-- Nevertheless, the fact that gold rather than a fiat currency, has been a storehouse of value and the ultimate currency for most of man's history tells us that events can occur that drastically change the demand/supply equation for gold as opposed to fiat currencies. --
I can understand the use of gold in the past as money because of it's scarcity and it's properties made counterfeiting impractical. But as a storehouse of value?? What's that suppose to mean. How come copper or lead or diamonds or corn or soy beans aren't a "storehouse" of value? Sure the corn and soy beans have a short shelf life, but as long as they are still unspoiled, they store value as good as anything else.
Really the value something has is how useful is it and how much supply is there. As Zeev pointed out, gold ain't all that useful, so just because the supply is limited doesn't necessarily make it valuable. You could splash paint all over a canvas and tell people it's a work of art, and since it is a one of a kind it is valuable, but you better be a very good salesmen if you expect anybody to buy them. Remember that guy about 20 yrs ago who did just that. He would setup shop on a sidewalk, and his claim to fame was he would "paint" you a painting in .... seems like it was 60 secs. He was such a good salesmen that he literally had people standing in line and made the national news. I wonder how long he was able to keep that going before he met the "demand"?
And in the early 80's I had some roommates that for a while made a living going door to door in office parks selling laser prints. Remember those. If I remember rignt that only lasted about a year. And then I knew somebody that sold black velvet painings by the roadside for a few years. Elvis was a big seller. <g> Last time I was in Kmart, walking by the Toy department, I happened to notice these "black velvet" about 1 1/2 by 2 foot cardboard designs. Instead of color in between the lines, it was color in between the velvet. I think the markers were included and it was only something like $4. There's a whole lot of people in China with a whole lot of time on their hands.
As I pointed out the other day, if you're on a desert isle and you have a pile of gold, and the one other person has a pile of food, you're going to find out really quick how much "value" is stored in that gold. Probably going to be hungry too.
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