Ive never been able to understand the concept of gold. Why is it so valuable? How do countries know that the amount of gold being held by other countries? Who audits these gold reserves to make sure the gold isn’t fake? In the event of a major war would you trade food for gold? feel like people would trade goods for different goods in such a dramatic event. I have potatoes and trade them for fruit type stuff. Is gold the same scam as diamonds? Or how is gold any different than Bitcoin?
In: Economics
To answer questions that others haven’t answered. No one audits other people’s gold reserves. It doesn’t really matter how much other countries have since money isn’t backed by gold anymore. The value of gold is currently determined by how much is for sale (not reserves) and how much people are trying to buy.
Perhaps gold futures might be determined by total reserves but that’s not as valuable as spot prices since it’s a given the volume of gold doesn’t change that much.
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