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wittynamehere -> RE: New gold-backed currency could be in use next month – Daily Reckoning (7/22/2010 3:11:13 PM)
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ORIGINAL: willbeurdaddy
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ORIGINAL: wittynamehere
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ORIGINAL: rulemylife
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ORIGINAL: Elisabella
He's wrong then. Gold has a number of properties that make it valuable - it doesn't rust, it conducts electricity brilliantly, it's malleable. Gold is used in so much tech these days the only way gold could possibly be worth nothing is if we somehow regressed to rocks and spears.
Gold has as many properties that make it valuable as any of a number of other materials that we don't trade as currency.
Myself, I think aluminum is going to be the next big thing.
Hoard aluminum.
Save your soft drink and beer cans and you'll be a multi-millionaire in no time.
Elisabella is right.
Gold and silver have intrinsic value because there is a need for them. Both are extensively used in industry, although silver has a FAR larger share in that regard. Most of the above ground silver has been used up in the past 100 years, and mining isn't even producing enough to meet demand anymore. Everything electronic requires silver, and now solar panels and medicines are using it, with new uses being found weekly. If you think these metals only have value because we declare them to, you are sorely mistaken. Please just google "silver uses" and go from there. It sounds like a lot of people have bought into the lie that paper rectangles actually can replace real money. They only represent value, as opposed to having intrinsic value like the PMs do.
"Value" is the word given to something that we desire because it's useful. The more useful, the more valuable. The more common and easy to get something is, the less value it has. Gold is somewhat useful and very rare, which gives it a value currently of about $1200 USD per ounce. Silver is incredibly useful and moderately rare, which gives it a value currently of about $18 USD per ounce.
A high % of the Earth's crust is aluminum. It's very useful, but not rare at all.
Gold and silver have intrinsic value because there is a need for them
What happens if there is no longer a need for them?
That's never happened in the 5000 years of recorded history, but we're in some pretty strange times, so there's always that chance. I don't see it happening for silver, because it's simply irreplaceable in so many applications. For some, copper, gold, or another metal from that group could be used. For others, the product, service, or technology would just simply have to end. Why are mirrors so shiny? That's a thin layer of silver. Renewable energy like solar power relies on silver. It seems like we're moving toward solar power rather than away from it, but I suppose we could abandon it completely. But no, I don't see all the uses for silver disappearing, unless humanity goes back to living without energy, medicine, or technology. Gold has some degree of irreplaceability, but not nearly what silver has. Gold is simply rarer (below ground, anyway), and has a bigger monetary vector than silver because it has always been known as the money metal.
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