Gold

[pickles]

I have just read an article about 2 miners who were rescued from a gold mine in Tasmania. Miners spend huge amounts of time and energy to mine gold so that people can refine it and then put it back underground in vaults for security, most of it doesn't get used it gets horded

This may be a dumb question but why is gold valuable if nobody uses it.

 

[Brightness]

Errrrrrrrrrrrrrrrrrrmmmmmmmmmmmmmmmmmmmmmm because it's pretty and sparly and shiny? Sorry, it's the only answer I could think of!

Oh yeah and it looks good on my finger, in my ears or round my neck!

 

[JohnD]

it's valuable because people think it is, and it's scarce. Like Cowrie shells.

Not like diamonds - there are actually a lot more around than the public will buy, the CSO restricts sales from the mines to keep prices up, and guards but doesn't expoit all the mines and fields it owns.

See also http://en.wikipedia.org/wiki/De_Beers

 

[joe-90]

It's something to do with a country's gold reserves that decides how wealthy it is.


joe

 

[JohnD]

Wealth does not have to be held in gold. It's just a psychological perception. Better to have your wealth in productive assets.

 

[joe-90]

I don't think countries deal in psychology.



joe

 

[noseall]

i think its the fact that gold is virtually indestructible and possesses a unique purchasing ability.

 

[splinter]

It's something to do with a country's gold reserves that decides how wealthy it is.


joe

I was wandering if that is still relevant in todays world ,given that the UK sold offquite a lot of their gold a few years back

 

[joe-90]

There is some connection with the amount of currency in circulation and the gold stocks held as surety - but I don't know the details.

joe

 

[JulieL/B]

I don't know the details.

joe

Blimey,.....what a suprise!! I thought you knew everything

 

[hermes]

There is some connection with the amount of currency in circulation and the gold stocks held as surety - but I don't know the details.

joe

This used to be the case before WW1.It was called the Gold Standard and it meant that you could exchange your notes for gold, but no longer the case.

 

[joe-90]

I don't know the details.

joe

Blimey,.....what a suprise!! I thought you knew everything

I'm honest Julie. If I know it - then I know it, but if I don't then I'm happy to be enlightened.

You know you like me really.


joe

 

[Thermo]

governments still use it as a store of wealth and are able to sell it during times of crisis. the gold market is also a relativly stable one so can be relied upon to a certain extent (well thats what we were told in a level economics)

 

[hermes]

Article on the radio this morning saying that 75% of the worlds gold has already been mined and the rest is difficult and costly to get at. Very environmentally damaging to extract, the area must be flooded with cyanide and the gold extracted, but this also releases poisonous substances such as arsenic. The process also uses huge quantities of water so the water table is at a big risk of being contaminated for many years.

 

[JohnD]

The more of your "wealth" you tie up in gold, the less you have available to do something useful with.