In praise of gold

[David Honig]

At 07:03 PM 11/19/01 -0800, georgemw at speakeasy.net wrote:
>On 19 Nov 2001, at 17:40, Tim May wrote:
>
>> On Monday, November 19, 2001, at 05:03 PM, David Honig wrote:
>> >
>> > Yes, but what this thread has ignored is that gold (and other
>> > densely precious things) were valued *in and of themselves* and so
>> > using them as money was not symbolic.  You traded your goat
>> > for a goat's worth of gold; if trust evaporated overnight
>> > the gold is still worth something.
>> 
>> Not really. It was still a matter of belief that that gold coin, or gold 
>> nugget, would be worth something.
>> 
>> "In and of itself" is a very vague and intangible concept.
>> 
>> --Tim May
>
>I understand your point, you can't eat gold, it won't keep you
>warm and dry in a storm, it really is mostly only good for
>you in that other people will also give you stuff for it BUT
>I think the other side is pretty clear also.  Gold isn't like,
>say, the good will of the king, which becomes wortheless as soon
>as there's a new king. I suspect that it never ocurred to most people
>during gold standard days that gold could in principle become
>wothless (although alchemists understood perfectly well that
>being able to turn lead into gold is only the key to riches if
>you alone posess the secret).
>
>Anyway, there are very good reasons why gold is better than
>anything else as a basis of currency.

BTW, I wasn't arguing it is "better" nowadays; I'd think the kilowatt-hour
(aka joules) would be more useful today.  I was thinking about
how the use of inert metals (etc) arose historically.  At first
the 'trust' was minimal and it was a 1:1 trade for the more portable
gold.

>2) Gold does not rust or decay.  Again, very important if you
>have to keep reserves.

Also why it was available to cavemen, and why it was shiny,
which was attractive.

>3) Gold is uniform.  Diamonds are all different, oil comes in
>a plethora of types and grades.  Tobacco was used as money
>in the early days of the american colonies, with the (easily 
>predictable) result that people smokes the good stuff and used the
>crappiest stuff they could find to pay their debts. Nothing
>could be purer than pure gold.

Isotopically pure gold :-) 

Watts are 'uniform'; so is an N% solution of ethanol (if you
want to put your joules in your car, etc.)

>4) Gold is elemental.  It's much more plausible that somebody will
>come up with an economic way to synthesize, say, diamonds than 
>gold. 
>
>5) Gold makes women sleep with you.  I don't know why they
>like it, but they do.

They sleep with you because of your large cattle herd only they
have accepted abstracted value and settle for gold or stocks...