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<p>[QUOTE=&quot;InfleXion, post: 1634842, member: 29012&quot;]Nothing has value outside the human mind. I was merely articulating the origin of value to illustrate that yes, you are right, and it doesn&#039;t matter. It is not unique to gold in any way. What gold does not have is &quot;practical&quot; (applicational) value as a commodity because it is too expensive to be cost effective. I am not falling back on supply and rarity issues. Sure, with silver supply and rarity above ground is a concern, but with gold it has everything to do with currency supply, not gold supply. </p><p><br /></p><p>Yes, silver has traditionally also been money, and quite a few of the world&#039;s languages use the same exact word for &#039;money&#039; as &#039;silver&#039; and has historically been the most common currency, yet today is not. This is simply due to scientific breakthroughs we&#039;ve experienced in this age of technology that have vaulted silver to the 2nd most useful commodity where as in the past it was just a shiny rock. Silver would not make as good a circulating currency as it used to, because it is in limited supply and the industrial demand would not be met, but a dollar backed by silver or any other metal would work too. Nickel would be a fine currency, so would copper, so would aluminum if it came down to it. Any metal meets the 4 requirements and would be just fine. The only difference would be the buying power of your currency, but you could peg to any of them and essentially have sound money. </p><p><br /></p><p>It is the effort (labor, cost) it takes to get it out of the ground (which is in part due to rarity) that determines which are more valuable, why some are considered precious and others are very cheap. It&#039;s not because of the available supply on the market (in gold&#039;s case) which really means nothing (as long as there is not a shortage) otherwise silver would be more expensive, but rather it&#039;s the availability and ease with which it comes out of the ground which is tied to the labor cost to extract it. </p><p><br /></p><p>Money represents goods and services (labor), but when you can print money out of thin air that correlation is undermined. This correlation cannot be undermined with metals which cannot be created from nothing, and is why they go up in price when new money is printed. Money is like a pie crust with goods and services as the filling. If you make the pie bigger without adding more filling then the filling will spread out to take up a larger slice of the pie. </p><p><br /></p><p>Gold is only different from other metals because it does not have (very much) industrial value, so the others are more skewed by that where as gold is purely monetary, and so it assumes that role being the most appropriate to do so. Since it is not impacted by supply and demand it really makes it the perfect money because it is immune to market manipulation (not true today with paper gold unfortunately). That doesn&#039;t mean it has no value. It just means that its value is derived from its purpose, not its content, but its purpose is dependent upon that content so they are related. If gold wasn&#039;t a monetary metal people would still wear it as jewelry, but it would be a lot cheaper.[/QUOTE]</p><p><br /></p>

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