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This post is riddled with misconceptions, but I’m just going to focus on these because they’re probably the most productive places for you to start: > Real est

by wyager 5y ago

This post is riddled with misconceptions, but I’m just going to focus on these because they’re probably the most productive places for you to start: > Real estate is not a monetary asset, it's a productive asset… Gold is a commodity, not a monetary asset. This is wrong. Any asset with monetary properties can (and will, in the right environments) be monetized. When the primary medium of exchange is inflationary, people will use whatever non-inflationary value stores they can find with sufficient liquidity. Most of the value of gold, and much of the value of real estate, lie in their capacity as a wealth storage mechanism. They are monetized. Bitcoin does a better job of this and will likely subsume their monetization value. > It has no intrinsic value Invocation of “intrinsic value” is a 100% surefire sign of a dysfunctional economic mental model.

arcticbull 5y ago
> This is wrong. Any asset with monetary properties can (and will, in the right environments) be monetized. That is not the definition of a monetary asset. "A monetary item is an asset or liability carrying a value in dollars that will not change in the future. These items have a fixed numerical value in dollars, and a dollar is always worth a dollar. The numbers do not change even though the purchasing power of a dollar can potentially change." [1] Words have meaning, so I guess I'm not 100% sure what you're talking about. > Invocation of “intrinsic value” is a 100% surefire sign of a dysfunctional economic mental model. [citation needed] [1] https://www.investopedia.com/terms/m/monetary-item.asp https://www.investopedia.com/terms/m/monetary-item.asp
- deleted 5y ago
  [deleted]
- wyager 5y ago
  I used the phrase “monetary asset” once to mean “an asset which behaves and is treated like money”, but it would have been less ambiguous for me to use the phrase “monetized asset”. > citation needed Give me a minute to find a copy of the Official Rules of Economic Epistemology. If you’d like to put forward any particular theory that assigns “intrinsic value” to objects I could address it specifically.
  - arcticbull 5y ago
    > I used the phrase “monetary asset” once to mean “an asset which behaves and is treated like money”, but it would have been less ambiguous for me to use the phrase “monetized asset”. Real estate is a productive asset and gold is a commodity. I'm not sure in what way they "behave like money" - their prices float with respect to a currency and have roughly zero of the attributes of money [1] - but monetization just means to find ways to make money off an unproductive asset, rather than transmuting it into something that's basically money. > Give me a minute to find a copy of the Official Rules of Economic Epistemology. I'll wait. If you're going to accuse someone of a "dysfunctional mental economic model" it's best to have a case made. I'm referring to intrinsic value in the economic sense not in the epistemological sense. Economic intrinsic value is an independent mathematical derivation of the market value of an asset - based on its qualities and attributes - divorced from the price at which it trades. For instance, the intrinsic value of a SPAC is the cash on hand, and its extrinsic value is whatever its trading at on the hopes of an acquisition. [1] https://www.stlouisfed.org/education/economic-lowdown-podcast-series/episode-9-functions-of-money#:~:text=The%20characteristics%20of%20money%20are,%2C%20limited%20supply%2C%20and%20acceptability https://www.stlouisfed.org/education/economic-lowdown-podcas....
    - wyager 5y ago
      > Economic intrinsic value is an independent mathematical derivation of the market value of an asset - based on its qualities and attributes - divorced from the price at which it trades This doesn’t exist except in the imagination. It has no causal bearing on any economic process except through the influence it has on the person imagining it. > their prices float with respect to a currency So does EUR with respect to USD > and have roughly zero of the attributes of money Scarcity, fungibility, liquidity, durability, portability - gold’s 5/5 and real estate is 4.5/5. What properties are you thinking about?
      - arcticbull 5y ago
        > This doesn’t exist except in the imagination. It has no causal bearing on any economic process except through the influence it has on the person imagining it. No, it exists in math, with addition and subtraction. Like I said, a publicly traded bank account like a SPAC has an intrinsic value equal to its cash on hand. This is the economic definition of intrinsic value, and you're trying to once again substitute your epistemological definition. Same word, different meanings in different contexts, and it's disingenuous to try and substitute your definition as though it's the commonly accepted one in this context. > So does EUR with respect to USD This does not follow. Money isn't an asset, it's a currency, and a foreign exchange trade is a pair trade on the relative domestic purchasing power of the two. Currencies do not float with respect to other currencies because they are not priced in terms of each other. > Scarcity, fungibility, liquidity, durability, portability - gold’s 5/5 and real estate is 4.5/5. What properties are you thinking about? Ok let's talk about real estate. It's not fungible, each house is different. It's not liquid, in fact, sales take a substantial period of time. It's not necessarily durable, it decays without constant upkeep. It's totally not portable. And it's not broadly accepted as money. That's 0. Try bringing your deed to the Apple store to buy a MacBook. How is that 4.5 out of 5? Gold of course isn't broadly accepted either, so that's a critical one. Try bringing a gold brick to the Apple store and see if you can buy an iPhone. Yes it could be money, it was at some point, but we replaced it because it was bad at being money, and these days it definitely is not.

by wyager 5y ago

arcticbull 5y ago

> This is wrong. Any asset with monetary properties can (and will, in the right environments) be monetized. That is not the definition of a monetary asset. "A monetary item is an asset or liability carrying a value in dollars that will not change in the future. These items have a fixed numerical value in dollars, and a dollar is always worth a dollar. The numbers do not change even though the purchasing power of a dollar can potentially change." [1] Words have meaning, so I guess I'm not 100% sure what you're talking about. > Invocation of “intrinsic value” is a 100% surefire sign of a dysfunctional economic mental model. [citation needed] [1] https://www.investopedia.com/terms/m/monetary-item.asp https://www.investopedia.com/terms/m/monetary-item.asp

deleted 5y ago
[deleted]
wyager 5y ago
I used the phrase “monetary asset” once to mean “an asset which behaves and is treated like money”, but it would have been less ambiguous for me to use the phrase “monetized asset”. > citation needed Give me a minute to find a copy of the Official Rules of Economic Epistemology. If you’d like to put forward any particular theory that assigns “intrinsic value” to objects I could address it specifically.
- arcticbull 5y ago
  > I used the phrase “monetary asset” once to mean “an asset which behaves and is treated like money”, but it would have been less ambiguous for me to use the phrase “monetized asset”. Real estate is a productive asset and gold is a commodity. I'm not sure in what way they "behave like money" - their prices float with respect to a currency and have roughly zero of the attributes of money [1] - but monetization just means to find ways to make money off an unproductive asset, rather than transmuting it into something that's basically money. > Give me a minute to find a copy of the Official Rules of Economic Epistemology. I'll wait. If you're going to accuse someone of a "dysfunctional mental economic model" it's best to have a case made. I'm referring to intrinsic value in the economic sense not in the epistemological sense. Economic intrinsic value is an independent mathematical derivation of the market value of an asset - based on its qualities and attributes - divorced from the price at which it trades. For instance, the intrinsic value of a SPAC is the cash on hand, and its extrinsic value is whatever its trading at on the hopes of an acquisition. [1] https://www.stlouisfed.org/education/economic-lowdown-podcast-series/episode-9-functions-of-money#:~:text=The%20characteristics%20of%20money%20are,%2C%20limited%20supply%2C%20and%20acceptability https://www.stlouisfed.org/education/economic-lowdown-podcas....
  - wyager 5y ago
    > Economic intrinsic value is an independent mathematical derivation of the market value of an asset - based on its qualities and attributes - divorced from the price at which it trades This doesn’t exist except in the imagination. It has no causal bearing on any economic process except through the influence it has on the person imagining it. > their prices float with respect to a currency So does EUR with respect to USD > and have roughly zero of the attributes of money Scarcity, fungibility, liquidity, durability, portability - gold’s 5/5 and real estate is 4.5/5. What properties are you thinking about?
    - arcticbull 5y ago
      > This doesn’t exist except in the imagination. It has no causal bearing on any economic process except through the influence it has on the person imagining it. No, it exists in math, with addition and subtraction. Like I said, a publicly traded bank account like a SPAC has an intrinsic value equal to its cash on hand. This is the economic definition of intrinsic value, and you're trying to once again substitute your epistemological definition. Same word, different meanings in different contexts, and it's disingenuous to try and substitute your definition as though it's the commonly accepted one in this context. > So does EUR with respect to USD This does not follow. Money isn't an asset, it's a currency, and a foreign exchange trade is a pair trade on the relative domestic purchasing power of the two. Currencies do not float with respect to other currencies because they are not priced in terms of each other. > Scarcity, fungibility, liquidity, durability, portability - gold’s 5/5 and real estate is 4.5/5. What properties are you thinking about? Ok let's talk about real estate. It's not fungible, each house is different. It's not liquid, in fact, sales take a substantial period of time. It's not necessarily durable, it decays without constant upkeep. It's totally not portable. And it's not broadly accepted as money. That's 0. Try bringing your deed to the Apple store to buy a MacBook. How is that 4.5 out of 5? Gold of course isn't broadly accepted either, so that's a critical one. Try bringing a gold brick to the Apple store and see if you can buy an iPhone. Yes it could be money, it was at some point, but we replaced it because it was bad at being money, and these days it definitely is not.