Sam <[email protected]> wrote:
>
> But gold isn't worth much, it doesn't have a high value. It's just a
> placeholder for money. Supply and demand. If people stopped storing it
> in vaults there would be very little demand.
>
No, gold isn't a placeholder for money, it is money! It's a medium of exchange.
The reason gold is popular is because there's basically a steady
supply of it and central bankers can't just manufacture more like they
can with currency.
Thus when money becomes worthless (as we're steadily doing now) people
look for some other form of value to exchange. Gold.
For example:
In the future if you want to pay Germany for a BMW, sure, you could
offer them a whole pile of worthless paper slips with some printing,
but they can't use those American slips of paper for anything. It's
worthless.
Gold on the other hand can be used to buy stuff. So if you have gold you win.
Your mistake is in thinking that paper slips ("money") has value. You
can't have a bubble with the medium of exchange.
You either have some gold or you don't. And you don't.
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