Homestead mailing list

[Clansgian AT wmconnect.com]

> Cay: >No government in the world currently uses gold to back their currency.
> 

Immaterial.  Governments back currency and gold is "valued" between your two 
free independent traders based on established and enforced currencies.  Why 
is 
gold right now suddenly more valuable than it was a year ago?  Is there less 
gold in the world?  No just the opposite, there is more gold held on 
speculation now than ever before.  It appears to be more valuable only 
because monetary 
policies have made the fiat currency less valuable.  The "value" of gold is 
inexorably intertwined with the value of government backed currency.

The paradigm offered by the goldniks is that in an eschatological hard time 
they would be able to use the gold monetarily to obtain the goods they need 
to 
survive.  Besides a few stories of plunder and bribery as during the Nazi 
era, 
are there any examples or paradigms to point to where people with a cache of 
gold were able to sustain themselves for five years or more using that gold 
in 
absence of a government backed monetary system.

Bob, in another post of this thread, talks about showing up at a homestead 
wanting to trade a gold coin for some bread.  Will that be a deal?  Maybe or 
maybe not.  Even if it is, the bearer of gold is at a distinct disadvantage.  
In 
hard times the hardscrabble family might join in the speculation and spare a 
loaf of bread for the prospects of much greater wealth in the future.  So 
maybe 
five or six one ounce coins for a loaf of bread.

That is:

Cay:>With gold the value is the price that another man is willing to pay 
using another medium of exchange (currency, rice, chicken, whatever) 
regardless of 
the concept of "intrinsic value

In other words, gold is a gamble.  Rice, chickens, and rum are NOT gambles.  
Good times or bad, inflation or deflation, monetary system in place or not, 
the rice will sustain you.  The gold may be worth a ton of rice or else it 
might 
not be worth a cup of it.  Your above comment points out the major 
charateristic of gold that I would emphasize:  Gold ONLY has value when you 
can get two 
people to agree it has value.  Rice has value whether someone agrees to it or 
not.

Cay:>But the rock just sitting there has no intrinsic value,

That's a red herring in the discussion.  Gold in your lock box in the attic 
has no value either so long as it is just sitting there.


James