I know there are these kind of common sense answers, like: - gold is the best material in atomic table to be currency - it is universal demanded so it is the best stuff once a country own currency is at risk - it is shiny so everyone loves it - it is jewelry but I don't think any of these reasons are as important as stuff like we need oil to turn on a tank or jet to have a war. Then why not country stores oil instead of gold? Does gold have any hidden ability may be even supernatural kind so every country fights for it? Muammar Gaddafi had so much gold but couldn't save his life.
We have a 50 year strategic reserve of oil if production halts. I don't think we have a 50 year strategic reserve of gold if the dollar halts. The reason countries keep gold is that no currency really has survived its government for more than a few centuries.
nothing lasts forever, man... Who knows how long America can still be the no.1 country in the world? Once it was Britain.
I agree that oil is a great product and store of value . It has many important applications at this point in time. Governments and central banks hold gold because it has been recognized as money for thousands of years. MONEY: something generally accepted as a medium of exchange, a measure of value, or a means of payment: Why not hold both oil and gold, both can be used as "money" as well as other applications . Holding some lead, or steal (bullets)help too.
today oil is valuable, tomorrow it may not be, plus, it is expensive to store. People will almost always trade for gold, and it is cheap to store somebody who likes charts and math facts should compare GC to CL over the last 10 years and see just how correlated they actually are.
Thanks for the last two replied. Gold has been used for thousands of years as currency and basically everyone believes it would always worth a lot, but is there is reason for this other than just everyone believes it is?
because world people population mostly feel and invest more in that material mainly and gold its have more stuff to buy and sell
Why does anything have value? Because it fulfills a need or want. Gold fulfills a want. Oil fulfills a need. What are the attributes of money? Portable. Divisible. Store of value. Oil is divisible. Portable? Not really. Store of value? Gasoline and other refined feuls have a short shelf life before they degrade and lose their value. So not really. Crude oil, yes. Digital and paper fiat are portable and divisible but not a great store of value due to inflation and debauchment. Hence gold. Or real estate. Or stocks. Etc Gold is really an alternative currency to fiat paper.