Thursday, March 18, 2010

The gold standard is pointless

The value of gold comes from two sources: commercial/industrial use and perception. The former would give it much less value than it has. The latter is well, perception.

Gold is a useful material commodity. It isn't a stable currency or a reserve. It's just a rare metal which we hype up and fool ourselves into believing it has innate value comparable to the market price.

Moving to a gold standard would fix absolutely nothing. Anyone who advocates a gold standard or investment in gold is either speculating on a bubble or deluding themselves. Gold isn't special or magical. It's a rare metal that makes shiny stuff. That's all.