I'm currently reading Bernstein's "The Power of Gold". The irrationality of gold's value is a recent epiphany for me. In Africa at one stage, an ounce of gold was being traded for an ounce of salt. [Ed: about that time machine...]
Here are some notable quotes from the book:
"Is that not strange? Out of steel, we can build office towers, ships, automobiles, containers and machinery of all types; out of gold we can build nothing. And yet it is gold we call the precious metal."
"In a global economy managed by central bankers and international institutions, does gold matter at all?" [Ed: after the current perfect storm credit bubble, will the revised edition make the case FOR gold, based on the MISmanagement by central bankers?]
Yet, my favourite is the Prologue's opening paragraph:
"...John Ruskin told the story of a man who boarded a ship carrying his entire wealth in a large bag of gold coins. A terrible storm came up a few days into the voyage and the alarm went off to abandon ship. Strapping the bag around his waist, the man went up on deck, jumped overboard, and promptly sank to the bottom of the sea. Asks Ruskin: 'Now, as he was sinking, had he the gold? Or the gold had him?'"
[Ed: Recent volatility has caused huge spikes in gold call option purchases. I wouldn't bet on a flight to reason any time soon...]
1 comment:
What about gold's use in jewelry and ornamentation? If rarity is not part of the equation (and I still believe it must be a relatively rare metal) is gold still not one of the better metals to make displays of wealth with?
Perhaps ego and the need to display wealth are hard to quantify to logically value something but they are some of the strongest drivers for obsession and will beat logic anytime.
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