Quote:
Originally Posted by Orruar
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Gold doesn't derive most of its value from its industrial uses. Platinum and silver do. Gold is valued and used as money for thousands of years because:
A) It is rare, which means you don't need 4 tons of it to buy a car (like if you were using iron as money)
B) It is difficult to counterfeit
C) It is easily divisible (which is why we don't use Rembrandt paintings as money)
D) It is durable
E) The total supply does not fluctuate wildly (increases about 1% per year)
Paper money fails 4 of these tests, which is why it only really works when backed by a commodity such as gold.
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We arent in the stone age anymore. The value of the dollar is just like any other good. Supply and Demand. If we went to a gold currency the supply would be minimal thereby increasing the value of 1 dollar. This would just change how many dollars you would get paid at work. Its all about what you can get with what you have. Gold would mean you could fill your tank with (bullshittin) 5$. However, this matter little if you are making .50C an hour.