What is the "inherent" value of gold?

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Bungeebones

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If gold did have such a thing wouldn't that percentage of it's market price that was indeed the inherent portion be readily distinguishable from the portion of it's value as a currency, hedge against inflation etc?


So how much is it? $5 FRN? $50 FRN? $500? FRN? Should be obvious to everyone shouldn't it? Gold experts should have an answer ready and in which there would be wide agreement upon. If so, how did they arrive at it?
 
Based on the exchange markets it's around $1,250 per ounce of gold, but in general it depends.

For example, copper is about 20 cents per ounce. One use of copper is to make electrical wiring. If you want to know what the inherent value of gold is based on how much someone might be willing to pay for gold to make electrical wiring, then it's 20 cents per ounce.

I did a calculation and figured that the value of a bitcoin in dollars, based on equating the ratio of gold scarcity and bitcoin scarcity, is about $550,000 per bitcoin.

Assuming gold is $1,250 per ounce, I suppose the inherent value of gold per ounce in bitcoins, based on a comparison of their respective levels of scarcity, is about 0.00227273 of a bitcoin.
 
erowe1 said:
Gold has no inherent value at all. Just like fiat currency, it's value is completely dependent on the subjective imputation of value to it by people.
http://www.fee.org/the_freeman/detail/the-fallacy-of-intrinsic-value#axzz2saKxZb7X
Click to expand...


You could say that about everything, including air and water. If everyone became suicidal, they may not place any value on being able to breathe or drink. Gold has practical uses and uses based on its unique properties, such as jewelry, and thousands of years of history of being desired, so the likelihood of its value dropping to even near nothing is very slim.
 
Tod said:
You could say that about everything, including air and water. If everyone became suicidal, they may not place any value on being able to breathe or drink. Gold has practical uses and uses based on its unique properties, such as jewelry, and thousands of years of history of being desired, so the likelihood of its value dropping to even near nothing is very slim.
Click to expand...

That's exactly right. Value is subjective. I don't know of any economists who disagree. Utility informs subjective value-it does not create objective value.
 
It makes dependable, low resistance electrical connections that are resistant to corrosion and it's very easy to solder to.
 
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Neil Desmond said:
Wow, that's from way back in 1969? Impressive.
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I just googled something like "Gary North gold inherent value." I've read more recent things he's written on it. And I'm sure I could have picked another author besides North. But that was the one that caught my eye in the results.
 
erowe1 said:
I just googled something like "Gary North gold inherent value." I've read more recent things he's written on it. And I'm sure I could have picked another author besides North. But that was the one that caught my eye in the results.
Click to expand...

Because of one of Peter Schiff's most recent videos where he's talking about bitcoin and what it is, I guess I was sort of under the impression that the notion of inherent value was something that wasn't questioned, well understood, or that there was a lack of awareness of what that means. I find it interesting that actually this is an issue that has been thought of and addressed decades ago.
 
Neil Desmond said:
Based on the exchange markets it's around $1,250 per ounce of gold, but in general it depends.

For example, copper is about 20 cents per ounce. One use of copper is to make electrical wiring. If you want to know what the inherent value of gold is based on how much someone might be willing to pay for gold to make electrical wiring, then it's 20 cents per ounce.

I did a calculation and figured that the value of a bitcoin in dollars, based on equating the ratio of gold scarcity and bitcoin scarcity, is about $550,000 per bitcoin.

Assuming gold is $1,250 per ounce, I suppose the inherent value of gold per ounce in bitcoins, based on a comparison of their respective levels of scarcity, is about 0.00227273 of a bitcoin.
Click to expand...

I was looking for some answers saying something like " gold's inheritent or intrinsic value is X% of it's market value" or something like that. I've heard a lot of people such as Peter Schiff and Jim Rickards and others always harp that gold has this so called intrinsic value and Bitcoin doesn't. So what/how much is it?
 
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Ronin Truth said:
See?
Click to expand...

You mean do I see that marketplace purchasing power protection insurance over hundreds of years is not an inherent property of Gold, using the definition of inherent that you just posted? Yes, I do. That was my point.

Marketplace purchasing power protection insurance over hundreds of years is a property that Gold can only have on account of the decisions of people, without whom Gold would still be Gold.
 
The phrase "inherent value" is an oxymoron - "value" is not (and cannot be) a quality or characteristic that "inheres" in a thing by itself.

The concept of "value" denotes a relationship between things - a subject (the "valuer") and an object (the thing that is "valued").

Thus, "value" is always subjective and extrinsic (and never objective or intrinsic).
 
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