I hear some economics arguing that currency should be pegged to gold as a way of ensuring that its value isn’t arbitrary / volatile but I don’t understand how this would solve the problem. I understand that gold is a scarce resource that is difficult to mine but is it this alone that gives it intrinsic value ?
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It’s big part historical. We consider it valuable because it was considered valuable in the previous generations.
It eventually boils down to why the first humans considered gold precious. Probably because it’s shiny, easy to work with, you could find it in the rivers without a problem.
Earliest civilizations didn’t even use it as money, they made jewelry of gold. Some civilizations only gave gold jewelry to the dead people as it was considered from the world of the dead. But divine properties were generally attributed to gold.
So it’s a shiny, rare enough, divine thing. Inherently valuable.
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