While everything said about the value of ‘precious’ metals in total societal collapse is likely true, I want to point out that the 20th century is full of examples of relatively brief collapses of fiat currency, which wiped out cash and bank accounts but left other assets relatively untouched, provided you could survive the crash without having to liquidate them. The most famous is, obviously, the hyperinflation in the Weimar Republic. I still have a few ‘million mark’ banknotes left by my granddad that I’d be happy to sell at nominal value…
So, there is a use case for hoarding gold, but you’d be just as well (actually much better) served with real estate, farm land, or similar assets with limited availability and intrinsic value.
A friend travelled a lot for work in the 80s and 90s. He met his wife in China in the early 90s, and they moved back to Canada together. Years later he could still clearly remember the gasp she made the first time they walked into a Canadian supermarket in mid-winter and saw stacks of oranges. “How… how… how is this possible?”
One thing I loved about the book Station Eleven is how it’s partly a love-letter to the wonders and joys people have built together using these incredible webs of cooperation.
The Weimar hyperinflation though wasn’t due to being a non-gold backed currency. The main cause was having to pay war reparations in gold or foreign currency.
Whether the currency was backed by gold or not, once the gold was gone with more still to pay, the options were never going to be good.
And as you say, gold doesn’t inherently have any better ability to ride out such collapses than any other non-cash asset.
Even stocks and shares are at least as good and share certificates have the benefit of being a lot more portable.
It’s also quite possible to have significant fluctuations in value and inflation with a gold backed currency - see medieval Europe, see post-American colonisation Spain, see Mansa Musa’s hadj.
Bingo. And this is what the gold-standard types don’t understand. In one discussion I had, the person kept insisting that gold had intrinsic value. I pointed out all the fluctuations in gold prices in the last 200 years, and how that would cause economic chaos. His response: “Well, the government could enforce a certain price for the price of gold, so that it wouldn’t change.” My reply: “And then the government could issue some sort of colored paper based on the unchanging price of gold? So that it would always have the same value?” Him: “Yes. Like that.”
I’m no gold collector but that statement is a bit hyperbolic. Gold has plenty of uses, and would be used a lot more if it weren’t so expensive. In addition to its conductivity it has several other useful physical properties that other metals don’t. It’s one of the least-reactive elements on the periodic table and one of the densest non-toxic metals.
Even with some of the modern composite materials available now, gold is still a good option for certain types of dental work and medical implants. Just about anything heavy currently made from lead (fishing weights, bullets, boat keels…) would be far better to make from gold if gold were comparable in price. Its softness makes it a good option for certain bearing applications where lead is currently used.
So I guess my point is that you can go ahead and make fun of the silly gold “investors” all you want (and they certainly have it coming) but you don’t need to insult the element itself. Surely you would agree that it has an intrinsic value that’s at least as high, if not a bit higher, than lead?
I’m old and jaded, but still amazed we get fresh bananas every day of the year. The window on getting those to the store from the tree is something on the order of 24 hours. That’s the thing United Fruit Company (now Chiquita) figured out. You have to have a perfect vertically integrated transportation system from the jungle to our kitchens. That includes trains, fast ships, and now airplanes, all perfectly timed. It’s an amazing logistical feat (though we must acknowledge the horror big fruit companies have enacted on the people of those countries where this fruit grows).
To boot, I live in a small town in a remote rural area in Canada. Yet there they are, any time I want. Fresh, perfect bananas. The mind boggles.
I’d be interested to know how neatly apocalyptic optimism lines up with the various other positions and assorted conspiracy theories that emerge from the premise that expertise is really elite obscurantism being deployed against common sense rather than a sign that the answer to “I don’t understand it, so how hard could it be?” is “Very, in fact”.
I’m certainly not inclined to discount unknown unknowns as part of the problem; but there’s a definite shift in attitude between the general assumption that seeing a bunch of people toiling over something that doesn’t seem so bad probably means that you don’t understand how bad it is and the general assumption that apparent complexity is probably a con by the insiders.
So much this. I call this the “undermining of expertise”. We’ve seemingly entered a time of peak hubris emerging from ignorance. People tend to call this Dunning-Krueger, though it’s a bit of a misreading of their conclusions to say that.
More to the point, when expertise in general is devalued, we get all kinds of problems. Anti-vaxxers, the rise of of fake medicine, disregard for the importance of complex systems like we’ve discussed in this thread, and so on. This is even more important now than ever because we live in an age when the world is too complex for any one person to understand everything. We have to rely on experts for most things. I have a certain amount of blind faith that I can drink the water from my faucet because a whole army of scientists, civil servants, public policy experts, and officials have all been doing jobs that I don’t understand. It would be suicide to defund or undermine all those experts just because I don’t understand what they do. Yet this is exactly what many people are now doing.
That’s not the same as saying we should have transparency and accountability of course (as evidenced by Flint and Jackson, in my water example) but people need to understand that other people know things they don’t and our systems are set up this way for a reason.
Ah yes, I think it has gotten longer thanks to modern methods.
I was referencing the Minor Cooper Keith story, who did all this at a time before mechanical refrigeration or fancy ripen-slowing chemicals. He did it all with fast ships and perfectly timed dedicated railroads through the jungle. Remarkable.
(Also we must once again acknowledge that Keith did horrible things to the locals in pursuit of his dream of a banana empire)
Ah, yes. Well, if you want to live your best life, you can visit Fulton, KY, during the Banana Festival. It celebrates a time when most of the bananas coming to North America came to New Orleans, then Fulton, and then dispersed to points all over eastern part of the continent.
Putting that money wasted on gold toward owning your home is the better option to hedge against a more realistic financial crisis like hyperinflation. Shelter is a foundation stone of Maslow’s Pyramid but it’s a precarious one for most people.
If anything the attack on expertise as a concept is probably as good a source of cover as one could reasonably imagine for exactly the sort of experts you should be worried about; even as it denies you the fruits of complex systems in favor of stuff that’s appealing, simple, and wrong.
There are absolutely complex systems full of hardworking experts who do not have your interests at heart; but by virtue of doing malice with competent professionalism that outside observers probably don’t even understand is necessary they can only really be addressed either by countervailing systems not markedly less complex or detailed than they are; or by setting everything on fire, with the attendant drawbacks of that approach.
If, say, an encounter with American pharmaceutical prices gives you the impression that parts of the medical establishment view diabetic amputations as a signal that the shareholder value is working you probably aren’t wrong. The problem is that, if you think that they’re evil because they’re an expert cabal doing something complex to pull the wool over your eyes, then any hope of addressing that problem will likely flounder because you think that the FDA is evil because they are also an expert cabal that does something complex; and your alternative is wandering off into theories about how germ theory is a hoax and it can all be cured by alkaline water or vitamin c and apple cider vinegar, or whatever They don’t want you to know about.
I wouldn’t go so far as to say that this is by design(pending information on a lovingly crafted public relations campaign that carefully advanced it for the purpose); but reflexive nihilism in the face of complexity is really about the most useful thing you could hope for if your complex system is up to something nefarious; since anyone with the capabilities to catch you in detail is probably also complex enough to be painted as up to something; while accusations simple enough to be intuitively appealing will vary from ‘accurate in only the broadest strokes’ to ‘just plain kook ranting’.
Halelujah! I like that one of the details in The Expanse is that Holden practically melts with relief when he finds that the Rocinante has a large store of whole coffee beans and a high-end coffee maker.
The thing about gold is that it does have a lot of commercial applications we just don’t use, not just because of the cost, but because some people just go crazy around gold.
Years ago, when gold was just a few hundred dollars per ounce, and platinum was over a thousand, my dad was working on a new catalyst – gold based, capable of being used for a whole lot of processes including plastics, epoxy, silicates, and the like. The whole project was canceled and they went back to the platinum research because the gold kept getting stolen. Not just by some mysterious thief – samples would go into the executive safe one weight, and come out another, solutions containing gold would come back from recycling underweight by a large factor, and entire batches of catalyst were discovered, after cooking, to not contain any actual gold, it having been pilfered at some stage in the process.
Even so, gold cloth is used catalytically in oil refining and chemical engineering quite frequently, and a quick search shows that other groups have successfully made several other catalytic uses of gold, so it wasn’t a complete dead end.
But still, can you imagine if catalytic converters on IC engines had gold in them? No car would survive a non-guarded overnight parking lot, or a day-long stay at a non-secured commuter lot.
This might be for the same reason that 419 emails are stuffed ful of bad spelling. You want marks that aren’t going to catch on that this is a scam, so a really obvious scam filters out everyone but the most oblivious suckers.
The operable term is total. During currency collapses that affect a limited geography, external fiat currency can prop up the economy until there is a chance for recovery. The Libertarian prepper’s fantasy is where all fiat currency fails, globally, so that they become the new aristocracy with theirhoarded gold, with nary a disturbance in the availability of everyday luxury items, as @VeronicaConnor points out.
