From: cmk@athena.mit.edu (Charles M Kozierok)
Subject: Re:  Gold vs. Oil
Organization: Massachusetts Institute of Technology
Date: Mon, 28 Dec 1992 05:52:31 GMT

In article <1992Dec17.012957.16862@samba.oit.unc.edu> bolden@beta.math.unc.edu (Jeffrey Bolden) writes:
>Charles -
>I have two basic arguments against gold.  
>
>1)  If a country gets
>stuck with lots of gold there almost nothing they can do with it.  If a
>country gets stuck with lots of oil, there's lots they can do with it. 
>Gold is only valuable in the same way that unbacked American Currency is
>valuable; people take it in exchange for intrinsicly valuable things. 
>IMHO there would be no way to trade a large quantity of gold suddenly.  If
>there were then why isn't South Africa, USSR...  making a fortune selling
>off their gold.

you can repeat this until you are blue in the face but it doesn't change
any of these points:

1. oil is not portable and therefore not useful to the average person;
2. intrinsic value is whatever people say is value;
3. whether countries "get stuck" with large amounts of the commodity or
   not is irrelevant, because people decide what is of value, not countries;
4. oil is controlled by far more potentially dangerous countries than gold.

>2)  I don't think all of the gold in the world is worth more than all the
>currency circulating in the US.  Hence gold couldn't back US currency.

irrelevant, see my previous post, but since you keep bringing it up,
i looked up some numbers.

the latest number on the currency supply is $288B

the only number i have on the amount of gold outstanding is an estimate
from 1986 of 135,000 metric tonnes. this has an approximate value, 
using today's very low gold price, of $1,200B. and that is *1986* --
the total amount of gold in existence now is certainly higher.

so you are wrong anyway. and of course none of that includes whatever
is still in the ground or that we don't know about.

>I've argued that under reasonalbe
>economic conditions oil is no harder than gold to use as a backing
>currency.

you have argued it unsuccesfully. you have not refuted the portability
issue which makes all the difference in the world between the two.

>Now people like yourself seem to be talking about these collapse of
>civ. scenerios where they want to pack there wealth in a bag and head for
>hills.  Even in this scenerio I think gold would be worthless.

why? why?
all evidence back to the beginning of history suggests otherwise.
back it up or give it up.

>But for
>the sake of argument I'll grant if civ. collpases gold would be easier.  

thanks.

>	So what?!  Do you really think a defecit of less than 1 years gnp.
>can come close to bringing our govt. down?  I just can't except that for
>this reason a standard which requires that people use paper is
>unacceptable.  

read "Bankruptcy 1995". i could quote you plenty of reasons why the
deficit and more importantly, the accumulated debt, are too high.


>	As for general fear of price fluctiation that's been argued. 
>We've reached an impasse.  You think it would happen, and very few others
>share your opinion.  

this is not a poll, it is a discussion of fact and logic. very few people
also predicted the crash of '29, or the rise of the third reich. that is
why the majority are called *sheep*.

we have only reached an impasse because blind faith is your only refutation
of my claims. read the book. then tell me where it is wrong. it costs $15
and several hours of your time. and it is worth ten times of each.

--
charles
Newsgroups: alt.politics.libertarian