I'll give you one, or maybe a couple. [Reasons for gold to have more than commodity value.] But they all deal with relapsing into the historical psychology that surrounds the metal.
Aha! Gotcha! When the psychological demand for the metal makes it valuable, it has the value many of us would like to ascribe to it during non-crisis times. Ergo, if enough of us want it to have "emergency storage" value, then it does in fact have that value, right? Furthermore, since you agree that it does in fact have a "contingency value" in times of crisis, isn't it reasonable for governments to hold it for just that reason? Sort of like having some candles and a few cans of beans available on this coming New Years's Eve. It is a calming factor that helps inspire confidence in our fiat currencies, irrespective of any day-to-day intrinsic value it may or may not have.
When we hollowed out the LA salt domes to store oil, it seemed like a pretty good idea. When we hoard plutonium and tightly control its distribution, it seems like a pretty good idea, too. Back in pre-WWII days, when helium was considered a strategic material, vast areas in the Texas panhandle were considered "vital defense areas," for the same reasons as we hold gold -- we may need it someday.
See what a moment of weakness can do to your image? <huge g>
jim |
