7 ms·

I suspect there are three flavours of gold bugs: 1) Wealthy + Paranoid + Stupid. They'd rather keep their money in sovereigns under their mattress, than put

by hakfoo 3y ago

I suspect there are three flavours of gold bugs: 1) Wealthy + Paranoid + Stupid. They'd rather keep their money in sovereigns under their mattress, than put it into any sort of productive economic activity. On a long term, especially in the US, you could pretty much throw darts and build a portfolio that competes with, or beats, inflation. 2) Conspirational: "fiat currency is a grand scheme to undermine our savings for (insert nefarious bugaboo of the day)" 3) Arguably a subset of 2) but Apocalypse Enthusiast. "When civilization crumbles, the obvious trade unit won't be something like grain, alcohol, or bullets, but my bags full of low-grade silver dimes! I'll be King of the Wasteland!"

brnaftr361 3y ago
Couldn't we bifurcate it, though? I mean, I'm fucked. I've effectively lost between 10-20% of my purchasing power out of what ultimately equates to a relatively small sum in the first place because my time horizon was pretty small, I put a trust fund together for myself. Whole I was doing this bond yields were negative, and had been for a long while, and I'd posit they still are (last I looked the $1 pound loaves at Walmart were $1.50). I just did not and do not have the buffer money for investing, not to mention a need for liquidity and possible penalties. It would be nice to have something more stable. Of course, Au and Ag haven't yet reared their imaginary powers yet in any case, though many portend they will. Ideally though, an ounce of gold is an ounce. But a dollar can be anything. The question is one of making gold, silver, or some other fixed-quantity, portable, arbitrarily valuable substance into legal tender, right?
zoklet-enjoyer 3y ago
Gold coins are beautiful liquid assets. Why not keep part of your retirement or emergency fund in gold and silver? I can just go down to one of many local coin stores and sell them if I need the cash.
bheadmaster 3y ago
> fiat currency is a grand scheme to undermine our savings How exactly is it not? Inflation = stealing value from people, that they have already created, time-limiting their spending power so that there's no way to actually save money in the long-term. Money printing is theft, indirect taxation without consent.
- qwytw 3y ago
  > no way to actually save money in the long-term The idea is that you'd save by investing into productive enterprises (and or government bonds) obviously that doesn't necessarily function as well as one would hope for but it's an better solution than hoarding cash/gold/bitcoin/etc.
- throw0101b 3y ago
  > so that there's no way to actually save money in the long-term. Besides equities? Besides TIPS? * https://www.investopedia.com/terms/t/tips.asp https://www.investopedia.com/terms/t/tips.asp Do you literally keep bills under your mattress or buried in your backyard? There's your problem.
  - bheadmaster 3y ago
    > Do you literally keep bills under your mattress or buried in your backyard? There's your problem. No, there's not my problem. The problem is that the government keeps printing money, so my bills under my mattress or buried in my backyard keep dropping in value. The fact that there are securities that are literally called "Inflation-Protected" as an antidote to that only serves as a proof of the original problem. > But you can save money! No, you can invest money. But investing should not be mandatory just to keep your wealth from rotting.
    - deleted 3y ago
      [deleted]
    - throw0101b 3y ago
      > The problem is that the government keeps printing money […] Except that it doesn't. Money is created by private banks through credit (loan, mortgage) creation: * https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m... * https://www.bankofengland.co.uk/explainers/how-is-money-created https://www.bankofengland.co.uk/explainers/how-is-money-crea... > […] so my bills under my mattress or buried in my backyard keep dropping in value. Yes, this is a feature: the discouragement of the non-productive uses of capital and hoarding à la Scrooge McDuck. > No, you can invest money. Most people actually save and do not invest: * https://www.pragcap.com/saving-is-not-the-key-to-financial-success/ https://www.pragcap.com/saving-is-not-the-key-to-financial-s...
lamp987 3y ago
"fiat currency is a grand scheme to undermine our savings" imagine writing this as ironic mockery during an ongoing inflation crisis.
- Finnucane 3y ago
  Note also that historically, the gold standard didn't actually prevent inflation.
- hakfoo 3y ago
  The operative portion was the other half of the sentence. It's never a "they're targeting a number that they believe in good faith will maximize economic activity on a national level", it's always "devaluing my existing holdings gives $boogeyman_ethnic_or_political_group an advantage" like you're somehow prohibited from investing.
mschuster91 3y ago
> 3) Arguably a subset of 2) but Apocalypse Enthusiast. "When civilization crumbles, the obvious trade unit won't be something like grain, alcohol, or bullets, but my bags full of low-grade silver dimes! I'll be King of the Wasteland!" Yes, direct trade may definitely be grains, alcohol or bullets - but as soon as economies more complex than a self sufficient farm village crop up, eventually some form of token will be required. For that, historically gold and silver have been the established tokens of choice for millennia, and even today's currencies are backed by insane amounts of gold in central bank vaults - it's not a bad assumption per se to think that gold and silver will outlast even our modern civilization. Come to think of it, most of the world's currencies sans the Swiss Franc and the US dollars are barely decades old. We're already seeing a switch from the US dollar as the universally accepted international reserve and trading currency - only 60% of reserves and 40% of trades are valued in dollars, mostly towards the Euro and, in smaller amounts, yen, yuan and a bit of Francs. Think forward a few decades... what humans create can vanish in a very short time.
jelani_t 3y ago
So because someone has a different worldview, you're gonna call them stupid? Cool. In the meantime, look how much purchasing power your dollar has lost since 1971. In your first point, you're also only taking into account the government-reported inflation. Go to your local grocery store and run the numbers yourself and you'll get a much higher number. After a certain percentage, inflation just becomes a tax unless you have it sitting in assets. And I don't understand your second point either. Your savings have most definitely been undermined. Your nominal wages might be up, but your purchasing power is way down since after the stimmys. To calculate the difference, compare how many hours you'd have to have worked in the past to how many hours you'd have to work now to achieve the same standard of living. Maybe cut out the pretentiousness and dismissiveness and listen to what people who are generally concerned about you and your purchasing power are saying.
- throw0101b 3y ago
  > In the meantime, look how much purchasing power your dollar has lost since 1971. See also the amount of deflation that has occurred over the decades: * https://www.huffpost.com/entry/radio-shack-ad_b_4612973 https://www.huffpost.com/entry/radio-shack-ad_b_4612973
  - jelani_t 3y ago
    Cool, now do housing and university in real wages (non-nominal).

by hakfoo 3y ago

brnaftr361 3y ago

Couldn't we bifurcate it, though? I mean, I'm fucked. I've effectively lost between 10-20% of my purchasing power out of what ultimately equates to a relatively small sum in the first place because my time horizon was pretty small, I put a trust fund together for myself. Whole I was doing this bond yields were negative, and had been for a long while, and I'd posit they still are (last I looked the $1 pound loaves at Walmart were $1.50). I just did not and do not have the buffer money for investing, not to mention a need for liquidity and possible penalties. It would be nice to have something more stable. Of course, Au and Ag haven't yet reared their imaginary powers yet in any case, though many portend they will. Ideally though, an ounce of gold is an ounce. But a dollar can be anything. The question is one of making gold, silver, or some other fixed-quantity, portable, arbitrarily valuable substance into legal tender, right?

zoklet-enjoyer 3y ago

Gold coins are beautiful liquid assets. Why not keep part of your retirement or emergency fund in gold and silver? I can just go down to one of many local coin stores and sell them if I need the cash.

bheadmaster 3y ago

> fiat currency is a grand scheme to undermine our savings How exactly is it not? Inflation = stealing value from people, that they have already created, time-limiting their spending power so that there's no way to actually save money in the long-term. Money printing is theft, indirect taxation without consent.

qwytw 3y ago
> no way to actually save money in the long-term The idea is that you'd save by investing into productive enterprises (and or government bonds) obviously that doesn't necessarily function as well as one would hope for but it's an better solution than hoarding cash/gold/bitcoin/etc.
throw0101b 3y ago
> so that there's no way to actually save money in the long-term. Besides equities? Besides TIPS? * https://www.investopedia.com/terms/t/tips.asp https://www.investopedia.com/terms/t/tips.asp Do you literally keep bills under your mattress or buried in your backyard? There's your problem.
- bheadmaster 3y ago
  > Do you literally keep bills under your mattress or buried in your backyard? There's your problem. No, there's not my problem. The problem is that the government keeps printing money, so my bills under my mattress or buried in my backyard keep dropping in value. The fact that there are securities that are literally called "Inflation-Protected" as an antidote to that only serves as a proof of the original problem. > But you can save money! No, you can invest money. But investing should not be mandatory just to keep your wealth from rotting.
  - deleted 3y ago
    [deleted]
  - throw0101b 3y ago
    > The problem is that the government keeps printing money […] Except that it doesn't. Money is created by private banks through credit (loan, mortgage) creation: * https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m... * https://www.bankofengland.co.uk/explainers/how-is-money-created https://www.bankofengland.co.uk/explainers/how-is-money-crea... > […] so my bills under my mattress or buried in my backyard keep dropping in value. Yes, this is a feature: the discouragement of the non-productive uses of capital and hoarding à la Scrooge McDuck. > No, you can invest money. Most people actually save and do not invest: * https://www.pragcap.com/saving-is-not-the-key-to-financial-success/ https://www.pragcap.com/saving-is-not-the-key-to-financial-s...

lamp987 3y ago

"fiat currency is a grand scheme to undermine our savings" imagine writing this as ironic mockery during an ongoing inflation crisis.

Finnucane 3y ago
Note also that historically, the gold standard didn't actually prevent inflation.
hakfoo 3y ago
The operative portion was the other half of the sentence. It's never a "they're targeting a number that they believe in good faith will maximize economic activity on a national level", it's always "devaluing my existing holdings gives $boogeyman_ethnic_or_political_group an advantage" like you're somehow prohibited from investing.

mschuster91 3y ago

> 3) Arguably a subset of 2) but Apocalypse Enthusiast. "When civilization crumbles, the obvious trade unit won't be something like grain, alcohol, or bullets, but my bags full of low-grade silver dimes! I'll be King of the Wasteland!" Yes, direct trade may definitely be grains, alcohol or bullets - but as soon as economies more complex than a self sufficient farm village crop up, eventually some form of token will be required. For that, historically gold and silver have been the established tokens of choice for millennia, and even today's currencies are backed by insane amounts of gold in central bank vaults - it's not a bad assumption per se to think that gold and silver will outlast even our modern civilization. Come to think of it, most of the world's currencies sans the Swiss Franc and the US dollars are barely decades old. We're already seeing a switch from the US dollar as the universally accepted international reserve and trading currency - only 60% of reserves and 40% of trades are valued in dollars, mostly towards the Euro and, in smaller amounts, yen, yuan and a bit of Francs. Think forward a few decades... what humans create can vanish in a very short time.

jelani_t 3y ago

So because someone has a different worldview, you're gonna call them stupid? Cool. In the meantime, look how much purchasing power your dollar has lost since 1971. In your first point, you're also only taking into account the government-reported inflation. Go to your local grocery store and run the numbers yourself and you'll get a much higher number. After a certain percentage, inflation just becomes a tax unless you have it sitting in assets. And I don't understand your second point either. Your savings have most definitely been undermined. Your nominal wages might be up, but your purchasing power is way down since after the stimmys. To calculate the difference, compare how many hours you'd have to have worked in the past to how many hours you'd have to work now to achieve the same standard of living. Maybe cut out the pretentiousness and dismissiveness and listen to what people who are generally concerned about you and your purchasing power are saying.

throw0101b 3y ago
> In the meantime, look how much purchasing power your dollar has lost since 1971. See also the amount of deflation that has occurred over the decades: * https://www.huffpost.com/entry/radio-shack-ad_b_4612973 https://www.huffpost.com/entry/radio-shack-ad_b_4612973
- jelani_t 3y ago
  Cool, now do housing and university in real wages (non-nominal).