“BTW, the last post was to Inquisitor, who feels my grasp of Mises is ‘weak.’”

It did nothing to change that view.

Ah, so now we see Bob that you are not afraid to bust a few heads to implement your socialist utopia. When you say, “the building of the foundations of systems which you now take for granted claimed more lives than any Socialist experiment.”, you are admitting that socialism is an evil that leads to death, just to lesser degree than your conception of capitalism.

I totally disagree with your statement that capitalism does not form freely. That is exactly how it works, free exchange, value for value. And yes, Law is required to enforce property rights. Holding democracy above the law leads to theft by the 51%.

Actually, I am not a socialist. I am simply open to the crazy notion that there are areas where markets failures are pervasive. I am also open to the notion that there are areas where markets perform best.

Socialism is not about taking away rights for the “greater good” of society, though it could be if that is the path taken. Capitalism can be various things as well, like the child laboring 15 hour work days of the past, BEFORE social movements caused concessions. The main principle is to end the dominance of production on exchange and to give the workers a say in the production process. Markets may heighten freedom, law may be used to protect freedom, but Capitalism is the antithesis of freedom.

I am fairly certain that my argument ran counter to what you are saying, if you can identify where you believe I made this correlation I will be glad to clarify what I meant.

Bob: “Austrians have nothing to say about the fundamental origins of concepts and institutions, such as value or government. They simply analyze them as they are today.”

You clearly don’t know anything about Austrian economics. Most of it is about value. As for the origins of government, later Austrians such as Rothbard, Hoppe and others have a great deal to say about it.

Bob: “…most Mises disciples live in a world of make believe…”

Instead of making ridiculous assertions that do nothing but demonstrate your ignorance, please provide some evidence that we can discuss.

Bob: “It therefore renders the magnitude of value first and foremost theoretically measurable.”

Marx was a classical economist. As such, he took the classical nonsense of intrinsic value and labor theory of value seriously. The subjective value and marginal value revolutions that occurred after Marx proved intrinsic value to be wrong and one of the major flaws of Marxism.

Bob: “All of you on this forum need to actually read Marx…”

You would be surprised how many of us have read Marx and still find him to have been an idiot. And which Marx are you talking about, the early or late Marx? Besides, modern Marxists don’t understand Marx anyway. They all disagree about what Marx intended because the guy couldn’t write two words that made sense.

Bob: “He is abstracting from the fact that it is not prices that determine what people want, but people that determine what people want. This abstraction, when reduced, is essentially what democratic planning of production is about.”

You clearly haven’t read Mises. People determine what people want, that is true, but prices determine what people can get and guide production. Mises proved that democratic planning of production without free market prices is possible, but it wastes resources until everyone is equally poor and starving. The USSR and Communist China spent decades proving Mises right.

Bob: “On the other hand, the Soviet Union broke any institutional continuity.”

Here we go again. The USSR was the darling of Marxists until Stalin’s mass murders were revealed. Same with China. They weren’t really Marxist after all. But the truth is that Marx was deliberately vague about how a socialist state would work. Lenin and Mao thought they were following Marx as closely as possible. They intended to follow Marx. If they got it wrong, which they didn’t, it was Marx’s fault, not theirs. The USSR and Communist China before Deng’s reforms are the best examples of Marxism the world has to offer, otherwise, Marxism has not example.
Bob: “I have read Mises’ “Socialism” in its entirety, as well as several works by Schumpeter, Hayek, Bohm, Weeks, Friedman, Marx, Kindleberger, etc”

Then explain why your understanding of Mises is so wrong?

Greg: “Capital investment is what drives our economy ahead and we encourage this investment to increase productivity.”

Exactly! And what is the greatest hinderance to capital investment? Inflation and the business cycle. A real gold standard would eliminate inflation and virtually get rid of the business cycle.

BTW, if it’s becoming confusing, FTG is the same as Francisco Torres. The G is from my last last name.

Why not let the market decide?

At many points, this thread reads like a divisive argument among central planners. But why must one size fit all?

How about letting those who disdain gold use fiat currency, and let those who disdain fiat currency use gold, or whatever else?

Then we could abandon rancorous hyperbole and let our bank accounts do the talking. That would be an argument everyone would understand.

Unless they also advocate the repeal of legal tender laws, it seems to me that proponents of fiat currency don’t believe their own arguments.

“If you would like to quote someone do it in full without misrepresenting their idea and offer a full rebuttal, not some two word trash that’s entirely useless.”

If you’re referring to me, then demonstrate where I misrepresented him. A full rebuttal is only meritted where that being rebutted is adequately fleshed out and concretised to make sense…

inquisitor, fundamentalist, and the rest of you guys arguing with Bob Stafford:

Waste of time, boys, on someone who’s not worth the energy. Only his very shortest sentences are even coherent, let alone correct. He’s what’s called a “tar baby.” He claims to have read Mises’ SOCIALISM. If true, he ought to be able to cite a passage from that work with which he disagrees and point out in just what respect he finds specific error, not merely cite his disagreement.

Over on another thread on which he’d commented,
I’d pointed out for him a couple major shortcomings of Marx (first, that he was committed to the “Iron Law” and, therefore, the “immiseration argument” with which you are all familiar, not having absorbed the discovery of subjective valuation and, second, that he was totally unfamiliar with the very prime question of “economic calculation in the socialist commonwealth” as enunciated by Mises in the early ’20s). It is a sad commentary on the state of education in general and economic literature in particular to appreciate that this fellow could possibly parlay the kind of compositional skills to which we have been witness into a graduate degree of any sort; of course, that pales by comparison to the prospect that he might actually be in position someday to “instruct the young.”

You are witness, not to the process of decline in modern civilization but to evidence of its advanced state.

“A fixed dollar/gold exchange rate is ‘restrictive’
in the same way that the Bill of Rights limits the
discretionary power of the feds.”

Um, do you mean it doesn’t work?

Hallelujah to Gene Berman! Stop the madness!

Good point Mike Cuneo. The spike you speak of is one of the main reasons Robert P. Murphy’s essay is so germane. As usual Mr. Murphy has written a gem — and I don’t know him, I am not related to him, and he isn’t paying me any money.

I loved reading Murphy’s reaction to Michael Sesit’s article, the title of which made me humph (with derision). Then I read the article — it confirmed my initial reflex.

“Gold Standard Fans Yearn for Great Depression.”

Right. Prove it. The article starts with an idiotic title and goes downhill from there. There is nothing in the article that supports its header. I know the idea behind a “grabber”. But news flash to writer — the grabber needs to find some support in the body of the article.

I am fascinated as to why Sesit might think gold standard fans pine so for a Great Depression? I can only speculate because he does not tell me.

Maybe just so that such fans can thus demonstrate that a Gold Standard is superior to willy-nilly money printing by the FED?

This is like saying such fans are like Rush Limbaugh who wants Obama’s plans to fail because those plans are unconstitutional. Notwithstanding that the whole fractional-reserve bank system and fiat currency and the Federal Reserve System actually ARE unconstitutional. But no one with any empathy for the suffering of fellow humans would wish the effects of such failures on them just to prove some ‘academic’ point.

It’s like suggesting that such ‘fans’ want orphans and single mothers to fall through the safety net just to watch them suffer. And just to prove that unconstitutional remedies won’t work.

Obama’s plans (and the FED’s) won’t fail because they’re unconstitutional or because gold-standard fans pine for a Great Depression — they will fail because they cannot work. We cannot succeed with actions that have created the failures in the first place. What is the Obama team’s approach? Homeopathic cures as Economic Medicine?

I don’t know which ‘fans’ Sesit is talking about. OK I will give him that there are the proverbial brokers who might sell their grandmothers for a nickel, but I am glad I don’t move in circles where I know of either such ‘fans’ or such brokers. Maybe Sesit does move in such heartless social circles. In that case, I feel for him.

I cannot materially add to Murphy’s cogent arguments logically picking Sesit’s stances apart. Sesit is IMO just making stuff up or repeating what he has read from some other mainstream Gold-paranoid neo-Keynesian economists, maybe like Krugman?

Why the paranoia? Why not examine the positives against the negatives of any system? Especially when the current Central-Banks-led paradigm seems to be so broken?

And you are right IMO, Mike Cuneo, to be afraid — to be very, very afraid of what the FED and other central banks are doing.

The point is not whether the so-called Gold Standard is superior. You don’t even have to call it a Gold Standard. Just refer to it as a Rules-Based Money Supply System. Milton Friedman wanted such a rules-based system. He said he did not trust Central Banks to not be influenced by the politicians. Neither did Friedman trust them with their apparent do-good Social Engineering tendencies.

Central Banks were supposedly established as arms-length institutions to be ‘independent’. Some ‘arms-length’ — those arms are shorter than the period at the end of this sentence. Being in bed with the political class is incongruous with running an independent organization.

It’s worse than that. The lessons ‘learned’ from the Great Depression are incomplete. Some lessons were well learned. Don’t let money supply contract. Don’t let savers lose their life savings. Don’t raise taxes. Don’t let prices rise (well that one clearly has been poorly learned given what the FED is up to). Have a safety net for people.

But what we learned incorrectly was to think that the Great Depression confirmed that we should try to ‘stimulate’ our economy out of such a predicament. Our dear Ben is confused.

Dr. Bernanke thinks that somehow in the Great Depression the authorities were ‘slow’ to ‘jump-start’ the economy. In fact Ben Bernanke is convinced that the more titanic and expeditious his additions to the money-supply are, the better this medicine will be. We all know what happened to the Titanic.

Please see the counterarguments to Bernanke’s position by IMO a very learned Janet Tavakoli at business.theglobeandmail.com/servlet/story/RTGAM.20090313.wtakingstock0314/BNStory/robColumnsBlogs/home?cid=al_gam_mostrecom

Some outtakes from Janet Tavakoli’s thinking:

By printing money and throwing it at consumers to encourage more spending, the Fed and the Obama team are feeding the same bad habits that got us into this mess, she said.

“We have to take the pain of realizing that trying to get people to borrow and spend more as unemployment is rising is a really bad idea. What we really want them to do is to be able to save up for a decent down payment, and somehow reverse the tide of housing prices declining.”

But are they getting it? Ms. Tavakoli doesn’t think so. She is sharply critical of many of the people who are now working to find a solution to the financial mess, saying they were too involved with creating the problem and are unable to push for the hard decisions that will stop the credit bubble from reforming.

“It knocks me back on my heels when I see that some of the people who were the most egregious offenders are raising their hands to help the government,” she said, adding: “It’s beyond a joke that this is still festering.”

What she advocates is the financial equivalent of kicking a drug habit cold turkey. No more no-down-payment mortgages. No more encouraging consumers to resume borrowing to buy homes and cars and televisions they don’t need.

“One of the things that Warren Buffett has said is that President Obama needs to provide clarity, and within that clarity it should be clear that we’re going to promote prudent finance from here on.”

Except, in her opinion, that’s pretty much the opposite of what the U.S. government is doing in response to the crisis. Rather than face the grim symptoms of a withdrawal from cheap and easy debt – falling consumer spending and the attendant disaster for car companies and retailers – the Obama administration is busy coming up with more ways to hand out money.

Ms. Tavakoli pointed out that new no-down-payment mortgages issued under the auspices of government programs are now going into default faster than mortgages from before the credit crunch.

And as for the next big Fed plan – to funnel as much as $1-trillion (U.S.) into a program aimed at restarting the securitization market to fuel new loans to consumers — it almost leaves the voluble Ms. Tavakoli speechless. But not for long.

“The financial meth labs at Wall Street firms – shutting them down would be a really good idea, but then don’t create another financial meth lab at the Fed where the Fed becomes the entity that allows people to leverage up.”

Back to our friend Michael R. Sesit who IMO writes such mishmash about gold’s investment potential, gold’s ability to act as a hedge, gold’s use as a monetary system anchor, gold’s difficulty of extraction, its use for exchange rate policy, and so on, that I have difficulty seeing where he is taking us. He reminds me of B.S. logic. Befuddle them first, then move in for the kill, or not.

I could understand if he had written first about gold’s use as a hedge. Then deal separately with gold as a money anchor.

“A return to the gold standard, where countries peg their currencies to a given quantity of the metal and thus to one another, is a bad idea. Gold-based monetary systems are overly rigid and restrictive, possess a deflationary bias and can be volatile.”

This is vapid repetition of Keynesian muddle-thought — already addressed by Murphy. As R.P.M. writes, since he is not a psychoanalyst, he is unable to explain what motivates the underlying thinking of such anti-gold authors. I can see neither the logic nor the motivation.

A gold standard tends to have a recessionary bias. When speculators and others attack a country’s currency, the burden usually falls on that nation to adjust by contracting its economy and increasing unemployment.

Not true. There is in reality NEVER any need for a nation to maintain its exchange rate. In fact later in the article, this position is completely contradicted by Sesit when he accepts the fact that Latin American countries and Britain have repeatedly devalued their currencies whenever their values became unrealistic.

BY THE WAY THAT IS THE WHOLE BEAUTIFUL IDEA.

When a currency cannot maintain its ‘peg’ it HAS to revalue or the country will face HUGE repercussions. This was the tragedy of China in the last 15 years. By not having a rules-based system, China never had to revalue. It simply artificially maintained its peg against the American dollar leading to huge maladjustments in trade and investment.

This has turned out to be catastrophic for everyone but most of all for China (which is only BEGINNING to feel the fallout). A gold-based system would have guaranteed that China would have had to revalue UP and/or the Americans would have had to devalue against China’s currency. But no, the ‘game’ was played right up until the chairs slid off the deck.

The system places no matching requirement on countries with “strong” currencies to adjust.

Wrong again, at least in a relative way. Both strong and weak would adjust in a rules-based system. In a gold-based system it does not really matter that the ‘strong’ country (the one with the export surplus) does not adjust. It is the relative adjustment that is crucial. This will allow a rebalancing before the iceberg is hit. So this point is devoid of meaning.

Take South Korea. Its currency, the won, has fallen 29 percent against the dollar in the past six months. Such a depreciation wouldn’t have been permitted under a gold standard. Korea would have been required to support its currency by raising interest rates to maintain the won’s parity with bullion, exacerbating an already virulent recession.

Says who? This is False. Stupid. Vapid. And dishonest. OK, only in my opinion. Please see earlier point that a country does not lose its sovereignty just because it joins a gold money standard.

In a parable with relevance to today’s economic environment, “attachment to the gold standard played a major part in keeping governments from fighting the Great Depression, and was a major factor turning the recession of 1929-1931 into the Great Depression of 1931-1941,” Bradford DeLong, an economist at the University of California, Berkeley, wrote several years ago.

Commitment to the gold standard prevented the Fed from expanding the money supply in 1930 and 1931, forcing President Herbert Hoover “into destructive attempts at budget-balancing in order to avoid a gold-standard generated run on the dollar,” DeLong said.

Hey, no one mandated to Hoover that he could not devalue. Because it was politically unpalatable for Hoover to do so, does not criminalize the Gold Standard System nor any other rules-based Money System. That was Hoover’s choice and folly. No country in the world would have invaded America if Hoover had devalued against gold. Let’s remember FDR did devalue against gold. Hoover could have done the same thing. There is such a thing as being “too married” to your purist philosophy.

China, the U.S., South Africa, Australia, Russia and Peru make up the six biggest gold producers. If their mining operations were interrupted by, say, political upheaval, it could lead to deflation and rising unemployment. In contrast, major improvements in mining technology could ignite inflation.

This makes me laugh again. Boy this guy should be on SEINFELD. Gold mining could stop. Or aliens could steal half the gold we have. Who cares? The system adjusts.
Deflation? Don’t get me started. Deflation doesn’t cause a collapse in Aggregate Demand — a drop in Aggregate Demand leads to falling prices.
And if the growth in money supply did “stall” like it has before or if gold supply “grows suddenly” like when Spain conquered the New World, prices adjust. Things don’t go off a cliff like they indeed have today, as the FED prints money like it was toilet paper.

What’s more, a gold standard isn’t the panacea its advocates claim. A central bank’s ability to adhere to it is only as strong as the population’s willingness to endure the pain associated with enforcing the system.

OK, where is the straw man who said it was a panacea? Sure it was better than what we have. And sure we are not going back to it.
“The pain associated with enforcing the system”? Please read earlier rebuttals. This “pain” is a straw man.

By the way, who says you need a Central Bank under a rules-based (or gold-based) system? It is not the Central Bank that would have to adhere to anything or even exist.

The money system adapts by letting prices change as countries revalue their exchange rates against gold. Governments would have to enact policies that tried to be as pro-growth as those they traded with, to avoid revaluing. A revaluation would be what it used to be, a sign of relative failure.

If a country was more confiscatory against its productive sectors, it would soon run into trouble, be unable to pay it way in the world trade market, and be forced to revalue. Lessons learned maybe for bad policies? But at least no long-run imbalances would be encountered that lead to the fiasco we have today.

Countries periodically abandoned the gold standard during times of war — Britain during World War I, for example — and free-spending Latin American countries were repeatedly forced to exit the system in the late 19th century. The Bretton Woods System collapsed in 1971 when the costs associated with fighting the Vietnam War forced President Richard Nixon to suspend the convertibility of dollars into gold.

What did I say earlier about writing 2 different things in 2 different sections of the essay? OK, we’ll excuse the selective memory.

Nobody is defending Bretton Woods. A flexible rules-based system does not mean going back to that flawed system. Not all countries can perform at the same economic level.

I agree that not all parts of the old system were good. They do need modifications. But there is a difference between attacking gold-based, or rules-based, money systems on their own merits and then attacking what was Bretton Woods. They are not the same thing. Our friend at Bloomberg was not clear in his distinctions and to not discriminate on this issue is IMO intellectually disingenuous.

By the way, there was a choice. Nixon could have easily have devalued against gold and maintained convertibility at a different rate. It was not too much later (if we can now remember for a change?) that the economic system revalued American money against gold automatically, without any political decision being involved. Or have we forgotten the inflation of the late 1970-s also?

Bretton Woods could have been reformed. The choice made has shown itself finally in the outcome we have now, in our ‘modern’ world.

BTW, yours was a great post, Deefburger — after all, every person alive at any point in time over all of time, can say, ‘I live in the modern era’ — unless that person wants to be avant-garde and say, ‘Look at me — I live in the post-modern era’.

If you don’t have faith in central bankers or politicians to ride herd over inflation, why would you trust them to keep a country on a gold standard for more than a short period of time?

I wouldn’t trust them. That’s why “staying on a gold standard” is in the Constitution. Too bad no one reads it anymore. And too bad the American Federal Justice System failed the country when it did not enforce the Constitution against fractional-reserve banking, fiat currency, and the Federal Reserve System. But I have a feeling that revisiting these issues lies not too far off in the future.

One last point on this whole topic. We can understand how badly the whole world has gone off the tracks, culturally, ethically, monetarily, economically, by simply reading the ‘wisdom’ from one of our esteemed Nobel laureates in Economics. Namely, Paul Krugman at http://www.nytimes.com/2009/03/02/opinion/02krugman.html

In his own words in the op-ed in the New York Times on March 1, 2009:

If you want to know where the global crisis came from, then, think of it this way: we’re looking at the revenge of the glut.

And the saving glut is still out there. In fact, it’s bigger than ever, now that suddenly impoverished consumers have rediscovered the virtues of thrift and the worldwide property boom, which provided an outlet for all those excess savings, has turned into a worldwide bust.

One way to look at the international situation right now is that we’re suffering from a global paradox of thrift: around the world, desired saving exceeds the amount businesses are willing to invest. And the result is a global slump that leaves everyone worse off.

So that’s how we got into this mess. And we’re still looking for the way out.

What a great simple explanation — jeez, wish I had thought of that. I too could be a Nobel Laureate!

My response in an unpublished letter follows:

Dr. Krugman perpetuates the myth of a Saving Glut first promulgated by Dr. Bernanke.

It is illogical to think that a credit crunch can be created by too much saving. A surplus of saving would only relieve the credit crunch.

Furthermore, such a Saving Glut cannot simultaneously be the cause of the credit crunch and of the credit bubble.

The central banks of Asian countries manipulated their currency exchange mechanisms to create a huge backwash of dollars into America. It was this artificially-maintained flow that created the bubble, and if anything, depleted savings in real terms in both eastern and western nations.

Both Japan and China among other export-oriented nations allowed their central banks to print huge amounts of local currency with which to buy up American dollars from their exporters — at least those portions of the earnings that their exporters needed to convert for local use.

Then the same central banks used the American dollars so acquired to buy American Treasury bonds.

That refutes the conclusion that the oft-maligned poor Asian savers were responsible in any way for our woes.

Links for my referenced materials are at

minyanville.com/articles/index/a/9293

globaleconomicanalysis.blogspot.com/2006/12/global-savings-glut-revisited.html

I used to be for a gold standard, but now I think that legalizing competing currencies would be a better idea.

Which is more likely to be abused?

If we had all sorts of debit cards, bank accounts, etc. all that cater to having gold backing; and all of these were intertwined with dollar denominated accounts, then all we’d need was to eliminate taxes on transfer between dollars and gold and no legal tender laws, I think it would be harder for them to unravel it all.

Going off of gold is too easy.

I see this same one size fits all kind of argument used by pseudo-Libertarian against reserve ratios. Banks should set whatever reserve ratio in whatever currency they like. Higher reserve ratios would garner safety and lower returns. Lower reserve ratios would equal risk and higher average returns.

And robbing 7-11s is a low-risk, low-return activity, whereas robbing major banks in a high-risk, high-return activity – Libertarians should support all kinds of robbery.

Oops. Sorry, I forgot the best one. (Its late, cut me some slack).
The very best is to use womens lingerie. Have you ever stopped to figure out how much you are paying per ounce for that present for the wife? And its magical – the less it weighs, the more it costs.
Plus, if your wife ever finds strange lingerie between the sheets, you can always say “its nothing, honey, I was just reviewing our portfolio”. Its a win-win.

Marxism was not meant to be synonymous with state control, but giving that control to people who actually produce things for modern society. If anything, what transpired in your country was a testament to how to further take away control from the workers.

I am sure some of the commies had good intentions. One needs to judge the ideology not by its purported good intentions, instead by the results. Results have been terrible: millions have been slaughtered like pigs.

‘In fact, gold is a better conductor of electricity than copper.

No it isn’t. Are you thinking of silver?’.

Yes it is. And its marvellously ductile and malleable, outperforming all other metals.

But the REAL AUstrian point is not that money HAS to be based on gold, but simply that whatever is used as money needs to be a commodity that has a meaningful cost of production ( hence limited supply), and it helps for it to be divisible, and neither perishable nor cumbersome. And if its useful in its own right, that helps too. Gold fits these bills more neatly than other things, hence it’s invariably emerged as money throughout history.

Having a money that entails a significant cost of production is the only way of assuring that it cant be debased at will by any authority. This is the central ( pun intended) fraud in the very existence of fiat money.

“…gold is a better conductor of electricity than copper…”

Yes, that is why connectors in high end electronics are gold plated.

Is gold an inherently better conductor than alternatives, or merely less prone to oxidation? Whatever I know about electricity is more or less accidental — I assume that to be a better conductor, gold would offer less resistance than an equal volume (cross-section?) of copper, aluminum, steel, or what have you. Am I in the ballpark?

I guess we need an electrical engineer to chime in, but my from limited work in electricity it seems that gold is also a better conductor, but it does corrude less, too. Copper is better than aluminum, but utilities use aluminum for most transmission lines, for weight reasons I would guess. One of the big advances in computer chip making was to use copper instead of aluminum for the electon pathways.

A.Viirlaid:

I understand. All your arguments about a stable money supply, etc. are all well and good.
But here’s the problem. You can’t get Nobel economists to agree. Hell, you can’t even get them to agree on whether we are facing deflation or inflation.
So why would Joe Sixpack care about the gold standard. How does this translate into him putting food on the table (in a crisis) or buying a new truck (in good times) ?
If you can’t get Nobel economists to agree, and you can’t get the average Joe to care, the politicians sure as heck aren’t going to. They will continue to scurry around making it look like they are doing something constructive. Because that’s what gets them re-elected. And sitting in Congress sure beats working for a living.
The best spokesperson you have is Peter Schiff. But he gets drowned out by the talking heads on TV. Who are way better at putting things in terms people can understand. Stimulus ! Credit ! Bailouts ! equals Jobs ! New SUVs !
What image does your message convey. Gold Standard ! Savings ! Hard Work ! equals …

By the way, silver is the best electrical conductor. Copper is even better than gold. (They are all Group 11 in the periodic table). But gold is used because of its resistance to oxidation. So you don’t get a bad connection. Its fine for use in satellites and military applications (where price is no object, and the cost of failure is astronomical). Its also used in high-def tv connections (bought with borrowed money). But this is mostly a marketing gimmick. A plain old (cheap) tin connection will work just as well.
So you see, you can sell the average person on gold, even when it has little use. Its just a question of marketing and sales…

In fact, gold is a better conductor of electricity than copper.

No it isn’t. Are you thinking of silver?’.

Yes it is.

Really?

Electrical conductivity (MS/m @25°C):

Silver 60
Copper 57.9
Gold 45

In what universe is 45 > 57.9?

973

Look at how the on line gold vault electronic payment mechanisms work. That should answer a lot of your questions.

‘Tis interesting that pure copper is a better conductor over gold. (I didn’t know that until I looked it up. :\) Whist gold ought to be better than copper in terms of durability but I once read that gold is a better conductor than silver at higher temperatures.

Guys:

Silver’s a better conductor than copper but is more subject to corrosion than gold. Contacts in relays, breakers, switches, connectors, etc. can, thus, be copper but where more resistance to corrosion is desired, are likely to be silver or gold. Bear in mind that, in the main, these are plated or vacuum-deposited coatings. The military spec for gold plating of this sort is 30 millionths of an inch, so the metal used is, proportionately, not very expensive. This is the case with silver coatings as well, although there are a few applications where pure silver is used; I’ve seen silver relay contacts weighing as much as a couple ounces apiece. Silver is also used extensively in producing wire and cable, both pure and as a coating. A gold coating is also preferred for mirrors intended to reflect as much light as possible in the infrared wavelengths(These coatings are only a couple millionths inch in thickness and are applied by a process called “sputtering” or, more usually, by vacuum deposition.)