2dimes wrote:If too many people own gold it becomes common. You need food regardless of cost. You desire gold because of it's cost.
The supply of gold is relatively fixed in the short-run--compared to printing cash money or lending it into existence, so if the number of owners increases (i.e. the demand), then the price of gold will rise. Gold would become more common if the supply of it increased, and if there's no change in demand, then the price of gold would fall.
People desire gold not only because of its price (or expenditure), but also because of its expected benefits. Typically, people purchase gold as an alternative method of savings. For example, some people spend $2000 on a computer, but it's not the price of that computer which brings that desire. It's the benefits of having that computer in exchange of foregoing whatever else you could purchase with $2000 (i.e. opportunity cost).
With gold, people exchange their money for it because they expect to exchange that gold for something else at a later time (i.e. savings). They could invest/save in many other ways, or they could simply sit on their cash (and let depreciation take its toll). So, people desire gold because of what they expect to exchange for gold in the future and because they investing in gold compared to alternative uses of their money. (Of course, people vary in how much they consume and save).
I understand the difference between a certificate and physical gold. There might not even be enough physical gold at the place where they claim to be keeping it for you. Further how do you go about exchanging the paper for the gold?
I'm saying that if food becomes scarce enough. You might think your gold is valuable but what are you going to do with it? You can eat it but it will just go right through you.
If the scenario is that dire, or as it approaches such a crisis, I'd rather have gold than paper cash. In a doomsday scenario, it would be best to have tangible goods and skills which others would find valuable (e.g. canned goods, guns, a car, think: Mad Max). As the doomsday scenario approaches, you'd rather have gold than having paper money--or even gold certificates.
If who ever sets the price of gold changes it to $2 per ton, (yes I'm aware of how unlikely that is) what is the advantage of having it?
The price of gold isn't set by some central planner or conniving elite group, unless they somehow own all the gold, or can force you to sell your gold at such a price (e.g. via coercion).
, yeah you know what you're talkin about! I wish I could afford to buy some gold. Lootifer, the writing is on the wall. If you can't read, then that sucks...
