For gold bugs

Now does anyone really believe that the store of gold in vaults is worth over 2% of all tangible assets everywhere?  Seriously? 

More:

I know the gold bugs will hate this idea – because it harks back to the argument against gold – which is that it has no intrinsic value.

Kill the heretic, kill the heretic!

Me? I\’m in the mining business (ish….very much ish, ish). He\’s right.

6 comments on “For gold bugs

  1. I’m a gold bug, in so far as I believe that gold would form the basis of any sound market based currency. And I also agree with him.

    Nothing could possibly have ‘intrinsic’ value, given that “value” is such a subjective thing. The reason gold has been used as a medium of exchange for so long (and I would anticipate it would continue to do so) is because of it’s scarcity, physical properties etc that enough people attribute subjective value to.

  2. 160,000t is not the store of gold in vaults, its all the gold ever mined. A fair amount (10,000t or so?) has been lost, another huge amount is in jewellery of various forms, electronics, and other industry. Most of this is, with some additional cost and time, recoverable.

  3. The problem with gold standards is that money actually represents the time exchanged in the economy, and has little to do with yellow metal.

    In a deflationary scenario gold is “over-abundant”, and just doesn’t go away, it causes more problems even though it’s a hard to beat inflation beater (unless your government robs all the aztec gold etc.).

  4. Does gold have any value to a man on his last legs, stranded in the middle of a desert without water?

    That gold has no intrinsic value doesn’t mean that the majority of people don’t value it in some subjective way, nor does it weaken the case for it as a medium of exchange.

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