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Comment by stupidhn | Hacker News Reader

Diversification of "hard assets" because the value of sovereign currency is illusory and often fleeting.

I agree that mining, storing and transporting gold around the planet is a waste of resources, but there are only so many places to store wealth in a physical manner. The fact that gold has historically been useless in industry probably adds to its value.

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Given that you want an asset which is difficult to move, wouldn't it be better to build infrastructure instead (eg. roads). At least you can use that asset. I don't understand why gold would be preferable.

roads require maintenance and are only valuable between two points people wish to traverse. gold doesn't deteriorate, is trivially divisible, and can be moved when you want to -- stays put when you don't. gold has been a store of value for millennia, so I personally find it ignorant to ignore the historical significance. hopefully we can rope an asteroid with a few billion tons of gold (and other precious metals) and make them all less precious indeed.

If diamonds are anything to go by, it is perhaps unlikely that the asteroid miners would dump the whole lot on the market in one go. It would be in their interests to maintain prices in order to maximise their profits, would it not?

Depends on if they're using the Bond villian playbook or not. I'm sure there's some convoluted plot you could cook up, given the threat to depress the world gold market.

The problem is that roads are too usable. They can be used by your political enemies just as they can your friends.

Infrastructure is both less durable as well as less liquid. It also returns diminishingly as you engage projects on your opportunity cost frontier. Also likely to be less secure to military or political threats.

You can give your gold to other countries in exchange for stuff (eg weapons) but you can't do the same with roads

Gold is not useless in industry. It is used to conduct electricity in many industrial settings. It also has other uses - dentists use it as a tooth crown etc. That it is useful is why it has value.

Yes, storing and transporting gold for financial purposes may be a waste of resources. But gold is easier to store than most commodities - put it in a vault for several centuries and forget about it. You can't do that with strawberries. You can transport a lot of value in several ounces of gold without much space needed.

When was the last time gold was used in dentistry?

Every day? Gold fillings are significantly more durable than amalgams.

http://www.webmd.com/oral-health/guide/dental-health-filling...

https://en.wikipedia.org/wiki/Dental_material#Gold

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