Question

What backs up the value of gold?

Our paper currency is valued based on speculation. Libertarians always ask what 'backs up' a piece of paper other than its speculated value. However the same paradox applies to gold. The value of each is speculated upon and is accepted as a means of exchange of goods and services based upon its perceived value.

So what backs up the value of gold that also does not back up the value of our paper currency?

Answers

_ Page 1

Exactly. Gold has an arbitrary value which we place on it. So does fiat currency.

#1

My prediction is that we are about to see something funny happen to gold. In January, Russia was busted by the IMF for selling 3 times more gold than they even had. March / April ,India and China have a gold war bidding for a sell off by the world bank . May, the contractor authorized by the US treasurey to deliver gold to china is busted for sending gold plated titanium bars. Currently , US is having a frenzy of gold being sold to private investors. There are alot of people holding certificates for gold that doesn't exist. I'm no prophet, but watch the gold market. There is something funky about to happen

#2

You are partially correct.

Gold has value because we attribute value to it.

People have attributed value to gold for centuries and don't appear to be changing that.

No govt. impacts on its value.

It now has inherent value.

Paper money has value because a govt. back it up.

The paper money is only as valuable as the govt. backing it is stable and fiscally fit.

We have seen over the centuries that paper money comes and goes with nations and their fiscal soundness. (got a sheckel on you?)

Gold fluctuates but stays.

#3

They are not the same. Paper money can be manufactured in an essentially endless supply. The supply of gold is finite.

#4

Anything can be used as a currency: beans, salt, gold, silver, minerals, rocks, etc.

I don't necessarily bash the U.S dollar. I believe you are confused on what it is a lot of us are saying. We want to end the Fed, and we want to do so for many reasons.

The Fed tampers with interest rates. Unless you are a socialist, I believe you agree that government setting prices isn't a good thing. Why should this be different? An interest rate is the price of money. The Fed should not be in this business.

What pisses me off about the Fed is that it can directly manipulate the amount of money with a printing press. With gold or some other commodity you can't. So while the same quantity/value ratio exists with gold and any other currency, tangible currencies have a fixed supply. They force a government to be prudent with its money. No waste, no huge stimuli without going over the budget, no huge debt that is thrown onto future generations, no unnecessary war, no more lost liberty.

I would support the dollar if it had a fixed supply and if there was no Federal Reserve to screw things up.

#5

What Tina said.

#6

There is only so much gold in the world, therefore the supply of it is limited. Paper currency has no limit, the government can just keep printing more.

Gold it also a relatively stable metal, it doesn't react with other elements very often. It also isn't radioactive, so it won't decay over time like other metals.

#7

We have more gold than we need. The only demand is fools who think gold with be there to save their wealth. Well you can't eat it, drink it, it doesn't provide shelter, can't wear it.. etc Gold seems kind of worthless to me. Now if you had a gun then... Do ya feel me..

#8