Why every country stores gold?

Gold is a miraculous substance. Drop by a scrap yard and buy a thousand pounds of electronic scrap (circuit boards). Remove the gold "fingers" and dissolve the base metals out from under the gold plate with muriatic acid and a mild source of oxidation (bubble air through an aquarium aerator, for example). Remove the bare PCB material and wash the gold foil with warm muriatic acid. Now dissolve it in muriatic acid with a strong source of oxidation (peroxide works). This is the only common combination that dissolves gold, simultaneous chlorine and oxidation. Precipitate the gold as a brown powder by adding sodium disulfite. (This reduces the chlorine concentration. You can use Bonide's "Stump Out".) Wash with muriatic acid to remove impurities. Let it dry out. Use a welding torch to melt it and you will have a button of nearly pure gold. You can now hammer it thin and explore the various attributes of gold that has attracted man for thousands of years.
 
Anubis said:
Hello Gloria:

You said "Then why not country stores oil instead of gold?"

Previous posters have already given many of the good reasons why gold versus oil.

A short lesson on money summarizing why gold is the ideal form of money may make it more clear.

For a commodity to be used as money (medium of exchange) there are several requirements. All of which gold satisfies best.

1.
When bartering the two parties have to have a double coincidence of wants. Meaning both parties have to want what the other one has. So for example let’s say you have some lumber, that you want to barter for some thing else, we'll call it a horse. So you have to find some one who is willing to exchange their horse for your lumber. Finding this other party is not so easy when all you have is lumber and you want to buy a horse. Gold works much better as money since a lot more people are willing to trade some thing for gold than for lumber. Since gold is in heavy demand it overcomes the double coincidence of wants requirement of barter.

So for a commodity to be money it has to have a high demand in the market. So instead of bartering your lumber directly for a horse, you could get gold as a medium of exchange for your lumber and then use the gold you got to buy a horse.

2.
Second the commodity should be highly divisible, so that small chunks of other goods can be bought, and the size of purchases can be flexible. A house or a horse could be used as money but are not easily divided. Being easily divisible is also handy if you run a business because now you can compare the relative value of various goods and services and calculate your profit or loss.

3.
The commodity should be easily portable and have a high value per unit weight. Easily portable and a high value per unit weight means it is more convenient to use. In order to have a high value per unit weight the commodity must be in relatively scarce supply. This also means it can’t be created out of thin air like the central banks do with fiat currencies. Fiat currencies lose there value as the supply is increased by the central banks. So fiat currencies are a poor store of value long term.

Fiat currencies eventually become worthless. Where as gold has thousands of years of history of maintaining its value. For example a few hundred years ago during medieval times an ounce of gold could buy you a very nice suit of clothes. An ounce of gold today could still be used to buy you a nice set of clothes and then some.

4.
The commodity should be highly durable so that it can serve as a store of value for a long time. Oil has an expiration date as do many other commodities unlike gold.

Since gold satisfies all of the above requirements very well and oil does not, gold became and has remained a medium of exchange or money for thousands of years and this is the real reason why central banks store so much gold instead of oil. In short they are hedging against the collapse of the dollar a fiat currency, with gold.


For the source of this money lesson see the excellent book
The Mystery of Banking by Murray Rothbard
https://www.mises.org/library/mystery-banking-1
More...

ideal form of money doesn't explain why it worth anything in current time. No one uses gold as real currency anymore.
 
Anubis said:
Hello Gloria:

3.
The commodity should be easily portable and have a high value per unit weight. Easily portable and a high value per unit weight means it is more convenient to use.
For the source of this money lesson see the excellent book
The Mystery of Banking by Murray Rothbard
https://www.mises.org/library/mystery-banking-1
More...


I love this. Murray must have lived several thousand years ago when people still carried stuff around with them to the market. Hitch up the ox to the cart, load it with gold, wheat, cow dung or whatever and then journey 5 days to the market town to buy some goats. Then the Chinese invented paper money which is very, very portable. Then somebody invented debit cards and EFTs. But I'm sure Murray's descendants or his tribe are still carrying stuff and metal in ox carts. It cuts down on impulse shopping for sure!
 
achilles28 said:
1 buttcoin worth more then 280 US dollars. Puts the USD to shame, eh
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why the hate?

if you think it should be worthless, short it. personally, I love the action in cybercurrencies long or short. I would trade bottle caps if they were as fun.
 
TooOldForThis said:
Gold is a miraculous substance. Drop by a scrap yard and buy a thousand pounds of electronic scrap (circuit boards). Remove the gold "fingers" and dissolve the base metals out from under the gold plate with muriatic acid and a mild source of oxidation (bubble air through an aquarium aerator, for example). Remove the bare PCB material and wash the gold foil with warm muriatic acid. Now dissolve it in muriatic acid with a strong source of oxidation (peroxide works). This is the only common combination that dissolves gold, simultaneous chlorine and oxidation. Precipitate the gold as a brown powder by adding sodium disulfite. (This reduces the chlorine concentration. You can use Bonide's "Stump Out".) Wash with muriatic acid to remove impurities. Let it dry out. Use a welding torch to melt it and you will have a button of nearly pure gold. You can now hammer it thin and explore the various attributes of gold that has attracted man for thousands of years.
More...



That sounds like a fun project. I bet the fumes and waste products would be good on my vegetable garden. Those old gold tailings in the watershed of western towns are a real health blessing for people into heavy metal toxicity.
 
m1nt said:
why the hate?

if you think it should be worthless, short it. personally, I love the action in cybercurrencies long or short. I would trade bottle caps if they were as fun.
More...


I did short it last year when it hit 2000.
 
m1nt said:
why the hate?

if you think it should be worthless, short it. personally, I love the action in cybercurrencies long or short. I would trade bottle caps if they were as fun.
More...
I don't hate bitcoin. Jerry does. Read the thread...
 
achilles28 said:
I don't hate bitcoin. Jerry does. Read the thread...
More...

I don't hate ButtCoin. I just think it's about as funny and useful as tits on a bull. I did love that really fat ugly guy at Mt. Grox explaining how he lost hundreds of millions of other people's ButtCoins. Such a cool guy.
 
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