The weakness in this article is this notion of intrinsic value. It is true that gold's intrinsic value is hard to pin down, but what is the intrinsic value of a $50 bill? Intrinsically, nearly nothing, because aside from its symbolic value, it can't be used for anything much useful. What is the intrinsic value of the the balance in your savings account? Even less, it is simply a digital representation, some electrons on a screen. If you want to talk about the intrinsic value of things, then you are in the category of commodities, a bushel of wheat or a barrel of oil has intrinsic value. A tractor has intrinsic value because it is a productive asset that can achieve a wide variety of uses for the farmer. Money does not have intrinsic value, it is a medium of exchange. Whether it is gold coins, mother-of-pearl, or paper with fancy symbols on it, it's "value" is simply what somebody will exchange with you for it. In the case of gold, that is currently about $2200 USD per ounce. This is not as mysterious as it seems once one realizes it has nothing to do with intrinsic value.
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The weakness in this article is this notion of intrinsic value. It is true that gold's intrinsic value is hard to pin down, but what is the intrinsic value of a $50 bill? Intrinsically, nearly nothing, because aside from its symbolic value, it can't be used for anything much useful. What is the intrinsic value of the the balance in your savings account? Even less, it is simply a digital representation, some electrons on a screen. If you want to talk about the intrinsic value of things, then you are in the category of commodities, a bushel of wheat or a barrel of oil has intrinsic value. A tractor has intrinsic value because it is a productive asset that can achieve a wide variety of uses for the farmer. Money does not have intrinsic value, it is a medium of exchange. Whether it is gold coins, mother-of-pearl, or paper with fancy symbols on it, it's "value" is simply what somebody will exchange with you for it. In the case of gold, that is currently about $2200 USD per ounce. This is not as mysterious as it seems once one realizes it has nothing to do with intrinsic value.
Post: Shining Moment
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