John tells Joe “you don’t have anything I need to trade, see you next time”
Joe looks for someone who is in need of his services, trades it for meat.
Joe now has something John needs/wants.
Gold is only useful if what you want to trade is encumbered. So you transfer the ‘value’ into a gold rock … but you could’ve just as easily use shells, or peppercorns, or merchant notes, or fiat. But first you do need an agreement between parties on the proper value of gold, so you need a comparison, and it needs to be backed by some form of trust.
If the value is relative than gold ceases to be ‘money’, it’s just another pretty thing to barter with.
That isn't true because all of those things break down or diminish over time. Gold doesn't. Gold being what it is has intrinsic value itself like the vegetables, or the furniture. Or the most valuable thing of all, your time.
You are arguing that currency is money and it isn't. Those things you list may be usable as a currency, but they are NOT money.
Everything has intrinsic value, that is true. The crux is that the specific intrinsic value is recognize by everyone and is agreed upon as a stable form of money, of exchange.
I’m saying what you deem your 5 bundles of beet root is worth, is not the same for me or anyone else. Same with gold if we’re thrown into a barter economy.
As of today, the value of gold is based off the USD pair. So now we have a floor frame of reference around the world.
If economy goes to shit, and we’re thrown back to the barter economy, gold is only worth what each party agrees it is.
The worth of the USD today is based on barrels of oil, aka the ‘petro-dollar’.
"gold is only worth what each party agrees it is."
Oh absolutely I agree with you there and really we should be arguing the merits of a silver and not so much gold. During the depression an ounce of gold could buy a city block just about.
The value will always be determined by the parties in the transaction and of course we'll never know what that value would be until a scenario like that would play out. Let's hope it doesn't
John tells Joe “you don’t have anything I need to trade, see you next time”
Joe looks for someone who is in need of his services, trades it for meat.
Joe now has something John needs/wants.
Gold is only useful if what you want to trade is encumbered. So you transfer the ‘value’ into a gold rock … but you could’ve just as easily use shells, or peppercorns, or merchant notes, or fiat. But first you do need an agreement between parties on the proper value of gold, so you need a comparison, and it needs to be backed by some form of trust.
If the value is relative than gold ceases to be ‘money’, it’s just another pretty thing to barter with.
That isn't true because all of those things break down or diminish over time. Gold doesn't. Gold being what it is has intrinsic value itself like the vegetables, or the furniture. Or the most valuable thing of all, your time.
You are arguing that currency is money and it isn't. Those things you list may be usable as a currency, but they are NOT money.
Everything has intrinsic value, that is true. The crux is that the specific intrinsic value is recognize by everyone and is agreed upon as a stable form of money, of exchange.
I’m saying what you deem your 5 bundles of beet root is worth, is not the same for me or anyone else. Same with gold if we’re thrown into a barter economy.
As of today, the value of gold is based off the USD pair. So now we have a floor frame of reference around the world.
If economy goes to shit, and we’re thrown back to the barter economy, gold is only worth what each party agrees it is.
The worth of the USD today is based on barrels of oil, aka the ‘petro-dollar’.
"gold is only worth what each party agrees it is."
Oh absolutely I agree with you there and really we should be arguing the merits of a silver and not so much gold. During the depression an ounce of gold could buy a city block just about.
The value will always be determined by the parties in the transaction and of course we'll never know what that value would be until a scenario like that would play out. Let's hope it doesn't