Plus we understand economics a lot better than the ancients did. One way to think about it might be gold per capita. Back then population did not grow very quickly, and the gold supply kept up - or outpaced population in the Spanish empire. Today I very much doubt gold mining increases the gold supply at the rate the population is growing. A gold standard would result in less gold per person, which would be severely deflationary. And I hope even gold bugs know that deflation is a very bad thing.
People don’t use ancient medical treatments because of their longevity, so why gold?
That’s the austerity program: the rich get richer; the rest get sicker; then the rich move offshore to escape howling mobs. Do los ricos take their pet politicians along, or leave them behind as sacrificial offerings?
I hope I’m just over-sensitive when I complain:
Why does everyone insist on twisting my points into the very OPPOSITE of the point I’m making?
Did I write about returning to a gold standard? No, I wrote:
Voyager’s mention of “gold per capita” may imply that the price of gold may rise which is all I’ve been saying about Gold!
PS: And before we hear another round of “Gold has no intrinsic value” someone might ask Apple why there’s $2 of gold in every iPhone. I know engineers and they wouldn’t spend $2 if $1 would work.
ETA: (And yes, yes, yes, I know. Only a minuscule portion of Fort Knox’s gold is needed to supply Apple. But can we continue the interminable self-contradicting rants in the Pit, if at all?)
The price of a gold necklace is only loosely related to the gold value thereof; spending $1000 on a necklace doesn’t get you $1000 worth of gold. (Depending on the fineness of the gold, the design and marketing, the volume you buy, etc., you may be getting anywhere from a few bucks worth to maybe $700 or so.)
Now go to another establishment selling goods based on design and marketing: you can find shops which charge $1000s for a simple dress or suit. Does that mean the fabric is inherently worth that price as a store of value? Why or why not?
[quote=“septimus, post:83, topic:844086”]
Voyager’s mention of “gold per capita” may imply that the price of gold may rise which is all I’ve been saying about Gold!
This matters only if the price of gold rises faster than inflation. If the price rises at less than inflation, then the value (purchasing power) is declining even as prices rise.
I was reacting to this:
Yes, you did say “But past performance is no guarantee of future results.” but there are few other realms of modern endeavor where we pay a lot of attention to what the ancients did.
And of course gold has value independent of its use as money. But that makes it a lot more volatile - and depressed its value in the old days. I have a gold class ring which I bought for a reasonable sum when gold was $35 an ounce. Today’s graduates can hardly afford it any more, the school produced an alternative that uses a lot less gold. It’s increase is far above inflation - even above tuition inflation.
The amount of gold per capita only really matters if gold is being used as the basis of a monetary system. Otherwise gold would fluctuate, like any commodity, either above or below inflation rates.
Look at oil. The interesting question is how much of the fluctuation in the price of gold is due to natural economic factors and how much is due to its special position that comes from history. That raises prices on gold needed for industrial uses.
After all, I doubt there are ads on Fox telling you to hoard oil for the coming crash. Might be a better idea than hoarding gold if you believe Mad Max.
Or cringe Waterworld. But then, when the ice caps vanish…
The problem with pointing to inflation as a reason to hold precious metals is that it’s not that. It’s just a reason to avoid holding large chunks of cash. But that just means you should invest it in something. Equities. Real Estate. Bonds. Most of those are better investments than gold or silver and also adequately hedge against inflation risk.
(FWIW, where I live finely-worked gold necklaces are sold at only a very slight markup over the metal value.)
Bonds are a hedge against unexpected inflation? :smack: Pull the other one! Stocks generally do poorly in an inflationary environment. (Obviously this can obtain with a rise in the nominal price.) Real estate IS a good hedge: we’re in the market! But precious metals are far more liquid.
I can’t believe we keep having this same discussion. There have been periods when gold outperformed stocks and many more periods when stocks outperformed gold. Even optimists might want diversification as a hedge. FWIW, despite my own misgivings about near-term economic prospects, far more of my own savings are invested in equities than in precious metals. 
No, but nice job adding the word “unexpected” in there out of nowhere. Bonds are a hedge against expected inflation. Which is what you need when you notice that the central bank inflation target is ~2% a year and you realize that it’s a bad idea to hold cash.
Also, there are inflation-indexed bonds, which are in fact a hedge against any kind of inflation at all.
Gold or silver is not money either, and is a type of fiat currency.
And No, we dont know “that all fiat currencies eventually fail” since the US Currency has been good for like 200 years.
During WW2 the Jews of Warsaw were trading pounds of silver for pounds of food. You cant eat silver.
Money is what people accept. Try buying your groceries with a silver bar or a bag of gold dust.
Sure you can take either to a pawn shop- and exchange for real money. You could also exchange Hummel Figurines- but they arent real money either. Nor are Rolexes, but they fit all of your so called 'qualifications".
Diamonds are worth exactly what De Beers say they are.
Yep. Gold and silver’s monetary value is just as fictional as “fiat” currency. Some people just like it because it’s shiny.
There simply isn’t enough gold and silver to run a large economy on using what you call “sound money”; coins can only be made so small before they become unusable. That puts a low, hard limit on how large an economy based on “sound money” can grow.
A society that uses only that can* never be* anything other than impoverished.
We have discussions like this every year or so. The misleading arguments get worse and worse over time.
I was old enough to vote when Nixon closed the gold window in 1971. I’m not quite 100 years old yet, let alone 200.
And anyone who writes “the US Currency has been good for like 200 years” doesn’t know much about US currency. Unless you follow the lead of others in this thread who refer to minted silver dollar coins, which have a dollar’s worth of silver, as “fiat” money. Two hundred years ago, paper money in the U.S. was issued by private banks and sold at discounts. The first federal banknotes were issued by Abraham Lincoln, and traded at 30 cents on the dollar compared with gold or silver coins.
As recently as 1889, Nellie Bly had trouble spending American silver dollars on her famous around-the-world trip. (Miss Bly was no dummy: she’d brought the American coins as an experiment. Her main cash reserve was British gold coins and British banknotes.)
But electronic money, possibly as at present, or possibly backed only by some Bitcoin or E-coin, may be the wave of the future. I don’t know if anyone in the thread is arguing differently. Will E-coin be government controlled? Backed by anything? I dunno; I dunno. Will it eventually collapse and cause a new money to emerge? Probably.
OP asked about a “currency collapse.” What does that mean? It means you can buy fewer BigMacs with some fixed amount of dollars. Fewer iPhones, fewer heads of lettuce, fewer dates with your favorite $200-per-trick hooker, fewer bags of cement, and fewer bottles of beer. I don’t think there’s any argument here. But suggest that you may also be able to buy fewer ounces of gold and pandemonium sets in! 
Copper coins can be used for small values when silver coins would need to be overly small. (I can’t claim credit for this brilliant invention — the Chinese Shang Dynasty may have had a sort of copper coin more than 3000 years ago.)
Redemptions into precious metal can be inconvenient — you’re right about that — but do you really believe there was never a large prosperous economy prior to Nixon closing the gold window in 1971?
Silver is the only financial investment for me because:
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It’s the safest and most liquid asset in the world
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It is the second most versatile commodity in the world, after oil
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It is a universally recognized symbol of value
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It is afforable
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It is one of the few assets that can be completely outside of the financial system.
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It is the antithesis of the modem fiat currency, debt based, global, generational Ponzi scheme
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It has tremendous potential
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It is a form of real wealth, and not a paper or digital illusion of wealth.
This is saying, quite explicitly, that currency is backed by confidence. How does that differ than the rest of us saying that currency is backed by, wait for it, confidence?
Yes, it certainly is that… picks up gold ring, cups it in his left hand, and begins to slowly caress it with his right My… precious!
Construct specific claims; express them in clear sentences and I will be happy to tell you whether I agree or disagree with each claim. Instead the thread jumps all over the place, with posters seeming to put words in others’ mouths. (I may also be very guilty of that. Sorry. :o )
I’ll start with yours: Yes, currency is backed by confidence.
This is precisely why I mentioned discounted greenbacks and Nellie Bly’s journey when I saw what appeared to be a claim that American money has been confidence-inspiring for 200 years.
As a thought experiment about confidence, put $1000 of U.S. currency in a time vault, along with the gold purchased with a 2nd $1000. (To please OP, buy silver with a 3rd $1000 and put that in the vault too.) Come back and open the vault in 50 years. I am fairly confident (not 100% certain, but perhaps 96% or so) that the gold and/or silver will then be worth more than the paper money. (To make it interesting, we’d want to put another item in the vault – a rolling-over interest-paying CD or such with initial $1000 value. This becomes more complicated.)