What is the "inherent" value of gold?

[psi2941]

That's not inherent.

then don't use gold

 

[erowe1]

then don't use gold

Why not?

 

[psi2941]

Why not?

if your asking why gold is inherently valuable, you shouldn't be buying/using any gold

 

[eOs]

The inherent value of gold is whatever you decide it is. To me, it's useless, therefore to me, it has no intrinsic value. To put it another way, its value is whatever I can trick you into giving me for it.

 

[heavenlyboy34]

if your asking why gold is inherently valuable, you shouldn't be buying/using any gold

This doesn't follow. By this reasoning, noone should pursue FRNs because they have no inherent value. People buy gold for a number of reasons. As erowe correctly pointed out earlier, gold, when used as a medium of exchange, is fiat. What makes gold money different from paper is that gold can't be printed. Thus it serves as a store of value, which FRNs don't.

 

[heavenlyboy34]

The inherent value of gold is whatever you decide it is. To me, it's useless, therefore to me, it has no intrinsic value. To put it another way, it's value is whatever I can trick you into giving me for it.

IOW, it has no intrinsic value. Correct! You get a gold star.

 

[TheGrinch]

This doesn't follow. By this reasoning, noone should pursue FRNs because they have no inherent value. People buy gold for a number of reasons. As erowe correctly pointed out earlier, gold, when used as a medium of exchange, is fiat. What makes gold money different from paper is that gold can't be printed. Thus it serves as a store of value, which FRNs don't.

If gold is fiat, then all money is fiat. Why then even bother criticizing the true fiat currencies, if we're just going to change the definition of all money to fall under that umbrella definition? Perhaps you should look up what fiat really means.

Of course any "accepted medium of exchange" is going to draw additional value from being one of the rare commodities that enough of society thinks is worthy of being a medium. That doesn't make it fiat, it is a feature of how money happens naturally. You have something with the desirable characteristics to be a convenient means of exchange, one that solves the inherent problems of bartering (and as we know, gold has many characteristics that make it an ideal source of money, such as scarcity, durability, portability when compared to other commodities, etc.).

And finally, I must ask, are there any more noteworthy countries that even use a gold standard anymore? Even if there are, the vast majority aren't buying gold just to sell to them... Yet gold is still considered valuable without being a currency. No matter if you think it should be valuable or not, it undoubtedly holds value on its own.

It's pretty simple how it holds value on it's own: Uses as commodity + costs of production + scarcity + long history of accepted value and desirable characteristics = market value (without even getting into supply/demand curves, though scarcity has an effect on those). Who gives a crap about "intrinsic", when the market has spoken. It's valuable, and not just because people say so. People see value in it without it being sanctioned anymore. That's anti-fiat.

All of those reasons (and that's just scratching the surface) makes calling gold fiat a pretty baseless claim. People who support bitcoin would be wise to shy away from trashing gold, because all it's doing is working to de-legitimatize any alternative currency.

 

[TheGrinch]

I don't mean all that to be overly critical, but I think sometimes people want to forget that theres a way that money is supposed to, and has to work for a free market to be possible.


Theres a reason gold arose naturally to be a accepted medium of exchange, and it was almost completely natural compered to fiat currency.

 

[erowe1]

if your asking why gold is inherently valuable, you shouldn't be buying/using any gold

First of all, I'm not asking that. I'm stating unequivocally that gold definitely has no inherent value.

Second of all, why does that imply that I shouldn't buy or use it?

 

[erowe1]

The inherent value of gold is whatever you decide it is.

If that's what its value is, then that value is by definition not inherent. If it were inherent it wouldn't depend on our decisions.

 

[eOs]

multi-post

 

[eOs]

If that's what its value is, then that value is by definition not inherent. If it were inherent it wouldn't depend on our decisions.

Precisely! The qualifier inherent is the fool's gold of the discussion. It's all entirely subjective, it's just that when these subjective opinions sometimes come to a common agreeability between more than one individual the individuals will then allow the material itself to take on a secondary property it never had to begin with, hence, intrinsic value is born.

 

[helmuth_hubener]

Precisely! The qualifier inherent is the fool's gold of the discussion. It's all entirely subjective, it's just that when these subjective opinions sometimes come to a common agreeability between more than one individual the individuals will then allow the material itself to take on a secondary property it never had to begin with, hence, intrinsic value is born.

Subjective opinions are often based upon objective facts.

Materials do, in fact, have some actual properties, out of which subjective properties such as "value" are born.

 

[Jamesiv1]

The inherent value of gold is that it can be atomized and suspended in the atmosphere where it has the marvelous ability to reflect light from the sun.

So if you have enough of it, you can create a protective 'barrier' around a burnt, dead planet, shielding it from the sun's rays which allows the planet to heal and become healthy again.

 

[heavenlyboy34]

Gold is good and it is its utility as money that defines its inherent value. This should be pretty obvious, and yet I have never seen or heard anyone indicate such an awareness. That's pretty weak, not to mention scary.

I mentioned this earlier in the thread. (though I find it more accurate to say "inherent utility", as value is everywhere and always subjective. The Austrians get it, as do a number of others.) I agree-it is weak and rather scary that the subject is so misunderstood around here.

 

[heavenlyboy34]

The inherent value of gold is that it can be atomized and suspended in the atmosphere where it has the marvelous ability to reflect light from the sun.

So if you have enough of it, you can create a protective 'barrier' around a burnt, dead planet, shielding it from the sun's rays which allows the planet to heal and become healthy again.

This is utility (the use of gold which is why people subjectively value it), not value in itself.

 

[heavenlyboy34]

Precisely! The qualifier inherent is the fool's gold of the discussion. It's all entirely subjective, it's just that when these subjective opinions sometimes come to a common agreeability between more than one individual the individuals will then allow the material itself to take on a secondary property it never had to begin with, hence, intrinsic value is born.

You were right until there. The value you describe here is subjective-but commonly agreed upon, not "intrinsic".

 

[FindLiberty]

Could any computer (or IC chip) even function without a few atoms of gold here and there? No real value there ether or so it would seem.

Maybe only our human brains and red blood cells have any true value (to us). http://plato.stanford.edu/entries/value-intrinsic-extrinsic/