Originally Posted by
upside_umop
Like what? Paintings would come to mind...but then paintings are bought to hang on the wall to show off, and admire the extreme skill some artists have. Gold is put away in a vault and never looked at again 'its just there.'
The paper you talk about is a promissory note of exchange. It is perfectly logical, as it is an efficient means of trade. Much more efficient than say, bartering (i.e. it would be difficult to form a market place where you could do some accounting work for your car to be fixed....but by selling your service and receiving a form of exchange, 'paper notes', you can go and get that car serviced instantly and more efficiently). To use gold instead of paper is EXACTLY the same concept....the only difference is:
-It is costly to produce
-Harder to bend to put in your wallet.
Gold also has the flaw that its supply would be determined by the geological challenges the earth provides us. If you look back a few pages, I posted some facts, one being that we were more in recession than out of it for over 100 years when under the gold standard.
Thats a strange concept, JB. If I were to build a mountain of dirt for the rest of my lifetime, with a digger....would you consider it to have some worth just because it was costly?
Yes, but the fundamentals behind it don't seem to be known by many. A few of us here are just trying to point them out given the same old articles get put up.
I had a look on trademe to see what the types of people were like buying gold and silver. One buyer appeared to have bought all the silver he could get his hands on...I didn't look to far down his previous trades, but the first 10 or so were all silver spoons. Another bought a gun...he was preparing to head for the hills by the looks (waterproof torch was there too).
Heres a wee tip for you: The central bank doesn't necessarily have to have the 'printing presses' on to create money. They can simply debit the cash to the balance sheet...so they don't literally always turn the printing presses on :t_up: Can't get cheaper than that mate.