) have all viewed gold as having value, and that over at least 1000 years of recorded history each. 3. It does not corrode or rot the way paper money does. In Israel they recently found some Byzantine-era gold coins, aside from the obvious numismatic/collector value they still retain value for the gold itself. 4. Gold does not require a government to enforce its value. It's value is innate or intrinsic to the thing itself. As such if a government falls or decides to modify the value of a paper dollar (as Mexico, Argentina etc. have done in the past) then the value changes. Gold that you have in your pocket cannot have its value modified by a government order.
  - fallentimes 18y ago
    Great answer - thank you. If you have a blog/site you should definitely write about this.
    - davidw 18y ago
      The internet is full of gold bug blogs. Here's one response to the gold bug arguments, by Nobel prize winner Krugman: http://web.mit.edu/krugman/www/goldbug.html http://web.mit.edu/krugman/www/goldbug.html Even libertarians like Arnold Kling don't really have much time for the gold standard: http://econlog.econlib.org/archives/2007/01/the_new_deal_an.html http://econlog.econlib.org/archives/2007/01/the_new_deal_an.... (and in other articles) Generally, it's not regarded as territory for "serious economists", although of course it is always possible that serious economists are wrong.
      - bokonist 18y ago
        The two most interesting posts I've read in defense of gold are these two: http://unqualified-reservations.blogspot.com/2007/11/who-heck-is-benn-steil.html http://unqualified-reservations.blogspot.com/2007/11/who-hec... and here http://unqualified-reservations.blogspot.com/2008/02/return-to-castle-goldenstein-gold.html http://unqualified-reservations.blogspot.com/2008/02/return-... Both are much better than the Krugman piece.
      - Prrometheus 18y ago
        Selgin and White wrote some papers in defense of the gold standard. Hayek was sympathetic to a commodity standard, though not the classical gold standard per se. The gold standard, having been around for 2,000 years, is the constant subject of serious study by economists.
        davidw 18y ago
        There are certainly a few serious, respectable economists who favor the gold standard - I said only that "most don't", not that anyone who does is a not a "serious economist". Incidentally, I think the "because we did it that way for a long time" argument is a terrible one. There are plenty of things we've done for a long time as humans and as societies that aren't very good, and are worth discarding. I don't think the gold standard is a good idea myself, but in the arguments for it, there are better ones than that one.
gaius 18y ago
Gold will always be valuable For varying values of valuable. Our bold leader Gordon Brown sold off the UK's gold reserves for about a third of the current market price. He even announced well in advance that he was planning to dump a load of gold on the market, so the price dropped even further. Gold's a great asset but it's not the be-all and end-all.

fallentimes 18y ago

Gold will always be valuable... How do you know? While I'm all for world & class asset diversification, the whole reason is because I/we don't know.

patrickg-zill 18y ago
1. It is needed for industrial/electronics purposes. 2. It is internationally recognized as being valuable, regardless of culture. That is, cultures as diverse as India, China, England, Russia, pan-Arabic (i.e. non-Jews in the Middle East) have all viewed gold as having value, and that over at least 1000 years of recorded history each. 3. It does not corrode or rot the way paper money does. In Israel they recently found some Byzantine-era gold coins, aside from the obvious numismatic/collector value they still retain value for the gold itself. 4. Gold does not require a government to enforce its value. It's value is innate or intrinsic to the thing itself. As such if a government falls or decides to modify the value of a paper dollar (as Mexico, Argentina etc. have done in the past) then the value changes. Gold that you have in your pocket cannot have its value modified by a government order.
- fallentimes 18y ago
  Great answer - thank you. If you have a blog/site you should definitely write about this.
  - davidw 18y ago
    The internet is full of gold bug blogs. Here's one response to the gold bug arguments, by Nobel prize winner Krugman: http://web.mit.edu/krugman/www/goldbug.html http://web.mit.edu/krugman/www/goldbug.html Even libertarians like Arnold Kling don't really have much time for the gold standard: http://econlog.econlib.org/archives/2007/01/the_new_deal_an.html http://econlog.econlib.org/archives/2007/01/the_new_deal_an.... (and in other articles) Generally, it's not regarded as territory for "serious economists", although of course it is always possible that serious economists are wrong.
    - bokonist 18y ago
      The two most interesting posts I've read in defense of gold are these two: http://unqualified-reservations.blogspot.com/2007/11/who-heck-is-benn-steil.html http://unqualified-reservations.blogspot.com/2007/11/who-hec... and here http://unqualified-reservations.blogspot.com/2008/02/return-to-castle-goldenstein-gold.html http://unqualified-reservations.blogspot.com/2008/02/return-... Both are much better than the Krugman piece.
    - Prrometheus 18y ago
      Selgin and White wrote some papers in defense of the gold standard. Hayek was sympathetic to a commodity standard, though not the classical gold standard per se. The gold standard, having been around for 2,000 years, is the constant subject of serious study by economists.
      - davidw 18y ago
        There are certainly a few serious, respectable economists who favor the gold standard - I said only that "most don't", not that anyone who does is a not a "serious economist". Incidentally, I think the "because we did it that way for a long time" argument is a terrible one. There are plenty of things we've done for a long time as humans and as societies that aren't very good, and are worth discarding. I don't think the gold standard is a good idea myself, but in the arguments for it, there are better ones than that one.

gaius 18y ago

Gold will always be valuable For varying values of valuable. Our bold leader Gordon Brown sold off the UK's gold reserves for about a third of the current market price. He even announced well in advance that he was planning to dump a load of gold on the market, so the price dropped even further. Gold's a great asset but it's not the be-all and end-all.