Define Intrinsic Value
There are dozens of posts about silver and gold floating around here. You've got the people who are bullish on it because they are bearish on the dollar, and then you have the group of people saying gold and silver have no intrinsic value because it is not productive. The latter group has been consistently wrong about gold and silver for about 10 years. I have a huge portion of my portfolio in silver...but I come here unbiased because I am ususally the first one to rip on somebody for going off on rants about the USA burning in flames, hyperinflation, etc.
I don't understand why this group thinks that gold and silver have no intrinsic value. If the market sets the price of gold at $1520 an ounce , that is how the general public values it...is this its extrinsic value?
Surely, if gold and silver have no intrinsic value, that neither does the dollar, right? Money is imaginary in a sense. Currency isn't money. I look at my bank acount and there are a few numbers with a comma here and a decimal there. Is this somehow worth intrinsically more than gold or silver?
Taking it a step further, we can compare it to equities. Lets take the stock of RIMM (just using it as an example). RIMM produces a lot of dollars. But dollars are worthless, because they have no intrinsic value. They have no intrinsic value because they don't produce anything. So therefore RIMM is worthless. Also, it is a company losing market share...so how does it have any value? Even if you don't look at it as something generating dollars, how does me owning a piece of a company make it intrinsically valuable if I am not doing any work for that company?
Taking it another step further, some people don't care about money at all. They care about their family and health. There are some tribes that don't use currency at all. Are you in the position to tell somebody he should value RIMM shares more than his family? Should you be shorting finance and going long happy?
So if the price of silver and gold goes up faster than the price of RIMM (and you can count on that), then you can say whoever invested in silver was smart enough to know that in the future people would value silver at a higher in/ex trinsic value than RIMM.
So, please, tell me why you know what intrinsic value is, but everybody else is wrong for having different values.