Comment on Currency
Holytimes@sh.itjust.works 22 hours agoGold and silver caught on because they are rare for surface deposits making them rare, non reactive making them good for coins. Soft and easy to work with, again good for coins. But durable enough and most importantly heavy enough but not too heavy to be not easily lost. Again making them good for coins.
It literally just comes down to they were useful to make coins.
Look to South America where they would “waste” oodles of gold on religious rituals.
Practicality is first, foremost and the only reason something catches on and then STAYS popular.
Over time that practical reason can fall away and stop mattering but to get started you need practicality
sp3ctr4l@lemmy.dbzer0.com 19 hours ago
Yep, you got it.
Gold and silver originally become commonplace as money, as currency, because they are excellent material to make coins out of.
You can carry bits or coins of gold and silver on your person, and you can denominate them fairly easily, you can store them and they won’t corrode, and its not that hard to weigh them or melt them down.
Compare that to trying to haul around a backpack or trailer full of bigmacs.
Yeah, they’re pumped full of preservatives, but they won’t last anywhere near as long as a non reactive metal.
Nowadays… well, gold and silver are massively important components in computer technology.
So they’ve got the historical basis as money, and the commodity basis of having a significant amount of vital industy dependant on them.
Bitcoin people used to argue that bitcoin would be a superior currency to all other currencies for a myriad of reasons… but you will always need some kind of computer thing that is either made out of or at some stage of industrial production involves gold/silver/other metals to even be able to transact with bitcoin.
In a modern, capitalist, international fiat currency context, you also can’t escape some kind of supply/demand based on use case dynamic for currencies.
Oh, your economy is imploding due to a debt/bond/stock/trade balance crisis?
Less ongoing demand for holding your wealth in that economy’s currency, even if it is in bonds that pay interest or stocks that are nominally appreciating.
en.wikipedia.org/wiki/Triffin_dilemma
We are currently basically reverting to a pre Breton Woods international monetary system as the USD implodes, central banks everywhere are hoarding and repatriating gold as the de facto international exchange mechanism, as geopolitical monetary turmoil rises.
www.macrotrends.net/…/sp500-to-gold-ratio-chart
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So basically, if at the beginning of 2024, you had $100k in the SP500, you would have ~$146k right now.
If you had $100k of gold at the beginning of 2024… you would have ~$275k right now.
Thats 1.46x vs 2.75x.
That’s gold outperforming the SP500 by 88%.
That is a dying economy and currency.
Gold went from about $2000/oz in early 2024 to about $5500/oz at time of me writing this.