What Makes Gold Evergreen? FutureIQ

2,281 views Wait, is this logic right? • Nov 21, 2025

Slog Reference: Why is Gold Evergreen

Description

Gold prices are hitting all-time highs, up 30% in just two months and yet India is buying more of it than ever. What makes gold so irresistible, even when logic says demand should fall? In this episode of Future IQ, we dig into the unique mix of economics, psychology, culture, and history that makes gold the world’s most evergreen asset.
From ancient coins and royal treasuries to modern ETFs and gold bonds, we explore why gold became humanity’s favorite form of money, why it still beats almost every asset on trust and longevity, and why its appeal goes far beyond investment returns. Gold is durable, portable, divisible, culturally precious, emotionally charged, and the one thing people turn to when everything else feels uncertain.
But if gold is so perfect, why do we use paper money today? And do digital forms of gold really give you the best of both worlds, or do they sacrifice the qualities that made gold special in the first place? This episode cuts through myths, hype, and tradition to explain why gold has lasted 6000 years and why it still matters today.

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Videos you may like / referenced in today’s episode:
Diamonds Are a Scam, Not Rare & Not a Good Investment: https://youtu.be/EjJ4GmcgukU
Showing Off is Important! Costly Signaling Theory: https://youtu.be/0YEBK7eR3Ek
The Only Investment Advice You Ever Need: https://youtu.be/UUDxDUXNWvA

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Source / References:
Dhanteras 2025 sales/value surge (Mint): https://www.livemint.com/news/india/jewellery-sales-hit-rs-85-000-crore-on-dhanteras-likely-to-cross-rs-1-lakh-crore-by-diwali-11760880631460.html Properties/functions of money (overview): https://en.wikipedia.org/wiki/Money Commodity money (pros/cons): https://en.wikipedia.org/wiki/Commodity_money Earliest substantial gold hoards (Varna, 4600–4200 BCE): https://en.wikipedia.org/wiki/Varna_Necropolis Bubble exemplars (Tulip mania): https://en.wikipedia.org/wiki/Tulip_mania Railway Mania (NY Fed Crisis Chronicles): https://libertystreeteconomics.newyorkfed.org/2015/06/crisis-chronicles-railway-mania-the-hungry-forties-and-the-commercial-crisis-of-1847/ Cowries as money (Africa/Asia; general): https://en.wikipedia.org/wiki/Cowry#Money Cowrie inflation & Maldives imports (journal/book review): https://www.persee.fr/doc/cea_0008-0055_1987_num_27_105_3204_t1_0214_0000_1 Beaver pelts as currency (“Made Beaver”): https://en.wikipedia.org/wiki/Made_beaver Counterparty risk of bank FDs (DICGC insurance ₹5 lakh): https://www.rbi.org.in/commonman/english/Scripts/FAQs.aspx?Id=272 Illiquidity examples—art/privates (opacity & liquidity, academic): https://onlinelibrary.wiley.com/doi/10.1111/jbfa.12574 Illiquidity—real estate frictions (transaction costs): https://www.sciencedirect.com/science/article/pii/S014861950500021X Programmability in Indian digital rails—e-RUPI (NPCI overview): https://www.npci.org.in/product/e-rupi

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Why is Gold Evergreen

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Transcript

- Why do we love gold so much? I mean, gold price hit an all-time high last week and during Danteras, sales were 60% higher than last year. That makes no sense. Economic theory tells us that when the price of something increases so much, sales should go down. But no, gold is just different from everything else in the world. Congratulations, people. Naven has finally let the inner Marvadi come out. No, no, no, no, no. My inner economist and inner behavioral psychologist is going to come out. Okay, fair. Fine. All right, I'll bite. Uh, A, why are we talking about gold today? And B, yeah, why is gold special?

0m 42s Yeah. So, Dr. Arun of Delhi, a regular viewer of Future IQ and a member of the future IQ community, he asked this question on the community and we love the questions. So, we're making an episode as part of answering his question. gives me a wonderful segue into the WhatsApp community that we have started for future IQ QR code on your screen link in description. Join us there and you also get to ask questions like Dr. Arun did which then become episode ideas and then become episodes like these. So thank you Dr. Arun and uh to those of you who have not joined we'll see you in the community. But second question why is gold special?

1m 21s Yeah so one of the important of course gold is jewelry it is shiny. It is like really nice and all that but many other things are right. One of the important reasons why gold is special is because gold used to be money for the longest time, right? Yeah. I remember my chemistry class where we learned that gold is a noble metal doesn't get corrupted and probably that's why it was used as money, right? Yeah. So, kings and countries would used to have gold coins. You must have heard of Mohar and the balloons and so on, right?

1m 52s Asher. Yeah. But that the fact that it's a noble metal isn't enough of a reason why gold is money, right? Because people have used many many different things as money over the centuries, right? Salt used to be money. That's where the word salary comes from. Okay? Uh cowies used to be money. Sheep used to be money and so on, right? Gold ultimately beat them all. Yeah. Why? Because to answer that question we have to understand what are important properties that money should have to make it suitable as money right uh so let's go through that list okay one is durability right if you earn money today and you save it somewhere it should still be there 2 years from now 3

2m 39s years from now right uh if you get paid in grain in some time it'll rot if you get paid in sheep it might die okay that doesn't happen to hold. Okay. Second thing is portability. You should be able you earned money here, you should be able to take it somewhere else and pay for it elsewhere. Right. Correct. People used to get paid in land but land doesn't move. You can't move there. I mean stone used to be money. Big blocks of stone used to be money. But again that is very difficult to move around.

3m 09s Not just difficult to move. It is also anybody can bring stone from anywhere. So that comes to a related point right that verifying the value of the money right so for example you used to get paid in gems uncut gems right but looking at it you can't really tell the value of this gem you need an expert gemologist to be able to look at it and say how much the value is whereas gold you just look at the weight and you're done right and related to that is standardization right because one gold coin of a certain weight and my gold coin of a certain weight. They're the exact same thing and they mean the same to

3m 48s everybody, right? Uh diamond like two diamonds which look similar to me might have very different values, right? Uh land related diamonds are a scap. Yeah. Land for example, a piece of land here and a piece of land there can have very different values, right? So it's not easily exchangeable and standardization is a problem, right? There needs to be divisibility, right? I need to be able to pay small amounts, large amounts. I should be able to cut it into smaller pieces, right? Like I mean, you know, you are not uh going to pay in half a sheep or half a diamond, right? You try to cut a diamond into two, the value just completely goes away, right?

4m 29s Same thing with sheep, of course. Uh well, there is a different value in that, but we'll not talk about that value. Go on where the durability significantly reduces. But yeah, another thing that money should have is scarcity. Okay, let's take the example of cowis. Okay, cowis are kudi shells, right? You must have played with them when you were a kid. We did. Not many kids today do, but they make jewelry out of it. So yeah, for many many centuries, kaudis were used as currency. Yes. Okay. In Africa mostly, but also India and China and so on.

5m 07s Yeah, we have language. We have language around kodi kodim mole and koda in kodik kodi kikimat etc. So for example uh right in around 1600s you could buy a slave for 10,000 cowis. Oh okay now here's a problem with caudis right now kaudis are difficult to fake you can't make a kaudi only the the thing in the ocean can make it right. Uh but what happened was that when Europeans started the slave trade and they said figured out that they need to pay using caudis they went around looking for caudis found huge deposits of them in the maldives and then imported them on mass right so by the 1700s they had brought in billions of

5m 51s cais and because of that just the price of caudis fell now instead of paying 10,000 for a slave you had to pay 1 lak 50,000 per slave hyperinflation. So the point is if the amount of that thing can significantly be increased by somebody then the value of your money is suddenly going to drop like crazy and nobody wants that. Whereas gold has this property that there is just a limited amount of gold and it can only be taken out at a certain rate from the ground. Right?

6m 25s Bitcoin enthusiasts, I know what you're thinking. Do not bring that up right now. But you know Bitcoin has that property scarcity. Diamonds do not. Okay. See our episode on diamonds to understand why diamonds are not as scarce as you think they are. Right. All right. So gold has a lot of physical properties that allow it to be money in terms of exchanging value between two different people. It's not just physical properties. Okay. Gold has more risk associated with it in terms of you know I give you a gold coin. Mhm.

7m 00s Right now it is your money. Yes. Whereas if I give you a check, no guarantee that you have the money because you know 2 weeks from now you go and try to encash the check and the money might not be there. I mean I get what you're saying. It's it's a promise that the money is mine but the money is not mine. Correct. Gold is a it's called a bearer instrument. Once you have it in your hand, you have the money. A lot of other things are just promises.

7m 26s Yeah. uh which is why currency notes are actually promisory notes well no but that's just you know let's not get into the detail okay cash is cash you have it and you can use it as money right whereas a check is not an FD is not I mean the the you have an FD but if the bank disappears the money is gone right so there is counterparty risk it is fair I understand the psychology that you are trying to point to yeah uh another pro but you know gold is better than cash in a certain sense Because even your government cannot suddenly manufacture a lot of new gold whereas the government can just print more money and then everybody's money

8m 04s has less value which is something that regularly happens in countries like say Venezuela right government prints a lot of money to be able to pay their debts and as a result there's insane inflation there is Zimbabwe as another example there is Venezuela as an example where their currency notes go into millions billions and trillions Another thing with currency or money is liquidity. You should be able to exchange it for things quickly, right? Correct. You want to spend money, you have good, you can use it today, right? If you have land or if you have art, it'll take you 3 months just to sell it to get it appraised to get a certain value that both buyer and seller can

8m 46s agree on and then sell it. One more thing, shock resilience. Okay. Meaning I mean something big happens in the world, right? Like if a government falls, suddenly the value of your currency can go up or down. Yes. When war breaks out, the cost of so many different things including your currency can change significantly. Right. Uh an insane president of a big country suddenly uh you know imposes tariffs on the whole world and costs of everything including your stocks and so on goes down. Right. hypo hypothetical scenario.

9m 22s We would like to give a disclaimer here uh that uh any resemblance to people living or non-living is entirely coincidental. People with golden colored hair. Yeah. Entirely coincidental. Yeah. Now another important shock. Okay. I know people who have had to run away overnight from wherever they were staying either because of some gunda there or many many reasons or you know people uh in Uganda where idyamin just kicked out all the Indians from there at that time your equity your stocks are not going to help you your bank deposits are not going to help you your gold which you have in your hand is what helps you right that's the shock and finally privacy okay because any other form of money you

10m 07s have it is now attached with Aadhaar and fan and you know you I mean all of this is making it sound like you are giving ways to hide your money that is not the intent of this episode there are good reasons to hide your money okay not just bad reason of course smugglers want to hide their money black money wants to be hidden but also if you have a dictator if you have a repressive government you want to use money without the government coming to know and you want to be able to use the money without scammers getting to know about it and a whole bunch of other things. All right. So I would like to explain here that we are

10m 46s talking about this from a very conceptual lens from a very first principal lens. We are not trying to give you a device on whether to buy gold or not keep gold or not but thinking about gold as a concept. Uh because especially like he said uh gold is something that is used as money. Gold is something that is used as currency for all of these various properties that you described. Yeah. But also there is an important psychological and cultural aspect to gold being so popular. Right? Uh so first of all gold is very simple to explain and understand. Right? Here is coins. This is your money and you know the amount just depends on the weight.

11m 26s Whereas try explaining to people what bitcoin is and how it is your money and where is that money and how much does it cost and so on. Right? Cultural importance as savings. Right? Women's jewelry for example is important because it is money that you have for if you are in trouble but also it is better than having a savings account or FD in bank because culturally it is seen as a big big big problem if you have to sell women's jewelry right so it really gets saved and not get used for frivolous things it will only get used for important things right so it's a very important way of saving culture Naturally, it is also important

12m 10s as women's empowerment. A woman has jewelry and for various reasons both culturally and legally it is her money. Correct. Correct. So she has uh some sense of you know I have some financial uh power there right cultural importance is also there in terms of emotions right so gold jewelry is passed down from generation to generation. This was my grandmother's and my mother's and so on. uh and that just can't be recreated with lo you know lads of cash or cowi shells or any other various uh kinds of currency that we have spoken about and of course cultural importance also in terms of fashion right because gold is so malleable and ductile and of course shiny that because of that you

12m 57s can make these really lovely fine designs which are not easy to do with anything else and cultural importance is also there in terms of costly signaling. Yeah. Okay. We have an episode on costly signaling where you have to, you know, you want to try to prove to the world how cool or how great you are, right? Or what a great status you have in society among your people. Gold as costly signaling has two important parts to it. One is that this is a costly signal that is hard to fake. True. Right. So I mean gold is good. Everybody can tell real gold from fake gold more or less. And second, it's a culturally acceptable way of showing

13m 37s your wealth, right? You just show up with jewelry because, oh, it's a wedding. I was not trying to show off. And cultural importance is also there in terms of purity, right? It's a noble metal. It's a pure metal unlike, you know, dirty money and so on. Cultural importance is there in terms of gift. I mean giving cash as a gift is low class but giving gold as a gift has pretty much the same value in terms of economics but very different value in terms of psychology. Right.

14m 07s And the lowass reference being in terms of the costly signaling part. Yeah. Please do not take it as a comment on some behavior or whatever. Yeah. Go on please. Right. So these are the psychological aspect. So that is why gold is special. Yeah. Yeah. It is like physical aspects what makes it ideal as money and a whole bunch of psychological aspects because of which people don't want to let go. They see this as better than other forms of money, other forms of saving, other forms of investment. Yeah. And absolutely when you compare gold against other forms of currency, you will be able to see that all of these cultural aspects, these psychological aspects do not apply to a lot of these other

14m 50s alternative forms of currency. Whether it is Bitcoin, whether it is sheep, whether it is grains, whether it is salt, whether it is cy shells, whatever. So agreed. But then there is paper money for which a lot of this is applicable. Which is why paper money exists today, right? Why does paper money exist if gold exists? Yeah. So there are disadvantages to gold. Okay. One is that it is too expensive for everyday use. just over the years the value of gold has gone up that you can't now buy cigarettes using gold. Okay, that is one. Second is that storage and handling cost is there. Right now that cost is there with paper money also but most of our money is not paper money.

15m 32s Most of our money is a number in your bank account which is like almost zero cost of storage and handling. Right. Third is transportation across borders especially because of customs and this and that. Uh I mean in the old days this was easier now it has become more difficult because of modern rules whereas you know credit cards are much easier to transport although not uh like completely free and bitcoin exists because this is the problem they're trying to solve. Right. Correct. Another thing is one problem big problem with gold is that gold just sits there right it's not doing anything the same money if you invest in a company or in the stock market right

16m 18s that company is doing something with your money and there is a return you are getting on it right so it is adding value to the world because of which you get returns which are usually in the long term higher than returns you get And no, but the same argument can be applied to gold. If you take that gold and give it to that company, if gold were a currency, then that company would be able to use that gold. At this point, that gold is their money and what you have is that company's stock is a good investment because it grows. The gold just sits there and doesn't grow.

16m 55s Ah, like that, right? So, in that sense, gold is static and passive. Yeah. But even in that case the gold still appreciates in value because the gold appreciates in value only because the demand increases and there are long periods of time when gold doesn't appreciate in value right there I mean if over a very long period you look usually stock market will beat gold okay except in certain periods you know if if there is unrest etc if there is a country that is just going bonkers with tariffs and things like that then gold rises but otherwise active investments are better right we've done an episode recently on this on what is the right way to think about

17m 43s the stock market in terms of investments we'll put a link in the description go check it out two more disadvantages of gold right one is environmental footprint right adding money in your bank account zero environmental cost whereas gold you have to dig and mine and bring out things and finally programmability Modern digital currencies are programmable. So for example, uh UPIE mandate can be set up so that you know you autopay uh your bills every month can't be done with gold. The e rupee is purpose specific non-ransferable as in you are given an e rupee and you can only use it to buy a co vaccine or only use it to buy food again can't be done

18m 25s with gold. Right? So correct those are the disadvantages which is why ultimately most of things I mean basically digital currencies are now beating gold for most things. Yeah I wouldn't call them a disadvantage. I would call it more of a tradeoff. I mean given the option between an e rupee and gold. I know that I will go for gold for a whole variety of other reasons which we will probably discuss. 90% of the time you're choosing currency. That's why currency is winning. Yeah. But there exists things such as gold bonds like the sovereign gold bonds that RBI comes out with or there are gold ETFs, exchange traded funds.

19m 01s Why not use them? Right? So basically what you're saying is that all the disadvantages of gold that I listed were disadvantages compared to digital money. Correct. And digital gold exists. So it should be best of both worlds, right? More or less. Not really. Right. Sure. I mean digital gold which is gold ETFs and gold bonds have advantages over gold which is that it's more divisible, more portable, lower storage costs, easier uh price verification, lower environmental footprint and bond even gives interest which is more active than gold.

19m 34s The disadvantages are there is still a little bit of a risk an ETF that company might disappear. M there is lower the privacy part of gold is not there right shock resilience is not there if you have to run away from the country because of some reason you can take physical gold with you can't take your ETFs uh with you and you can't wear gold bonds to a wedding right so okay that's that puts up a very funny picture in my head but I know what you mean so is gold not even a good investment at all okay so first of of all future IQ is not investment advice. We just help you understand things from first principles.

20m 16s Yes. And the first principles most experts say that most of your long-term savings should be in active investments which are going to grow over time like you know mostly that means equity stock market index funds. But because of the other advantages of gold, especially in terms of shocks, 5 to 10% of your long-term savings should be in gold usually, right? Okay. Uh mostly what they would say is that do it using gold, bonds, ETFs for convenience, but maybe some of it should be physical because we talked about the advantages, right? And just remember that gold is lindy. It has been around for 6,500 years, which means that it'll be around for 6,500 years more long

21m 07s after most of these currencies have disappeared. Right? So that is why gold is evergreen. H gold is lindy is a very interesting way to put it. And uh we do have an episode pending on the Lindy effect, but we've spoken about Lindy effects in a lot of other places in a lot of other things. um which if you are a regular viewer of future IQ, you'll know if you're not a regular viewer of future IQ, come join the WhatsApp community and ask the regular viewers about where we've spoken about the Lindy effect uh and in what context. And uh if you are thinking of investments then there is this other episode that we referenced that you

21m 43s should definitely check out which is uh future IQ's investment first principles. I'm not calling it advice because it is not advice. We are not an investment advice channel. So please do not take anything that we say as advice. Think of it as first principles, understanding of concepts and all that lens. What that will do is it will allow you to see how other people's investment advice is [ __ ] Yes, it is. And there are multiple other episodes also. But right now we are lining up the investment first principles episode for you. Go check that out. Shriant Naven, Future IQ.