Nonsense. Gold has non-currency uses so it is, innately, NOT a "fiat" currency. It can be used to make objects of art, and it's essential in many manufacturing processes.
This argument gets repeated again and again, but it doesn't have roots in reality. The market value of gold is far, far in excess of what the demand from industrial, scientific, fashion and jewelry use cases dictate. In fact, these uses exist despite the fact the gold is very expensive. (Perhaps with the exception of the latter two, which are popular because of gold's high market value. But they do not themselves cause it).
If gold and other precious metals did not have their historical use as a currency and the trust of markets (and its suitability as a currency, I suppose), they would be worth at least an order of magnitude less than they are today. And it would be mined a lot less of them.
> The market value of gold is far, far in excess of what the demand from industrial, scientific, fashion and jewelry use cases dictate.
You forgot speculation. The reason it's so much more expensive than 10 years ago is because people expect that at a certain point inflation will finally be realized, and prices will be so high that it will be used for scientific, jewelry, and ornamental uses again, at prices even higher than today.
And even forgetting that, we have the fact that people buying gold to save removes it from the market, reducing supply at lower prices, leaving only higher bidders in the market. And you can still get gold tipped RCA cords, despite what you say. So as long as there are any consumption buyers just below the current price, the price is justified.
If we're going to play the "memes for intellectuals" game, I could just as easily make a similar claim on your comment. This is a content-free comment.
The easiest support for my argument would be looking at the list metals with a similar rarity to gold, and noting that gold is more expensive than all but platinum, despite having an annual production which is >15 times higher.
Now, please provide a citation for your claim "gold's market value is mostly caused by demand from art and manufacturing processes". I claim that this wrong because 34% of all the world's gold is kept in vaults, and an additional 52% is stored in jewelry (of which a significant amount should be considered an investment by its owners due to the high market value).
The fact that you are putting words in my mouth ("gold's market value is mostly caused by demand from art and manufacturing processes") is an indication that you are not debating in good faith. Good day. I shall waste no further time or effort on you.
so is mud. we dont use it as currency. why? gold has value for us not cuz of its uses, but cuz it is scarce and it is shiny and its an easy metal to work with
Gold has unique properties like every element has. But gold jewellery costs a months salary cuz we believe it is valuable, it is purely psychological. Its cost has Nothing to do with its chemistry or value to society.
Same goes for btc.
Actually it does. One of those unique properties of gold is that it is incredibly non-reactive, which means it doesn't visible age, discolor, or tarnish. The value of that for jewelry should be self-evident. It's excellent ductility and malleability are valuable properties as well.
all the things you are saying are just arguments for making gold a good medium of exchange, which it is no longer used for. not one of your arguments suggests that it is a good storage of value, which it used to be because of its scarcity.
if indians stop paying doweries in gold and arabs stop finding its shininess alluring, the value will plummet. there is nothing intrinsic in gold that makes it valuable
Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head. Source:http://online.wsj.com/news/articles/SB1000142405274870403270...
If gold and other precious metals did not have their historical use as a currency and the trust of markets (and its suitability as a currency, I suppose), they would be worth at least an order of magnitude less than they are today. And it would be mined a lot less of them.