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The government's "stable coin" lost 96% of its value since 1913. Time to try something different? https://comparegoldandsilverprices.com/news/economics-101/do

The government's "stable coin" lost 96% of its value since 1913. Time to try something different? https://comparegoldandsilverprices.com/news/economics-101/dollar-devaluation-since-1913/ https://comparegoldandsilverprices.com/news/economics-101/do...

crooked-v 8y ago
That article is dramatically inaccurate in many ways, starting with its claim of gold's value not changing over time.
arcticbull 8y ago
I can’t overstate this enough, DONT HOLD DOLLARS. Currency is intentionally lossy so you invest it in productive assets. You’re pointing to a feature and yelling bug because you don’t seem to understand how it’s meant to work. Wages kept pace so earn rate remained constant or better and if you invested instead of throwing dollar bills under your mattress you’d have done incredibly well as the S&P has had a historical 7% geometric return. Finally, all the popular stable coins are literally indexed to the US dollar, so you can’t say USDC/USDT is great then whine about the USD right?
wcarron 8y ago
What a strawman. Inflation BAAAAAD, right guys? C'mon. We all know why the Fed targets a relatively consistent rate of inflation. It's because deflation suppresses consumer spending. Not what you want in a consumer economy.
- cheeseomlit 8y ago
  What if I want to save? Certainly seems kinda bad when my savings keeps losing value
  - askafriend 8y ago
    Why not save shares of the S&P 500 index? You just sell some when you want to buy something like a car.
    - arcticbull 8y ago
      This right here, literally how it’s supposed to work. “Money becomes worth less over time, what should I do?” “Invest in productive assets” “OHHHHHHHHH” There, we just saved you from having to go to an Econ class :P
      - celticninja 8y ago
        So if I have a $2000 how much of that do lose in fees when I buy shares? Sure it makes sense if I am saving $1000 or more a month but it doesn't work when I'm saving $50 to $100 a month for my kids college education, fees eat that up the same way that inflation does, but both make hardly any difference to the person saving $1000 or more a month.
        arcticbull 8y ago
        Robinhood charges $0 in fees, so nothing. The trend in ETFs is reducing fees, there’s now zero fee ETFs too. Even if you use a discount brokerage that charges 3-4$ per trade the break even point is quite low, so store it as cash until you’re happy with the fee ratio. How much do you lose in fees when you buy crypto? 1-2%? Plus insane volatility. If you’re low income that volatility is crippling.
      - dlubarov 8y ago
        The thing is, this assumes a shortage of capital for productive enterprises. Historically, that's been normal, but not so much since 2008. Banks have been hoarding cash well in excess of reserve requirements [1], despite ~zero interest for most of that time [2]. [1] https://fred.stlouisfed.org/series/WRESBAL https://fred.stlouisfed.org/series/WRESBAL [2] https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/FEDFUNDS
    - krupan 8y ago
      Unless the market happens to be down the week your old car dies?
  - stanleydrew 8y ago
    If you are saving by stashing dollars under your mattress then that's on you. Don't save by holding currency.
  - mactrey 8y ago
    Are you holding cash? The S&P500 is up something like 200% since 2008 so it's hard to understand how anyone's savings could have lost value in the past decade.
    - ehrtt 8y ago
      What you're talking about is investing+speculating, not saving. By the same logic investing in the S&P500 over the 1999-2009 decade would have been worse than cash. You save money, you invest/speculate to earn a return -- which requires taking on downside risk.
  - JumpCrisscross 8y ago
    > What if I want to save? Buy Treasuries. Or shares of stock. This is the point of inflation: it forces savers to invest time into productively allocating capital.
- billions 8y ago
  "What a strawman." -@wcarron Below is a list of 590+ failed fiat currencies, 150 caused by hyperinflation. Seems the Straw Man argument is yours alone. https://trader2trader.co/tag/historic-graphs/page/3/ https://trader2trader.co/tag/historic-graphs/page/3/
  - compcoffee 8y ago
    >Below is a list of 590+ failed fiat currencies Below is a list 1000+ cryptocurrencies, 99.9% of which no one has heard of, many of which have lost 90%+ of their value in a matter of months. https://coinmarketcap.com/all/views/all/ https://coinmarketcap.com/all/views/all/
    - ehrtt 8y ago
      If no one has even heard of them, how could their prices possibly matter to anyone.
  - wcarron 8y ago
    This is hardly worth dignifying with an answer, but I will anyway. Your original premise was that the dollar has lost enormous value since 1913. Strongly implicating the inflation is a measure by which you can measure whether or not a currency is "failed". This is false. A dollar or any unit of currency is an arbitrary symbol of a certain amount of worth. Inflation does mean that the spending power of a currency decreases. No argument there. But guess what! Wages increase(d) relatively in line with inflation. If a snickers bar used to be $1 when the average salary was $10000; and now it's $2 when the average salary is $20000, then the actual cost of a Snickers bar has not changed, in simplified terms. I see no problem here. It also intuitively makes sense, that as the population of capital producing workers grows, so too does the GDP. These people need currency issued, too, otherwise, the currency would be deflationary. So new currency is issued to prevent deflation (just 1 example of why it's issued) and keep the currency in circulation in line with production. > 150 caused by hyperinflation. Like, for example, the Bolivar? or the Mark? That's actual hyperinflation. ~2% inflation YoY doesn't mean hyperinflation. This is Econ 101.
compcoffee 8y ago
>The government's "stable coin" lost 96% of its value since 1913. Most of the cryptocurrencies out there have lost that much value since January.

crooked-v 8y ago

That article is dramatically inaccurate in many ways, starting with its claim of gold's value not changing over time.

arcticbull 8y ago

I can’t overstate this enough, DONT HOLD DOLLARS. Currency is intentionally lossy so you invest it in productive assets. You’re pointing to a feature and yelling bug because you don’t seem to understand how it’s meant to work. Wages kept pace so earn rate remained constant or better and if you invested instead of throwing dollar bills under your mattress you’d have done incredibly well as the S&P has had a historical 7% geometric return. Finally, all the popular stable coins are literally indexed to the US dollar, so you can’t say USDC/USDT is great then whine about the USD right?

wcarron 8y ago

What a strawman. Inflation BAAAAAD, right guys? C'mon. We all know why the Fed targets a relatively consistent rate of inflation. It's because deflation suppresses consumer spending. Not what you want in a consumer economy.

cheeseomlit 8y ago
What if I want to save? Certainly seems kinda bad when my savings keeps losing value
- askafriend 8y ago
  Why not save shares of the S&P 500 index? You just sell some when you want to buy something like a car.
  - arcticbull 8y ago
    This right here, literally how it’s supposed to work. “Money becomes worth less over time, what should I do?” “Invest in productive assets” “OHHHHHHHHH” There, we just saved you from having to go to an Econ class :P
    - celticninja 8y ago
      So if I have a $2000 how much of that do lose in fees when I buy shares? Sure it makes sense if I am saving $1000 or more a month but it doesn't work when I'm saving $50 to $100 a month for my kids college education, fees eat that up the same way that inflation does, but both make hardly any difference to the person saving $1000 or more a month.
      - arcticbull 8y ago
        Robinhood charges $0 in fees, so nothing. The trend in ETFs is reducing fees, there’s now zero fee ETFs too. Even if you use a discount brokerage that charges 3-4$ per trade the break even point is quite low, so store it as cash until you’re happy with the fee ratio. How much do you lose in fees when you buy crypto? 1-2%? Plus insane volatility. If you’re low income that volatility is crippling.
    - dlubarov 8y ago
      The thing is, this assumes a shortage of capital for productive enterprises. Historically, that's been normal, but not so much since 2008. Banks have been hoarding cash well in excess of reserve requirements [1], despite ~zero interest for most of that time [2]. [1] https://fred.stlouisfed.org/series/WRESBAL https://fred.stlouisfed.org/series/WRESBAL [2] https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/FEDFUNDS
  - krupan 8y ago
    Unless the market happens to be down the week your old car dies?
- stanleydrew 8y ago
  If you are saving by stashing dollars under your mattress then that's on you. Don't save by holding currency.
- mactrey 8y ago
  Are you holding cash? The S&P500 is up something like 200% since 2008 so it's hard to understand how anyone's savings could have lost value in the past decade.
  - ehrtt 8y ago
    What you're talking about is investing+speculating, not saving. By the same logic investing in the S&P500 over the 1999-2009 decade would have been worse than cash. You save money, you invest/speculate to earn a return -- which requires taking on downside risk.
- JumpCrisscross 8y ago
  > What if I want to save? Buy Treasuries. Or shares of stock. This is the point of inflation: it forces savers to invest time into productively allocating capital.
billions 8y ago
"What a strawman." -@wcarron Below is a list of 590+ failed fiat currencies, 150 caused by hyperinflation. Seems the Straw Man argument is yours alone. https://trader2trader.co/tag/historic-graphs/page/3/ https://trader2trader.co/tag/historic-graphs/page/3/
- compcoffee 8y ago
  >Below is a list of 590+ failed fiat currencies Below is a list 1000+ cryptocurrencies, 99.9% of which no one has heard of, many of which have lost 90%+ of their value in a matter of months. https://coinmarketcap.com/all/views/all/ https://coinmarketcap.com/all/views/all/
  - ehrtt 8y ago
    If no one has even heard of them, how could their prices possibly matter to anyone.
- wcarron 8y ago
  This is hardly worth dignifying with an answer, but I will anyway. Your original premise was that the dollar has lost enormous value since 1913. Strongly implicating the inflation is a measure by which you can measure whether or not a currency is "failed". This is false. A dollar or any unit of currency is an arbitrary symbol of a certain amount of worth. Inflation does mean that the spending power of a currency decreases. No argument there. But guess what! Wages increase(d) relatively in line with inflation. If a snickers bar used to be $1 when the average salary was $10000; and now it's $2 when the average salary is $20000, then the actual cost of a Snickers bar has not changed, in simplified terms. I see no problem here. It also intuitively makes sense, that as the population of capital producing workers grows, so too does the GDP. These people need currency issued, too, otherwise, the currency would be deflationary. So new currency is issued to prevent deflation (just 1 example of why it's issued) and keep the currency in circulation in line with production. > 150 caused by hyperinflation. Like, for example, the Bolivar? or the Mark? That's actual hyperinflation. ~2% inflation YoY doesn't mean hyperinflation. This is Econ 101.

compcoffee 8y ago

>The government's "stable coin" lost 96% of its value since 1913. Most of the cryptocurrencies out there have lost that much value since January.