# What would gold be worth if it were not considered money? **URL:** \ **Category:** Factual Questions\ **Created:** [March 21, 2020, 4:47pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965 "2020-03-21T16:47:43Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [March 22, 2020, 9:17pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/41 "2020-03-22T21:17:17Z")
I am surprised by the chart. A few countries, ie Haiti, have purchased a few tons of gold since 2009. Seems odd. I confess I am suspicious, perhaps someone is building a bug-out bag? Hope not. ---
**Author:** ![ftg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ftg/32/2801_2.png) [@ftg](https://boards.straightdope.com/u/ftg)\ **Post date:** [March 22, 2020, 9:46pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/42 "2020-03-22T21:46:35Z")
> [@Saint\_Cad](#): > > Central Banks use it as a storage of wealth. Not exactly the same thing I know but I believe countries still use it to exchange wealth. Nope. The charts that have been posted show that most first world countries’ gold reserves are steady or dropping. Those that are steady are not exchanging it with anybody. Those that are selling it off aren’t selling it to other Western first world nations since they aren’t buying it. The odd-men out are Russia and China. Since their reserves increases are a lot more than anybody is selling, they are getting it from other sources. Russia from its own local mining companies, China from overseas. Some of the latter is from places like Germany that are selling off, but that’s not enough. So they get it from private buyers. Country to country sales are rare. As noted, some countries that are in trouble are selling gold. But that goes on the open market which is private buyer dominated. The sellers don’t care who buys it as long as they get their cash. Those videos showing pallets of gold being moved around in the NY Federal Reserve vaults are private transactions for the most part. ---
**Author:** ![JasmineOlive](https://avatars.discourse-cdn.com/v4/letter/j/e99b99/32.png) [@JasmineOlive](https://boards.straightdope.com/u/JasmineOlive)\ **Post date:** [March 23, 2020, 4:13am UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/43 "2020-03-23T04:13:32Z")
gold is more than worth it! gold has its own value and is much higher than any currency in the world. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [March 23, 2020, 4:16am UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/44 "2020-03-23T04:16:57Z")
> [@JasmineOlive](#): > > gold is more than worth it! gold has its own value and is much higher than any currency in the world. I would happily give you a 1/4 oz British Gold Guinea for $5000 in US banknotes. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 23, 2020, 4:52am UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/45 "2020-03-23T04:52:32Z")
> [@ftg](#): > > Your chart definitely proves that virtually no countries are increasing their gold reserves. Esp. ones whose currencies are important in international trade. (Clicking on columns helps see that.) I don’t think we’re in any big disagreement. A reason the U.S. isn’t selling bullion is partly psychological, and What would be the point anyway? But you sure know how to spin the chart! China and Russia ARE important countries and have been increasing their gold reserves HUGELY. Making the aggregate central bank increase large. China is the 2nd-biggest economy in the world; calling its currency “unimportant in international trade” may be an exaggeration: > [@](#): > > The Chinese renminbi – sometimes referred to colloquially as the ‘yuan’ – is the official currency of the People’s Republic of China and the **eighth most traded globally** , accounting for a daily average volume of US$101 million. Despite being an emerging market currency it is also the **seventh most held reserve currency** – estimated to account for 1.23% of global reserves. It is issued by the People’s Bank of China (PBoC). The chart shows that 22 countries have _more than doubled_ their gold reserves this decade. Among gold sellers, Germany, with its tiny 1% sale, is in 2nd place with 37 tonnes. Contrast this with Russia’s purchase of 1464 tonnes. The answer to my question: “Are central banks still increasing their gold reserves?” was a simple ‘Yes (on average).’ HTH. ---
**Author:** ![ftg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ftg/32/2801_2.png) [@ftg](https://boards.straightdope.com/u/ftg)\ **Post date:** [March 23, 2020, 12:08pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/46 "2020-03-23T12:08:47Z")
> [@JasmineOlive](#): > > gold is more than worth it! gold has its own value and is much higher than any currency in the world. One can also claim the value of cereal box tops is higher than any currency in the world by this “logic”. How do you compare the value of one thing to currency except by that same currency? And if you do, just look at the massive instability in gold prices over the decades. And how much money you’d lose on average when inflation is taken into account. And that doesn’t take into account if you had bought govt. bonds instead and gotten an actual ROI. Sure, if there are low points and high points and say “Say you bought at X and sold at Y, you made money!” But that’s 20/20 hindsight and doesn’t apply to the average over time. Pick two random times to buy and sell and odds are you lose. But if you bought a stable currency and sold it at a random time, you’d do better on average. How on Earth does anyone think that gold is some sort of magic wealth generator? ---
**Author:** ![Xema](https://avatars.discourse-cdn.com/v4/letter/x/9de053/32.png) [@Xema](https://boards.straightdope.com/u/Xema)\ **Post date:** [March 23, 2020, 12:44pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/47 "2020-03-23T12:44:25Z")
> [@Marvin\_the\_Martian](#): > > I’d suggest platinum as a comparison point … AFAIK has never been used as currency. [Wiki](https://en.wikipedia.org/wiki/Platinum_coin) has this: > [@](#): > > The first and only case when platinum coins were used as a regular national currency was in Russia, where coins were circulated between 1828 and 1845. These coins proved to be impractical: platinum resembles many less expensive metals, and, unlike the more malleable and ductile silver and gold, it is very difficult to work. However, merchants valued platinum coins because it did not melt in fires like gold or silver. ---
**Author:** ![Richox](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@Richox](https://boards.straightdope.com/u/Richox)\ **Post date:** [March 23, 2020, 1:00pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/48 "2020-03-23T13:00:54Z")
> [@ftg](#): > > Nope. The charts that have been posted show that most first world countries’ gold reserves are steady or dropping. Those that are steady are not exchanging it with anybody. Those that are selling it off aren’t selling it to other Western first world nations since they aren’t buying it. > > The odd-men out are Russia and China. Since their reserves increases are a lot more than anybody is selling, they are getting it from other sources. Russia from its own local mining companies, China from overseas. Some of the latter is from places like Germany that are selling off, but that’s not enough. So they get it from private buyers. > > Country to country sales are rare. As noted, some countries that are in trouble are selling gold. But that goes on the open market which is private buyer dominated. The sellers don’t care who buys it as long as they get their cash. > > Those videos showing pallets of gold being moved around in the NY Federal Reserve vaults are private transactions for the most part. Your facts are off. China is the largest producer of gold by a significant margin. Like 30% clear of Australia. Second is Australia, third is Russia, then the US and Canada. Aussie and Russia are comparable, US/Canada a way behind. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 23, 2020, 1:14pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/49 "2020-03-23T13:14:18Z")
> [@ftg](#): > > How do you compare the value of one thing to currency except by that same currency? And if you do, just look at the massive instability in gold prices over the decades. And how much money you’d lose on average when inflation is taken into account. And that doesn’t take into account if you had bought govt. bonds instead and gotten an actual ROI. No matter how much you despise gold — or despise the people who don’t despise gold — you do your fellow gold haters a disservice by spreading disinformation and thereby lowering their credibility. In 1970 you could purchase 1 troy ounce of gold in New York City for $36.41. That gold could now be sold for $1500.30. (This ignores costs to store or safeguard your gold.) Had that same $36.41 been invested in U.S. Treasury bonds (with interest recalculated at the beginning of every September using the 10-Year Treasury Constant Maturity Rate) you would now have $730 (ignoring transaction costs). $1500.30 \> $730. Hope this helps. ---
**Author:** ![Keeve](https://avatars.discourse-cdn.com/v4/letter/k/f07891/32.png) [@Keeve](https://boards.straightdope.com/u/Keeve)\ **Post date:** [March 23, 2020, 1:52pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/50 "2020-03-23T13:52:31Z")
> [@Ynnad](#): > > **Derleth:** I am not saying you are wrong. But after thousands of years, a great number of people still think of gold as money. And I believe that it is that kind of thinking that gives gold an artificially high price. I disagree. No one thinks of gold as “money”. Many people, possibly everyone, thinks of gold as valuable, but that’s an entirely different thing. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [March 23, 2020, 2:26pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/51 "2020-03-23T14:26:41Z")
OK. Why did you pick 1970? ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 23, 2020, 2:50pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/52 "2020-03-23T14:50:26Z")
> [@](#): > > OK. Why did you pick 1970? Why did he pick U.S. Treasury bonds? I’m ready to do a comparison with the DJIA to solve the following puzzle, but first would need data showing the dividends paid on the DJIA, since of course we’d reinvest them. Can any good Googler provide that series? Alice and Bob each inherit $1000 worth of DJIA in 1950. Bob reinvests his dividends, and still has all that stock. Alice also reinvests hers until date X, when she trades all her stocks for gold; she still has all that gold. _For what values of X (call this the Alice-win set) would Alice have more wealth than Bob today?_ Every single day since Trump’s election would be in the Alice win-set! That win-set also includes many dates near market highs since 1997. Several dates in the 1960’s or 70’s would also be in the Alice win-set if the DJIA yield averaged less than 1.3% and my program is correct. _All of which is beside the point._ Gold may or many not outperform some other form of savings over some period — so what? (And the point which it is beside is different than the question OP asks. :smack: ) ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [March 23, 2020, 4:38pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/53 "2020-03-23T16:38:09Z")
> [@septimus](#): > > … > In 1970 you could purchase 1 troy ounce of gold in New York City for $36.41. That gold could now be sold for $1500.30. (This ignores costs to store or safeguard your gold.) > … > $1500.30 \> $730. Hope this helps. We could do that same with any number of stocks, not to mention real estate, art, collectables, etc. You also could have bought gold for $2178 in 1980 and sold it for $386 in 2001. Gold is simply a commodity. It goes up and down. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 23, 2020, 4:51pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/54 "2020-03-23T16:51:32Z")
> [@DrDeth](#): > > We could do that same with any number of stocks, not to mention real estate, art, collectables, etc. > > You also could have bought gold for $2178 in 1980 and sold it for $386 in 2001. > > Gold is simply a commodity. It goes up and down. So you’re taking my side of the “debate.” Well … > [@](#): > > You also could have bought gold for $2178 in 1980 … Except for this gibberish. If it seems to help your side of an “argument” to use so-called “constant dollars”, at least \*\*\*say that’s what you’re doing. * * * ---
**Author:** ![ftg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ftg/32/2801_2.png) [@ftg](https://boards.straightdope.com/u/ftg)\ **Post date:** [March 23, 2020, 8:44pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/55 "2020-03-23T20:44:34Z")
> [@septimus](#): > > In 1970 you could purchase 1 troy ounce of gold in New York City for $36.41. That gold could now be sold for $1500.30. (This ignores costs to store or safeguard your gold.) So you made a selective choice. People point this out. You respond that it’s gibberish. I am completely less than impressed. You keep twisting and twisting and twisting. Claiming all sorts of complete refutation of people’s arguments but missing the actual points being made and burying yourself deeper in the process. Even some of your own cites refute you! ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 23, 2020, 10:01pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/56 "2020-03-23T22:01:20Z")
I apologize for the following off-topic tirade. But we are here to fight ignorance, and the ignorance I address is huge. Nor do I take kindly to baseless accusations against me. > [@ftg](#): > > So you made a selective choice. People point this out. You respond that it’s gibberish. I am completely less than impressed. > > You keep twisting and twisting and twisting. Claiming all sorts of complete refutation of people’s arguments but missing the actual points being made and burying yourself deeper in the process. Even some of your own cites refute you! Wow. Almost every single sentence you’ve contributed to this thread, or the other one, has been completely wrong. Let’s start by obliterating your claim, from the other thread,“Note that many European countries are reducing their gold reserves since they are just a waste of money in terms of storage and other fees.” Upthread we’ve found a source for central bank sales. In most cases the central bank’s gold stock did not change over the last decade, or changed by too little to register given the source’s 1-tonne granularity. _I now present the results for **all** European countries whose gold stock changed by 1 tonne or more_: Belarus purchased 24 tonnes of gold during the last decade. Belgium sold 1 tonne. Bosnia and Herz purchased 2 tonnes. Czech Republic sold 4 tonnes. France purchased 1 tonne. Germany sold a whopping 37 tonnes, 1% of its stock. Greece purchased 1 tonne. Hungary purchased 29 tonnes. Poland purchased 26 tonnes. Russia purchased 1464 tonnes Serbia purchased 7 tonnes. Turkey purchased 138 tonnes. Ukraine sold 3 tonnes. If we exclude Russia (a special case?) this is still a net purchase of 183 tonnes. Without excluding Russia, the net purchase is 1647 tonnes. Dopers: Please raise your hand if you think this is compatible with **ftg** ’s claim “Note that many European countries are reducing their gold reserves since they are just a waste of money in terms of storage and other fees.” The only significant sale was Germany’s. (IIRC that was part of an experiment — they wanted to see how long it would take the N.Y. Fed to deliver Germany’s gold!) Yes, I used 1970 as a starting part for one comparison. I also mentioned that many other starting dates, including some way back in the 1960’s, would work even besting the DJIA with dividends reinvested. \*\*\*And I’ve repeatedly stressed that these comparisons are largely irrelevant anyway to any essential point \*\*\*— I just make them to obliterate the nonsense that gold is ALWAYS a bad investment. Finally, see if you can understand the following:When discussing apples, if one of the debaters thinks oranges, specifically seven oranges, would be a more useful example than apples, it is the responsibility of that debater to write the word “oranges.” If instead he discusses an example involving “seven apples”, where he actually is talking about “seven oranges” then said debater is remiss. Do you understand that? To write “apples” when one means “oranges” is inappropriate. Do we need to put that up for a vote also? “Constant dollars” are sometimes a useful way to think about a matter of economics or pricing. No argument there. In prior posts I bypass the need for inflation adjustment by comparing TWO investments and using nominal dollars at BOTH ends of an investment period. Others may find constant dollars convenient for some purposes. **But so-called “constant dollars” [SIZE=“4”]_are not dollars._[/SIZE]** You don’t slip them in to a paragraph to inflate your figures hoping **Septimus** is too dull to notice! Capische? I’ll give **Dr. Deth** the benefit of the doubt and guess that he Googled over-quickly, missed the word “constant,” and didn’t notice the absurdity of the number derived. Yet you have no such excuse. I pointed out Dr Deth’s blunder and you retort with more gibberish: “twisting and twisting.” Seriously: You couldn’t even figure this much out?? HTH. ```auto By the way: I've never thought of myself as a "gold bug." Until 2019 the last time I purchased gold was trinkets for Mrs. Septimus two decades ago. (I try not to be overly niggardly but Mrs. Septimus prefers automobiles and iPhones to gold trinkets.) Some months ago, based on my readings, I did sell a moderate-sized fraction of my stocks and used the proceeds to buy gold, both physical and ETF, as a "hedge." I got lucky. I wish I'd traded a larger fraction of my stocks. I did not buy the gold because I thought we were on the verge of Armageddon. I think I was aware that gold cannot be used as toilet paper, but I bought it anyway. I apologize if any Doper is offended that I purchased gold and thinks that gold buyers are too stupid to post in these forums. ``` ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [March 23, 2020, 11:39pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/57 "2020-03-23T23:39:13Z")
> [@septimus](#): > > So you’re taking my side of the “debate.” > > Well … > … Except for this gibberish. If it seems to help your side of an “argument” to use so-called “constant dollars”, at least \*\*\*say that’s what you’re doing. > > * * * Nope, gold is simply a commodity like oil, pork bellies, and silver. There is nothing special about it. There are hundred of stocks that would have dont better, and overall, the DOW does better than gold. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [March 23, 2020, 11:45pm UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/58 "2020-03-23T23:45:41Z")
> [@septimus](#): > > … > > Yes, I used 1970 as a starting part for one comparison. I also mentioned that many other starting dates, including some way back in the 1960’s, would work even besting the DJIA with dividends reinvested. \*\*\*And I’ve repeatedly stressed that these comparisons are largely irrelevant anyway to any essential point \*\*\*— I just make them to obliterate the nonsense that gold is ALWAYS a bad investment. > > … > > “Constant dollars” are sometimes a useful way to think about a matter of economics or pricing. No argument there. In prior posts I bypass the need for inflation adjustment by comparing TWO investments and using nominal dollars at BOTH ends of an investment period. Others may find constant dollars convenient for some purposes. > > **But so-called “constant dollars” [SIZE=“4”]_are not dollars._[/SIZE]** You don’t slip them in to a paragraph to inflate your figures hoping **Septimus** is too dull to notice! …[/SIZE] Sure, you can cherry pick lots of dates and come to the conclusion either that gold is a crap investment or fantastic. Same with the DOW, same with Pork bellies. Yeah, sure, adjusted for inflation- but just so both figures are, it comes out the same. There is nothing special about gold, it is no more a hedge against inflation than Pork bellies are. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 24, 2020, 9:21am UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/59 "2020-03-24T09:21:55Z")
> [@DrDeth](#): > > Nope, gold is simply a commodity like oil, pork bellies, and silver. > There is nothing special about it. > There are hundred of stocks that would have dont better, and overall, the DOW does better than gold. > [@DrDeth](#): > > Sure, you can cherry pick lots of dates and come to the conclusion either that gold is a crap investment or fantastic. Same with the DOW, same with Pork bellies. > Yeah, sure, adjusted for inflation- but just so both figures are, it comes out the same. > There is nothing special about gold, it is no more a hedge against inflation than Pork bellies are. 😕 Who do you think you’re arguing against here? Certainly not against me nor against anyone else in the thread. My only comment to YOU is that we don’t refer to oranges as apples, and we don’t refer to “constant dollars” as dollars. You may find that thinking of “constant dollars” simplifies _your_ thinking, _ **but refer to them correctly when you mention them.** _ Please acknowledge this, and pledge to exert more care in future. Otherwise your posts will cease to be worth reading. ---
**Author:** ![ftg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ftg/32/2801_2.png) [@ftg](https://boards.straightdope.com/u/ftg)\ **Post date:** [March 24, 2020, 10:52am UTC](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965/60 "2020-03-24T10:52:35Z")
> [@septimus](#): > > Please acknowledge this, and pledge to exert more care in future. Otherwise your posts will cease to be worth reading. An excellent point that you should consider. [Previous page](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965.md?page=2) [Next page](https://boards.straightdope.com/t/what-would-gold-be-worth-if-it-were-not-considered-money/849965.md?page=4)