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But there is not better alternative. That's the crux. Fiat...

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gozinsa

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18/12/19

22:20

Post #: 42040040
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Originally posted by Dr.Who: ↑

Gold supply bears no relation to the needs of the economy.

The supply of gold depends on what can be mined.In the 16th Century, the discovery of South America and its vast gold deposits led to an enormous fall in the value of gold - and therefore an enormous increase in the price of everything else.

Since then, the problem has typically been the opposite - the supply of gold has been too rigid. For example, many countries escaped the Great Depression in the 1930s by unhitching their currencies from the Gold Standard. Doing so freed them up to print more money and reflate their economies.

The demand for gold can vary wildly - and with a fixed supply, that can lead to equally wild swings in its price. That is hardly the behaviour of a stable store of value.

So, to paraphrase Winston Churchill, out of all the elements, gold makes the worst possible currency.

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But there is not better alternative. That's the crux. Fiat certainly isn't, its much much worse.
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