Gold as Commodity?

[Mike or Penny Novack]

On 1/25/2017 3:26 PM, GWB wrote:
> Hello, Lane,
>
>
>
> The earlier replies from Tuomo, John and Plutocrat might point you in
> a better direction, that is, treating Gold as a currency.  I would be
> interested as well if that were possible.  It would be less accurate,
> but easier, than using a Forex account to determine the value of gold
> (or silver, bitcoin, etc.).
>
> Anyone else have ideas on this?
>
> Gordon
>
Yes I do. The fact that gnucash has the facility for treating SOME forms 
of a "commodity" that is a "currency" in some other jurisdiction than 
the one for which the books are being kept differently than other forms 
of a "commodity" that are less easily converted seems to me to be 
confusing the issue in accounting terms.

Yes, there are people who consider "gold" or "bitcoins" to be 
"currency",  but this is more in the sense that more easily traded than 
say a share in one of those large stone disks on Yap or cows << I mean 
not in the sense of meat on the hoof but in the sense of those societies 
where those are the only "currency" for a purpose like a marriage 
contract >>

In other words, I would argue that for a set of books (whether kept by 
gnucash, other software, pen and ink on paper, etc.) there would be ONE 
"currency" << the one that is legal tender for the jurisdiction >> and 
anything else a "commodity" holding. Yes of course, foreign currency, 
gold, bitcoins, etc. might be more easily traded/converted than other 
commodities, but that is a continuum of ease of trading, not a sharp 
line distinction.

How would we propose to draw the line? What would be the basis of that 
line? That there was some official "quote"? But would conversion 
transactions necessarily be taking place at that quoted exchange rate? 
My personal experience (limited as it might be, just in Canada) is that 
not always the case, though the differences in that case relatively 
small. But friends who have traveled to remote parts of the world have 
told me that there could be huge differences between the "official rate" 
and what their US dollars might fetch on "the street".

Michael D Novack

Michael