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Price of gold and silver is at its peak and people are buying it more than ever convinced it will somehow become extinct. The people who have money to hoard gas

Price of gold and silver is at its peak and people are buying it more than ever convinced it will somehow become extinct. The people who have money to hoard gas are also the people who have the money to hoard gas at double the price. These are not individuals with any knowledge of economics - theyre not doing it for trade, they're doing it out of belief.

brobdingnagians 5y ago
We have to wait and see if future results justify current actions, when the action is preparation for some future event. It is only in hindsight that we can truly point out if someone's risk/reward calculation for the future was flawed. I'm not buying gold, but the odd thing is that Russian and Chinese central banks are. I would assume those people know a thing or two about economics. I'm curious to see what the future holds.
- Scoundreller 5y ago
  Why would Russia and China central banks buy gold? They’re already the #3 and #1 producing countries world-wide.
  - brobdingnagians 5y ago
    Because their central banks are concerned about stability of international currencies [1]. A central bank is in a good position to use gold, whereas most individuals aren't. [1] https://www.marketwatch.com/story/why-russian-and-chinese-central-banks-will-keep-buying-gold-2019-09-13 https://www.marketwatch.com/story/why-russian-and-chinese-ce...
roenxi 5y ago
> The people who have money to hoard gas are also the people who have the money to hoard gas at double the price. But then the outcome would not have changed, the people who hoard will be worse off, the people who produce a valuable commodity will be better off and there is incentive for people to contingency plan and have gas reserves for when things get tight. That is a strict improvement. Plus, you're probably being overly pessimistic - people will stop hoarding once the price gets high enough. The shelves would not be bare. > These are not individuals with any knowledge of economics - theyre not doing it for trade, they're doing it out of belief. The people with knowledge of economics don't have much of an advantage though, do they? When has an official body ever been banging the drum before a major crisis issuing panicked warnings? Every crisis it turns out all the people held up as experts had grossly misread the situation. People with knowledge of economics often get bowled under by people with a knowledge of politics or of statistics when it comes to trading.
fsckboy 5y ago
> Price of gold and silver is at its peak and people are buying it more than ever no, you've got it exactly backward. People buying it more than ever is driving the price up, and the feedback of higher prices is actually slowing down their purchasing not only by changing their minds, but also because their purchasing budget is spread more thinly.
tbihl 5y ago
"The people who have money to hoard gas", in the current environment, is as worthwhile a qualifier as "the people who have shoes to hoard gas". They're both necessary for going out to get gas, but neither is limiting in any important way. The people hoarding gas had a particular combination of gas containers, lawnmowers, and free time. I want the gas stations hoarding the gas and then trying to figure out what price will make them the most money by pricing high enough to just barely sell out by the end of a shortage. Last year when all the grocery stores were running out of staples, I was unluckily traveling for work where there are no grocery stores. Upon returning, I conveniently found that my neighborhood co-op still had eggs because, while almost all eggs had been sold out, no one wanted to hoard $7.50/dz eggs, meaning I had the opportunity to get eggs if I really wanted them. I was able to buy eggs and did so, adjusting my habits accordingly to operate on fewer (but not zero) eggs. Everyone else who had visited that store had the same opportunity, and they also had the chance to compare their own desire for eggs against others' desires to recognize that they could do with fewer, as could I. At the end of the day, having reduced amounts of something I want is way less impactful than having none. The only problem here is if gas stations talk to each other to set a price, but that is collusion, and is illegal independent of gouging laws.

brobdingnagians 5y ago

We have to wait and see if future results justify current actions, when the action is preparation for some future event. It is only in hindsight that we can truly point out if someone's risk/reward calculation for the future was flawed. I'm not buying gold, but the odd thing is that Russian and Chinese central banks are. I would assume those people know a thing or two about economics. I'm curious to see what the future holds.

Scoundreller 5y ago
Why would Russia and China central banks buy gold? They’re already the #3 and #1 producing countries world-wide.
- brobdingnagians 5y ago
  Because their central banks are concerned about stability of international currencies [1]. A central bank is in a good position to use gold, whereas most individuals aren't. [1] https://www.marketwatch.com/story/why-russian-and-chinese-central-banks-will-keep-buying-gold-2019-09-13 https://www.marketwatch.com/story/why-russian-and-chinese-ce...

roenxi 5y ago

> The people who have money to hoard gas are also the people who have the money to hoard gas at double the price. But then the outcome would not have changed, the people who hoard will be worse off, the people who produce a valuable commodity will be better off and there is incentive for people to contingency plan and have gas reserves for when things get tight. That is a strict improvement. Plus, you're probably being overly pessimistic - people will stop hoarding once the price gets high enough. The shelves would not be bare. > These are not individuals with any knowledge of economics - theyre not doing it for trade, they're doing it out of belief. The people with knowledge of economics don't have much of an advantage though, do they? When has an official body ever been banging the drum before a major crisis issuing panicked warnings? Every crisis it turns out all the people held up as experts had grossly misread the situation. People with knowledge of economics often get bowled under by people with a knowledge of politics or of statistics when it comes to trading.

fsckboy 5y ago

> Price of gold and silver is at its peak and people are buying it more than ever no, you've got it exactly backward. People buying it more than ever is driving the price up, and the feedback of higher prices is actually slowing down their purchasing not only by changing their minds, but also because their purchasing budget is spread more thinly.

tbihl 5y ago

"The people who have money to hoard gas", in the current environment, is as worthwhile a qualifier as "the people who have shoes to hoard gas". They're both necessary for going out to get gas, but neither is limiting in any important way. The people hoarding gas had a particular combination of gas containers, lawnmowers, and free time. I want the gas stations hoarding the gas and then trying to figure out what price will make them the most money by pricing high enough to just barely sell out by the end of a shortage. Last year when all the grocery stores were running out of staples, I was unluckily traveling for work where there are no grocery stores. Upon returning, I conveniently found that my neighborhood co-op still had eggs because, while almost all eggs had been sold out, no one wanted to hoard $7.50/dz eggs, meaning I had the opportunity to get eggs if I really wanted them. I was able to buy eggs and did so, adjusting my habits accordingly to operate on fewer (but not zero) eggs. Everyone else who had visited that store had the same opportunity, and they also had the chance to compare their own desire for eggs against others' desires to recognize that they could do with fewer, as could I. At the end of the day, having reduced amounts of something I want is way less impactful than having none. The only problem here is if gas stations talk to each other to set a price, but that is collusion, and is illegal independent of gouging laws.