funny lately that so many companies- and so many people- are pushing gold as The Thing to have to protect you in case of emergencies.
we had a great discussion the other day about currency and why we can’t just print more money to cover our national debt. the kids had lots of questions, and we were able to clear up lots of misconceptions about ecenomic principles.
i find it odd that so many people think of gold as having real inherent value (some commercials proclaim, “it’s a tangible asset!”). people who are afraid of currency collapse are hoarding sivler coins and saving up for gold. and to what end? because they have a “tangible asset”?
guess what? a paper dollar is a tangible asset too, meaning that i can touch it and hold it in my hand. but that paper has no more inherent value than a gold bar- these things only have value insofar as we believe we do.
a diamond only has more value than coal because we have been brainwashed to believe it is so. platinum is better than gold is better than silver is better than aluminum- why???
yes, some things are more scarce. according to the laws of supply and demand, scarcity will create a higher value. but only if that scarce resource has a demand. and many of the things that are in demand are arificially so because we have bought the lie that they are.
it’s random that we prize gold instead of bat guano. it’s arbitrary that we think diamonds are amazingly valuable but opals not so much and polished rocks almost not at all.
so gold has value only inasmuch as we believe in its value. same with paper currency. same as some animal fur and not others, or some gemstones and not others or some foods and not others.
caviar is so exotic and expensive- but uch gross! who decided that unborn fish eggs were a delicacy but unborn chicken eggs are worth a dollar a dozen? why is blond hair wow and brown hair underwhelming? why are blue eyes cool and brown eyes just regular? rarity doesn’t explain the value we assign to them.
freckles are rarer than non-freckles, but we don’t ooh and aah over a freckled child the way we do over one with big blue eyes. birth marks are rare, but if they are very obvious they cause embarassment rather than pride. in some cultures, they are even feared or reviled as some kind of curse or defect.
so scarcity does not equal value.
what about usefulness? i’ll guarantee you that a big sheet of plywood has more real world use than a brick of gold, but the plywood is a few dollars a sheet, while gold is selling for bizarre amounts of money. steel is stronger and more useful as a metal, but silver is more prized.
so usefulness does not equal value.
and why is there a demand for caviar? it’s icky to even think about, but somewhere along the line we bought the bill of goods that said we should want it. but it’s not inherently good. from what i hear it’s mostly just salty, so i’m not sure why a saltine cracker wouldn’t give the same rush. it’s completely strange that folks have managed to drum up demand for it. and other things that are equally bizarre are not sought after. nobody is paying $100 a serving for pig snouts, right?
so artificial demand does not equal inherent value.
so, what do we value? what does it take to get us to believe that something is worth working for?
i know this was touched on in the post about disaster preparedness, but if there is some kind of collapse of society, i would much rather have a stock of toilet paper than a stack of gold bars.
to me good solid shoes with support and a tough sole are way more valuable than spiky heels by some random designer. and i would much rather have comfy warm pajamas than a strappy evening gown covered in sequins. but i promise you that my jammies come way cheaper than the style-y dress.
i have no big answer here, and no clear agenda in bringing this up. i just think it’s an interesting point to ponder.
if we all stopped believing tomoroow that paper money had value, our economy would collapse. if we decided that gold was a useless commodity the gold market would tank. we are invested in keeping these things stable because we are afraid of the consequences of not believing.
so we are willing to shore up unsubstantiated beliefs to avoid making some hard choices.
i’m not in favor or against.
i just think it’s food for thought.