Why is gold so valuable?

[gaggedLouise]

In Germany at the height of the 1922-23 hyperinflation it used to be said that having a hooker in the family was worth more than a respected job and a well-furnished apartment. The lovegirl would get paid at once, or in goods instead of money, and she could easily adjust her prices upwards, while the salary from an ordinary job would never keep pace with the inflation.  ::)

[Oniya]

In Germany at the height of the 1922-23 hyperinflation it used to be said that having a hooker in the family was worth more than a respected job and a well-furnished apartment. The lovegirl would get paid at once, or in goods instead of money, and she could easily adjust her prices upwards, while the salary from an ordinary job would never keep pace with the inflation.  ::)

It was also said that if you left a shopping cart full of Deutschmarks on the sidewalk, thieves would take the cart and leave the Marks.

[Lithos]

Gold is valuable cause it is rare, easily moldable and rather pretty / doesnt tarnish easily.

[Inkidu]

Gold has been seen as a good item of value. Unless you work on a barter economy you need some kind of medium.

It's like the idiosyncrasy of a lot of elderly people who take their government check down the bank and cash it. It's a government check. If it's not good then the money you traded it in for is no good either. Each bill be it one or one hundred is basically a check worth that face amount. There is actually very little of worth backing any modern economy, especially when an economy becomes a tertiary one (ie post-industrialist). 

[Lrrr]

Now I'm sitting here trying to think of something that is rare but, not worth a great deal of money...

Answer: Bald Eagle poop.

And for something that's worth a lot because we say it is:  OEM inkjet printer ink at $50 an ounce.  (I use bulk ink at $1 an ounce)

[Mathim]

I always thought it was just superstition that made it valuable. Yeah, it's rare, but it's not the only rare thing, and until recently it hasn't been really useful in a practical sense, but now we can put it in computer chips and stuff as a conductor. So other than cosmetic uses (jewelry) the reasons for it are fairly shallow. Too bad people back in the day didn't realize alchemy was basically attempting to do something that nuclear cold fusion would need to be mastered to accomplish.

[Inkidu]

I always thought it was just superstition that made it valuable. Yeah, it's rare, but it's not the only rare thing, and until recently it hasn't been really useful in a practical sense, but now we can put it in computer chips and stuff as a conductor. So other than cosmetic uses (jewelry) the reasons for it are fairly shallow. Too bad people back in the day didn't realize alchemy was basically attempting to do something that nuclear cold fusion would need to be mastered to accomplish.

That was just the end-goal of alchemy, the big prize. Besides, as a culture that values money that only has value because someone says it does, I don't think we have room to talk, especially since cold fusion still isn't quite viable on the large scale.

At least alchemy gave us the foundations for modern chemistry. Our love of money gave us Wall Street. :P

Though if we could print diamonds onto circuit boards that'd be something amazing.

[Oniya]

Though if we could print diamonds onto circuit boards that'd be something amazing.

Printing nanotubes is probably more useful (and likely more feasible.)

[Caehlim]

Yeah, it's rare, but it's not the only rare thing, and until recently it hasn't been really useful in a practical sense,

When you think about it though, do you really want something useful to be used as our currency? If our currency were apples for example, we couldn't eat apples without taking money out of circulation. With gold having no real uses, we don't lose anything by sealing it up by the ton in something like Fort Knox. Also it never corrodes, which makes it useful for a perpetual currency as well.

Too bad people back in the day didn't realize alchemy was basically attempting to do something that nuclear cold fusion would need to be mastered to accomplish.

We have actually transmuted lead to gold in the present day, ironically by mistake. A damaged nuclear reactor's lead lining had large parts of it change from lead to gold because it was leaking a lot more radiation than it should have. Also the physicists at CERN can create gold atom by atom, although it would take millions of years of continuous operation to create enough gold to even have a speck you could see with the naked eye.

The medieval alchemists weren't actually interested in making gold for financial gain. The idea was that if you could perfect something like a metal, turning base lead into pure gold (believed at the time to be an intrinsically superior substance) they thought that it would be possible to do the same to a human. Based on Christian mythology, they wanted to return mankind to how it was during the garden of Eden. Lead into gold was just meant to be a proof of concept.

[Oniya]

Got a source for that nuclear reactor thing?  I was only able to find an article on the 'atom-by-atom' conversion (and apparently they used bismuth and not lead, because it was easier to detect the gold that way.)

[Inkidu]

Printing nanotubes is probably more useful (and likely more feasible.)

What about printing diamond nanotubes?

[Oniya]

Well, the difference between nanotubes and diamond is the arrangement of the carbon atoms, so the two are kind of mutually exclusive.  Nanotubes have the atoms arranged like a honeycomb, and diamond has the atoms arranged like a caltrop.

[Caehlim]

Got a source for that nuclear reactor thing?  I was only able to find an article on the 'atom-by-atom' conversion (and apparently they used bismuth and not lead, because it was easier to detect the gold that way.)

Found it, it was from the Terry Jones Medieval Lives: Philosopher documentary.

Here's the video, it starts at 6m33s

http://youtu.be/ZTf2EzTd1TE?t=6m33s

[TaintedAndDelish]

The medieval alchemists weren't actually interested in making gold for financial gain. The idea was that if you could perfect something like a metal, turning base lead into pure gold (believed at the time to be an intrinsically superior substance) they thought that it would be possible to do the same to a human.

http://cdnimg.visualizeus.com/thumbs/03/8c/boobs,girl,gold,nude,woman-038c03070961d9465955d9d13b227c1e_h.jpg

:)

Sorry.. I couldn't resist...

[Caehlim]

http://cdnimg.visualizeus.com/thumbs/03/8c/boobs,girl,gold,nude,woman-038c03070961d9465955d9d13b227c1e_h.jpg

:)

Sorry.. I couldn't resist...

:D

[Mantis Shrimp Prime]

I suppose another way to look at it is the mentioned qualities: rare, doesn't tarnish, beautiful, and useless, make it a luxury good and thus a status symbol.

So in ancient times someone with access to a lot of practically valuable goods (like control over agricultural land and herds of livestock), they could afford to exchange some of that in order to have pretty stuff made of gold lying around.



No idea if this has any support, but it's a good enough hypothesis to merit perhaps looking to see if anyone has done research into it.

[Nachtmahr]

I actually thought the value of gold in modern days were because of it's technological applications, being a decent conductor and what not.. But then I started thinking about it, and I realized that there can't really be a huge demand for 'industrial' gold when there is so much 'recreational' gold going around, can there? That would be sort of backwards.

Then I felt a bit dumb. ^^'

I guess gold is just really valuable because we've all just grown up thinking that? We've always been taught that gold is a reward or a treasure, so when we hear the word we just automatically associate it with great value even if it doesn't actually have all that many uses.

I would probably argue that the it is indeed because of it's long-lasting potential and it's fairly stable value, meaning that any investment in something that's made with gold can eventually be turned back into currency if you so desire, I.E. a ring made of gold with a diamond in it worth 500 [currency] is going to stay around that value, or simply just increase over time as it becomes antique - But I like the idea that we've just been taught to value gold more. x)

[Caehlim]

I would probably argue that the it is indeed because of it's long-lasting potential and it's fairly stable value, meaning that any investment in something that's made with gold can eventually be turned back into currency if you so desire, I.E. a ring made of gold with a diamond in it worth 500 [currency] is going to stay around that value, or simply just increase over time as it becomes antique - But I like the idea that we've just been taught to value gold more. x)

Actually most jewelry instantly loses about 80% of its value the moment you walk out of the store. The raw materials, even when gold, aren't worth anything like what you pay for the craftsmanship of buying a new piece of jewelry. Unless as you say it becomes an antique, but that requires it competing against all surviving pieces from the same time period and usually possessing a unique trait of some sort as many would-be comic book investors are discovering after the burst of the comics bubble in the 90s.

Also diamonds are also not rare at all, but an artificial scarcity is maintained upon them by the corporation that has a monopoly on them in order to keep their value high.

[Nachtmahr]

Also diamonds are also not rare at all, but an artificial scarcity is maintained upon them by the corporation that has a monopoly on them in order to keep their value high.

Heh! Sounds like dentists in my country!

But well - It was just a guess after all. ^^ I mean, you could argue the same thing with all kinds of art - A Van Gogh is literally worth nothing in terms of raw materials, compared to their actual price. If you get some jewelry from a famous source, which is sort of what I was hinting at, rather than something that's produced en masse, but it might have been a bit vague and general. But hey, it's just a thought. ^^

I mean, gold is probably just valuable because we need something limited to base currencies on, otherwise they collapse.

[Inkidu]

Heh! Sounds like dentists in my country!

But well - It was just a guess after all. ^^ I mean, you could argue the same thing with all kinds of art - A Van Gogh is literally worth nothing in terms of raw materials, compared to their actual price. If you get some jewelry from a famous source, which is sort of what I was hinting at, rather than something that's produced en masse, but it might have been a bit vague and general. But hey, it's just a thought. ^^

I mean, gold is probably just valuable because we need something limited to base currencies on, otherwise they collapse.

I don't think there's a G20 country in the world that's still on the gold standard. I know in America the value is basically whatever it's decided on being. If someone hacked the NYSE tomorrow and made everything plummet it'd be pointless. The treasury department could just go back a day and reset the values like a restore point on a computer.

[Nachtmahr]

I don't think there's a G20 country in the world that's still on the gold standard. I know in America the value is basically whatever it's decided on being. If someone hacked the NYSE tomorrow and made everything plummet it'd be pointless. The treasury department could just go back a day and reset the values like a restore point on a computer.

Well, like I said: I'm not claiming that I know what the answer is - It's just what I think/thought. So far it even seems that the theory of gold being valuable simply because we like to pretend that it is is the most viable one.

[LostInTheMist]

The value of gold is the value that the market sets it as. It's not an artificial number at all. It's what people are actually paying for gold by the ounce. In times of great instability or uncertainty, gold's value increases significantly, because even if the government collapses and all currencies implode, gold will still be there, the idea being that the gold standard could be set, no matter what happened to the dollar/euro/pound/lira/whatever. So the more worried people are about the future, the more they're willing to pay for a currency that will still be valuable whatever may happen in the future. In 2008, even when the stock market plummeted, the value of gold rose sharply, steadily, something like tripling in value between 2008 and 2012. I'm sure everyone remembers that in early 2008, there was a very real fear that we were headed for another Great Depression.

Oh, also, random fact. There are 12 ounces in a pound of gold, not 16. So an ounce of gold weighs more than an ounce of feathers, though a pound of each weighs the same. (You can use that as a double trick question.)

[Oniya]

Oh, also, random fact. There are 12 ounces in a pound of gold, not 16. So an ounce of gold weighs more than an ounce of feathers, though a pound of each weighs the same. (You can use that as a double trick question.)

This is because gold is measured in Troy ounces and feathers are measured in avoirdupois ounces.  Troy ounces are also called 'apothecary' ounces.

[Lrrr]

Oh, also, random fact. There are 12 ounces in a pound of gold, not 16. So an ounce of gold weighs more than an ounce of feathers, though a pound of each weighs the same. (You can use that as a double trick question.)

According to the big, big book (just teasing, it's a URL) of unit conversions:

1 pound = 14.583333333 troy ounces
1 troy pound = 0.82285714286 pounds
1 troy pound = 12.000000000 troy ounces

So, actually, a pound of each doesn't weigh the same if you're using troy pounds for the gold and pounds for the feathers.

That's what you get when you approve engineers as members of a website. ::)

[DarknessBorne]

I'd say gold has retained its value because (in no particular order):

1) It's bright and shiny
2) It's (almost) infinitely divisible, and can be readily poured into a fixed volume
3) It's durable and resilient
4) You can pack a lot into a small space
5) They're not making any more of the stuff (well, it can be mined, but this only adds a tiny bit at a time to supplies, year over year)
6) There's no technology on the horizon that would enable gold to be made from anything else at a cost that would even remotely make sense
7) Because almost everyone agrees it has value
8) Tradition