Shannon:
The “trading value” of gold is it’s value. It’s a store of value and a fairly compact one in comparison to oil, wheat and other consumables. Gold is a univeral store of value and used for trade.
It is:
-indestructible
-divisable
-rare
-easy to determine purity
-so easy to mine and work that the ancients could do it
-doesn’t corrode
-non-poisonous and non-radioactive
-easily formed and handled
-universally recognized
-extremely easy to store
-very valuable so a small amount can be traded
-extremely beautiful, so it has decorative or artistic uses
-useful in industry
-most maleable of all elements
-excellent conductor of heat and electricity
It, like all commodities, is an asset that is not also someone else’s liability like paper money, a stock certificate, a bond, or an insurance policy. It cannot be
defaulted upon by any government or group of people.
It is true that people may refuse your gold in exchange for something, but an ounce of gold is an ounce of gold. It may have different values at different times in different places, but it’s as close to universal money as anything has ever been. Its use as money has spanned thousands of years and many continents.
I’m guessing that by intrinsic value, you mean something that you can eat, drink or sleep in. If you’re off in the jungle by yourself, I would imagine that a good machete or water purifier would be worth its weight in gold to you at that time. But, in a social setting, where there is trade, I think that gold will always have its value unlike the paper promises of governments or corporations today.
The “intrinsic value” of paper money is if you can use it for toilet paper or decoration or starting a fire. It cost the Treasury 4 cents to print a $100 bill, so you could use these things as wall paper if you could get them at cost.
The value of paper money is purely a legal construct. Try spending foreign currency in this country. Will the neighborhood Starbucks take your Euros?
