I'm still not convinced of the "intrinsic value" claim. Value is pretty subjective. Gary North put it well:
Originally Posted by Steven Douglas
There is a basic confusion here. The confusion rests on a mixing up of two very different proposi tions: (1) gold and silver are his torically valuable; and (2) gold and silver haveintrinsic value. The first proposition is indisputably correct; in fact, there are few eco nomic or historical statements that could be said to be more absolute. Professor Mises has built his whole theory of money on the fact that gold and silver (especially gold) were first valued because of properties other than their mone tary function: brilliance, malle ability, social prestige, and so forth. It was precisely because people valued these metals so highly that they were to become instruments of trade, i.e., money.4 Since they are so readily market*able, more so than other goods, they can become money.
Today we value silver and gold for many reasons, and on first glance, monetary purposes are not the main ones for most people. That is because so few populations are legally permitted to use gold in trade, and the statist policies of inflation have brought Gresham’s famous law into operation: silver coins have gone into hoards, since the value of their silver content is greater than their face value as coins. But on the international markets, gold has not yet been de throned; governments and central banks do not always trust each other, but they do trust the historic value of gold.
Why this historic value? I do not want to involve myself in a rarefied philosophical debate con cerning metaphysics, but I think it is safe to say that gold does have certain intrinsic qualities. It is highly durable, easily divisible, transportable, and most of all, it is scarce.Money must be all of these, to one degree or another, if it is to function as a means of ex*change. It is vital that we get our categories straight in our minds: it is not value that is intrinsic to gold, but only the physical properties that are valued by acting men. Gold’s physical properties are the product of nature; its value is the product of acting men.