Throughout recorded history, people liked to wear the pretty, rare, yellow metal. The psychology involved is the psychology involved with making jewelry out of it. If people didn’t find gold pretty anymore, that would effect the price of gold.
Jim Sinclair writes:
Good money must have a number of unique characteristics.
(1) It must be durable, which is why we don’t use wheat or corn.
(2) It must be divisible, which is why we don’t use a Picasso painting or jade statues.
(3) It must be convenient, which is why we don’t use lead or copper or real estate.
(4) It must have value in itself, which is why we don’t use paper.
(5) It must be transportable, which means that large values must be contained in a small area (a gold coin weighing only one ounce can be worth far more than fifteen hundred dollars).
(6) It must have a long history of being accepted as a store of value. Gold was considered valuable as long as 5,000 years ago in the age of the Egyptians.
(7) It cannot “disappear” or be used up in manufacturing as is copper and even silver. Thus, the gold coin that you have in your hand may have been part of Cleopatra’s earrings centuries ago. Almost all the gold that has ever been discovered is still available in one form or another.
(8) It must not be the liability of any sovereign nation, nor should it require governmental law to make it money. For instance Gold requires capital, talent, risk, sweat and courage to recover or to accumulate.
I’m pro gold.
I think that all I was trying to say is that
1) people have always wanted it.
because
2) basically, it’s pretty.
People were arguing that people have liked gold forever but for no reason.
I was simply arguing that people have ALWAYS found it pretty.
My comment is a discussion of “(4) It must have value in itself, which is why we don’t use paper.”
It has value in itself, because people like to make jewelry out of it.
And a discussion of (6) - people have been making jewelry out of gold for at least 5,000 years.
I don’t think that people like gold today as money because slightly more expensive RCA connectors have a thin layer of gold on them.
I like Ron Paul and am with Ron Paul on this one.
I think people are reponding to my use of the word “pretty”. I don’t mean that as a bad thing, to diminish it.
I suppose that people could argue that gold isn’t pretty, gold is only believed to be pretty. I’m not saying that.
I’m saying that gold IS pretty. 5,000 years of people wanting to make jewelry out of it. The prettiness is in the gold, not in the brains of the specific individuals who agree with everyone else that gold is pretty. Gold IS good for jewelry. Now and 5,000 years ago.