
Originally Posted by
xanfiles1
In the 15th and 16th Century, Gold determined the Wealth of a Nation. Hence, the amount of money needed was directly related to Amount of Gold a Nation has. Hence it made sense to print money which was related to Gold
By the 21st century, a Nation's wealth is determined by pretty much its intellectual capacity, its manufacturing capability, its servicing capability its food growing capacity, its transportation and communication networks, its universities, its capital markets. None of this has anything remotely related to Gold.
Why is Gold still traded at high prices?
Every kid in every country is told stories of Kings and Queens, Magicians & Thiefs and every story they are bought up with one single concept.
Owning Gold is the greatest thing. Gold = Wealth. Gold = Riches. If you have Gold you are the King and you own a harem. When everyone has this Gold concept ingrained they artificially inflate its actual worth and drive the price up.
It is much easier to sway the masses by saying
i) Gold will always have value by telling stories of Kings
than convincing them
ii) Intellectual Property is Billion times more worth than Gold
Unless we get a modern Aesop, who tells stories of Bill Gates and Warren Buffetts in a fun way, Gold's prices will be artificially inflated. Or the Markets around the world one day just realizes Gold is just an ornament piece.
When will it happen? Next Month? 5 years?, 100 Years? God knows. What prices will Gold trade? Anywhere between $45 (Marginal Cost of producing Gold and hence its true Price) to $50,000,000 (Never underestimate the power of human imagination or sheep mentality)
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