Comment: intrisinic value

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intrisinic value

The gold has value because people want it - even now, without gold being money. Because money is general medium of exchange, gold (and silver) are suitable for this task, because:
- lots of people want to own it
- it is scarce enough to be valued by people high enough

Why not copper or nickel? Practical reasons, people value copper much less, you would have to take with you very heavy wallet. But for small values I think copper used to be used.

Paper standard can be easily manipulated, because you can print money so easily. If everybody was allowed to print money, paper money woudln't be "worth a colonial" within a day. You cannot print gold. You can only mine it and that is very expensive. If everbody was allowed to mint coins (provided he is not cheating on the quality of the coin)...well, no problem there :)

Now if there was a cheap way of creating gold (transmutation etc.), gold would cease to be a good candidate for money. This might happen in the future, but the free market will hopefuly find some good substitute.