Gold, psychology, and society - Deepstash

Gold, psychology, and society

If the modern paper-money economy were to collapse, we would fall back to gold.

  • People need to find ways of working together, which leads us to find ways of exchanging goods and services.
  • Gold is the logical choice of this exchange as it is one of the only substances on earth will the right qualities for the job.
  • If society agrees to turn gold into coins into a system of exchange, then gold coins would instantly assume value.

That means that gold will always have value in difficult and in good times.

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MORE IDEAS FROM Why Has Gold Always Been Valuable?

The value of gold

Some people think that gold has no intrinsic value and that gold's only worth is as a material to make jewellery. Others assert that gold is an asset with various intrinsic qualities that make it unique for investors to gather in their portfolios.

  • Most would agree that gold has always had value - as a component of jewellery, sometimes as a currency, and as an investment.
  • Another part of the value of gold is it's appeal to mystery. Something about the warmth of gold touches our human need for comfort and nurture.

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In the old days, a coin of some metal was easier to exchange than to implement a barter system. Of all the metals, gold was the logical choice.

  • Metals like iron, lead, copper, and aluminium are prone to corrode over time.
  • The "noble metals" like platinum or palladium are too rare to generate enough coins to circulate.
  • Gold and silver. Gold is heavier than silver. Gold doesn't corrode and can be melted over a flame, making it an excellent choice to stamp as a coin.

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Contagion In Economics

Contagion, in financial terms, refers to the diffusion of economic booms, and can occur both domestically and globally. It is basically a spread of an economic crisis from one region to another, and spreads on an international level due to the global market interdependence.

The term contagion was coined during the 1997 Asian financial crisis, but it was occurring namelessly even during the Great Depression in the 1930s.

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Marginal Benefit vs. Marginal Cost

Marginal benefit and marginal cost are two measures of how the cost or value of a product changes.

  • The marginal benefit is a measurement from the consumer side. It is the maximum amount of money a consumer is willing to pay for an additional good or service.
  • The marginal cost is a measurement from the producer side. It is the change in cost when an additional unit of a good or service is produced.

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A financial crisis

A financial crisis is often associated with a panic or a bank run where investors sell off assets or withdraw money from savings accounts.

  • Asset prices drop in value.
  • Consumers are unable to pay their debts.
  • Financial institutions experience liquidity shortages.

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