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It is actually its finite amounts that make it valuable. Anything that can be produced at will not hold up as a currency.

by mjnaus 18y ago

potatolicious 18y ago
But we do create more of it (or dig it out of the ground and refine it, as it were), there's simply a practically finite rate at which we can grow the gold supply. So the value of gold should in fact deflate over time, as we produce more and more of it.
- mjnaus 18y ago
  No, we don't. No matter how you look at this, gold is not "created". Cold is extracted from gold mines, the only thing humans can do it try to find, but they simply can not create it. Key here is that the total amount of gold on this planet is finite - not the production or extraction rate - making it truly valuable. Same thing applies to other natural resources such as oil, natural gas and diamonds.
  - kragen 18y ago
    Wait, you can grow diamonds in a laboratory.
    - eru 18y ago
      But Carbon is finite, too. (And on the same note, Dollars are finite, too. We have to store the bits somewhere.)
      - gdee 17y ago
        >We have to store the bits somewhere. +1 for the fine, fine irony. Intended or otherwise as it might have been.
  - gdee 17y ago
    >but they simply can not create it. I seem to remember reading that that's not the case anymore. As in, we actually can make gold through transmutation. The amount of energy required to do so is bigger than the "value" of the resultant gold tough.
- bsaunder 18y ago
  No, we mine it. We may discover more of it. But in ground reserve quantities are generally factored into the price of the stock of gold mining companies. So it is rather finite, and the more we explore and mine, the less likely we would be to discover more of it. Until someone invents the Philosopher's Stone.
Xichekolas 18y ago
Actually it's the demand that makes it valuable. (And the demand stems from everyone agreeing that it is valuable.) There is a finite amount of uranium on earth too, but the only reason it's considered valuable is because there is demand for nuclear applications. Only a little over 10% of gold is used for industrial applications. Without the demand provided by people agreeing that gold has value as a currency, the price of gold would plummet. The high value of gold is self-fulfilling... it's based on people's faith that everyone else thinks it is valuable.

It is actually its finite amounts that make it valuable. Anything that can be produced at will not hold up as a currency.

by mjnaus 18y ago

It is actually its finite amounts that make it valuable. Anything that can be produced at will not hold up as a currency.

potatolicious 18y ago

But we do create more of it (or dig it out of the ground and refine it, as it were), there's simply a practically finite rate at which we can grow the gold supply. So the value of gold should in fact deflate over time, as we produce more and more of it.

mjnaus 18y ago
No, we don't. No matter how you look at this, gold is not "created". Cold is extracted from gold mines, the only thing humans can do it try to find, but they simply can not create it. Key here is that the total amount of gold on this planet is finite - not the production or extraction rate - making it truly valuable. Same thing applies to other natural resources such as oil, natural gas and diamonds.
- kragen 18y ago
  Wait, you can grow diamonds in a laboratory.
  - eru 18y ago
    But Carbon is finite, too. (And on the same note, Dollars are finite, too. We have to store the bits somewhere.)
    - gdee 17y ago
      >We have to store the bits somewhere. +1 for the fine, fine irony. Intended or otherwise as it might have been.
- gdee 17y ago
  >but they simply can not create it. I seem to remember reading that that's not the case anymore. As in, we actually can make gold through transmutation. The amount of energy required to do so is bigger than the "value" of the resultant gold tough.
bsaunder 18y ago
No, we mine it. We may discover more of it. But in ground reserve quantities are generally factored into the price of the stock of gold mining companies. So it is rather finite, and the more we explore and mine, the less likely we would be to discover more of it. Until someone invents the Philosopher's Stone.

Xichekolas 18y ago

Actually it's the demand that makes it valuable. (And the demand stems from everyone agreeing that it is valuable.) There is a finite amount of uranium on earth too, but the only reason it's considered valuable is because there is demand for nuclear applications. Only a little over 10% of gold is used for industrial applications. Without the demand provided by people agreeing that gold has value as a currency, the price of gold would plummet. The high value of gold is self-fulfilling... it's based on people's faith that everyone else thinks it is valuable.