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Finance is a mountain of complexity piled on an 'IOU Nothing'. Next time you log into Robinhood and pour your IOUs, stop and think if you've ever-- and I mean

Finance is a mountain of complexity piled on an 'IOU Nothing'. Next time you log into Robinhood and pour your IOUs, stop and think if you've ever-- and I mean EVER-- examined precisely what it is you are buying. What makes gold valuable is exactly what used to make dollars valuable. No BS and you'd be nuts to borrow to buy and hold them (because no yield and storage costs money). That means, in boom times they don't bubble (as much) because ppl aren't buying on credit, and in busts, people see both the intrinsic credibility and price action as a sign of strength. Silver is a thin market more easily classified as a commodity somewhere between oil and gold. The oil market is in a very unusual situation. When that dumpster fire dies down look again at the movement in the gold/silver ratio.

adaisadais 7y ago
No, I beg to differ. Gold is not some fiat currency backed by the U.S. Gov’t (1). The US Dollar is. > you’ve ever— and I mean EVER— examined precisely it is you are buying. The same could be said about gold. Have you ever melted down the gold to check for impurities? I would hope that most people who invest in stocks or real estate would actually do just that. Investment is a much much different idea than just gambling by picking hot stocks. Haha I also haven’t used good ole Robinhood in several years... (1) https://www.federalreserve.gov/faqs/does-the-federal-reserve-own-or-hold-gold.htm https://www.federalreserve.gov/faqs/does-the-federal-reserve...
- drtillberg 7y ago
  I was referring to reading a stock certificate. Stock is a nuanced and highly specific legal claim on a sliver of the capital structure of an artificial entity. I was referring to reading the terms, conditions and property embodied in the stock. I'm very diligent about such things and I personally never have read that, nor has anyone ever suggested I should ... because ... well ... I'm not sure momentum investors really care 99% of the time about the intrinsic value of whatever they're spending money on. Gold is a natural element with scientific properties I'm generally aware of, even if I've never personally audited them. [p.s. - I was also was referring to the historical value of the dollar. A "dollar" literally was at the time of adoption in the U.S. a fixed amount of precious metal.]
TheOtherHobbes 7y ago
All value is about faith in the future. In fact it's about faith that society will continue to function in the future. Gold works as a hedge against loss of faith, because it's a more tangible and less abstract symbol of hope than fiat money. But ultimately it's all just concentrated hope. If you need food and no food exists, all forms of money are useless.
wrkronmiller 7y ago
Gold has value only if people value it. Same goes for money, stocks, etc...
- cloverich 7y ago
  This simplification misses the point. Unlike paper money and stocks you can't print more Gold. That's why people fall back to it again and again. Also it has _some_ intrinsic value in various applications. I am not arguing we should be using Gold, only that the statement you make, while true on the surface, glosses over the entirety of the interesting and relevant points about its use as money, historically and today.
  - jackcosgrove 7y ago
    Gold is a noble metal and does not corrode. That is its main value as currency. It conveys a feeling of durability.
    - zimbu668 7y ago
      Gold has a couple other things going for it. It's difficult to counterfeit, anything denser than it is more expensive(and usually radioactive). Tungsten is close enough to be a viable alternative, but is very difficult to work with, so this is only a modern (1980s on) problem. Additionally it is "appropriately" rare. Try using sand as a currency, you'll need a fleet of dump trucks. You can transport a significant amount of gold on your person, but if you tried that with Californium you would probably lose the dust sized particle that represents your life's savings.

adaisadais 7y ago

No, I beg to differ. Gold is not some fiat currency backed by the U.S. Gov’t (1). The US Dollar is. > you’ve ever— and I mean EVER— examined precisely it is you are buying. The same could be said about gold. Have you ever melted down the gold to check for impurities? I would hope that most people who invest in stocks or real estate would actually do just that. Investment is a much much different idea than just gambling by picking hot stocks. Haha I also haven’t used good ole Robinhood in several years... (1) https://www.federalreserve.gov/faqs/does-the-federal-reserve-own-or-hold-gold.htm https://www.federalreserve.gov/faqs/does-the-federal-reserve...

drtillberg 7y ago
I was referring to reading a stock certificate. Stock is a nuanced and highly specific legal claim on a sliver of the capital structure of an artificial entity. I was referring to reading the terms, conditions and property embodied in the stock. I'm very diligent about such things and I personally never have read that, nor has anyone ever suggested I should ... because ... well ... I'm not sure momentum investors really care 99% of the time about the intrinsic value of whatever they're spending money on. Gold is a natural element with scientific properties I'm generally aware of, even if I've never personally audited them. [p.s. - I was also was referring to the historical value of the dollar. A "dollar" literally was at the time of adoption in the U.S. a fixed amount of precious metal.]

TheOtherHobbes 7y ago

All value is about faith in the future. In fact it's about faith that society will continue to function in the future. Gold works as a hedge against loss of faith, because it's a more tangible and less abstract symbol of hope than fiat money. But ultimately it's all just concentrated hope. If you need food and no food exists, all forms of money are useless.

wrkronmiller 7y ago

Gold has value only if people value it. Same goes for money, stocks, etc...

cloverich 7y ago
This simplification misses the point. Unlike paper money and stocks you can't print more Gold. That's why people fall back to it again and again. Also it has _some_ intrinsic value in various applications. I am not arguing we should be using Gold, only that the statement you make, while true on the surface, glosses over the entirety of the interesting and relevant points about its use as money, historically and today.
- jackcosgrove 7y ago
  Gold is a noble metal and does not corrode. That is its main value as currency. It conveys a feeling of durability.
  - zimbu668 7y ago
    Gold has a couple other things going for it. It's difficult to counterfeit, anything denser than it is more expensive(and usually radioactive). Tungsten is close enough to be a viable alternative, but is very difficult to work with, so this is only a modern (1980s on) problem. Additionally it is "appropriately" rare. Try using sand as a currency, you'll need a fleet of dump trucks. You can transport a significant amount of gold on your person, but if you tried that with Californium you would probably lose the dust sized particle that represents your life's savings.