Silver, gold, diamonds vs knives, guns and bullets

[Ankesh]

Originally Posted by GordonJ

As for gold, when IT (the shyeet) goes down, my opinion: you can't eat gold. I think it is, perhaps, the biggest scam on investors ever perpetrated.

I have a friend who stays in Pune, India. One day we were talking real estate. And he said real estate prices in Mumbai - 200km away from Pune - are the biggest scam.

In Pune it costs Rs 8,000 per square feet of space.
In Mumbai it costs Rs 40,000 per square feet of space.

Why would anyone pay so much more for the same amount of space in a city just 200km away?

Why is the price of a product not based on the utility of that product? Why do countries like Venezuela crumble when they try to force and fix the prices of products based on their utility?

May be in there somewhere lies the answer to why gold costs so much too?