BigBallinStalin wrote: Nola_Lifer wrote: BigBallinStalin wrote:
Nola_Lifer wrote:If the economy tanks, I'd rather have a farm with my own well with crops already planted. Gold won't mean a thing if your starving to death and no one has food.
You'd probably need a nuclear war to happen, in order to justify investing in a farm for that reasoning. All other exogenous shocks* would still leave plenty of capital for the division of labor to continue, thus sidestepping the regression to subsidence agriculture.
*another exception: hostile alien invasion, the outcome of which is similar to a nuclear war.
Pretty sure there were lots of starving people during the Great Depression.
Sure, but that doesn't change the fact that gold was still extremely useful--even during those disastrous times. Its relative value compared to the US dollar was immense. Gold could buy you many things during that time because the price of US paper dollars were highly inflated.
For your scenario about gold being useless to be true, then we'd have to have some disaster where only subsistence agriculture were the only means to live, which means that nearly all stocks of capital would have to be destroyed. But even in a barter economy, gold still has its uses as a medium of exchange. See Carl Menger's the Origin of Money.
Even if I have all the gold in the world, you'd be a dumb farmer to trader your food for something you can't eat unless you have excess which you should store or preserve through a variety of ways.
No one is going to trade something on which they survival depends on; however, if they can fetch a good price for it, they may lower their standards. So, let's ignore the unlikely scenario that one person could have all the gold in the world, and let's focus on "you'd be a dumb farmer to trader your food for something you can't eat." This isn't true, because duh, no one eats gold, you use it as a medium of exchange--in this scenario.
You'd be a dumb farmer to not trade for something which you could immensely profit from, thus offsetting the marginal costs of having a little less food.