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Gold is the oldest ponzi scheme that exists out there! * The practical uses of it are totally diminished because of this "novelty premium". * Can't use it onl

Gold is the oldest ponzi scheme that exists out there! * The practical uses of it are totally diminished because of this "novelty premium". * Can't use it online * Can't use it offline either (Can I buy a starbucks with it?) * Securing it and moving it around is risky I don't get it, who's buying this crap?

piinbinary 6y ago
It has been consistently regarded as valuable for thousands of years, and there is very little chance of the value dropping to near zero. Edit: In response to child comment, I mean in the sense of the Lindy effect, not in the sense that age implies realness
- fredfoobar 6y ago
  Next, you're gonna tell me that "god" is real, because religions are old or something. There are untouched tribes out there in the Amazon who've been around for 1000s of years, it doesn't make their way of life better.
  - gnusty_gnurc 6y ago
    as though everyone hopelessly consumed by anxiety, existential meaninglessness and insecurity nowadays isn’t argument enough in favor of the religions you’re discounting...old things aren’t inherently simple-minded or useless
    - fredfoobar 6y ago
      Whatever floats your psychology man, do what you have to.
    - Loughla 6y ago
      I find this argument interesting. I want to focus on the anxiety portion. Is there proof that people are more anxious today than in the past? Is there proof that religious morals and expectations didn't have a negative impact on folks' anxiety levels in the past? What about religion means individuals would be less anxious, and how do you prove that?
      - gnusty_gnurc 6y ago
        It's not that we believe nothing now; it seems clear that nowadays many people will believe anything. It's unwise to assume that forgoing the complex and slowly evolved structures of the past is going to liberate people...many just replace it with nonsense. My original point was that discounting past things like "religion" in black/white terms ignores that these things were the basis of advanced civilizations that led us to today and managed to withstand circumstances much worse than what we're facing today. Tons of horrible issues, but focusing on the bad parts is too easy and narrow-minded.
  - ozankabak 6y ago
    No, but s/he might tell you that it is safe to count on God being an important concept to many people for the foreseeable future. In the same vein, gold will likely be perceived as a good store of value for the foreseeable future, which is what matters in this context.
    - fredfoobar 6y ago
      > God being an important concept to many people for the foreseeable future Just like those tribes in the Amazon, they will exist, but most of humanity will fork off that, it's already happening. Like someone else in this thread said: "You seem to be under the impression that only 'better' things exist. That is wrong." -> I agree with this 100%, old things will continue to exist, but they will be left behind.
  - jmcqk6 6y ago
    You seem to be under the impression that only 'better' things exist. That is wrong. The fact of the matter is that for literally millenia, humans have considered gold to be valuable. That is unlikely to change any time soon, though obviously the extent that we value it is always in flux. It doesn't have anything to do with 'better'. It's a description of reality.
    - fredfoobar 6y ago
      ok, I don't see people lugging around a bunch of gold coins in their purses in the future. It doesn't make sense. edit: I actually agree 100% on "You seem to be under the impression that only 'better' things exist. That is wrong." Worse things will also exist, but won't be adopted by the majority.
      - droffel 6y ago
        In terms of weight, gold is a bit more valuable than twenty dollar bills, pound for pound. And its density is much higher. In no sense would the average person be 'lugging around' a bunch of gold coins for day to day activities. There are many (better) arguments against the readoption of a gold standard. This one doesn't hold its weight (heh).
        BMSmnqXAE4yfe1 6y ago
        It is much costlier to verify that a gold bar doesn't contain some lead than to verify that a $20 bill is authentic. That is why if you buy a gold bar and immediately sell it, you will lose 10-20% of its value.
frodo_77 6y ago
If a financial bubble lasts 5000 years, is it still a bubble?
baron816 6y ago
The only way for your gold assets to increase in value is to convince other people they need to own gold. Usually, this is done with fear mongering.
- deleted 6y ago
  [deleted]
wqTJ3jmY8br4RWa 6y ago
Paper currency is the oldest Ponzi scheme that exists out there. I can wipe my nether regions with it. If there is a collective delusion that it has value, I can exchange goods for it. My point being, Gold is a delusion, just like paper.
- fredfoobar 6y ago
  That, is something I can agree on. The value we put on things like gold comes from our minds, not gold itself.
  - WillPostForFood 6y ago
    Nothing to do with ponzi scheme though. A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. https://en.wikipedia.org/wiki/Ponzi_scheme https://en.wikipedia.org/wiki/Ponzi_scheme
    - fredfoobar 6y ago
      Isn't that exactly how the price is going up though?
      - adventured 6y ago
        The price is going up for two reasons: 1) fear due to the virus and its economic consequences 2) the USD is falling rapidly. Gold as a commodity is almost exclusively priced in dollars globally. If the dollar plunges, gold will spike higher accordingly. US spending being out of control right now (pointing to aggressive dollar debasement as the Fed 'prints' - runs QE infinite to monetize the ever expanding debt) and concerns about the condition of the US economy near-term with the virus, have pummeled the dollar lately. So the price of gold is up due to the drop in the dollar, and there is a considerable fear premium on gold right now as well (likely to the tune of several hundred dollars). As that fear fades you'll see a drop in gold, from whatever new high it puts in, as in 2011-2016. It'll set a new higher low due to the dollar losing real value it will never recover from the spending spree going on (there is probably going to be $5+ trillion in unexpected spending that will occur over several years due to the virus, which was not baked into the dollar or price of gold previously).
anoraca 6y ago
Gold has been abstracted into a digital form so anyone who wants to invest in options and futures can now own digital gold, which makes it easier to trade, since no physical delivery or storage is required. Greed is extremely powerful. As is fear. https://www.marketwatch.com/investing/fund/gld https://www.marketwatch.com/investing/fund/gld
- fredfoobar 6y ago
  Who's guaranteeing that this is backed by real gold? how can we verify? can I take delivery whenever I want?
  - yesplorer 6y ago
    Most of the people trading Gold are trading it as a CFD asset anyway, so they shouldn't have any expectation of having it backed by real gold.
- pvfffghhr 6y ago
  So the only conceivable reason people invest or create financial instruments is greed?
legulere 6y ago
Pro points of gold: * It’s relatively rare and production is naturally very limited (in contrast to e.g. diamonds that can be produced from carbon) * It has a special tax-free status in some legislations. * It can hardly be destroyed (you can easily loose your bitcoin when your hard disk dies) * it’s beautiful and you can use it for jewelry and art Seems like a good choice if you see the risk of inflation, or of a state taking your money.
- fredfoobar 6y ago
  > It’s relatively rare and production is naturally very limited (in contrast to e.g. diamonds that can be produced from carbon) What about the gold-rich asteroids we can mine? > It has a special tax-free status in some legislations. This is a non-starter for me, someone can lobby the government to undo this easily > It can hardly be destroyed (you can easily loose your bitcoin when your hard disk dies) You can literally lose gold, just like how you can "loose" your bitcoin (who stores bitcoin on their hard-drive now anyway, it's 2020, there are paper wallets too, in fact, I can literally memorize 12 words) > it’s beautiful and you can use it for jewelry and art Sorry, I don't wear jewelry.
  - eMSF 6y ago
    >What about the gold-rich asteroids we can mine? Which asteroid(s) are you speaking of?
    - fredfoobar 6y ago
      https://www.bloomberg.com/opinion/articles/2019-07-08/asteroid-16-psyche-and-all-that-gold-won-t-make-earth-richer https://www.bloomberg.com/opinion/articles/2019-07-08/astero...
- adventured 6y ago
  Another important point is that it can be blended. Also, to add to the jewelry point, humanity has a nearly unlimited desire for luxury and will always seek out status, which is why so many thousands of years later humanity still has such an immense desire for gold jewelry when we very obviously don't need it. Status seeking is not going away. The continued expansion of human population, rising living standards and finite quantity of gold, ensures it will grow more scarce per capita (driving up its perceived value persistently). At the median our soon to be eight billion people will have a higher standard of living than when we had only one billion people. There isn't nearly enough gold to match that extraordinary change.
SilasX 6y ago
Good points, but you're being a little too hard on the offline uses. You can't directly spend it at Starbucks, but wherever (or whenever) you are, you can go any pawn shop (and they're ubiquitous) and sell the gold for the local currency, and then use that.
- fredfoobar 6y ago
  Have you actually done this before? did you get a fair price? If you're thinking about doing this with jewelery: Do you know that gold jewelery mixes other metals to make it a bit more durable? and you pay fees on making it too if you're using gold bars: How do you make sure things like this don't happen: https://www.bloomberg.com/news/articles/2020-07-15/chinese-jewelry-maker-probed-for-using-fake-gold-bars-for-loans https://www.bloomberg.com/news/articles/2020-07-15/chinese-j...
  - SilasX 6y ago
    >Have you actually done this before? did you get a fair price? I got a quote, yes. It was a little below market, but not significantly.
mbesto 6y ago
Gold has little to no utility. There are a few practical uses for it, and very limited when compared to other precious metals (silver for example). The price is based purely on speculation that it will go up. Which is frankly not much different from Bitcoin in its current form. In order for gold to have more utility it either needs to be used as a medium of exchange or other new uses that utilize its precious metal properties.
- fredfoobar 6y ago
  With Bitcoin, I can at least use it for transactions online. Which is almost 100% of my method of procuring stuff now, I also work for a company that facilitates that!
  - mbesto 6y ago
    I can also use gold to barter in person. The point is that Bitcoin reach as a medium of exchange is limited. I would argue on a global scale, it's as limited as gold.
    - fredfoobar 6y ago
      Yeah, you're not gonna give me a fake gold coin in exchange for whatever you wanted from me. I'll trust you to be honest and give me 100% pure gold.
      - mbesto 6y ago
        You mean just like all of the <insert random scam>coins out there or <insert random wallet> that gets hacked? You realize there are brokers who help exchange gold right?
        fredfoobar 6y ago
        Oh, the "Bitcoin can be hacked" narrative again. You realize you can manage a bitcoin wallet yourself right? I'm a software engineer, I trust the code that I can verify myself. And, regarding the brokers, I'd rather trust a decentralized public ledger than some dude's private ledger. Thanks. Like, keeping gold in your house is gonna prevent you from being hacked (to death)
ndesaulniers 6y ago
Yeah, too illiquid for my tastes. That's what ETFs are for! GLD overbought?
scumcity 6y ago
The US federal government is making poor choices in monetary policy - it's "fixing" the covid problem by printing US money, which, until now, was the new gold standard. As result, people are going back to an old, albeit, archaic gold standard. If the US government could have fixed covid with a real solution, we would not be observing extremely retarded stuff like people investing in gold. Sigh.
ffggvv 6y ago
for most of history you could use it offline, and it was actually the primary currency. until governments starting banning domestic redemption in gold. it’s only the last 100 years or so that we got off the gold standard. and it wasn’t until the 70s that the US got off the gold exchange standard internationally.
dnprock 6y ago
Gold probably started out as a toy. Humans learned to manipulate metal with gold around 40k years ago. It sparked metallurgy industries (e.g. Bronze Age, Iron Age). They advanced human civilizations. Gold use as money probably predated any written history. It's likely making a comeback after a 30-year recession. https://bitflate.org/post/2019/11/29/how-gold-became-money.html https://bitflate.org/post/2019/11/29/how-gold-became-money.h...
Humphrey 6y ago
In the modern world people don't buy gold to make transactions but to store wealth. No wealthy person would store their fortune in fiat (paper) currencies such as dollars, but in things with real value such as shares in a companies, property, or other things of value such as gold or silver. At any time these floating currencies can change their value (think hyperinflation, or just exchange rates). Compared to other "real" things, gold can be liquidated into dollars VERY quickly if you need to make a transaction, and since it's a real thing, it cant disappear. Also, often gold is stored by the company you bought it from on your behalf, so you can sell it back instantly online. So no need to have to have a home safe. Also, at an average return of 10%/year over the past 10 years (at least in australian dollars) it's has been out performing many other investment options.
- fredfoobar 6y ago
  why store it in a piece of metal though? > Compared to other "real" things, gold can be liquidated into dollars VERY quickly if you need to make a transaction, and since it's a real thing, it cant disappear. What happens when someone sticks you up and takes your gold away? > Also, often gold is stored by the company you bought it from on your behalf, so you can sell it back instantly online. So no need to have to have a home safe. Isn't that how the dollar got started and here we are.
gniv 6y ago
I read this recently and found it insightful, especially if you believe bitcoin is valuable: https://ofdollarsanddata.com/why-is-gold-valuable/ https://ofdollarsanddata.com/why-is-gold-valuable/

piinbinary 6y ago

It has been consistently regarded as valuable for thousands of years, and there is very little chance of the value dropping to near zero. Edit: In response to child comment, I mean in the sense of the Lindy effect, not in the sense that age implies realness

fredfoobar 6y ago
Next, you're gonna tell me that "god" is real, because religions are old or something. There are untouched tribes out there in the Amazon who've been around for 1000s of years, it doesn't make their way of life better.
- gnusty_gnurc 6y ago
  as though everyone hopelessly consumed by anxiety, existential meaninglessness and insecurity nowadays isn’t argument enough in favor of the religions you’re discounting...old things aren’t inherently simple-minded or useless
  - fredfoobar 6y ago
    Whatever floats your psychology man, do what you have to.
  - Loughla 6y ago
    I find this argument interesting. I want to focus on the anxiety portion. Is there proof that people are more anxious today than in the past? Is there proof that religious morals and expectations didn't have a negative impact on folks' anxiety levels in the past? What about religion means individuals would be less anxious, and how do you prove that?
    - gnusty_gnurc 6y ago
      It's not that we believe nothing now; it seems clear that nowadays many people will believe anything. It's unwise to assume that forgoing the complex and slowly evolved structures of the past is going to liberate people...many just replace it with nonsense. My original point was that discounting past things like "religion" in black/white terms ignores that these things were the basis of advanced civilizations that led us to today and managed to withstand circumstances much worse than what we're facing today. Tons of horrible issues, but focusing on the bad parts is too easy and narrow-minded.
- ozankabak 6y ago
  No, but s/he might tell you that it is safe to count on God being an important concept to many people for the foreseeable future. In the same vein, gold will likely be perceived as a good store of value for the foreseeable future, which is what matters in this context.
  - fredfoobar 6y ago
    > God being an important concept to many people for the foreseeable future Just like those tribes in the Amazon, they will exist, but most of humanity will fork off that, it's already happening. Like someone else in this thread said: "You seem to be under the impression that only 'better' things exist. That is wrong." -> I agree with this 100%, old things will continue to exist, but they will be left behind.
- jmcqk6 6y ago
  You seem to be under the impression that only 'better' things exist. That is wrong. The fact of the matter is that for literally millenia, humans have considered gold to be valuable. That is unlikely to change any time soon, though obviously the extent that we value it is always in flux. It doesn't have anything to do with 'better'. It's a description of reality.
  - fredfoobar 6y ago
    ok, I don't see people lugging around a bunch of gold coins in their purses in the future. It doesn't make sense. edit: I actually agree 100% on "You seem to be under the impression that only 'better' things exist. That is wrong." Worse things will also exist, but won't be adopted by the majority.
    - droffel 6y ago
      In terms of weight, gold is a bit more valuable than twenty dollar bills, pound for pound. And its density is much higher. In no sense would the average person be 'lugging around' a bunch of gold coins for day to day activities. There are many (better) arguments against the readoption of a gold standard. This one doesn't hold its weight (heh).
      - BMSmnqXAE4yfe1 6y ago
        It is much costlier to verify that a gold bar doesn't contain some lead than to verify that a $20 bill is authentic. That is why if you buy a gold bar and immediately sell it, you will lose 10-20% of its value.

frodo_77 6y ago

If a financial bubble lasts 5000 years, is it still a bubble?

baron816 6y ago

The only way for your gold assets to increase in value is to convince other people they need to own gold. Usually, this is done with fear mongering.

deleted 6y ago
[deleted]

wqTJ3jmY8br4RWa 6y ago

Paper currency is the oldest Ponzi scheme that exists out there. I can wipe my nether regions with it. If there is a collective delusion that it has value, I can exchange goods for it. My point being, Gold is a delusion, just like paper.

fredfoobar 6y ago
That, is something I can agree on. The value we put on things like gold comes from our minds, not gold itself.
- WillPostForFood 6y ago
  Nothing to do with ponzi scheme though. A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. https://en.wikipedia.org/wiki/Ponzi_scheme https://en.wikipedia.org/wiki/Ponzi_scheme
  - fredfoobar 6y ago
    Isn't that exactly how the price is going up though?
    - adventured 6y ago
      The price is going up for two reasons: 1) fear due to the virus and its economic consequences 2) the USD is falling rapidly. Gold as a commodity is almost exclusively priced in dollars globally. If the dollar plunges, gold will spike higher accordingly. US spending being out of control right now (pointing to aggressive dollar debasement as the Fed 'prints' - runs QE infinite to monetize the ever expanding debt) and concerns about the condition of the US economy near-term with the virus, have pummeled the dollar lately. So the price of gold is up due to the drop in the dollar, and there is a considerable fear premium on gold right now as well (likely to the tune of several hundred dollars). As that fear fades you'll see a drop in gold, from whatever new high it puts in, as in 2011-2016. It'll set a new higher low due to the dollar losing real value it will never recover from the spending spree going on (there is probably going to be $5+ trillion in unexpected spending that will occur over several years due to the virus, which was not baked into the dollar or price of gold previously).

anoraca 6y ago

Gold has been abstracted into a digital form so anyone who wants to invest in options and futures can now own digital gold, which makes it easier to trade, since no physical delivery or storage is required. Greed is extremely powerful. As is fear. https://www.marketwatch.com/investing/fund/gld https://www.marketwatch.com/investing/fund/gld

fredfoobar 6y ago
Who's guaranteeing that this is backed by real gold? how can we verify? can I take delivery whenever I want?
- yesplorer 6y ago
  Most of the people trading Gold are trading it as a CFD asset anyway, so they shouldn't have any expectation of having it backed by real gold.
pvfffghhr 6y ago
So the only conceivable reason people invest or create financial instruments is greed?

legulere 6y ago

Pro points of gold: * It’s relatively rare and production is naturally very limited (in contrast to e.g. diamonds that can be produced from carbon) * It has a special tax-free status in some legislations. * It can hardly be destroyed (you can easily loose your bitcoin when your hard disk dies) * it’s beautiful and you can use it for jewelry and art Seems like a good choice if you see the risk of inflation, or of a state taking your money.

fredfoobar 6y ago
> It’s relatively rare and production is naturally very limited (in contrast to e.g. diamonds that can be produced from carbon) What about the gold-rich asteroids we can mine? > It has a special tax-free status in some legislations. This is a non-starter for me, someone can lobby the government to undo this easily > It can hardly be destroyed (you can easily loose your bitcoin when your hard disk dies) You can literally lose gold, just like how you can "loose" your bitcoin (who stores bitcoin on their hard-drive now anyway, it's 2020, there are paper wallets too, in fact, I can literally memorize 12 words) > it’s beautiful and you can use it for jewelry and art Sorry, I don't wear jewelry.
- eMSF 6y ago
  >What about the gold-rich asteroids we can mine? Which asteroid(s) are you speaking of?
  - fredfoobar 6y ago
    https://www.bloomberg.com/opinion/articles/2019-07-08/asteroid-16-psyche-and-all-that-gold-won-t-make-earth-richer https://www.bloomberg.com/opinion/articles/2019-07-08/astero...
adventured 6y ago
Another important point is that it can be blended. Also, to add to the jewelry point, humanity has a nearly unlimited desire for luxury and will always seek out status, which is why so many thousands of years later humanity still has such an immense desire for gold jewelry when we very obviously don't need it. Status seeking is not going away. The continued expansion of human population, rising living standards and finite quantity of gold, ensures it will grow more scarce per capita (driving up its perceived value persistently). At the median our soon to be eight billion people will have a higher standard of living than when we had only one billion people. There isn't nearly enough gold to match that extraordinary change.

SilasX 6y ago

Good points, but you're being a little too hard on the offline uses. You can't directly spend it at Starbucks, but wherever (or whenever) you are, you can go any pawn shop (and they're ubiquitous) and sell the gold for the local currency, and then use that.

fredfoobar 6y ago
Have you actually done this before? did you get a fair price? If you're thinking about doing this with jewelery: Do you know that gold jewelery mixes other metals to make it a bit more durable? and you pay fees on making it too if you're using gold bars: How do you make sure things like this don't happen: https://www.bloomberg.com/news/articles/2020-07-15/chinese-jewelry-maker-probed-for-using-fake-gold-bars-for-loans https://www.bloomberg.com/news/articles/2020-07-15/chinese-j...
- SilasX 6y ago
  >Have you actually done this before? did you get a fair price? I got a quote, yes. It was a little below market, but not significantly.

mbesto 6y ago

Gold has little to no utility. There are a few practical uses for it, and very limited when compared to other precious metals (silver for example). The price is based purely on speculation that it will go up. Which is frankly not much different from Bitcoin in its current form. In order for gold to have more utility it either needs to be used as a medium of exchange or other new uses that utilize its precious metal properties.

fredfoobar 6y ago
With Bitcoin, I can at least use it for transactions online. Which is almost 100% of my method of procuring stuff now, I also work for a company that facilitates that!
- mbesto 6y ago
  I can also use gold to barter in person. The point is that Bitcoin reach as a medium of exchange is limited. I would argue on a global scale, it's as limited as gold.
  - fredfoobar 6y ago
    Yeah, you're not gonna give me a fake gold coin in exchange for whatever you wanted from me. I'll trust you to be honest and give me 100% pure gold.
    - mbesto 6y ago
      You mean just like all of the <insert random scam>coins out there or <insert random wallet> that gets hacked? You realize there are brokers who help exchange gold right?
      - fredfoobar 6y ago
        Oh, the "Bitcoin can be hacked" narrative again. You realize you can manage a bitcoin wallet yourself right? I'm a software engineer, I trust the code that I can verify myself. And, regarding the brokers, I'd rather trust a decentralized public ledger than some dude's private ledger. Thanks. Like, keeping gold in your house is gonna prevent you from being hacked (to death)

ndesaulniers 6y ago

Yeah, too illiquid for my tastes. That's what ETFs are for! GLD overbought?

scumcity 6y ago

The US federal government is making poor choices in monetary policy - it's "fixing" the covid problem by printing US money, which, until now, was the new gold standard. As result, people are going back to an old, albeit, archaic gold standard. If the US government could have fixed covid with a real solution, we would not be observing extremely retarded stuff like people investing in gold. Sigh.

ffggvv 6y ago

for most of history you could use it offline, and it was actually the primary currency. until governments starting banning domestic redemption in gold. it’s only the last 100 years or so that we got off the gold standard. and it wasn’t until the 70s that the US got off the gold exchange standard internationally.

dnprock 6y ago

Gold probably started out as a toy. Humans learned to manipulate metal with gold around 40k years ago. It sparked metallurgy industries (e.g. Bronze Age, Iron Age). They advanced human civilizations. Gold use as money probably predated any written history. It's likely making a comeback after a 30-year recession. https://bitflate.org/post/2019/11/29/how-gold-became-money.html https://bitflate.org/post/2019/11/29/how-gold-became-money.h...

Humphrey 6y ago

In the modern world people don't buy gold to make transactions but to store wealth. No wealthy person would store their fortune in fiat (paper) currencies such as dollars, but in things with real value such as shares in a companies, property, or other things of value such as gold or silver. At any time these floating currencies can change their value (think hyperinflation, or just exchange rates). Compared to other "real" things, gold can be liquidated into dollars VERY quickly if you need to make a transaction, and since it's a real thing, it cant disappear. Also, often gold is stored by the company you bought it from on your behalf, so you can sell it back instantly online. So no need to have to have a home safe. Also, at an average return of 10%/year over the past 10 years (at least in australian dollars) it's has been out performing many other investment options.

fredfoobar 6y ago
why store it in a piece of metal though? > Compared to other "real" things, gold can be liquidated into dollars VERY quickly if you need to make a transaction, and since it's a real thing, it cant disappear. What happens when someone sticks you up and takes your gold away? > Also, often gold is stored by the company you bought it from on your behalf, so you can sell it back instantly online. So no need to have to have a home safe. Isn't that how the dollar got started and here we are.

gniv 6y ago

I read this recently and found it insightful, especially if you believe bitcoin is valuable: https://ofdollarsanddata.com/why-is-gold-valuable/ https://ofdollarsanddata.com/why-is-gold-valuable/