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"Most recently for example, the price has gone from $260 per troy ounce in 2001, to peak at $1,921.15 in September 2011, before falling back to $1,230 currently
by math 13y ago
"Most recently for example, the price has gone from $260 per troy ounce in 2001, to peak at $1,921.15 in September 2011, before falling back to $1,230 currently. That is hardly the behaviour of a stable store of value."
There are many who believe gold is somewhat of a proxy to the probability that at some point there will be complete lack of faith in fiat currencies (combined with the belief that it will be an acceptable substitute in such an eventuality). If that is the case, the price volatility of gold has in fact a lot to say about the viability of fiat currencies as a stable store of value.
- nhaehnle 13y agoCorrection: The price volatility of gold has a lot to say about contemporary belief in the stability of fiat currencies.
- CmdrKrool 13y agoYeah, that statement suffers from an unquestioned assumption that dollars are the definitive, correct measure of value. It takes two to make a currency pair and if you were to look through the lens the other way it would seem like the dollar that is wildly swinging about in value, not gold. I like the word 'value' as a signifier of what a person or people desire and ascribe worth to; both gold and fiat currencies attempt to measure this, and neither is perfect. I wish people would be more dilligent at keeping these concepts seperate, but y'know, rhetoric. (See also the idea that GDP - which of course exists completely in fiat currency terms as a gross numerical figure - has its flaws as a measure of what humans actually value: http://www.globalexchange.org/resources/econ101/gdp http://www.globalexchange.org/resources/econ101/gdp )