Bill Anderson
Sep 3, 2018 · 2 min read

Eh not quite. Only one third of above ground supply is used for investment purposes. Almost half of the supply is used for jewelry. The rest is industrial. Gold is of prime functional value in electronics. It would be used much more in electronics if it were not so expensive to do so.

Banning gold mining, which is unlikely to be effective given that the largest producer and consumer of it is China, would only drive up the price. This would shift the proportion of its industrial versus jewelry versus investment away from industrial even further. As it is, almost as much gold is used for industrial purposes as is used for government “investment” purposes, globally.

Indeed if one was able to put in a universal ban regarding gold that actually worked (or was globally enforced and followed), the most effective means to your stated end would be to lower the price of gold. You would accomplish this by banning it for anything other than industrial use. Assuming people followed that, there would be a flood of supply from vaults and jewelry driving through cost down below what mining could support. This would then enable more widespread use in, for example, electronics and medical. This would eventually cause a return of demand which would eventually bring the price back up to where mining would make economic sense.

But again, that assumes people don’t still use it as value, which includes jewelry. And with half of the supply used in jewelry, I do not see that happening within the U.S., let alone a global market where half of the total production and demand is in China, with India and Turkey accounting for another leather chunk of the demand.

Now bitcoin, I can’t argue it as a good idea in any way. It has no value and general function. The claims made about it being a known quantity supply are baseless. One can’t honestly claim bitcoin (or other blockchain style currency) has a maximum quantity if it is divisible. Inflation can happen by division of currency just as easily as adding zeroes on the other side of the decimal point happens. But there is no real point to banning it, either. If your grouse is energy costs, well that has an end date since bitcoins have a limited number that can be created (“mined”). Thus there is a natural and ultimate end for that. Plus it would be even more ineffectual than banning gold mining since it can be done anywhere — which means it can be done using “renewable” sources. It can be done in a much more mobile fashion than a real mine, making it more difficult to police.

    Bill Anderson

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