Quote from jprad:
My statement has meaning because history is just that, history. The only way gold becomes a form of money again is if the world manages to bomb itself back to the stone age.
Until then, the three roadblocks that goldbugs never want to confront are the limited quantity of gold, the unequal distribution of gold mines throughout the world and the most damaging of all -- that annual commercial consumption of gold outstrips the amount produced each year.
I believe almost everything related to gold as money or the Gold Standard have been debated (confronted) and now worn bored. Maybe everything could be found somewhere at mises.org (I seldom visit the site).
1) "limited quantity of gold" - I gave it a little thought and found it is not a problem at all.
It is implicit to the simple model I posted in my thread "A Fixed Money Supply Full Gold Standard"
http://www.elitetrader.com/vb/showthread.php?s=&threadid=161660
2) "the unequal distribution of gold mines throughout the world" - inequality is the norm with most aspects of human society. Gold is rare which means only a little mined every year. Man's innate ingenuity and creativity is far far greater than that of a little advantage in gold.
3) "that annual commercial consumption of gold outstrips the amount produced each year" - I have read a fair number of gold articles and this is the first time I come across this.
Lets say your data is correct and there is an annual shortfall that gradually depletes the above-ground stock. The few factors I consider that may ameliorate the "great damage" :
a) the shortfall may be trivial.
b) Gold is very expensive and this would limit commercial usage or will encourage inferior, but acceptable, substitutes.
c) The problem is similar to every other natural resources we use like crude oil, coal, natural gas, copper, or iron. The absolute stocks are always depleting (does not matter whether above/below ground), but the global economy is still running.
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