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goose756's avatar

If our currency lost its value for whatever reason, would you find gold valuable?

Asked by goose756 (655points) July 20th, 2012

My girlfriend and I had a brief conversation about this topic and we have differing opinions.

She thinks gold has always and will always hold its value.

I think because currency is so important to us today, I feel like people would be more interested in things that are of use to them. Without currency I feel like gold is nothing more than a rock.

Your thoughts?

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22 Answers

ETpro's avatar

That equation actually depends on nearly the same things our faux currency’s value hinges on—how much others thinks the metal is worth. Gold probably has more intrinsic value than paper. It’s useful in manufacturing electronics and makes great jewelry. But then, paper is a better insulator, a better material to write on, and far better to burn on a cold winter’s night when you would freeze without a fire.

And gold would be a truly lousy medium of exchange in a world like today’s. If a cashier owed you a nickle back, how big a piece of gold would that be? Imagine the costs of having to constantly shuffle millions of metric tons of gold from here to Timbuktu and back to reconcile global trade transactions.

Truth told, if you were forced to live alone on a desert island for a year, you’d trade all the world’s gold and its paper money for a years worth of potable water, MREs and a first-aid pack. So you tell me what has real value. Life, and those things that support it come first in my book.

zenvelo's avatar

Gold does not hold it’s value, just ask those who paid $750 to $800 per ounce back in 1980, or the people that paid close to $1900 per ounce last December.

But gold is a decent store of value, but a lousy currency because it is inconvenient and there is a limited amount so there is not enough available to drive an economy.

Cruiser's avatar

Lead and brass. Ammo will be the currency of TEOTWAWKI.

Nullo's avatar

That would depend on the reason why the currency lost its value. In @Cruiser‘s TEOTWAWKI scenario, fresh produce is worth more to a person than an equivalent mass of gold. On its own, in a very suddenly un-industiralized society, gold is pretty useless, and so without value.

The thing about gold is that there is a small, limited quantity of the stuff. Works great when you have actual commerce going on, but not otherwise.

athenasgriffin's avatar

If money globally lost its value today, food and water would be worth much more than gold as the world attempted to reconcile itself in a suddenly barter economy.

cazzie's avatar

If money lost it’s value, the only system that would suffice for trading would be bartering.

*edit… Jinx, you owe me a cola.

athenasgriffin's avatar

@cazzie Double jinx, you didn’t count to ten! :P

bkcunningham's avatar

$1581. an ounce. I say that is pretty valuable. Gold was valuable before paper currency and will be valuable as the US dollar continues to lose its value.

cazzie's avatar

but you can’t eat it and you can warm yourself with it and you can’t run a vehicle or a generator with it. ...

Nullo's avatar

@cazzie At the same time, you can’t haul around hundreds of dollars in food, clothes, and fuel, either. Which is why we don’t have more barter economies in the industrialized world. And have you ever tried getting change for a camel? It’s not pretty.

Nullo's avatar

@zenvelo I think the problem is that you’re evaluating gold in terms of dollars, instead of in terms of gold. An ounce of gold is worth an ounce of gold, rather like how a $100 bill is worth $100. In other words, gold holds its value if you treat it like a currency. AFAIK the logic is that there is a fixed amount of gold in the world, setting a limit on just how much currency you can have in circulation. Tying the USD to gold would effectively kill inflation, which, I suspect, is the point of the gold exercise.

cazzie's avatar

@Nullo why do you keep saying ‘hauling around hundreds of dollars in food, clothes…’ etc. I don’t need to haul around ‘hundreds of dollars’, I need to have enough stuff to exchange for stuff I need or be able to provide a service.

And gold won’t be worth X amount of dollars, because dollars will be gone. It collapsed. It ceases to be. Pining for the fjords. Gold can’t be worth something that is no longer.

Haleth's avatar

It seems like there are lots of late-night infomercials for gold and collector’s coins lately. If it was so valuable, they wouldn’t have to advertise it in the lowest-rent time slot.

If there was no more money, I guess I’d fall back on goods and services. Gold is just currency; it doesn’t have intrinsic value on its own.

Nullo's avatar

@cazzie I only said it once.
You would need a variety of trade goods on your person or in storage (with deeds of ownership on your person) in case the vendors don’t want the first thing you offer them. Money, universally acceptable, serves as a medium of exchange.

I was not talking about gold-based dollars in the absence of dollars, thank you.

mattbrowne's avatar

Buying gold is speculation. You might also lose money.

cazzie's avatar

@Nullo I should have specified, the second part of my comment was not specifically aimed at you. @bkcunningham talked about a dollar value of gold as did a few others. Just trying to outline the point that if there is no dollar, there will be no dollar value of the gold, because there will be no exchanging it for dollars anymore, so I was just reiterating that point; a point that you were making yourself as well.

Also, the ‘keep saying’ I translated that wrong in my head, I think I meant to say, ‘insist’ or some such word… ‘insist’ isn’t even the right word, My English is failing me.

MadMadMax's avatar

Libertarian sites always talk of gold and how our currency is worth nothing.

Now it’s Bitcoins

I’m sticking with greenbacks

SecondHandStoke's avatar

What do you mean “if”?

The government continues to spend like there’s no tomorrow and simply prints more money to “cover” it.

As this practice continues the US Dollar becomes increasingly devalued.

But that’s not the bad news.

Americans completely take for granted that the US Dollar is the World’s currency standard.

There is no possible way the Dollar can keep this status with the way we try to print our debt down.

Not if, but when the Dollar loses this position inflation will skyrocket.

cazzie's avatar

@SecondHandStoke the supply of printed money is highly regulated and by this comment you show you are completely ignorant of how the US treasury system works.

ETpro's avatar

@cazzie Yes, those in @SecondHandStoke‘s school of economics have been yelling the sky is falling ever since we abandoned the gold standard on June 3 1933. The howls got far louder when we dropped silver certificates and went to a faux currency like every other developed nation on Earth has back in March of 1964. That sky must be falling inordinately slowly.

Cruiser's avatar

@MadMadMax I am sticking with ammo….12 gauge ammo will trump gold and bitcoins if and when.

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