> Well sorta. In real terms, the price of gold is anchored to the amount of energy required to mine a kilo of gold with a sustainable margin. That quantity doesn't change very much (in real terms) over time.
Could you explain more about why it is the amount of energy required that determines the price? That could get rather circular (what determines the price of energy).
A Marxist would say it is the quantity of labour power required; a classical economist would say it is the balance of supply and demand, but I haven't heard this one about energy.
I mean that in the fairly basic sense of mining gold being a physical process; so it uses energy.
The point is that it is possible to bring a practically unbounded amount of new dollars into the market at a cost-to-create of 0 (ie, in real terms, new dollars can be created for free) and cause inflation. Which is exactly what the central banks try to do except in a controlled manner.
Can't happen with gold, because the marginal cost of creating new gold is roughly the price of gold. The 1-2% increase in supply from mining isn't going to cause real inflation in gold that behaves anything like inflation in the dollar. Supply increases to meet demand, but the value that the gold represents does not change.
If someone finds a super-nugget the size of a cargo ship to mine that might change, but that isn't what the original point by joe_the_user was going to.
You've failed to explain your original premise, i.e. it is energy that determines the price of gold. You've made some tautological points that get us no where.
Could you explain more about why it is the amount of energy required that determines the price? That could get rather circular (what determines the price of energy).
A Marxist would say it is the quantity of labour power required; a classical economist would say it is the balance of supply and demand, but I haven't heard this one about energy.