Quote:
Originally Posted by TheDoc
How did it do during the great depression and depressions/recessions before then? If you can't exchange it, it has no value.
Exchange wise, or movement of anything with value, produces wealth. If it's gold, stocks, money, or chickens... as long as you can move it - wealth is produced, if it can't be moved/traded/exchanged to keep the 'flow' going, it has no value.
Gold has value because people are buying it...(money is moving) the amount of money in gold does not equal the actual amount of gold people can get. It's value is fake.
|
Well, this is the main point I ask people to recognize, the "depressions" you refer to were deflations.
Gold is money. The idea is that if one has gold in an inflationary (especially hyper-inflationary) environment, they protect their purchasing power. Fine -- in an inflationary environment.
In any event, there is the problem of using it as a medium of exchange -- meaning that some but not all people you want to accept gold as money will be willing to do so.