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[bob ford <bobford79 AT yahoo.com>]

James, This is from a blog responding to a comment about gold not having 
intrinsic value.  I am posting it as a 'devil's advocate" reply to your 
statements only.  I have never been a gold bug, James.  I used to laugh at or 
ignore the wacky ideas of those who were.  I am just re-thinking my position, 
that's all that I am doing.......................................

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It's staggeringly naieve to claim gold has no intrinsic value. It has many 
commercial applications.

It is the only money that has been acceptable for all of recorded history. 
Claiming this is an "irrational belief" is just silly. Please point out one 
other belief system that has survived that time frame. Gold was money before 
Jesus was born.

Gold is divisible and its value to weight ratio is extremely high. You can 
have ten grand of gold in your pocket and not even notice it is there.

The point of gold as a store of value is that it is a store of value. A cow 
is also a store of value, as is a truck load of steel beams.

Keeping a cow in your pocket is difficult. If you want to buy something that 
both parties agree is worth 1/4 of a cow this presents a problem. If you 
wanted to carve off a quarter of the cow and keep the rest of your purchasing 
power for later the cow would probably not co-operate with your scheme and 
unhelpfully die.

Gold gets around this difficulty.

Also if I am a merchant (which I am in real life) I wouldn't want the truck 
load of steel beams. I know people that could use a truck load of steel beams 
but right now they have no projects and no way to pay me. Also I don't want 
to trade steel beams to complete a completely different transaction.

Gold however works for me. I can take a 1/10 ounce coin with complete 
confidence that even in a Mad Max society gold will be accepted for payment. 
This has in fact happened over and over through history. Gold was the 
difference between Auschwitz and three meals a day in the Warsaw ghetto - 
probably the most extreme example of societal break down in the last century.

Attaching value to a series of zeros and ones in a banks computer is more 
irrational than believing in mankinds only long term store of value. Gold has 
been accepted by every ethnic, language, political or religious force the 
world has ever seen. 


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--- On Sun, 12/7/08, Clansgian AT wmconnect.com <Clansgian AT wmconnect.com> wrote:

> From: Clansgian AT wmconnect.com <Clansgian AT wmconnect.com>
> Subject: Re: [Homestead] gold back currency anyone?
> To: homestead AT lists.ibiblio.org
> Date: Sunday, December 7, 2008, 6:52 PM
> > >Many would say that your jug of rum has no
> intrinsic value, unless there 
> > was someone who desired to get drunk, just as the same
> person might desire a 
> > gold ring or necklace.  
> > 
> 
> Yes, Bob, and I call those people .... hmmmm ...er ....
> people without a 
> great deal of critical thinking.  Saying rum has no
> intrinsic value unless you 
> plan to get drunk is as idiotic as saying water has no
> intrinsic value unless you 
> want to avoid dehydration.  Do they understand what the
> word 'intrinsic' 
> means??  To wit:
> 
> If you want a bauble, you can go to the creek and find a
> colorful pebble, a 
> rock.  Your admiration of it is entirely in your head ...
> entirely.  It could 
> be the gold neclace or a pebble on a string.
> 
> But if you want to get drunk, try going to the same creek
> and drink the 
> water.  Not the same .... eh?  It's because there is a
> property of the rum that is 
> different from that of the water, it is characteristic of
> rum, that is, it is 
> intrinsic, doesn't depend on outside influences to be
> true.
> 
> Potatoes have intrinsic worth.  Try going to that same
> creek and eating the 
> rocks.  The potatoes will supply calories, protein, and
> enough vitimin C to 
> keep away the scurvy in the winter.  Does the rock do that?
>  No.  So the potato 
> has intrinsic worth and the rock does not.
> 
> A stack of firewood can raise the temp in my house from
> freezing to 68 
> degrees (what it is now).  Go to the creek and take up the
> sod on the bank.  Can it 
> do the same thing?  No.  The wood has intrinsic worth that
> the sod does not.
> 
> It shows how utterly detached from reality that someone is
> when they equate 
> admiring a gold ring to avoiding starvation.  Under the
> right circumstances 
> that person would trade a bushel basket of gold rings for a
> potato.  But would 
> you, under those same circumstances, trade a bushel basket
> of cabbages for a 
> single potato?  The difference there spells out the nature
> of intrinsic worth vs. 
> imagined worth.
> 
> >> Gold 'has' been used as a medium of
> currency and as a 'store of wealth' 
> > for millenia, but you are right that you can not eat
> the stuff. 
> 
> And you are not entirely correct that it has been thus used
> for millenia.  
> The use of gold comes and goes.  I've had this
> discussion many times before.  
> There were times in history when gold was just about
> worthless.  In most cases 
> in the past, the value of gold was enforced by some
> government or the other and 
> without that it may or may not have any value.
> 
> My example of this is that you are familiar with R.L.
> Stevens story Treasure 
> Island.  There was tons of gold there, but what good did it
> do anyone on the 
> island?  The goal of both the protagonists and the pirates
> was to get the gold 
> back to England where the government enforced a value
> system giving the gold a 
> monetary worth.  Unless you have that enforced system of
> values, the gold is 
> worthless as money.
> 
> Saying that gold has always been a store of wealth is to
> say that people have 
> always harobored the hope that they will be able to hold
> onto their gold 
> through evil times until there is a stable monetary system
> that will enforce the 
> gold's value.  During bad times the self same similar
> hope in others is the 
> only thing that gives gold a trade value.
> 
> James
> 
> 
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