The latter.

The biggest advantage of the West has been in the creation of Institutions that create and moderate financial instruments that are not deadweight like commodities. The Stock Market, index funds etc. are all considered “valid” places to put your financial resources in. These instruments invest in real companies and organizations instead of lying around in a bank.

Unless other countries figure out how to do finance better they won’t be able to create the same dynamism that Western capital markets have.

I don't agree, at least in the case of India, there have been other places to put your money for a long time. However all of those require funds that have known sources and on which taxes have been paid. There is a huge amount of funds in India in the "parallel economy" which can not be invested in these funds, the only options are to hold as cash or invest in real property (land/gold). Historically gold has been a good investment in India. See https://www.apnaplan.com/gold-price-in-india-40-years-histor...

Also worth noting that a financial instrument like an index fund is not something easy to understand for a very large, rural, not highly educated population. It's a fact that there are large Indian states where the literacy rate is between 60-70% vs 98%+ in countries where intangible investment products are popular.

https://en.wikipedia.org/wiki/List_of_Indian_states_and_unio...

Gold is something you can see and hold. In countries with 10%+ inflation rates, an investment that returns 4-8% is also different than, for example, a mutual fund in the US that returns 6-8% which is significantly over the US/Canadian inflation rate.

Trust is also not freely available in developing or poorer countries, so being able to see and hold something is more important. In the US, the incidence of theft* is so low that you can trust your electronic accounts won't be emptied, and if they are, you have a court/regulatory system that will make you whole. This is an important asset for developed countries to have as it greatly reduces transaction costs, whereas in developing countries, people have to deal with worrying about what happens if they get on the wrong side of someone who has influence.

*Ignoring the constant devaluation of money to prop up asset prices.

> The Stock Market, index funds etc.

> not deadweight like commodities.

I find it rather oxymoronic

Why? The numbers show commodities are a poorer store of value than equities.

> or are the alternatives just so bad that it’s still compelling?

In India there better alternatives but lot people specially older folks stay away from stock markets since there have been big stock market scandals in the past so most just use savings bank account or few govt investment schemes and use gold as an alternative investment which you can sell easily if you have any financial problems later or you can just give it as gift to your daughter/daughter in la w during marriage.

This is the case for fine jewelry and e.g. diamonds, however, simple heavy gold jewelry (e.g. rings, chains) are generally sold at a minor (10%?) markup over the cost of the metal and would be generally included in the retailer's markup - i.e. buying a 100 gram bar of gold would cost about the same as buying 100 grams of assorted gold jewelry. Fine pieces of art certainly can cost much more, but the local jewelry stores aren't really selling that, they're selling pieces for which almost all of the value is in the material, requiring only limited amounts of inexpensive jeweler's labor. So there's some overhead, but in general it does retain the resale value quite well.

In Oman you pay near spot price for jewellery. If you ever fancy some big gold chains, it could be worth a visit.

Cool country, wild camping is legal everywhere.

"In the US, buying jewelry and selling it back is a substantial guaranteed loss."

I do this all the time and don't lose money by any means.