Ron -
[...I never said gold didn't have intrinsic value. Everything I can immediately think of has some intrinsic value, with the possible exception of your rambling comments...]
Actually, intrinsic value is a myth. In about 1870, the German economist Carl Menger, along with two other economists independently, produced the 'subjective theory of value', and the marginalist approach to economics, finally explaining the apparent paradox of the relative valuations of a one carat diamond and a potentially life-saving cup of water.
Every economic good, including money of all kinds, is separately valued by every individual as he chooses which of all the possible exchanges available are to his advantage to execute sequentially from the most advantageous to the least. As any given good is accumulated, the marginal utility of a further amount decreases, and as another good (money, for example)is exchanged for the first good, the marginal utility of the remaining amount of the second good increases.
All exchanges come to a halt as the subjective marginal utilities of all goods for a given individual tend to equalize, leaving no perceived advantage for any further exchanges.
Regards, Don |
