Money must be easily exchangeable and possess the following properties:
#1: Money must scale easily - meaning it can be subdivided into smaller units or aggregated into larger units, easily. Gold gets a 'moderate" in this category since it requires specialized equipment to subdivide or aggregate and has practical limits for each end of the spectrum (micro small or huge weight to transport).
#2: Money must not corrode or rot over time. And it has to retain its value over time - meaning it’s scarce (but not so scarce a modest add or replacement to supply is impossible). Gold does a good job in this category - basically meeting this standard.
#3: Money must be transported easily and securely. God gets a moderate in this category since it is fairly dense and heavy in moderate to large quantities and subject to theft if transported through risky geography or common carrier
So Gold get’s a 1.5 on a scale of 3 using the above criteria to measure its adequacy as money.
The 3 characteristics in evaluating gold as money are : Salability, Scarcity and Neutrality. Gold get’s a B minus for Salability - since salability in turn rests on a) scalability - i.e. ease of divisibility and aggregation (give it a B), b) consistency of value over time (give it an B; it’s been as low in the last 10 years as about $1350/ounce in 2014/2015 and currently is as high as $1800+ in 2011 ) c) ease and security transporting (give it a C-). So overall the salability of gold is around a B-. The two qualities besides salability to assess are : Scarcity (often measured by stock to flow ration - gold get’s an A-(my opinion) ; it has a relatively low stock to flow of 62 (vs silver of 22, platinum has stf of about 1.1) ; the higher the stock to flow #, the less the currently supply is increased by inflows from mining. Finally, money must be neutral - it has no opinion and is indifferent to the opinions of others - gold gets an A here. So overall, gold has (my opinion) a B- for salability, and A- for scarcity and an A for neutrality. So overall a B-, an A-, and an A. Treating A as four, A- as 3.75, B as 3, B- as 2.75 gives a subjective # of 3.5 which is about a B+ overall for gold as money.
I can see the appeal of Gold and why it was used as money. Gold requires labour to be produced, it is recognised around the world it is Fungible, divisible, portable and has kept up with Inflation and protecting your purchasing power. Gold used to keep Government spending and printing in check as they had to rely on their reserves of Gold.
Gold as Money
Gold is stable ,portable and non toxic and it is fairly rare.
Gold does not rust or tarnish it can be made into coins, it is fungible, durable and you can store it.
Gold has stood the test of time
Gold has been money a lot longer than paper has been money. It has all the necessary characteristics. I also like that it isn’t digital. It gives gold a series of advantages (and disadvantages) that bitcoin doesn’t have.
With central banks talking about crypto fiat, for the first time in history, the neutrality of money is coming under assault in a way not previously possible.
Discuss “Gold as Money” below.
1, Gold is a language used to communicate value.
2. Gold can be use to store because it’s durable, dense, and rare. Also, it maintains its purchasing value and it’s hard tp produce. In addition, it can be sold ea
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Discuss “Gold as Money” below.
1, Gold is a language used to communicate value.
2. Gold can be use to store because it’s durable, dense, and rare. Also, it maintains its purchasing value and it’s hard tp produce. In addition, it can be sold easily and quickly sold if needed,
3. Gold is a medium of exchange because it’s widely accepted, portable, divisible, common and accessible, stable, and fungible, and
4. Gold can be used to measure value.
Discuss “Gold as Money”
Gold does not dissipate into the atmosphere, it does not burst into flames, and it does not poison or irradiate the holder. It is rare enough to make it difficult to overproduce and malleable to mint into coins, bars, and bricks. Civilizations have consistently used gold as a [material of value], In addition, gold is salable because it can be easily and quickly sold if needed. In addition, gold is neutral because it doesn’t any opinion about how it can be used.
Gold is timeless. It has an ancient history as a medium of exchange. It does not corrode. It is malleable and scalable. It has a relative scarcity and is therefore, precious. It holds its value and appreciates over time relative to fiat currency as a result of inflation and quantitative easing.
There four factors that make Gold Money:
Factor #1:
Gold (Au) is the 79th chemical element in the periodic table.
Gold is a transitional metal and share a common group with Copper (Cu) and Silver (Ag) called Group 11. Its physical apperance is slighty reddish but metallic yellow with an incredible reflection by light. One gold is 31.1034768 grams in mass.
Reasons why Gold became the ultimate choice as money:
First of all, it is solid at room temperature.
Second, it is safe: that is to say it is neither radioactive nor flammable.
Thirdly, it is rare element on Earth because the death of stars made this element existence possible.
Factor #2:
The salability of Gold:
- Scale: the value of gold is difficult to sub-divide and minting skills and workshops are essential requirements. The melting point of gold is 1064.18 °C.
- Time: precious elements like gold are extremely durable, because gold is completely pure and does not degrade over time. Silver unfortunately tarnishes over time, and copper goes green.
- Space: Transporting Gold is hazardous and requires special security and precautions due to numerous reasons: For example, terrorists can hijack the convoy and steal the gold or the ship carrying gold sinks in the middle of the ocean.
Factor #3:
The scarcity of Gold:
As previously mentioned before in factor #1, Gold is one of the most rarest elements found on Earth; therefore, Gold is a scarce asset.
However how scarce an item or element may be, without demand, it has no value. Now in order for something to have demand, it must possess physical attributes to allow the person to utilize it many ways. Fortunately, Gold is a dense and soft metal, which through minting, can be easily transformed into anything: Jewelries for example. For this reason, gold has been established as a very demandable commodity. Its demand combined with its supply has set a valuing system. The higher the demand and lower the supply, the higher its value.
Thankfully, there is a formula called Stock-to-Flow ratio, which is the rate of flow of newly added gold to the existing stockpile. In other words, it has been determined, through this ratio calculation, that the inflation rate of gold is approximately 1.6% / yr.
Factor #4:
The Neutrality of Gold.
What do Gold and a Gun have in common?
They are both inanimate objects whose purposes are determined by their holder.
Guns are used for hunting or sports, and Gold is used as an economic unit or for decorations (e.g. jewelries).
In conclusion:
Gold is a rare, scalable, fungible, portable, safe, merely impossible to counterfeit, globally accepted money which has an exceptional demand to-which people are even willing to risk their lives just to acquire it, and if they must, they are willing to travel to the Caribbean islands and start digging holes to find that pirate’s chest. Hopefully, they will have found what they’ve been looking for without unexpected surprises. 
Learning more and more and aiming to build a sense of maturity and neutrality in how I look at working systems. I think gold is still a great value because its S2F ratio is much better than silver, but silver is used more often so supply is higher. When determining money we know it’s a store of value, but then we know that gold is hard to transport. If gold is regulated then why can’t governments just allow someone to pick up their gold in another country? (Now I know regulations are important, but I’m still interested in if it’s doable)
Gold withstanding the test of time has proven to be a solid exchange vehicle of our economy as a species. Its utility as an option to devaluating currency is certainly not going away in the current global fiat market climate. Although its value can be unstable in correlation to fiat currency that unstable relationship I believe will at one point have the potential to be a stable exchange vehicle along with crypto in the demise of the global fiat debacle.
gold has not been always been the “money” as we know it. sea shell could be money, if there are enough people agree on it as store of value, scarce enough, and cannot be artificially made. today’s society gold has become valuable because most people agree and accept it as store of value.
its interesting how the gold has been symbol of wealth and adorned by powerful people since the ancient days. also cross the culture gold has been the uniformly accepted as desirable metal. it’s intrinsic quality and rarity made likely to be so desirable. today’s world, we still view gold as the money equivalent but not necessarily we look at them as literal money. we look at FIAT currency at the money and gold as some sort of store of value. intrinsically, modern society doesn’t desire gold as much. however, as store of the true value (not how much in currency worth), has not changed since the early days. 1 banana would cost same fraction of gold 1000 years ago as now.
Gold & Silver have been something ive wanted to invest in for a while. I still feel Bitcoin in the current bull market is a better investment. but to diversify would be best. G&S BTCÐ im not sure if we need a MoE if you have those 4?
Gold is unique and even among 4 other metals the one that has the longest history of acceptance as a medium of exchange. It is rare, portable, scalable, fungible and universally accepted. The phrase that gold is money and everything else a form of debt is true because gold doesn’t have a counter liability.
Discuss “Gold as Money” below.
Gold was and will remain a sort of stable means of store of value because of its underlying properties.
Like JP Morgan once said : " Money is Gold, nothing else is"
He was referring to the monetary properties of gold .
-As a Store of value Gold is ; -very Durable, it has outlasted all of us through history and time , can be melted and remade to new forms .
:- It has a dense Value and can store small and large amounts of value
-As a Medium of exchange ; it is somewhat poor because you cannot use it at your local store to buy goods, Also Not Very portable when travelling with large value .
;- it is Well Divisible and can be subdivided into smaller portions to accommodate less value .
;-it is also stable and Fungible
-As a Unit of Account ; gold is Granular and can be divided into small coins for example .
-All in all gold is scarce and its scarcity makes it very attractive for the Value it has enjoyed overtime , which has led to its growing demand , which propagated the the discovery of its usefulness and thus the usage in its unique properties.
Gold is rare enough to make it difficult to overproduce and malleable to mint into coins, bars, and bricks. It has served as money for millennia.
Unlike paper money or fiat money, gold can’t be replicated by turning on a printing press.
Out of all the elements on the periodic table, gold was the best suitable candidate for what we need in money.
We can’t use things like gases, elements which dissolve in water, anything that reacts with air that corrodes or burst to flames, elements that are radioactive or elements that are too common.
That leaves us to a few candidates or metals that can be used as money.
Gold, silver, rhodium, platinum and palladium.
Rhodium and palladium were discovered in the 18th century. The problem with platinum is that its melting point is around 3000 degrees celsius which was fairly impossible for the people in ancient times. Gold and silver were adopted as both stores of value and mediums of exchange.