Does gold have some sort of magical properties to retain its value?

[Kasz216]

Mr Khan said:

Kasz216 said:

Mr Khan said:
It does make the whole concept of the gold standard seem rather silly, given that its only advantage over fiat currency is that a country has to tweak its balance of trade in order to mess with its currency values, rather than just ordering money printed or buying up a hell of a lot of assets to alter supply. But the underlying idea is still about arbitrarily assigning value to something.

Granted, gold is also a very useful metal, similar to Platinum or the Rare Earths.

Seems like an important advantage though if you've been following Bitcoins.  Which have skyrocketed in value when literally that's it's only advantage vs real currencies... and it has tons of disadvantages.

The key about gold though is that while the era of the gold standard is idealized in terms of how countries conducted their monetary policy (the phrase back then was "Rules of the game" that countries had to follow), stronger countries, like Great Britain for instance, were always breaking the rules, forcing themselves into stronger positions and other countries into weaker positions, so it's not like the system is foolproof for abuse.

And i really hadn't followed bitcoins, aside from SamuelRSmith mentioning them in passing in his "Pillars of the State" thread. What went on there?

Basically they shot up in "value" by a gigantic amount in recent weeks.  Which is interesting because Bitcoins as a currency have less backing then coupons printed up by a Hobo. (God bless the King of America)

 

As far as anyone can tell they shot up in value because

A) People are willing to buy them/accept them for stuff.

B) They get made in a specific not expected to change way.

 

So... people are rushing to a "fake" currency more or less simply because they don't expect it to inflate.