It's like saying, "gold is not money"

I won't hate you! I respect you.
However, I will retort.
IMHO, if anyone claims they don't stack for financial or economic benefit (whether that be fiat, bitcoin or any other form of tradeable value) then you are kidding yourself. Or, alternatively, you are promoting this ludicrous claim for the purposes of an "out" for why it doesn't worry you when spot falls.
Additionally, if you stack and believe you aren't speculating, then you are kidding yourself even more! Or, alternatively, you are blind to the definition of the word speculation, most likely due to your all encompassing naivetiy.
(Disclaimer: The word "you" does not refer specifically to Bordsilver)

 

:lol: See, I knew you'd hate that.

Stacking for risk-adjusted welfare gain isn't necessarily the same as speculating (or "investing") for risk-adjusted nominal price gain. Admittedly welfare and financial gain are usually related but they are certainly not the same. Indeed, "losing" the welfare gain bet can still be rewarding and the utility is in having the downside hedge. Stacking for civil liberties is certainly not the same as speculating.

 

You are correct, stacking for civil liberties is certainly not the same as speculating.... however, if you lose the welfare gain for the sake of civil liberties, it could be likened to cutting off your nose to spite your face.

 

Your assertion is correct - but it has only been correct for the past 40 years. For thousands of years prior to that your assertion was manifestly incorrect and gold and silver were the only trusted form of money used.

I believe that the pieces of paper you think so highly of will NOT be accepted for any of these things 40 years from now - but gold and silver will.
In fact i'm sure that 20 years from now this paper money will be good for ... NOTHING! :lol:

Your faith in the ponzi fiat monetary system and the political system built on top of this is misplaced. You are but one of many new members on this site who seem to show no understanding at all of the fundamentals of world economics :lol:

I suggest you move to a shares forum, or better still - to a socialist government loving forum :lol:
It's only those kind of fools who could possibly believe in the hairbrained fiat system we currently have.

 

Yippe - completely agree except for the long time line. 20 Years you are an optimist . More likely 2-5 years than 20 ?

 

Not at all true bord. Just because something has intrinsic properties, characteristics, or qualities does not at all mean that it is priced. That's an absurd notion you embrace. Both you and I can think of almost countless things that have intrinsic properties or characteristics but is not priced.

Also, just because the investment industry uses a term in a nonsensical manner, doesn't in any way, shape, or form mean that it is a good convention to use that term in such a way. If you would just learn the etymology of "intrinsic" you would understand that the way in which the investment industry uses it is fully opposite of the only sensible meaning of the word. The antonym is extrinsic, which is exactly what ANY valuation (price is based strictly on valuations) of gold is. Also doesn't mean that wise people shouldn't reject the poor convention or use of a term in a particular way. Someone claiming that fiat currency, gold, or dog poop in the shape of Elvis Presley or Jesus Christ has intrinsic value makes no sense at all. Any value (determined as price) attributed to these things is an extrinsic value.

Finally, indeed it is (some) inherent qualities (intrinsic characteristics) of an element such as gold that is an essential factor in some level of demand for it. The investment industry wants people to believe that such inherent qualities play no role whatsoever in demand and supply positions for it. To me, that's a crock of bullshit that this industry expects people to believe.


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In certain places and times in the past, gold and silver were used as money. I never maintained otherwise. You project things onto me that isn't true and that I don't assert.

I actually agree with you, Yippe, in part...only the part where you are right. The rest of what you are saying is nonsense.

I don't think highly of fiat currencies...never claimed to...that's you projecting again. What I assert is that this fiat currency has a lot of utility; people can use it in vastly greater ways than they can use gold. I just gave a handful of examples...there are a vast number of ways that i could have mentioned (but didn't because of the examples I gave were adequate for normal people to understand the point) in which one can use fiat currencies in ways that gold can not be used. Also, I never claimed to have faith in the political system we have...that's you doing what you do so well - project made up things upon people. If you knew anything about my political positions, you would know that I strongly reject a lot of the ways in which our political system is run. That doesn't mean that I, unlike you, shouldn't be in denial about the facts on the ground, or that i shouldn't make the best of the bad situation or that I should regurgitate canned Right Wing rhetoric like you.

Any day that you want to discuss things without projecting made up things about me, just let me know. Until then, get your head screwed on more tightly please, you're going to lose that last marble that's rolling around in there.


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Zero is still a price.

That's what I said (I think).

The intrinsic property of currency that gives it a price is the threat of violence if one does not use it. This is substantially different compared to the intrinsic properties of gold.

 

Not really sure what you mean. They were two separate reasons albeit potentially interrelated like welfare gain and financial gain.

 

bord, I agree with you on both those points.

Zero $ an ounce for thing X means it is extrinsically valued at that amount by the person(s) not willing to offer payment in return for it. $1300 an ounce for thing Y means it is extrinsically valued at that amount by those who want to pay that amount. Same goes for thing Z if valued at 800 quintillion dollars an ounce. None have intrinsic value because individuals are required to give it value even if that value is determined to be zero by the individual(s) and by definition then, that requirement makes X, Y, Z's (and everything else) value always and entirely extrinsic. A simple test for this is to ask yourself what was the price of gold 683,298.64 years ago?


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I'm not sure I understand how losing the welfare bet for the sake of civil liberties can be rewarding?

 

Easy. 683,298.64 years ago, the price of gold was the effort and resources needed to extract it. That was the price of gold for whoever wanted to go to the effort.

IMO you are overcomplicating intrinsic value in an economic context, with a somewhat enigmatic philosophical interpretation.
There are many philosophers who would disagree with you and interpret the exact opposite... here is but just one: http://plato.stanford.edu/entries/value-intrinsic-extrinsic/

 

The word soldier probably derives from German word "soldat" (which derives from Latin word "soldarius"). Word "soldat" is also older version of what we use now and means exactly "give salt". In time of Roman Empire salt was considered maybe even more worth than gold. Soldiers were being paid (also) in salt.

Today salt is just something you put into your meal.

If old toilet is being "decorated" by some artist it can be sold for few thousands if not few hundreds of thousands of dollars. Toilet itself it's useless.

On the other hand, measuring human knowledge and skills can be very hard. You can hardly say that someone is being Y x (*) skilled, but the "hidden value" can mean huge difference in the end wealth and income.

Thus I would say it's not really that much important as what is the "actual" value, but what somebody can do with it to make the most of it.

 

Good day to you too, and thank you for a great discussion!

In my reading above, your main point appears to be that you believe gold has no intrinsic value, and you don't believe that the use of gold as money would solve the current financial issues the world is facing.

Let me address both points.

"Gold has no intrinsic value": I wonder whether we might be on slightly different pages of a playbook in the definition of our terms... please allow me to clarify. By "intrinsic value", I mean a level of importance that an object or item has in and of itself in it's own right simply by existing, where "importance" can be expressed/explained as (but not limited to) desirability, attraction, necessity, useability and so forth. In almost all cases where something has an "intrinsic value", this, and the level of that value, is determined by man himself, and can be influenced by (but not limited to) culture, race, religion, geography, upbringing, tradition and so forth.

To give an example: A can of salmon may have a high value to you - you may like salmon, perhaps cannot get it often due to where you live, and thus, you place a high value on this item. To me, it has little value - I can easily obtain as much as I want, and also, happen to dislike salmon. Yes, that's not a fantastic example, but I hope it serves to clarify my points above.

You argue that gold has no intrinsic value - however, I would suggest it does... not only on the basis of scarcity and desirability, but also useability. Mankind often uses gold in the plating of contacts for electronic equipment, and whilst the amount used in each device is extremely small, the fact remains that the gold used must be won from the ground before it can be applied in this regard, and the effort required to do so dictates a relatively high value, because it is relatively rare, and takes a considerable amount of effort to obtain.

"Gold as money solves no problems": With all respect, I feel here we are actually fairly clear in what we discuss, and I cannot agree with your statement.

One of the main reasons the world is in the place it is in is because of debt, on this point that you make, I am in wholehearted agreement. You state that having gold as money would not eradicate our issues of being addicted to debt - but I would argue that it will. The *only* reason that we are where we are today is that each and every dollar that is born into existence is lent into existence, and interest is payable on that dollar. The dollar with which to pay the interest on the debt incurred does not yet exist - that too must be lent into existence.

The reason this can happen is that banks have "taken over" the creation and issuance of money - it is no longer being done by the government itself - it is being done by a private organisation maquerading as a quasi-government entity.

And all of that is possible only because the world moved away from a gold standard, backed currency to a pure fiat currency - which meant that suddenly there were no constraints on the amount of money that these quasi-government entities could create, and 40 years later, here is where we are.

Returning to a government issued, honest and sound money (e.g. gold), would prevent the rampant printing and conjuring of currency out of thin air - it would put limits on levels of debt, and the amounts that governments, individuals and corporations could borrow, and return us to a much more sane world.

Will it be possible to arrive in this position without a massive reset of the entire financial system on a global scale? Absolutely not in my opinion - there is far too much money sloshing through the system, and far too much debt to not have to rest at the very least, a large proportion of it.

Any further proof that may be required as to whether or not gold as money is workable or not can be obtained through looking at history - gold and silver as money have lasted for 5000 years, it is only in the last 40 that we have abandoned this honest money, and moved to a purely fiat currency. Take a look at where we were in 1971, and compare it to today. Then look back over 5000 years of history, and acknowledge that no purely fiat currency over all that period of time ever survived, yet gold and silver did, and did so without the downward spiral of doom that we are finding ourselves in today.

Thank you too for a good, well discussed debate We may agree to disagree, but it's a pleasure being able to set forward points of view and debate them

 

We may be discussing different things. The insurance/risk adjusted welfare case can happen independently of civil liberty improvements both of which can be worthwhile reasons separate from financial speculation.

 

I wonder what he'd say about silver...

 

Again wrcmad, you have failed at understanding what is actually quite simple. You didn't answer the question I asked to ask of oneself because you know the answer is one which you hate to admit. You already know that before humans place a value on it, it has no value. By definition, gold doesn't have and never had intrinsic value. And even if, illogically, we used your answer, your answer still results in the same conclusion (gold = no intrinsic value) because effort and resources themselves are values that are derived by extrinsically. Without humans to evaluate and derive at or place a value on effort and resources needed, value of these things can not be determined. It's really simple. The fact that you believe its "overcomplicated" is your deficit.

Plato's understanding of intrinsic value is fundamentally the same as mine. In no example would Plato have argued that to a rock, enjoying the playing of music is intrinsically good. For Plato, intrinsic value always required a human judgment. Without humans to judge whether some action was consequentially pleasurable or not, intrinsic value had no meaning. Therefore, things like gold, without humans, have no intrinsic value. The fact that there's intrinsic value in people doing pleasurable things (like for some, holding a bar of gold in their hand and for others hugging a tree) doesn't mean that the object itself (the gold or the tree) have intrinsic value....it's the activity that the human judges to be pleasurable is what is said to have intrinsic value.


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So it's with money. Money (as material) it's even more worthless, expect for using it for fire or for wiping your ...

El Dorado and things like that were always made out of gold. I can't imagine having city build from money (paper).

Buffet is well knows as stock investor. If you will as someone who is "pro" (for) precious material it will say to you that stocks are worthless. There are "prophets" on "both sides".

One of the richest guy from our country build his "empire" from garbage. He now owns at least on island in Greece and Croatia and many other things. Some were laughing at him when he was stockpiling garbage - used car tires, chicken's claws, etc. Nobody here would eat chicken claws unless being really desperate. On the other hand, they are very popular in China...

So, what is junk for other, is fortune for another one.

If I would look at my silver stack as pure silver (market value) it wouldn't be worth much. But some coins mean something to me. And that's what it counts, I guess.

 

You actually agree with me on my basic premise that gold has no intrinsic value when you write "Value only exists because individuals ie humans value or give value through demand or desire". Precisely, without humans to value it, it has no value, whether intrinsic or obviously, extrinsic.

As for cats, they value many, many, many things including on occasion, the chasing/playing with a mouse (whether it's a real mouse or a toy mouse)....that's why the cats that I have in my home for example chase a toy mouse....they intrinsically value the pleasure they derive from doing that activity. If one particular toy mouse, hypothetically, was somehow given the ability to withstand any attack by a cat and were able to successfully injure the cat, I guarantee you the next time that cat saw a toy mouse that looked like that special one, that cat would not want to chase/play with it because the value the cat derives from the pleasure of playing with it is replaced with the belief that displeasure will result (being attacked) from trying to knock it around. It's simple behavior modification but it's based on the fact that a cat either values the pleasure it might derive...or the cat doesn't value knocking around a toy mouse because the result will be anything but pleasure. I have seen plenty of cats who don't care to play with the same toy mouse that other cats value knocking around. I could give a million other examples to illustrate how cats, or any sentient individual values many, many things. 16th century Decartes assumptions about animals has long been proven to be wrong.

Holding or placing value on a thing or activity doesn't necessarily mean that a positive set price is established for that thing or activity. Stark gave a good example of this in his broken toilet hypothetical. The weirdo buying that broken toilet to hang on his wall might have bought it for half or double of what it might have been sold to him for. So, the weirdo placed a value on that toilet even though there's no positive set price established for it. The main point is, value is a judgment, not necessarily a price. Intrinsic value requires an individual's judgment. A piece of dust, a broken toilet, a grain of sand, a nugget of gold has no intrinsic value. A price can be placed on these things but an extrinsic valuation (of things like the value of the effort required to acquire that thing) by an individual must be made before a price established or paid is determined.

I'm not sure I follow your reasoning...we may actually agree but to clarify, let me say that what you described is EXTRINSIC value placed on something, not intrinsic value it has. The "desirability, attraction, useability" are all examples of valuations made extrinsically, by some people who desire, are attracted to, or plan a use for that thing. 874,985.93 years ago, what precisely and explicitly was the importance of gold? Gold, without humans to place a value on it, has no value. Value is based on judgment by individuals; judgment of how desireable or useful or pleasurable to have that thing is thought to be. Gold can not hold judgment therefore it can not value anything. Gold has no intrinsic value. It has intrinsic characteristics or properties that some humans may judge to be of value to them and only to them will gold hold value. The value that gold has, it's entirely extrinsic because a value by you or I has to be placed on it for it to have any value at all.
The same could be said of a used, broken toilet with feces remnants from some entertainer all over it. Any value it has is extrinsic, just like gold or your example of salmon. None has intrinsic value.

The fact that gold has intrinsic CHARACTERISTICS / PROPERTIES that some people happen to judge as valuable to them is not an example in intrinsic value. That's an example of extrinsic value (of the intrinsic properties) placed on gold. The value of the effort to acquire gold (or anything for that matter) is determined by the people who desire to posses it. You yourself claimed that this dictates the value of gold. That is, by definition, an extrinsic valuation. The gold is valueless without the judgments of value placed on the effort of acquisition and desire for whatever form of gold that individual desires. In reality, neither scarcity nor amount of effort required to obtain a thing are necessarily a factor that determines the value of that thing desired. Go back to the example of the toilet if you want proof of this.


As for your contention that a gold backed currency would solve all our current fiscal woes, I strongly disagree. If this is not your position, then please help me understand where I misunderstood you. Fractional lending can be done with a gold backed currency. Fractional lending creates debt. Creating debt is what has gotten countries into more fiscal problems than anything else, one could argue.

I don't see a gold standard as the fix to screwed up human behavior which is what has caused our country's fiscal woes in the first place.



Final thought for gold = no intrinsic value. Understanding the etymology of the word "intrinsic" we know that the naming convention (claiming that inanimate things have intrinsic value) used by the financial industry is nonsensical. Intrinsic means to be valuable unto itself or perceives, for its own sake, value. The fact that gold or anything at all has to first be desired by humans means that it's value is derived extrinsically. Gold has no value unto itself and can not make a valuation for its own sake. All costs (labor, etc) are ascertained by a judgment as to the subjective worth of that labor and the subjective worth of the resources used to power that labor. Can subjective worth be collectively agreed upon? Of course, yes. In fact, that's how societies arrive at subjective worth of things...through collective evaluation. The minimum wage rate in a given city, as just one of many examples, illustrates this point.

The fact that thing X is scarce, requires substantial effort to acquire, or is highly desired doesn't mean that thing X has value unto itself or that for its own sake it perceives value.

I argue that a far more accurate term to describe what the financial industry problematically calls "intrinsic" value is "base" value.

For all the right reasons, I reject the naming convention used by the investment industry....you should too.



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