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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.
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If you take a look back at most civilization collapses that had to do with finances, it's because they went off gold or silver and started using some kind of paper currency. Now Pre WW1 Gold Standard was not the same thing as post WW1 Gold Standard, which was a perversion and doomed to fail. Also, not many people held physical gold at that time.
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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.
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That's why before there were fiat currencies, there was gold and silver, as well as barter systems.
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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.
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This is completely inaccurate. Gold is the only precious metal without any real industrial use so it's ONLY use is a medium of exchange and a store of wealth.