Powell: “Rapid changes are taking place in the global monetary system that may affect the international role of the dollar”
(theconservativetreehouse.com)
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I'm not confused about anything, the concept of value is very clear.
Any object used as money requires a certain combination of properties. Any one property is not enough, it needs to have all of them. Anything that doesn't, such as crypto or paper or seashells or cattle or salt, can have temporary trust-based value but not long-lasting intrinsic value as money.
These properties include:
Rare but not too rare. You need enough for everyone but not enough to pick it off the ground or digitally conjure it out of thin air. Gold fits the bill. Mining it is expensive and hard work and that limitation is physical, not artificial like in crypto.
Easy to work with, such as smelt or smith. Gold fits the bill. Palladium, platinum, rhodium and many other similar expensive metals don't.
Fungible, every piece needs to be the same and interchangeable. Gold fits the bill based on point 3. Diamonds for example don't.
Store of value. It needs to last and not be used up, worn out or tarnished. It needs to be dense in value for easy storage and transportation. Gold can sit in ocean water for 500 years and come out looking like the day it went in. Gold can be caught in a fire and be fully recovered. A handful of gold coins buy a new car even today. Gold fits the bill like nothing else.
Easy to recognize and verify. This is where the "prettiness" and long history of gold comes in. Gold is easy to recognize and fakes are quickly spotted using simple tests. A farmer in rural India knows what gold is and knows its value while the average layperson in the US can't explain what crypto is. Gold fits the bill.
Notice how conductivity or any other industrial application is irrelevant here. In fact, based on point 4, industrial uses are a drawback for use as money as they consume the supply. Money needs to sit still and hold value and there is nothing in the world that does it as well as gold does. Can't eat gold? Can't eat dollars either but you can buy food for gold when paper money turns worthless overnight, see the Serbian civil war. There's a reason government vaults are full of gold while they're telling everyone it's a useless relic and printing paper fiat like there's no tomorrow.
Oh, and I can touch my gold any time I like.
You’re assuming people still see value in gold following the end of the paper money. You named ways it can be used and it’s durability but no reason for why it would retain value to the people. If the dollar collapses (likely the world collapses as well) so what banks will be there to hold the gold? Farmers are going to just take on massive amounts of gold for their food? They can’t turn it into anything so they will just keep massive reserves? We’ve seen currencies collapse before, how much golf was traded by the people during those times?
Mini smelters for everyone! 😂
"not long-lasting intrinsic value as money."
All of the materials you listed in the preceding sentence were used or are still being used, as money (or currency). "Money" is merely a physical medium with perceived value used to conduct transactions. What you should have said was, some materials are better suited to be used as money than other materials, because that's what you continue on to argue.
The 5 properties you listed are all reasonable attributes that some would expect to look for to trust that material as a form of currency. However, some of your assertions and assumptions are not exactly on par. First, you assume that "gold" is rare. Is it? Humans keep finding it, despite all these years of mining. If you truly wanted to keep it rare and stop the value from fluctuating, mining should cease, or be banned, right? You think that mining crypto is easy and cheap? You must really not understand much about the crypto mining process. Easy to work with? Crypto doesn't even require smelting or smithing, making it far easier to "work with" than physical metals (might want to rethink this property as being a good attribute). Fungible? Quite in the contrary... sound money should be non-fungible, as in, not easy to reproduce or alter its nature, or copy (counterfeit). You should really do some more research on blockchain technology. Actually, not even going to hit on the last two pounts, as it's evident you don't understand much about digital currency (or "crypto"). Just here peddling... https://youtu.be/sr0gNJ090JA
"There's a reason government vaults are full of gold..."
They are? How do you know? You seen it? Touched it? Bit into it? You just THINK it's there. You BELIEVE it's there.
https://youtu.be/DZqy4RdfGDE
"printing paper fiat like there's no tomorrow"
Yes. This is a massive problem and the ultimate cause behind inflation... hits on that issue of fungibleness and reproducibility.
"Oh, and I can touch my gold any time I like"
And I can touch my dick any time I like... doesn't mean that anyone else is also going to want to touch it as a means of transaction for goods and services 😜
You're still missing the point of this entire thought exercise. What is money, actually? It's what people collectively decide it is. If 70% of the world woke up tomorrow and decided that our ancestors were idiots for using shiny metal objects as currency, just like using seashells, beans, sticks or tulips were eventually declared stupid forms of currency, then what of your gold and silver? The point is that there's something far, far more essential when it comes to currency than the physical nature or attributes of the proposed material.
Regardless of the physical object, the value of all money, all currency, is dependent on psychology. The mere idea behind crypto is currently up-ending the long established accepted views towards currency, financial institutions and monetary policies. And that's why it poses such a threat to those in control of it all, and who have been for the all of history. Don't take this as financial advice. You clearly love your metals because "they've always been used". Not saying that's not a good reason to trust metals. But it's not a great reason to doubt digital currency, which has already taken over the developed world for the past 10-15 years. "Crypto" or rather the blockchain tech behind it, is just an essential security upgrade in the evolution of digital currency. It's not going to be stopped.