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Gold's other uses wouldn't make gold worth much on their own. "Legitimate" uses of a commodity that trades more for its properties as money should be thought m
by Sambdala 13y ago
Gold's other uses wouldn't make gold worth much on their own.
"Legitimate" uses of a commodity that trades more for its properties as money should be thought more of a really crappy put option, that is it sets a low price floor.
For example, it's been estimated that gold's industrial uses would only allow it to be traded in the low double digits per ounce if people didn't desire it for other reasons.
It's just in the case of something that isn't physical and isn't "backed" by any alternative uses, the floor is 0% of the current price instead of 1%, or similar.
- codexon 13y agoGold isn't just shiny, it is the most unreactive metal. It has a lot of other potential uses that other industries avoid because it is so expensive. If the price ever falls it will be kept up by those uses. http://geology.com/minerals/gold/uses-of-gold.shtml http://geology.com/minerals/gold/uses-of-gold.shtml
- ansible 13y agoIndeed, without gold, modern electronics would not be the happy place it is now. I am old enough to have had to use a pencil eraser to periodically clean tin plated contacts. Even silver oxidizes under normal conditions. I like my gold (plated contacts).
- patrickg_zill 13y agoJust as people say, "the market can act crazy, longer than you can remain solvent" about trading stocks on Wall Street, so I would point out that gold's value "as money" has been around a lot longer than even the lifetime of Methuselah. People have been using gold in some form for thousands of years - I don't see that changing anytime soon.
- mike_esspe 13y agoPeople used silver for a long time too, but it was demonetized in 20th century. http://www.dailyreckoning.com.au/silver-a-brief-history-of-de-monetisation/ http://www.dailyreckoning.com.au/silver-a-brief-history-of-d...
- patrickg_zill 13y agoPeople still buy silver as an investment, I hesitate to say "as money" ; although I told in Mexico you can buy and sell silver in many banks (I don't know the details however). In the USA, gold was demonetized (1933) before silver (1965) in the currency when used in the USA. The dollar was convertible into gold internationally however. The international gold window was closed by Nixon in 1971.
- davidgerard 13y agoGold's price is sensibly on the order of the price of silver (which gets classed as money but has a pile of uses). Gold's magickal role is largely cultural bias. There's lots of metals that are rarer and pricier than gold, but you don't hear about scandium-bugs or rhodium-bugs.