One can argue back and forth about whether or not gold is money. The arguments have a lot more to do with how one defines money than the strengths or weaknesses of gold itself.
Depends about what different definitions of words should be both bore and tire me, particularly when people are trying to change the definitions to score points in an argument about actual concepts and facts.
I think Radagast's pragmatism is a good starting point: Money is what you can buy goods with.
His definition was in my view limited, as it didn’t factor in time. Money is what you can buy goods with
over time, i.e. money keeps its purchasing power.
Another limitation was spatial: Money is what you can buy goods with globally, not only in the USA.
In my view, there are grades of goodness in being money. The perfect form of money is an abstraction.
Probably the best way to formulate the question is not „Is x money or not“ but „How good/bad is x as money in such and such circumstances“.
X can be better money than Y compared to criterion a), or under certain circumstances, and at the same time worse than Y compared to criterion b), or under other circumstances.
My point is, answering the question "Is gold money?" is not just a matter of definitory arbitrariness, as you seem to suggest. In defining the meaning of the word Money there is also some place for empirical evidence, so to speak.
Paul, can you explain what the specific non-negligible advantages you see of hedging against inflation with gold rather than in real estate or stocks and how those fit in to gold being money?
I don’t know Maizeman. I'll rectify it and convert it into a supposition: "as being money
should be no negligible advantage of gold vs. stocks and real estate."
I’m wondering, what are the specific, non-negligible reasons why the Central Banks buy/hold gold instead of real estate or stocks?*
And how does it fit in to gold being money?
I guess, it has something to do with liquidity and absence of counterparty risk.
One thing is certain: it has nothing to do with performance (transaction costs, tax treatment, bid-offer spreads etc.).
*I know CBs hold stocks too, but I it seems to me that their reason for holding stocks is at least partly different from the reasons for holding gold, "gold reserves" and "stocks reserves" answer, at least partly, different purposes.
Also could you clarify whether you are talking about hedging with gold funds or tangible in-your-hands gold?
Sure. I’m talking about title of ownership of gold bars.
It doesn’t have to be in-hand. I don’t belong to the „If you don’t touch it, you don’t own it“ camp.
In my view, BullionVault, GoldMoney, BullionStar (just examples) are as much gold as tangible in-my-hand gold.
ETF shares don’t represent title of ownership of gold. They are IOUs.
When I talk about gold I don't mean gold derivatives like futures, ETFs, unallocated gold accounts etc.
* My own view is that gold is every bit as much and every bit as little a currency as bitcoin is. Bitcoin is better at the medium of exchange bit, gold is better at the store of value bit
I couldn't agree more Maizeman
In societal breakdown levels of inflation, gold is definitely going to be more useful to ensuring ones survival than a well funded stock portfolio and a rented out 4-plex.
How about currencies crises like those in Argentina, Russia, South-East Asia, Zimbabwe, Ecuador, Mexico, Venezuela …
Was gold in those countries more useful that stocks or real estate?
If you had lived in those countries at that time, what would you had converted your fiat into?