Survival/elementary civilizing skills on the whole are objectively more important than gold. If we could not draw water, produce food, bear/raise children, make clothing, build shelter, we would be much worse off than if we didn't have any gold.

Disagreement over different skills worth relative to one another, disagreement over what plans to execute as a team etc. dissembles the individual skills' value compared with gold.

People who can't agree where to put a bridge, what crops to plant, or whether or not to go to war will all want gold. The consensus about gold's value is a stronger component of gold's worth than its actual intrinsic value is.

Imagine there's a person with a drill for wells and a person with a material amount of gold. If each walks into a town where people are dehydrated, the people of the town will hopefully be more excited to see the drill person than the gold person.

If they each walk into 5 random towns, however, one would imagine the gold guy would have a more positive reception on average, because gold's beauty is independent of people's circumstances or culture, whereas the value of a well is very contingent on whether or not people want a new source of water. Historical royalty who did not want for anything were always happy to see more gold. Precious metals are one solution of the age old conundrum: "What gift do you get for the man who has everything?"

This relatively inelastic desirability makes gold valuable for trade. As a proxy for human energy and people's resources, gold can solve many different problems that a drill cannot.

Perhaps my cynicism, but wouldn't material goods with more utility be worth even more? I'm sure in a some End-of-Government scenario in which people would be in a barter economy, I would value things like food and water, tools, firearms, and ammunition a bit more than I would a shiny metal.

Stephen Colbert made segment about gold, along with a mocking commercial asking folks to diversify their portfolio (with Women and Sheep...) but the idea that shiny metal holds value better than a magazine full of 5.56 and a rifle seems a little off. One can hunt or defend oneself with a rifle and ammunition, trade the ammunition to others, and even become a bandit. All gold does is allow one to trade. Hell, in the Metro book/video game series which takes place in a post-apocalyptic Moscow, the units of currency are military grade, pre apocalypse, ammo and, at a lesser value, post-apocalyptic ammo.

Is there more to the notion that gold is valuable than "history" and "shiny"?

[0] - http://thecolbertreport.cc.com/videos/ufq6qh/prescott-financ...

All gold does is allow you to trade? That's sounds quite valuable if you are in need of a magazine and a rifle.

My questions is why wouldn't something lime ammo be considered more valuable? In the US at least, you have fairly standard calibers, most rifles are going to be .308 or .223, and a couple others. A 30-round magazine of .223 carries much more value than a gold bar, so why would anyone value that brick more than that magazine of ammunition? Once you get into a scenario where you're having to barter for goods, you're not having an organized system of governance. I see some comments about fleeing wartorn for stable ones, but I'm asking in the context of an end-of-government type scenario.

People still think money is important? In the case of some massive catastrophe it seems as if the skills of people to recreate society and technology would be much more important than some treasure.

In tbe event of a massive catastrophe, gold is worth MORE than money. Think of it this way, name a civlization in history. Would you rather have $100 of their currency now, or $100 worth of gold from that era now?

If the era is January 1980 I'll take the cash. $100 worth of 1980 gold (bought with 1980 dollars) would be worth about $40 today.

Every time I got interested in buying gold, I would look at those 30-40 year graphs and decide differently, but maybe history will not be a barometer in this free money economy? I now look at my CD rate and it's .10 %. I look at the stock market and wouldn't risk putting in money now. I hear the economy is getting better, but just on my block there's so many unemployed men digging into that savings account.(The account that was meant for retirement?) Yes, tech is hot. VC's have money to burn--now. The average guy is locked out of the current party though. While I'm on the box, why do I feel the big boy investors are just waiting until the retail stock investors get over any 2008 residual fear, and start putting serious money into the market; then the big boys(who have had access to this free money) will pull out of the market--leaving The Retail investor holding an empty bag? I am not asking lister. I'm just babbling out loud. I guess what's really scaring me is these low interest rates, and maybe gold might be a good call?

Even though you are cherry picking a peak value, I don't follow your logic.

$100 worth of gold bought at $850/ounce buys 0.117 ounces of gold. Today that gold (at $1181/ounce) is worth $138.90.

Your cash is worth $100.

I was using inflation-adjusted prices. I took the phrase "$100 of their currency now" to mean one hundred 1980 dollars now, which would be worth about $250. Otherwise the argument is a straw man. Any non-perishable commodity is going to outperform an inflating currency in the long run. There's nothing particularly special about gold in that regard.

Not quite.

The gold bull run of the 70s peaked at $850. So, even if you bought an ounce of gold at its peak, you'd be getting about $1300 for it today.

Cash, on the other hand, would have inflated away quite a lot, so your 100 bucks would buy you about 40 1980-dollars' worth of goods and services today.

January 1980 isn't exactly an era.

I'd like to revise my earlier answer. I was using inflation-adjusted gold prices, but not inflation-adjusted currency values. In other words, I was trying to buy 1980 gold with 2015 dollars.

But this still highlights the problem with this scenario: currencies lose value over time. They do this by design to encourage people not to hoard currency, but instead to exchange it for goods and services, which encourages people to produce goods and services. Because of this, any non-perishable commodity is going to gain value over time relative to a fiat currency. There is nothing special about gold in this regard.

Ask the people who were displaced during WW1 and WW2. The ones who were able to migrate to safer places with gold, restarted their life much more easily compared to the ones who had nothing more than clothes they were wearing.

Gold is still important and will remain important as long as people consider it to be value of last resort for bartering or exchanging product and services. What good is the skill if you can't exchange it for more important things you need for survival? Generally in economics, capital (gold) is always considered more valuable than labor (skill).

"The ones who were able to migrate to safer places with gold, restarted their life much more easily..."

IOW "The wealthy were able to migrate to safer places and restart their lives more easily."

No surprise there. So it was their wealth, not gold per se, that made their move safer and restarting easier.

Gold is the most useless element in the world. But greed has no bounds and the love of men for gold seems endless.

> No surprise there. So it was their wealth, not gold per se, that made their move safer and restarting easier.

If you're wealthy but cannot easily carry said wealth with you across borders or conflict lines or hide it from a kleptocratic Government then there's not that much that you can do.

Case in point, the high middle classes from my Eastern-European country, who after WW2 were wiped clean by the Government in just a couple of years, the result of industry and real estate nationalizations, combined with a forced revaluation of paper money. Holding gold could have protected one against all this, at least partially.

And, how were wealthy able to carry their wealth with them? Primarily it was gold (compact and valuable), easier to carry. Look into history of Gold and you will learn much more about why and how Gold became the medium of exchange. Do you think anyone going to care about USD or Euro as medium of exchange during bad times?

Hey now. Gold is useful as an electrical connector, as a dye, as an EM reflector, in dentistry and electron microscopy... gold has lots of uses!

Out of all the naturally occurring elements, proactinium probably takes the "most useless" prize - it's used by scientists doing radiometric dating. And it's both toxic and radioactive.

What kind of a giant straw man is this? The necessity of technology and society during a nuclear war making gold not important? Gold is a currency. Not a commodity, not material, a currency. It was the original shared ledger. It isn't the most important thing, but who's saying it is?

Texas just wants to make sure what they have claims to is actually in their possession. What is wrong with that?

The detail being left out here is that the gold in question really belongs to the state university system and is part of the investment of their endowment. It's not some rainy day fund just in case the world goes to hell in a hand basket.

It's pretty normal for any large investment fund like that to own some gold. What is weird is that Texas as a state is getting into the precious metals storage business which would normally be the domain of private business.

It has been for over 6000 years. And it could be useful in far less catastrophic situations.

Some economists such as Willem Buiter like to claim gold is in a "6000-year bubble", but others figures like Kyle Bass counter:

"Buying gold is just buying a put against the idiocy of the political cycle. It's that simple"

Kyle Bass rant: https://www.youtube.com/watch?v=QWmOmt1zJ7Y "5 Reasons Why Kyle Bass is Wrong About Japan"

Not saying I think gold is a good investment or that the system is in any danger, but it's obvious why gold is still important. Just as with bitcoin and unlike fiat currency or IOUs, it's quite hard to forge metal (or proof-of-work) into existence. Having something unforgable is a hedge against inflation, not against catastrophe.

It's worth noting that lately there has been talk[0] of using the cashless society in order to implement negative real rates. Negative real rates are a way to fight inflation (by removing money directly from bank accounts), but typically such rates are not possible because people will just hold gold and physical cash against negative rates. In the past such behaviour is what prevents rates from going negative.

[0]: http://www.bloomberg.com/news/articles/2015-04-10/citi-econo...

There is a really good BBC article on why every civilization picks gold as its currency: http://www.bbc.com/news/magazine-25255957

Vikings picked silver. China picked silver. Sparta picked iron. (Granted, that was kind of a special circumstance. But at times China used iron too. On the other hand, China never used monetary gold.)

As described, there can't be a good article on "why every civilization picks gold as its currency" because the premise is false.

The article acknowledges this as to silver, though not as to iron. On the other hand, the somewhat bizarre premise that currency has to be one or another chemical element goes unquestioned. Historically it was common to use grain as a currency. Even among metals, we know electrum coins have been used to great success.

In a 2014 talk at the Council of Foreign Relations, Alan Greenspan said:

“Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.”

http://www.cfr.org/financial-crises/alan-greenspan-central-b...

Assuming your argument is valid, what do skills have to do with choosing fiat currencies vs gold?

I don't know anyone willing to work for a worthless piece of paper.