topic: GOLD - A NEW RECORD!!!

Historically, gold has been used as money because there was a finite supply of it, it was impossible to counterfeit, it was compact and portable, and other than decoration, had no practical value.

Nowadays we sometimes use it as an anti-corrosive coating for electrical contacts and some odd things like coating the visors of spacesuits, but the rest is still basically true.

Here in the USA we think of gold as the basis for money; in most of European history gold was for decoration and silver was for money. The larger supply of silver made it easier to make change in transactions, etc., while the overall supply was still limited.

Paper money originally started as "letters of credit", but gradually people got the idea that the paper itself was the money, and eventually the "credit" part went away.

TRX
09-14-2011

Originally Posted by sjohnson
Considering the ever-increasing production of gold, I don't agree with the finite supply statement

Agreed. What I should have said was something along the line of "the rate of increase in gold accumulation is determined by its profitability", but I was trying to keep things simple.