PKT_VOL
Veni, Vidi, Vici
- Joined
- Jun 12, 2009
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What is the nature of gold?
Such a question might seem intuitively obvious. However, the more I think about this question the more perplexed I am. Maybe it just my philosophical mind.
I just finished watching a documentary that exposed the Federal Reserve and our fiat money system. It basically described our monetary system as one gigantic ponzi scheme. I don't disagree with this notion and it is not the subject of this thread.
I have studied monetary policy in the past, seen documentaries, and read Ron Paul's book End the Fed. The one thing they are crystal clear about is the difference between money and currency. Basically that gold, silver, and certain other commodities are "money" while the dollar, euro, etc. is "currency". The thought process behind this is that "money" has "intrinsic" value and ought to be the base of any monetary policy as it was during the Bretton Woods agreement.
This brings me to the question which I have pondered (quite unsuccessfully) for many years; what exactly gives gold its intrinsic value? It has been almost universally accepted since the beginning of human civilization that gold has intrinsic value.
I can understand in the old days that it was rare, durable, and could easily be made into jewelry and other things. In current culture, in places like India, gold is almost considered divine. So I can understand the intrinsic value there.
To me, maybe this is due to my philosophical mind or background in science or both, gold is merely another element with only a handful of useful properties. It is durable because it has a very low reactivity. It is shiny but then so are other metals. It does have a unique color. But outside of that, I am not really sure how it is intrinsically valuable. In fact, the more I think about it, the more I think gold is a bigger sham than fiat money.
What are your thoughts? Why is gold valued so in our society? Does it make sense to you?
I'll up the floor for your thoughts.
Such a question might seem intuitively obvious. However, the more I think about this question the more perplexed I am. Maybe it just my philosophical mind.
I just finished watching a documentary that exposed the Federal Reserve and our fiat money system. It basically described our monetary system as one gigantic ponzi scheme. I don't disagree with this notion and it is not the subject of this thread.
I have studied monetary policy in the past, seen documentaries, and read Ron Paul's book End the Fed. The one thing they are crystal clear about is the difference between money and currency. Basically that gold, silver, and certain other commodities are "money" while the dollar, euro, etc. is "currency". The thought process behind this is that "money" has "intrinsic" value and ought to be the base of any monetary policy as it was during the Bretton Woods agreement.
This brings me to the question which I have pondered (quite unsuccessfully) for many years; what exactly gives gold its intrinsic value? It has been almost universally accepted since the beginning of human civilization that gold has intrinsic value.
I can understand in the old days that it was rare, durable, and could easily be made into jewelry and other things. In current culture, in places like India, gold is almost considered divine. So I can understand the intrinsic value there.
To me, maybe this is due to my philosophical mind or background in science or both, gold is merely another element with only a handful of useful properties. It is durable because it has a very low reactivity. It is shiny but then so are other metals. It does have a unique color. But outside of that, I am not really sure how it is intrinsically valuable. In fact, the more I think about it, the more I think gold is a bigger sham than fiat money.
What are your thoughts? Why is gold valued so in our society? Does it make sense to you?
I'll up the floor for your thoughts.