HTH Gold RLD February2013: A Review of the Online Radio Station that Plays Diverse Music Genres and Artists
It is hard to think of gold as having intrinsic value in any meaningful sense. It is a currency, and as you say, it has relatively low velocity, which makes its supply less responsive to changes in relative prices than other forms of wealth.
HTH Gold RLD February2013
The initial value of gold may be large, and the relative price of gold may be moving faster than the corresponding market prices of other more useful commodities. Those are two plausible scenarios.
I would argue that in the case of the dollar, that its at least one foot in the currency value camp, and one foot in the commodity value camp. If you go by the insight that gold is an unlimited store of value because you cant run out of it, the dollar also is because there is always a point at which you have too much and you will be unable to create more of it. A more intrinsic one foot in the currency value camp would be to say that the dollar is a store of value because its value to its users is fixed, people promise to exchange dollars for gold, the government promises to promise to promise to honor that promise and so on. But that means you have to have something to which you can say that, you cant just chase imaginary paper around.
Gold, oil, you name it. If the value of that commodity is fixed per capita then it is fixed in nominal terms as well. If you disagree with me you are arguing that there are really no quantities or prices at all. If so, you are going to end up with a world of not very useful science and not many gold bracelets.
Go look at your own life, your friends, your family, your neighbors. Who you think will be the first person that gets to you and says, give me 5% of your gold? Its not them, its you. I don't know any families that don't argue about money. Why? Because we all want something to buy with or we want to get rid of something that we need to sell, and all those things are all about money. Instead of agreeing to each others prices and terms, we fight over it. Do people look at their cars and say give me X of your life or your labor? That is as absurd as all this talk.