Re:Global Currency

[Padmanabha Rao <kvprao@igidr.ac.in>]

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On Mon, 23 Apr 2001, Srinath S wrote:
 Here is a question. Why is gold so expensive? I have thought a lot about
 this, but cannot come to a conclusion other than "for historical
 reasons". One cannot eat gold, gold is not hard as iron or lead, it is
 not light as lithium or duralumin, it cannot be used to build roads, it
 cannot be used as manure, it cannot be used to run machines, it cannot
 be used to write software... Its properties that it is insoluble and
 malleable seems as arbitrary as anything else. It is simply that,
 historically gold has been expensive and used as a standard which
 continues today.

Well, it takes enormous amount of energy to extract it and then it doesn't
corrupt easily, actually pure gold doesn't corrupt at all in the normal
earth atmosphere. So, if people valued these properties for their
decorative ambitions (and once dal, kapda and makhan is taken care of
decoration comes next?), then it would be naturally priced high.


Padmanabha Rao


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