Random thoughts.

[alexandraerin]

Does anybody else wonder what the people who are buying up gold in case civilization collapses and paper money is worthless think they're going to be able to do with gold in that eventuality? Trade it? How exactly does that work? Why would somebody who has something useful or necessary give up any of it in exchange for a piece of malleable yellow metal?

Clarifying edit: Um, when I say "people who are buying up gold in case civilization collapses and paper money is worthless", I mean... shockingly... "people who are buying up gold in case civilization collapses and paper money is worthless". I'm not talking about the power elite here. I'm talking people. Some folks are making a ton of money convincing folks that civilization is one good, hard shove away from falling in a very homogeneous way and that when this happens money will be worthless and gold will be money.

There are so many things wrong with that scenario that I don't really feel the need to pick it apart here.

---

"Benevolence" is an intention. "Benefit" is an outcome. Somebody can want nothing but the best for you and still be the worst for you.

Comments

[syphilis-jane.livejournal.com]

Well, I don't know about "in case civilization collapses and paper money is worthless", but my family came here as refugees and my grandfather would always get gold jewelry for presents for my grandmother...the (most relevent) rationale is that if bad shit happens, you can transport the gold with some ease and its worth will not drop in the general market, even if your own currency does. Even if you end up in a situation where you can't get somewhere more stable, if paper money becomes worthless, gold is still seen as something worthwhile to people who can get it somewhere stable.

[alexandraerin.livejournal.com]

That's sensible, but it assumes the people who are suddenly buying up the gold believe there is a world outside America that's worth doing business with/that the world would survive if America's economy collapses.

[amber-indikaze.livejournal.com]

I strongly doubt civilization will collapse (in the Stone Age sense, anyway) if America's economy does.

Furthermore, currency works on faith. It's not a given that people will retain their faith in gold if the economy collapses, but they're much more likely to lose it in currency once people realize that it doesn't work as predicted anymore (switching to barter and similar things in the meantime)

So even if another government pops up in the ruins of the old, they'll have a strong incentive to change the currency to something else (which will probably be backed by something, maybe gold, maybe something else)

[alexandraerin.livejournal.com]

I didn't say that civilization would collapse if America's economy did. I didn't even suggest it.

[amber-indikaze.livejournal.com]

What did you mean by: "that the world would survive if America's economy collapses"?

Sorry if I misinterpreted, but it seems a reasonable conclusion from where I'm standing now.

[heliophobe.livejournal.com]

It's umm.... shiny?

[thoughtgolem.livejournal.com]

Just because the government that printed your money falls apart doesn't mean humanity will abandon the idea of a medium of exchange. It just means we'd have to find something else to use...and since precious metals have a very, very long history as a medium of exchange, they seem likely candidates in that sort of bleak future.

Also, just because our government falls apart doesn't mean there won't be any safe havens in the world for the wealthy.

[alexandraerin.livejournal.com]

You really think so? Imagine this conversation: You have gold. I have food. You have to convince me that if you give me gold and I give you food, I will find someone else with something I need who will accept the gold in exchange for it.

Ready? Go.

"Precious" metals were originally valued as a medium of exchange because they were scarce and pretty and the people who were wealthy in real terms (land, cattle, political power) desired it for status reasons. That started a tradition that's been passed down through the ages, but it's kind of been interrupted by our adoption of fiat currency. If people use anything as a medium of exchange out of a force of habit, I bet they use currency.

Plus, the wealthy in their safe havens will have a powerful incentive to keep the current currencies... current.

[thoughtgolem.livejournal.com]

I doubt any of the people hoarding gold are planning on being anywhere their choices are limited to 'gold' or 'food'. Besides, the smart ones are learning to farm/befriending farmers. Gold/money is for all the stuff you can't produce yourself.
The dumb ones...well, what can you do?

Gold is a heck of a lot scarcer and prettier than paper money. It's also still very much in use as value storage, which is just one step away from being a medium of exchange. The whole world isn't going to suddenly become poor just because our government and a few others collapse. Anywhere people consider themselves wealthy, status symbols like gold will hold value.

[alexandraerin.livejournal.com]

You're talking about the ultrarich, who I believe are actually primarily investing in gold not because they fear that currency will suddenly be worthless but because gold is relatively insulated from ordinary, non-catastrophic drops in the value of currency. Right now it's an attractive part of a diverse portfolio and a safe haven from the storms and currency and stock markets. While I'm sure they do have plans for worse case scenarios, buying up gold does not, I believe, figure into it. They're behaving rationally.

They're also not what I'm talking about.

[thoughtgolem.livejournal.com]

Who are you talking about?

I'm not talking about the ultrarich...other than Warren Buffet i don't know or follow anyone who could be classified as ultrarich. I'm just talking about the authors i've read and the people i know who believe, or claim to believe, that we're in very real danger of hyperinflation and economic collapse.

[baronvonduck.livejournal.com]

Buy bullets instead. They'll always be worth something. And hey, sometimes they go at the exchange rate of one bullet for all of somebody's food. Or car. Or water. Or all of the above.

[thoughtgolem.livejournal.com]

The gold collectors i follow tend to be weapon collectors too.

[stormcaller3801.livejournal.com]

My expectation is that they haven't thought that far, for the most part: rather, they just know someone on tv said 'buy gold' or said everyone else is buying gold, and so they bought gold. And they're going to sit on it expectantly waiting for the next statement on how to get rich by... apparently outwitting all the other people doing the same thing? I dunno.

The few who have thought it through I expect are looking at it as a stop-gap for when money markets shift and the dollar tanks. Their expectation being that they have a safe form of wealth they can shift into whatever ends up being the next good value.

And I expect there's people out there who bought gold because gold is valuable, and they just stopped right there.

The gun buyers are more interesting, because that seems to be entirely fueled by chain mail hoaxes talking about how some bill you've never heard of is going to nuke the 2nd amendment and sidestep all the constitutional balances along the way. So people are buying guns in anticipation of an 'ammo tax' or 'gun tax' or outlawing anything that's larger than a .22 pistol or what have you. And various gun manufacturers are reaping the rewards with big sales.

[alexandraerin.livejournal.com]

My expectation is that they haven't thought that far, for the most part: rather, they just know someone on tv said 'buy gold' or said everyone else is buying gold, and so they bought gold.

That's my point exactly.

It's pure Underpants Gnomes logic.

The people who are making money off this are the brokers who are getting people to buy gold at an artificially inflated price and the peoGlennBeckple who they're paying to peddle their message.

[inever.livejournal.com]

The thinking around buying gold might be that if the economy fails, like during the great depression, that after a few years it will bounce back and the gold will be worth something again. If it's full out apocalypse then the gold may never have value again.

[thoughtgolem.livejournal.com]

If you're talking about idiots who just do what random media people tell them, then your question is not answerable. They're not thinking.
I'm not convinced they fully qualify as 'people', either.

There are people who are taking rational steps to prepare for the collapse of the government or economic system of the land they live in. They aren't part of any 'power elite', they aren't super rich. They may be a tad paranoid or pessimistic. They've lost faith in 'the system' and are doing what they think is best to prepare for or avoid the transition phase that comes after collapse. Some of their advice is useful whether or not things go to hell, so these people can be worth paying attention to.

[popelizbet.livejournal.com]

People who listen to the media aren't people now?

[thoughtgolem.livejournal.com]

Says who?