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Currency (slrpnk.net)
submitted 9 months ago by to c/lemmyshitpost@lemmy.world
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[–] 27 points 9 months ago (11 children)

Why do people assume gold has intrinsic value? I just saw today they were freaking out about how much gold is fluctuating, it is just as imaginary as the dollar.

Technically the Big Mac does provide some form of intrinsic value in the form of food for the homless. but for the average person it would actually give them more value to take the big mac away so it has sorta a negative value, negative intrinsic value, I think I just invented that.

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  • [–] 8 points 9 months ago (5 children)

    Even so, in a scenario where all the currencies fall apart, Gold and Silver are very probable to become the basis of wealth.
    Nowadays, stuff like SiIicon and Copper are pretty high value (and similarly, Germanium), but they really depend a lot upon hard to measure purity which goes with high-technology.
    So Gold and Silver, which are easier to determine with lower technology (unless someone uses high-technology to spoof them) and also easier to make into useful products, will tend to hold intrinsic value.

    Value of iron and others, break down due to abundance, while steel depends upon technology and expertise.

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  • [–] 3 points 9 months ago (4 children)

    Also because gold and silver are what people will mentally default to. Even if you develop a quick, easy, and free test to determine the purity of cobalt or neodymium and demonstrate how they're more functionally valuable, people will still default to trading au and ag to buy the amount of those metals they need. Copper would be next.

    So why gold? Because everyone knows that enough people will trade for it, in the same way you know your landlord, grocer, and bar will all take your country's currency, and that's why you accept it in exchange for your labor

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  • [–] 1 point 9 months ago (3 children)

    Yeah, and that's why crypto is not catching up well.
    Kind of a chicken and egg thing.

    But in case of Gold and Silver, there had to be some initial driving factor for when it was first popularised (before people just started mentally defaulting to it).
    Even though archaeology suggests that there were some civilisations did use notational currency in times before the relatively modern, well known history, enough of them did go with Gold. And since this was during the time when long distance trade was way slower, I won't consider the case of some single power influencing everyone else without any other driving force behind Gold itself.

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  • [+] 3 points 9 months ago (1 child)
    [deleted]
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  • [–] 1 point 9 months ago* (last edited 9 months ago)

    Yep, you got it.

    Gold and silver originally became commonplace as money, as currency, because they are excellent material to make coins out of.

    You can carry bits or coins of gold and silver on your person, and you can denominate them fairly easily, you can store them and they won't corrode, and its not that hard to weigh them or melt them down.

    Compare that to trying to haul around a backpack or trailer full of bigmacs.

    Yeah, they're pumped full of preservatives, but they won't last anywhere near as long as a non reactive metal.

    Nowadays... well, gold and silver are massively important components in computer technology.

    So they've got the historical basis as money, and the commodity basis of having a significant amount of vital industy dependant on them.

    Bitcoin people used to argue that bitcoin would be a superior currency to all other currencies for a myriad of reasons... but you will always need some kind of computer thing that is either made out of or at some stage of industrial production involves gold/silver/other metals to even be able to transact with bitcoin.

    In a modern, capitalist, international fiat currency context, you also can't escape some kind of supply/demand based on use case dynamic for currencies.

    Oh, your economy is imploding due to a debt/bond/stock/trade balance crisis?

    Less ongoing demand for holding your wealth in that economy's currency, even if it is in bonds that pay interest or stocks that are nominally appreciating.

    https://en.wikipedia.org/wiki/Triffin_dilemma

    We are currently basically reverting to a pre Breton Woods international monetary system as the USD implodes, central banks everywhere are hoarding and repatriating gold as the de facto international exchange mechanism, as geopolitical monetary turmoil rises.

    https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart

    So basically, if at the beginning of 2024, you had $100k in the SP500, you would have ~$146k right now.

    If you had $100k of gold at the beginning of 2024... you would have ~$275k right now.

    Thats 1.46x vs 2.75x.

    That's gold outperforming the SP500 by 88%, in just over two years.

    That is a dying economy and currency.

    Gold went from about $2000/oz in early 2024 to about $5500/oz at time of me writing this.

    I think it was like a week ago that Goldman Sachs or somebody said gold might hit $5400 by the end of the year.

    https://www.kitco.com/news/article/2026-01-22/goldman-sachs-raises-2026-gold-price-target-5400oz-private-sector-joins

    Yep there it is.

    So uh, we did a year in a week.

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  • [–] 3 points 9 months ago

    I think the fact that they're pretty, nonreactive, rare, and were available very early is huge here. Gold is just there sometimes, little flakes and beads washed to rhe surface. It's one of the only metals you find non metallurgical cultures using. From there it became valuable for jewelry and ritual objects because of its rarity and appearance, and once you have something durable, reworkable, and more desired than possessed it becomes a really easy thing to trade, especially when cross culturally valued.

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  • [–] 4 points 9 months ago (1 child)

    The word "fluctuating" implies the price of gold has been going up and down. That is not what has happened since the Commander-In-Thief took office.

    Market price of one ounce of gold over the last five years:

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  • [–] 0 points 9 months ago

    That's a zoom out of 5 years Gold prices don’t move in a straight line. On a day‑to‑day and week‑to‑week basis, there are ups and downs - it zigzags it is absolutely fluctuating but the bigger problem is the sharp incline which suggests it is in a bubble.

    And none of any of that has anything to do with anything I said.

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  • [–] 2 points 9 months ago (2 children)

    Gold is nothing but an uncertainty indicator proxy, if gold price goes up, people are unsure in the market and future returns and thus buy gold, if the price is low the market and economy feels stable and people don't buy gold

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  • [–] 1 point 9 months ago (1 child)

    Question for you:

    Is there any gold involved in the process of you typing and posting that comment?

    Could there maybe be, I dunno, gold, literally as a direct component in, or vital to the manufacturing process of ... maybe some kind of computer chip or something?

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