06-01-2017, 11:01 AM
Gold is not 'the money', the basis of prosperity. Reputedly a quarter of the world's gold is in India, a poor country. It's basically the personal savings of people who do not fully trust banks, central to avoid inflation, or retail to avoid fleecing people. Much of it is in women's jewelry, a hedge against widowhood or being cast off by a husband.
Commodity production, whether steel, wheat, or kilowatts of electrical power, is the real wealth. Gold is valuable because it is rare, easy to distinguish from anything else, and hard to fake. Yes, gold has skyrocketed against the dollar, but by much more than have commodity prices. In real terms, petroleum is cheap in contrast to what it was around 1980. The only thing that has approached the appreciation of gold has been prime real estate as in New York, Boston, and San Francisco, and that due to population growth. Of course, there's plenty of cheap real estate in such places as Detroit, Flint, Gary, Youngstown, St. Louis.... Try making a living in such places.
Gold would be a poor medium of exchange now due to its high cost per unit for commodities. At 0.76 ounces per 1000 dollars, it would take 0.00152 ounces of gold to pay for a $2 hamburger at a fast-food place.
Should the economy get bad at producing such basic commodities as metals, wheat, petroleum, or electrical power, then cash will be worthless. The coin of the realm is worth what one can buy with it, which explains why dollars are worthless if they have the word "Zimbabwe" on them.
Commodity production, whether steel, wheat, or kilowatts of electrical power, is the real wealth. Gold is valuable because it is rare, easy to distinguish from anything else, and hard to fake. Yes, gold has skyrocketed against the dollar, but by much more than have commodity prices. In real terms, petroleum is cheap in contrast to what it was around 1980. The only thing that has approached the appreciation of gold has been prime real estate as in New York, Boston, and San Francisco, and that due to population growth. Of course, there's plenty of cheap real estate in such places as Detroit, Flint, Gary, Youngstown, St. Louis.... Try making a living in such places.
Gold would be a poor medium of exchange now due to its high cost per unit for commodities. At 0.76 ounces per 1000 dollars, it would take 0.00152 ounces of gold to pay for a $2 hamburger at a fast-food place.
Should the economy get bad at producing such basic commodities as metals, wheat, petroleum, or electrical power, then cash will be worthless. The coin of the realm is worth what one can buy with it, which explains why dollars are worthless if they have the word "Zimbabwe" on them.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.