Below is a post on a discussion board for a macro course I am taking as I pursue my MA in Econ. If there is anyone out there with more of a handle on gold and the gold standard, I would appreciate any coaching/feedback on my response to the following point, specifically am I on track from the Austrian perspective:
POINT: “Gold is it is not a good asset to have for appreciation and investment purposes. Gold, as a commodity, rises and falls in price according to market demand and supply. However, as a compounding instrument, gold will fail, because its inherent value will only be exchanged at the market price at the time of trade.”
MY RESPONSE:
"I am having a hard time understanding two things that were suggested: One why gold would not be a good asset to have for appreciation and investment purposes, and two, that gold will fail.
Since these scenarios are unlikely, why wouldn’t gold survive as an asset worthy of use as a means of exchange?"