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<p>[QUOTE=&quot;fatima, post: 890452, member: 22143&quot;]It&#039;s easier to understand once you realize that diamonds and emeralds do not qualify as currency.&nbsp; They are valuable assets, but they are not currency.&nbsp; &nbsp; They fail the currency must be divisible qualification.&nbsp; Gold for example can be divided into smaller amounts and it&#039;s still worth the same.&nbsp; Oz of gold is worth X.&nbsp; 1/2 Oz = X/2.&nbsp; Same for paper currency. You can exchange a $100 bill for five $20s etc.&nbsp; $ is the same regardless of the note it is printed on.&nbsp;&nbsp; </p><p><br /></p><p>On the other hand, a diamond&#039;s worth is not divisible.&nbsp; i.e. a 4 carat diamond is worth X, a 1 carat diamond is not worth X/4.&nbsp;&nbsp; This means the currency discussion we are having isn&#039;t relevant to it because 4 carat diamonds are very rare and are directly subject to supply/demand constraints.&nbsp;&nbsp; </p><p><br /></p><p>You are however correct on the true worth of gold, but keep in mind that because of the way our money system works, and the fact that central banks hold 1000s of tons of gold, the price of gold has been supressed by governments to make their paper currencies seem worth more.&nbsp; How this is accomplished is beyond the scope of this discussion, but their ability to do this has been lessening in the past few years.&nbsp;&nbsp; There are currently some big banks under investigation now for this.&nbsp; (at least in the silver market)[/QUOTE]</p><p><br /></p>

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