4 ms·

No, in 1944 the dollar was fixed at $35 per ounce of gold. It was not a time of crisis for the gold market, because gold was money. The peg was eventually remov

No, in 1944 the dollar was fixed at $35 per ounce of gold. It was not a time of crisis for the gold market, because gold was money. The peg was eventually removed (I think in 1971). Right now there are factors driving the price of gold up, including massive central bank purchases and also massive understated inflation in the West. Everyone knows that fiat currencies are fleeting so the world is preparing for an inevitable decline or collapse of the dollar.

csomar 3y ago
It's important for people to realize that the US dollars market are quite open that if the current actors thinks that the dollar is going down, it'll go down very fast. So if you are an average HNer (citizen) don't go freak out and put all of your money on gold or bitcoin. (This is not a long-term assessment though; that being impossible to predict the far future). Nobody wants to see the US dollar collapse overnight. Neither the US nor China (which holds trillions of US bonds). But everyone wants to move from that standard including the US (which, being the reserve currency, has suffered a horrible NIIP since the end of the gold standard[1]). 1: https://en.wikipedia.org/wiki/Net_international_investment_position#/media/File:US_Net_International_Investment_Position.png https://en.wikipedia.org/wiki/Net_international_investment_p...
SideQuark 3y ago
It's easy to check BLS inflation against old ads for goods and see that BLS inflation is pretty spot on. I've yet to meet someone claiming "massive understated inflation" that has done this simple check honestly. As to the claim that "fiat currencies are fleeting," it is a fact every country of 200+ has one, so it's safer to say every non-fiat currency has failed. There's also significant empirical evidence such economies are on the whole less volatile than older ones limited by how fast one can dig material out of a hole. See a list of severity and frequency of US recessions, or study the Great Moderation, or simply look at the volatility of gold prices, to see how unstable non-fiat pricing is.
- djtango 3y ago
  Have you ever noticed how inflation metrics are always finding ways to ignore how housing and rent has gone up much faster than wages? Pretty much all the important things in life have gone up more than stated inflation. I don't care that I can get a cheap very environmentally unsustainable cardigan for less than ever before. Likewise for a watery nutrition-less tomato. Meanwhile education, housing and healthcare are the least affordable they've ever been. https://en.m.wikipedia.org/wiki/Baumol_effect https://en.m.wikipedia.org/wiki/Baumol_effect
  - randomdata 3y ago
    Inflation isn't a cost of living metric, it is an attempt to determine change in value of the currency. A change in value of, say, housing is independent to a change in value of the currency. And housing is undeniably more valuable than it once was for a long list of factors. If you want to understand cost of living, just look at your personal bookkeeping. It will paint the most accurate picture. There isn't much to be gained in reporting cost of living in the news – unless you think aliens on some far away planet will take interest a thousand years from now when the signal arrives at their location.
    - wakawaka28 3y ago
      CPI is the most commonly cited inflation metric, and it is actually a cost of living metric. We could also use the velocity of money plus money supply stats, but that is very hard to relate to. Housing might be somewhat more valuable than it used to be, but the extreme valuation swings we've seen in the last 20 years were due to monetary policy and macroeconomic conditions, and not actual demand. Or I should say, demand for housing is always proportional to population. It's not like when people can't afford a house, that demand disappears. It just can't be acted on.
      - randomdata 3y ago
        > and it is actually a cost of living metric. It is not. A CPI measures the change in cost of a fixed basket of goods. A COLI measures a change in cost of a fixed level of "well-being". > It's not like when people can't afford a house, that demand disappears. It is like that. That's literally what defines demand. Perhaps you have confused "demand" with "desire"? They do share the same first couple of letters.

csomar 3y ago

It's important for people to realize that the US dollars market are quite open that if the current actors thinks that the dollar is going down, it'll go down very fast. So if you are an average HNer (citizen) don't go freak out and put all of your money on gold or bitcoin. (This is not a long-term assessment though; that being impossible to predict the far future). Nobody wants to see the US dollar collapse overnight. Neither the US nor China (which holds trillions of US bonds). But everyone wants to move from that standard including the US (which, being the reserve currency, has suffered a horrible NIIP since the end of the gold standard[1]). 1: https://en.wikipedia.org/wiki/Net_international_investment_position#/media/File:US_Net_International_Investment_Position.png https://en.wikipedia.org/wiki/Net_international_investment_p...

SideQuark 3y ago

It's easy to check BLS inflation against old ads for goods and see that BLS inflation is pretty spot on. I've yet to meet someone claiming "massive understated inflation" that has done this simple check honestly. As to the claim that "fiat currencies are fleeting," it is a fact every country of 200+ has one, so it's safer to say every non-fiat currency has failed. There's also significant empirical evidence such economies are on the whole less volatile than older ones limited by how fast one can dig material out of a hole. See a list of severity and frequency of US recessions, or study the Great Moderation, or simply look at the volatility of gold prices, to see how unstable non-fiat pricing is.

djtango 3y ago
Have you ever noticed how inflation metrics are always finding ways to ignore how housing and rent has gone up much faster than wages? Pretty much all the important things in life have gone up more than stated inflation. I don't care that I can get a cheap very environmentally unsustainable cardigan for less than ever before. Likewise for a watery nutrition-less tomato. Meanwhile education, housing and healthcare are the least affordable they've ever been. https://en.m.wikipedia.org/wiki/Baumol_effect https://en.m.wikipedia.org/wiki/Baumol_effect
- randomdata 3y ago
  Inflation isn't a cost of living metric, it is an attempt to determine change in value of the currency. A change in value of, say, housing is independent to a change in value of the currency. And housing is undeniably more valuable than it once was for a long list of factors. If you want to understand cost of living, just look at your personal bookkeeping. It will paint the most accurate picture. There isn't much to be gained in reporting cost of living in the news – unless you think aliens on some far away planet will take interest a thousand years from now when the signal arrives at their location.
  - wakawaka28 3y ago
    CPI is the most commonly cited inflation metric, and it is actually a cost of living metric. We could also use the velocity of money plus money supply stats, but that is very hard to relate to. Housing might be somewhat more valuable than it used to be, but the extreme valuation swings we've seen in the last 20 years were due to monetary policy and macroeconomic conditions, and not actual demand. Or I should say, demand for housing is always proportional to population. It's not like when people can't afford a house, that demand disappears. It just can't be acted on.
    - randomdata 3y ago
      > and it is actually a cost of living metric. It is not. A CPI measures the change in cost of a fixed basket of goods. A COLI measures a change in cost of a fixed level of "well-being". > It's not like when people can't afford a house, that demand disappears. It is like that. That's literally what defines demand. Perhaps you have confused "demand" with "desire"? They do share the same first couple of letters.