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Money is stored wealth, the ability to buy goods and services in the future. The problem seems to be that we live in a time of societal upheaval. The future o
by tcbawo 6y ago
Money is stored wealth, the ability to buy goods and services in the future. The problem seems to be that we live in a time of societal upheaval. The future of stored wealth becomes cloudier and more uncertain the further you go out in time. So, what is the best place to store wealth? Will my wealth be eroded by inflation? Will the companies I invest in become obsolete by technology or market-manipulating nation states? Will regulation changes suddenly damage the value of my investment? Will changes in tax regime eat my earnings? Will corruption and crime take my wealth?
Clearly, some people are getting out of hand with speculation and credit (a suitcase full of lottery tickets is not diversification). As Warren Buffett says, when the tide goes out you learn who's been swimming naked. The economy has its ups and downs and speculative fervor ebbs and flows. There are no certainties, but IMHO all you can do is stay diversified and maximize the probability of your success.
- LudwigNagasena 6y agoAssets are less ephemeral stored wealth. Money facilitates transactions, but it is not a factor of production, it is not a consumption good, and it is not backed up by any of these things, so it is a very nebulous type of wealth.
- galaxyLogic 6y agoI would agree with a previous poster that money is a debt obligation. If you have "money" in bank, what does it mean? It means the bank has a debt-obligation to pay you back with other type of debt-obligation, the government sanctioned cash. Money is definitely an interesting concept. I'm not sure I fully understand it. But I use it.
- LudwigNagasena 6y agoI don't get how it contradicts what I've said.
- paulpauper 6y agoMy answer to these questions and other unknowns about the fed, fiscal policy, America and its role in the world, the economy etc. is that the future will be a lot like the present, but more so. So extent the current trends into the future. Sure, things sometimes change, even dramatically such as the fall of the USSR or 911, but we are living in a steady-state world in which the underling trends do not change. Inflation will remain low in spite of printing, America remain on top economically and militaristically. Stock market keep going up. US dollar remain strong.
- jonfw 6y agoI bet the romans said the same thing
- XorNot 6y agoSure and like America eventually, they'll be taken out by ecological collapse (Rome was dealing with exhausted agricultural soils for much of it's collapse). But in the wake of that, the idea that you're going to be holding onto much of anything that'll matter globally is laughable.
- nonameiguess 6y agoMost of them were right. Rome lasted for 950 years. All things must pass, but it isn't likely to happen in your lifetime.
- imtringued 6y agoThe current president is attempting to bring things back to normal and the USA will stay strong because of that. The EU and Japan are not doing what they really should be doing.
- solosoyokaze 6y agoThe current trend is record breaking wealth inequality. We already have rampant inflation in the form of housing, education and health care costs. It's an unsustainable situation near its breaking point.
- 6y ago
- rufus_foreman 6y ago>> The problem seems to be that we live in a time of societal upheaval What time wasn't a time of societal upheaval? The Great Depression? World War 2? The Cold War? The Sixties? Stagflation? The Reagan era? The Clinton era? Post-9/11? Trump? Markets climb a wall of worry.
- mrfusion 6y agoWe didn’t start the fire ...
- gumby 6y ago> Money is stored wealth... That is merely one function of money, and as the marginal cost of production plummets that role becomes less useful. In a modern economy it’s also, for example, a signaling mechanism (arms-length communications tool), with pricing guiding production and effort.
- XorNot 6y agoMoney isn't really stored wealth, it's a transferable debt obligation from the government. It's guaranteed to be redeemable to settle up taxes and court rulings, and entitles you to some estimate of the productivity of it's jurisdiction - enforced by the government.
- galaxyLogic 6y ago> it's a transferable debt obligation from the government But isn't Bitcoin money as well, not guaranteed by the government?
- salawat 6y agoOnly in the sense a goat is when you happen to be contemplating doing business with someone looking to acquire a goat.
- aqme28 6y ago> Money is stored wealth This is sort of a tautology. I like the explanation better that money is a "call option on goods and services."
- AnimalMuppet 6y agoI heard of a wealthy family that had managed to maintain their wealth in Europe across multiple generations, through lots of war, upheaval, regime change, and so on. Their formula was "one third gold, one third art, one third land". You could lose any piece of it in any upheaval, but you wouldn't be likely to lose all of it.
- solosoyokaze 6y agoTheir formula was being wealthy enough to float above war, upheaval, regime change and so on. If they were wealthy enough, they probably triggered some of that and capitalized on war profiteering.
- xyzzy123 6y agoI don't like this comment, but I can't put my finger on why exactly. I think it's the drive-by, reflexive assignment of guilt, while knowing nothing of the circumstances. This strikes me as the opposite of thinking. What you said might be true, it might not, what have you added to the world?
- stainforth 6y agoThe gold, land, art reference 2 posts above yours almost certainly refers to the Rothschilds, so I don't know why solosoyokaze is being downvoted as the Rothschilds most definitely funded wars to their own profit.
- AnimalMuppet 6y agoI believe it was the Rothschilds, yes. I suspect solosoyokaze is being downvoted for the word "triggered". That's a long step past "funded".
- gretch 6y agoWell actually if solosoyokaze had said something more like "This is probably referring to the rothschilds based on (link to historical information). It's reasonable to extrapolate that they were war profiteers based on (reasoning)" Then I think it really could have added some insight into the world instead of being like the drive-by ignorance the parent comment refers to.
- imtringued 6y agoMoney is a debt that grants you to the right to someone else's labor, the reason you work for money is that someone else promises to work for you in exchange. It doesn't store wealth. If you do not utilize your money, then someone else doesn't work and that person's time is irreversibly lost, despite no work being performed. That is why money is losing value over time, I mean, money should be losing value over time. The "should" is just a political decision because we consider it fairer, than the inverse, letting someone become unemployed and then you ask for even more work from them because your money has appreciated. This is why you must put your money into a bank account, because someone else out there will use that unemployed person's time to create value on behalf of you.
- psychlops 6y agoMoney is a representation of stored wealth. An important distinction. Live in a country that has an unstable currency for a while and money is a liability and may show what it's truly worth. Nothing.
- randomsearch 6y agoMy take was always that money is a medium of exchange. A mechanism by which you can buy or sell things. Wealth is something that people want. Lawnmowers or a movie stream. One consequence of this distinction is that if money fails as a medium of exchange (eg everyone loses confidence in the dollar) then those dollars are now useless. But no wealth has been destroyed. So I conclude money is not a store of wealth.
- lisper 6y ago> But no wealth has been destroyed. No, that's not true. One of the things that people want is the ability to easily acquire new things that they need. If there is no universally accepted medium of exchange, that adds friction to the economy which destroys actual wealth. It's kind of like if you drain the oil out of your car. The value of the car goes down by more than the cost of the oil.
- randomsearch 6y ago> No, that's not true. That's an interesting but slightly pedantic point. If we continue that line of thinking, if the "end of the dollar" is actually caused by switch to (say) the euro as a currency in our hypothetical world, then the "loss of medium exchange as a loss of wealth" argument no longer holds, but your original mechanism has been destroyed, so I think my point stands.
- lisper 6y agoWell, yeah, but that's a big if. A switch from the dollar to the Euro is unlikely to be seamless, especially in the U.S. which is still the world's biggest economy.
- MichaelMoser123 6y agoit may be that crypto is seen as a way to mobilize untapped wealth that currently sits in cash (for whatever reason); with cryptocurrencies you have something that is relatively unregulated, so that crypto may mobilise that kind of money.