I never understood why, if the situation becomes so bad that government-issued money is worthless, would people prefer gold instead of, say, water, toilet paper, medicine, access to a dentist, and so on?
>why [...] would people prefer gold instead of, say, water, toilet paper..
"Hi here's your monthly pay it's $5,000 of toilet paper. Where would you like me to park the truck that's full of it?"
The purpose of a money as a technology is to be a highly salable good that stores wealth across time and space.
Taking your salary in toilet paper isn't good because it's not as salable and it also can rot and degrade. If someone tells you that it's good your money rots because then everyone will have to work more than if their money was more robust (inflation) they're probably the person that can create money costlessly but charge you for it (a bank). If they claim that it's bad if the amount of money required to produce something decreases (deflation) when reducing the consumptive inputs (labor, materials, yes even money) creates a more efficient product, is less demanding on the planet, they are probably that gain their wealth from taxing and taking your things (states).
> Hi here's your monthly pay it's $5,000 of toilet paper. Where would you like me to park the truck that's full of it?
Don’t know if you realize this, but that’s literally what was happening in Ukraine (and probably elsewhere) during 90s after USSR collapse. People were paid with products of factories they worked on. Toilet paper, teapot sets, boxes of matches, etc. not fun times.
Yes, it's what I was referring to. Trade will occur regardless of what happens. If factories run out of a fiat money, they'll offer to trade the factory outputs for worker labor. It's just that the people with the most performant money will survive the best.
In a normal situation it would not make sense but:
> if the situation becomes so bad that government-issued money is worthless
If you are receiving a salary (!) in a non-gold currency, and have an effective method of converting that currency to drinking water, food, toilet paper, medicine, etc. then, even if it is a crisis, what do you need gold for?
And if the value of government-issued money has completely collapsed, chances are that things are so bad that you'll need things for your immediate survival. Also, as there won't be a central instance setting a commonly-agreed value of gold, it is up to each supply to set their own prices, so how would gold keep its value?
Historically government-issued money has become worthless on a country by country basis so if say you lived in Venezuela and had money in gold you could smuggle it out and buy a condo in Miami etc.
I daresay offshore accounts could fulfil the same function with less hassle.
Or just save your money in the first world country with the most stable currency (dollars in the US as of now) like most of us third world citizens have been doing for a long time. We're not buying gold, and if the point ever comes that another currency is stronger, I guarantee the US will see capital flight like it's never seen before (hence all the wars would be my guess).
Exactly. The idea that you would even have access to the internet and computers in the event of a governmental collapse is inane.
Crypto is posited as a hedge against oppressive governments, but the people who use it almost always live in countries that offer more freedom and democratic control than anyone ever had in history.
People who are actually oppressed by their governments - the North Koreans and Turkmenistanis of the world - don't even have the infrastructure to buy crypto.
Full-blown government collapse is quite far-fetched scenario. Infrastructure in venezuela still works at some level, however poorly. Bitcoin works in places pretty well where goverment is crappy but still not that crappy, that you have electricity, internet, etc.
> They are selling gold to afford these necessities.
They are probably using anything that there is available as a currency replacement. I would bet that mostly physical USD, but also gold, bitcoin, cigarettes etc. I don't think gold is the main replacement when national currency starts hyperinflating, just a tool among others.
