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> And in a crisis likely won't be useful for buying things that do. In a crisis, the value of gold holds more than that of the Papiermark, or even the US dolla
by regularization 1y ago
> And in a crisis likely won't be useful for buying things that do.
In a crisis, the value of gold holds more than that of the Papiermark, or even the US dollar - I can buy only one egg for the two I could have bought five years ago. Gold is uniform, portable, divisible and durable - useful attributes in a crisis, and worth more than Confederate dollars.
Gold is useful - for filling teeth, for electronic coating. It's value has stayed normal for thousands of years - although in times of inflation or crisis it might become a little overvalued temporarily as people flee to its safety. One could switch to other precious metals like silver, but this happens to them too.
- Nifty3929 1y agoIf you think the value of gold has remained stable, that's only because you're only measuring it during times and places of stability. See how much bread your ounce of gold buys you when there's no bread to buy. In a real crisis, the value of gold drops to near zero, just like fiat money does. No hungry person cares about electronic coating. The best you can say is that gold is tangible, portable and universal. So you can bring it with you (often in the form of jewelry) as you flee, and it will likely return to value in some other time/place.
- tock 1y agoGold is a safe haven against currency risk thats all.
- qwytw 1y agoAnd yet it wasn't a very good asset to hold between 1980 and 2000, despite quite high inflation during the period. It's nominal value barely moved while real value of USD halved.
- tock 1y agoGold isn't really held because central banks expect its value to go up always. It's held because its safe from other risks like assets being frozen, the currency completely collapsing to 0, etc. Gold has managed to always hold "some value" over centuries. It's a hedge.
- qwytw 1y ago> It's value has stayed normal for thousands of years - although in times of inflation or crisis it might become a little overvalued temporarily as people flee to its safety That hasn't been the case after the Dollar and all other currencies were unpegged from gold. Adjusted by inflation it has been a very volatile asset in the last 50 years: https://upload.wikimedia.org/wikipedia/commons/e/e3/Gold_price_in_USD.png https://upload.wikimedia.org/wikipedia/commons/e/e3/Gold_pri...