Are people who say Gold has intrinisic value morons?

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Stuff Neurotypicals like to say.

where's the poll?

Better: does gold have intrinsic value to cold and hungry people?

I gather it is used as a good electrical conductor for making connections within some microchips. So aside from it being a monetary standard I guess it would have some intrinsic commercial value anyway.

I'd guess that if it wasn't a monetary standard it would probably have lots more commercial uses and hence intrinsic commercial value too.

It certainly is a good electrical conductor but not at it's price. The majority of my experience with conductor materials is based on spark plugs. Copper is the best conductor that is conventionally used but it is a comparatively weak metal to deal with the cylinder pressures. Platinum is seen as being a overall worse plug aside from maintenance intervals around 4x longer due to the material hardness. Iridium is considered the best, it has more electrical conductivity than platinum, the hardness of the material allows for you to make a thinner center electrode which will at least in theory provide less resistance than a bigger copper one. Gold could never stand up to this application. Going off of this and it's cost I wouldn't want gold as a conductor in a vital high/fluctuating temperature situation just over concerns of wear and tear.

Coincidentally, I believe older computers have more gold in them than new ones. I had a friend who accumulated a lot of ancient computers (broken) that he intended to chemically separate the gold. He had a tupperware box full of clipped ends of ISA cards and similar that he was appraising as having "probably around $600 worth of gold". I don't know how right or wrong he was but this guy put himself through college scraping and taught me everything I know about it.

Gold has quite a few intrinsic properties that are valuable in chemistry and physics. It's exchange value varies. Some years ago I bought some to make jewelry at about $35 per ounce. It is quite a bit more expensive today.

I have endless debates over this issue with people.

Some basics.

1. Gold has limited practical value as a substance.

2. Gold can be purified to a determinable standard.

3. Gold is not subject to rust, corrosion or any number of environmental conditions that would cause it to "waste away" over time.

4. Gold is a limited commodity. There's more of it in the ground, but short of stumbling across a very rich vein, the cost to extract and refine it makes obtaining more of it out of reach of the insanely-large majority of people in the world.

As such, precious metals such as gold, sliver, platinum, palladium, etc. make excellent forms of legal tender because the represent a set value that cannot be falsified or otherwise counterfeited.

Most all the world utilizes "fiat currency." This is "currency" that's not backed by anything except the promise of the issuer that it has value. So long as people believe it has value, they will accept it in trade for real goods and services rendered.

These currencies must inevitably collapse because it lends to "debt driven economies" where the incentive to just print the amount of currency needed to move an economy is very high. The supply of "money" (sic) is diluted until it truly is worthless and people realize that is so.

When people realize that the "currency" is worthless and the promise to honor it means nothing because the state has nothing of value to offer in exchange for the worthless paper, they go back to trading durable goods in place of "currency."

Most anything can become "currency" in such a situation, but durable goods only have the value the other party sees in it. A box of bullets might be worth 10 sacks of grain or 2 sacks of grain depending on how coveted it is by the person you are bargaining with. This is an unreliable economic model at best. Gold, silver, etc. became valued as "money" because they were durable and could be minted into coins that represented a unit of value. That they were rare meant they could be used to represent value. Paper money can be counterfeited. You could always mint your own coins, but you'd have to still have the gold and silver to pull that off. Make your own paper money and you create currency from nothing. Make your own gold coins and you really must provide your own gold.

This is why gold retains its value as a medium of exchange. It may not have the practical value of oil, but all oil is not equal. As the supply of oil decreases, the value of it goes up...an unpredictable rate of exchange.

Finally, the wealthiest families in the world settle their accounts in gold. Ultimately, what dominates as a rate of exchange depends on who is willing to use it (basic reason why "alternative energy" isn't going anywhere...no uniform accepted standard for what will be the new fuel we all use). Yes, the majority of the world uses paper fiat currency, but that's by the design of wealthy families that use gold and want to keep the gold largely in their own possession. The uber wealthy can collapse the fiat currencies and create a new feudal system on a global scale. Their gold endures, our fiat currency flounders.

There are two large dangers with commoditized currencies:

1) Fixed supply. A bank can only issue as much currency as it has commodity to back it. This almost completely eliminates a central bank's ability to respond to an economic crisis. If the economy grows by 3%, but the commodity supply grows by only 1%, then there is less currency per unit of economic activity. The law of supply and demand immediately dictates that equilibrium will be found through deflation.

Deflation has a number of impacts:

-Deflation rewards savers and punishes debtors. Because your debt payments are expressed in actual dollars, the purchasing power of each payment rises over time. This is, in effect, a structural interest rate that increases the costs of borrowing.
-Accordingly companies will seek to create growth on the basis of equities rather than leverage. This tends to inhibit growth because there is a more limited supply of capital in the marketplace.
-Investment is further disincentivized because the discount rate on a NPV exercise beomes negative. If currency is becoming more valuable in and of itself, then there must be a larger return to balance risk?
-Trade deficits increase. As your currency becomes more valuable, imports become cheaper, and export markets for your products become harder to find (or else export earnings fall, producing the same deficit).
-Deflationary spirals. If deflation is sustained, it can lead to lower production, which leads to lower aggregate wages and demand, which further depresses prices. There are some theorists who describe the Great Depression as a deflationary spiral.

2) Withdrawal of reserve commodities from the economy. Since currency issuers are required to hold the commodity in order to issue currency, that commodity is no longer available for use in the marketplace.

Well, if it's true that morons say gold has intrinsic value, that would explain Glenn Beck promoting gold on his show.

-Bill, otherwise known as Kraichgauer

it has applied value

I heard this one fellow tell me how studies show gold has healing properties, so we naturally esteem it on a subconscious level.

I know.