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Old 03-21-2020, 11:47 AM
Ynnad is offline
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Join Date: Jul 2018
Location: The City Different
Posts: 226

What would gold be worth if it were not considered money?


People often assert that gold has no inherent value. I have even seen that assertion on this message board several times. It is my opinion that gold has value to humans because of several of its physical properties. These properties include, but are not limited to, density, conductivity, malleabililty, inertness (resistance to corrosion), and color. Since ancient times, gold has been used as money, currency, and a medium of exchange. It has also been used a store of value.

What would be the value of gold (in terms of price per unit mass) if it were no longer used as money, currency, and a medium of exchange in any way whatsoever? I first thought about also excluding its use as a store of value, but this would be problematic as many other physical substances as well as intangible abstractions are used a store of value such as aluminum, copper, steel, pork belly futures, fiat currency, stock in corporations, etc.

I don’t think we will ever arrive at any number that everyone agrees on. I am more interested in what methodology SDMB people would propose to attempt to determine such a number.

There are a few uses for which I cannot think of a bright line rule to determine if the use is or is not use as money, currency, or a medium of exchange. For example, some uses as jewelry or collectible numismatic items containing gold might be questionable. You cannot have a good argument unless everyone agrees on some definitions. Can anyone propose more refined definitions of money, currency, or medium of exchange that would make borderline cases easier to decide?

As analogy to the uses of gold for non-monetary purposes, consider rhodium. It is also a noble metal but has never been used as money. Yet it has a price per unit mass much greater than gold's.
 

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