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Gold is silly as a measure of value. It's just a piece of shiny metal. The amount of value in the world is increasing so you want to exchange medium to grow wit

Gold is silly as a measure of value. It's just a piece of shiny metal. The amount of value in the world is increasing so you want to exchange medium to grow with it else you're pulling breaks on the actual economy.

butlike 6mo ago
Well it's also soft, bacteriostatic, and conductive.
- RealityVoid 6mo ago
  OMG, we should totally base our economic exchanges on copper instead!
engineeringwoke 6mo ago
Yes, it's just a shiny piece of metal. However, it is a pure element and there is a limited amount of it, unlike pretty much anything else except maybe silver. Otherwise this happens. https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL This is the origin of the entire white collar world and all of its odd bedfellows, and it will die in our lifetime. All of our jobs will go with it, unfortunately.
newguy1000 6mo ago
Gold is actually really good at transferring and measuring value. Think about what a "good" measure of value would be have. It needs to last over time, not corrode or dissolve to the forces. It needs to be distributable, Divisible.. to be ubiquitous. Hard to create/refine, hard to find, so supply can't easily be inflated. It doesn't matter what the object that is being used for exchange of value or holding value, that's why you can trade and barter random objects. But if you condensate down the properties that make a GOOD money, then gold is more than just a shiny metal. "The amount of value in the world is increasing so you want to exchange medium to grow with it.." we find more gold every day, so there is an easing already happening naturally. And even if there wasn't, imagine having an exchange currency that literally never inflated... that's GOOD. We have been hoodwinked into thinking that we need inflation to keep up with goods and services, literal stockholm syndrome taught by the FED.
- RealityVoid 6mo ago
  > And even if there wasn't, imagine having an exchange currency that literally never inflated... that's GOOD. I fundamentally disagree. Value comes from building stuff not from hoarding. I maintain my intense dislike for gold. And I grant that it had the property of having most people on this earth consider it the peak of value. Sure common belief is a useful property. But I disagree that it's a positive outcome or that there couldn't be many many other variations except gold.
  - bartvk 6mo ago
    Your dislike aside, is it part of your investment portfolio? If not, what did you replace it with?
- SR2Z 6mo ago
  Hold on - you say "we find more gold every day" and then go on to suggest that the money supply doesn't actually need to keep up with economic growth? If we had the technology to maintain 0% inflation, we would do that. We can't, and rather than risk deflation we instead target low positive inflation. This is because deflation leads to nightmare spirals where people start stuffing money into their mattresses instead of investing in useful things because holding has risk-free guaranteed returns that the unpredictable real world can't match. The amount of gold being mined is not sufficient to keep up with economic growth and gold is therefore inherently deflationary. It's not a good way to store value, because a coin that's going to double in value over two years or whatever is obviously not a stable store of value. You can argue about corrosion resistance or whatever other physical properties gold might have, but unless the civilization collapses you will find just as much luck storing your wealth in the database of a major bank. Needless to say, designing a civilization around the idea that it could collapse at any moment is unnecessary and expensive.
  - zahlman 6mo ago
    > If we had the technology to maintain 0% inflation, we would do that. We can't, and rather than risk deflation we instead target low positive inflation. I don't think this is quite right. My understanding is that a low positive inflation would be targeted anyway, because it stimulates the velocity of money; i.e. there's a downside to hoarding, since you need to beat inflation to come out on top. So people will be willing to invest to at least some extent in risk assets, or to buy things now rather than later. Which, yes, makes inflationary spirals possible, but they've proven less damaging. The inflation numbers seen in regimes that actually collapsed as a result are absolutely dizzying; whereas the deflation seen in the Great Depression was... significant, but not nearly comparable.
panarky 6mo ago
Just because a social construct is silly when you think about it doesn't make it any less real or useful. A national border is silly as a physical reality; it is just a cartographic whim. These invisible lines, drawn by long-dead men, pretend that the lithosphere is fundamentally different on one side of a coordinate than the other. Fiat currency is silly as a store of value; it is just a digital ledger or a piece of cotton-linen blend. Its "worth" is derived entirely from the collective hallucination that a central bank’s promise is more substantial than the paper it is printed on.
- atoav 6mo ago
  Yes. And we should never forget that these ideas are just that: useful ideas. They may seem without alternative to most people, but that doesn't mean they necessarily are.
JTbane 6mo ago
Yeah I don't get why people don't understand this- there is not enough gold to base the entire global economy on it.
- CyberDildonics 6mo ago
  That makes no sense, do you think people are talking about using gold coins instead of paper money in their wallet?
  - RealityVoid 6mo ago
    In effect, some of them are. Look how many decry the death Breton Woods. They don't want to necessarily have good coins on them, but they want them to be tethered as a proxy. Why?
    - CyberDildonics 6mo ago
      In effect, some of them are. No, not in effect, no one is talking about physically exchanging gold coins, so it doesn't make sense to say "there isn't enough". but they want them to be tethered as a proxy. Why? That's a completely separate issue. People want to not have to deal with inflation where they are on a treadmill of needing to get paid more to support the fact that companies can raise their prices easily.
      - RealityVoid 6mo ago
        > No, not in effect, no one is talking about physically exchanging gold coins, so it doesn't make sense to say "there isn't enough". I think my point still stands. If you can't create more gold [1] and you say - I am pegging 35 dollars to an ounce of gold. Then you are limiting the amount of dollars to the mass of gold[2]. The money works as an IOU for gold. You aren't exchanging pieces of gold, but the idea that you have 35$ is as if you have 1 ounce of gold, _that is what people pine for_. It's effectively, an IOU for 1 ounce of gold that you keep in a safe. Yes. I think the point still stands that in effect, that's what people are asking for. [1] - You can, but it's a much slower process, deff rate limited, it's actually what people really seem to like about gold. [2] - Yes, I am aware about the concept of fractional reserve, but that's exactly the part that goldbugs want to avoid.

butlike 6mo ago

Well it's also soft, bacteriostatic, and conductive.

RealityVoid 6mo ago
OMG, we should totally base our economic exchanges on copper instead!

engineeringwoke 6mo ago

Yes, it's just a shiny piece of metal. However, it is a pure element and there is a limited amount of it, unlike pretty much anything else except maybe silver. Otherwise this happens. https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL This is the origin of the entire white collar world and all of its odd bedfellows, and it will die in our lifetime. All of our jobs will go with it, unfortunately.

newguy1000 6mo ago

Gold is actually really good at transferring and measuring value. Think about what a "good" measure of value would be have. It needs to last over time, not corrode or dissolve to the forces. It needs to be distributable, Divisible.. to be ubiquitous. Hard to create/refine, hard to find, so supply can't easily be inflated. It doesn't matter what the object that is being used for exchange of value or holding value, that's why you can trade and barter random objects. But if you condensate down the properties that make a GOOD money, then gold is more than just a shiny metal. "The amount of value in the world is increasing so you want to exchange medium to grow with it.." we find more gold every day, so there is an easing already happening naturally. And even if there wasn't, imagine having an exchange currency that literally never inflated... that's GOOD. We have been hoodwinked into thinking that we need inflation to keep up with goods and services, literal stockholm syndrome taught by the FED.

RealityVoid 6mo ago
> And even if there wasn't, imagine having an exchange currency that literally never inflated... that's GOOD. I fundamentally disagree. Value comes from building stuff not from hoarding. I maintain my intense dislike for gold. And I grant that it had the property of having most people on this earth consider it the peak of value. Sure common belief is a useful property. But I disagree that it's a positive outcome or that there couldn't be many many other variations except gold.
- bartvk 6mo ago
  Your dislike aside, is it part of your investment portfolio? If not, what did you replace it with?
SR2Z 6mo ago
Hold on - you say "we find more gold every day" and then go on to suggest that the money supply doesn't actually need to keep up with economic growth? If we had the technology to maintain 0% inflation, we would do that. We can't, and rather than risk deflation we instead target low positive inflation. This is because deflation leads to nightmare spirals where people start stuffing money into their mattresses instead of investing in useful things because holding has risk-free guaranteed returns that the unpredictable real world can't match. The amount of gold being mined is not sufficient to keep up with economic growth and gold is therefore inherently deflationary. It's not a good way to store value, because a coin that's going to double in value over two years or whatever is obviously not a stable store of value. You can argue about corrosion resistance or whatever other physical properties gold might have, but unless the civilization collapses you will find just as much luck storing your wealth in the database of a major bank. Needless to say, designing a civilization around the idea that it could collapse at any moment is unnecessary and expensive.
- zahlman 6mo ago
  > If we had the technology to maintain 0% inflation, we would do that. We can't, and rather than risk deflation we instead target low positive inflation. I don't think this is quite right. My understanding is that a low positive inflation would be targeted anyway, because it stimulates the velocity of money; i.e. there's a downside to hoarding, since you need to beat inflation to come out on top. So people will be willing to invest to at least some extent in risk assets, or to buy things now rather than later. Which, yes, makes inflationary spirals possible, but they've proven less damaging. The inflation numbers seen in regimes that actually collapsed as a result are absolutely dizzying; whereas the deflation seen in the Great Depression was... significant, but not nearly comparable.

panarky 6mo ago

Just because a social construct is silly when you think about it doesn't make it any less real or useful. A national border is silly as a physical reality; it is just a cartographic whim. These invisible lines, drawn by long-dead men, pretend that the lithosphere is fundamentally different on one side of a coordinate than the other. Fiat currency is silly as a store of value; it is just a digital ledger or a piece of cotton-linen blend. Its "worth" is derived entirely from the collective hallucination that a central bank’s promise is more substantial than the paper it is printed on.

atoav 6mo ago
Yes. And we should never forget that these ideas are just that: useful ideas. They may seem without alternative to most people, but that doesn't mean they necessarily are.

JTbane 6mo ago

Yeah I don't get why people don't understand this- there is not enough gold to base the entire global economy on it.

CyberDildonics 6mo ago
That makes no sense, do you think people are talking about using gold coins instead of paper money in their wallet?
- RealityVoid 6mo ago
  In effect, some of them are. Look how many decry the death Breton Woods. They don't want to necessarily have good coins on them, but they want them to be tethered as a proxy. Why?
  - CyberDildonics 6mo ago
    In effect, some of them are. No, not in effect, no one is talking about physically exchanging gold coins, so it doesn't make sense to say "there isn't enough". but they want them to be tethered as a proxy. Why? That's a completely separate issue. People want to not have to deal with inflation where they are on a treadmill of needing to get paid more to support the fact that companies can raise their prices easily.
    - RealityVoid 6mo ago
      > No, not in effect, no one is talking about physically exchanging gold coins, so it doesn't make sense to say "there isn't enough". I think my point still stands. If you can't create more gold [1] and you say - I am pegging 35 dollars to an ounce of gold. Then you are limiting the amount of dollars to the mass of gold[2]. The money works as an IOU for gold. You aren't exchanging pieces of gold, but the idea that you have 35$ is as if you have 1 ounce of gold, _that is what people pine for_. It's effectively, an IOU for 1 ounce of gold that you keep in a safe. Yes. I think the point still stands that in effect, that's what people are asking for. [1] - You can, but it's a much slower process, deff rate limited, it's actually what people really seem to like about gold. [2] - Yes, I am aware about the concept of fractional reserve, but that's exactly the part that goldbugs want to avoid.