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You forgot to say "so far". One of my managers was also flying high circa 2000 - multiple lakefront properties, Porsches you name it, the guy was living the lif

by ein0p 2y ago

You forgot to say "so far". One of my managers was also flying high circa 2000 - multiple lakefront properties, Porsches you name it, the guy was living the life. In 2002 he was bankrupt - didn't sell his tech stocks in time, thought they'd "bounce back". But I'm not talking about stocks. I'm talking about cash here. Cash is literally an article of faith and nothing else. It's not backed by any asset.

klipt 2y ago
> multiple lakefront properties Let me guess, bought on credit, he over leveraged > Cash is literally an article of faith and nothing else. It's not backed by any asset. The US dollar is backed by the federal government, a behemoth that handles more assets than any other entity on earth. For example we know they target 2% inflation on average. So US dollars are much more stable than if I were to issue my own "klipt bucks" currency.
- ein0p 2y ago
  US dollar is also constantly and arbitrarily diluted by the Federal Reserve, to the tune of $2-3T a year. If it was a stock, you'd run away in horror.
  - selectodude 2y ago
    Cash isn’t an investment. It’s a temporary store of labor value. Since work now is worth more than work later, of course cash has value decay. If it didn’t, it wouldn’t be very good at its raison d’être.
    - LudwigNagasena 2y ago
      The main reason the value of cash decays and the main reason central banks target 2% is downward wage rigidity. If you reduce wages of people, they get angry, sometimes very angry to the point of strikes. If the value simply drops, they don’t get as mad. It’s as simple as that, a matter of psychology and social institutions. There is no reason why payment for labor should be a “temporary store of labor value”, whatever that means. There is no reason one cannot receive wage in productive assets, commodities, credit and whatnot.
      - selectodude 2y ago
        >There is no reason one cannot receive wage in productive assets, commodities, credit and whatnot. You're right about that. It's called the barter system and we don't use it anymore because it's inefficient and sucks shit. >The main reason the value of cash decays and the main reason central banks target 2% is downward wage rigidity. If you reduce wages of people, they get angry, sometimes very angry to the point of strikes. If the value simply drops, they don’t get as mad. It’s as simple as that, a matter of psychology and social institutions. No, it's because if cash has a fixed value, then the "temporary" part of labor storage goes away and the economy grinds to a halt.
        LudwigNagasena 2y ago
        > You're right about that. It's called the barter system and we don't use it anymore because it's inefficient and sucks shit. Barter sucks because of coincidence of wants. It doesn’t suck because paying in S&P500 ETF doesn’t correspond to magical temporary store of labor whatever that is supposed to mean. > No, it's because if cash has a fixed value, then the "temporary" part of labor storage goes away and the economy grinds to a halt. What would grind to a halt exactly? Sorry, plebs, only rich people are allowed to be paid in stocks and other non-inflationary assets. You have to suffer, otherwise economy grinds to a halt!
        selectodude 2y ago
        >It doesn’t suck because paying in S&P500 ETF doesn’t correspond to magical temporary store of labor whatever that is supposed to mean. How many shares of SPY does a car cost? Before you answer that, you cannot convert any value of this into currency first. I certainly can't answer it! >Sorry, plebs, only rich people are allowed to be paid in stocks and other non-inflationary assets. Rich people are paid in cash. When the CEO of a company gets $10m in stock grants, nobody involved in the transaction is working on number of shares of stock, they work with dollars and figure out how many shares they need to meet that number. If I get a $500 bonus from work and immediately buy a few shares of AAPL, there's no fundamental difference between that and me getting a $500 stock grant of AAPL. They're even taxed the same.
    - ein0p 2y ago
      OK, it's 2025. You have received $1M in cash. The US stock market is ludicrously overvalued across the board. What's your move?
  - klipt 2y ago
    Yeah I know the dollar is intended to lose value on average: > we know they target 2% inflation on average That's why you don't put all your long term savings in USD. But it's good to have your emergency fund in USD because it has less short term fluctuations than assets like stocks.
    - njarboe 2y ago
      And emergencies will generally correlate with stock prices going down.
  - rsynnott 2y ago
    … I mean, yeah, you’re not _supposed_ to invest in cash. Cash is, essentially, for using. If, say, your pension is in cash, you’ve been very poorly advised.
- robertlagrant 2y ago
  I would love to get in on the ground floor with klipt bucks. I am sold on kliptomania!
ajmurmann 2y ago
Can I buy (foreign) cash as an investment on Vanguard (I genuinely don't know)? The money market fund is about interests from debtors not currency speculation.
selectodude 2y ago
Cash is a thing that has, at its base, value in so far as you can pay your taxes with it. If the whole world (including American citizens) stopped using USD tomorrow, it would still have value since the US Government still demands it.
- matwood 2y ago
  Makes you wonder if Vanguard will change their position if the new administration gives crypto any sort of US backing. So far it seems like the new admin has only been interested on the scam side of crypto though.
- cyberax 2y ago
  I dislike that take. Taxes don't really matter, and there are examples of currencies that are worth something and that are not used for taxation. Cigarettes in prison is an example of a currency that is not taxed per se, the early US dollars are another example. Currency is useful because people have faith in its properties: scarcity and ubiquity as a medium of exchange. Dollar is important because people have faith in the US government to not dilute it (too much), and because everyone in the world accepts it. Bitcoin _is_ a currency. Its scarcity is limited by its construction, and it's widely accepted. But it's a bad currency, that is mostly backed by illicit transactions, and its "mechanical" usability just sucks due to delays and transaction fees.
  - selectodude 2y ago
    >Cigarettes in prison is an example of a currency that is not taxed per se. Yes, cigarettes, like the dollar have an intrinsic value. You can smoke them and nicotine makes you feel good. It is similar to the way that I can pay my taxes in USD and feel comfort in the fact that I won't have to barter for cigarettes in federal prison. Bitcoin is not a currency because it no longer meets the primary economic definition of currency - a medium of exchange. It is a speculative asset. A security, if you will. It can be used as a currency in the same way as gold bars and bricks of cocaine can (barter system) but it's not a currency.
marchie_uk 2y ago
Cash is backed by a government that can exert influence and control over its population and counterparts with policy, laws or - at the extreme end - force.
deleted 2y ago
[deleted]
randerson 2y ago
That money market account is backed by bonds, which are assets. Why not also make the argument that stocks are an article of faith. You have faith that the business will act in your interests and the currency you invested in will still exist when its time to sell. If your old manager went bankrupt by mis-timing the market with a handful of tech stocks, then he most certainly didn't invest the Vanguard way: diversify and hold on for the long haul.
bluecalm 2y ago
>> I'm talking about cash here. Cash is literally an article of faith and nothing else. It's not backed by any asset. It's backed by contracts to pay it back. There are powerful institutions employing people with guns and other means to make you pay back. "Faith" undersells the situation. We developed the whole system to force people to pay their loans back.

by ein0p 2y ago

klipt 2y ago

> multiple lakefront properties Let me guess, bought on credit, he over leveraged > Cash is literally an article of faith and nothing else. It's not backed by any asset. The US dollar is backed by the federal government, a behemoth that handles more assets than any other entity on earth. For example we know they target 2% inflation on average. So US dollars are much more stable than if I were to issue my own "klipt bucks" currency.

ein0p 2y ago
US dollar is also constantly and arbitrarily diluted by the Federal Reserve, to the tune of $2-3T a year. If it was a stock, you'd run away in horror.
- selectodude 2y ago
  Cash isn’t an investment. It’s a temporary store of labor value. Since work now is worth more than work later, of course cash has value decay. If it didn’t, it wouldn’t be very good at its raison d’être.
  - LudwigNagasena 2y ago
    The main reason the value of cash decays and the main reason central banks target 2% is downward wage rigidity. If you reduce wages of people, they get angry, sometimes very angry to the point of strikes. If the value simply drops, they don’t get as mad. It’s as simple as that, a matter of psychology and social institutions. There is no reason why payment for labor should be a “temporary store of labor value”, whatever that means. There is no reason one cannot receive wage in productive assets, commodities, credit and whatnot.
    - selectodude 2y ago
      >There is no reason one cannot receive wage in productive assets, commodities, credit and whatnot. You're right about that. It's called the barter system and we don't use it anymore because it's inefficient and sucks shit. >The main reason the value of cash decays and the main reason central banks target 2% is downward wage rigidity. If you reduce wages of people, they get angry, sometimes very angry to the point of strikes. If the value simply drops, they don’t get as mad. It’s as simple as that, a matter of psychology and social institutions. No, it's because if cash has a fixed value, then the "temporary" part of labor storage goes away and the economy grinds to a halt.
      - LudwigNagasena 2y ago
        > You're right about that. It's called the barter system and we don't use it anymore because it's inefficient and sucks shit. Barter sucks because of coincidence of wants. It doesn’t suck because paying in S&P500 ETF doesn’t correspond to magical temporary store of labor whatever that is supposed to mean. > No, it's because if cash has a fixed value, then the "temporary" part of labor storage goes away and the economy grinds to a halt. What would grind to a halt exactly? Sorry, plebs, only rich people are allowed to be paid in stocks and other non-inflationary assets. You have to suffer, otherwise economy grinds to a halt!
        selectodude 2y ago
        >It doesn’t suck because paying in S&P500 ETF doesn’t correspond to magical temporary store of labor whatever that is supposed to mean. How many shares of SPY does a car cost? Before you answer that, you cannot convert any value of this into currency first. I certainly can't answer it! >Sorry, plebs, only rich people are allowed to be paid in stocks and other non-inflationary assets. Rich people are paid in cash. When the CEO of a company gets $10m in stock grants, nobody involved in the transaction is working on number of shares of stock, they work with dollars and figure out how many shares they need to meet that number. If I get a $500 bonus from work and immediately buy a few shares of AAPL, there's no fundamental difference between that and me getting a $500 stock grant of AAPL. They're even taxed the same.
  - ein0p 2y ago
    OK, it's 2025. You have received $1M in cash. The US stock market is ludicrously overvalued across the board. What's your move?
- klipt 2y ago
  Yeah I know the dollar is intended to lose value on average: > we know they target 2% inflation on average That's why you don't put all your long term savings in USD. But it's good to have your emergency fund in USD because it has less short term fluctuations than assets like stocks.
  - njarboe 2y ago
    And emergencies will generally correlate with stock prices going down.
- rsynnott 2y ago
  … I mean, yeah, you’re not _supposed_ to invest in cash. Cash is, essentially, for using. If, say, your pension is in cash, you’ve been very poorly advised.
robertlagrant 2y ago
I would love to get in on the ground floor with klipt bucks. I am sold on kliptomania!

ajmurmann 2y ago

Can I buy (foreign) cash as an investment on Vanguard (I genuinely don't know)? The money market fund is about interests from debtors not currency speculation.

selectodude 2y ago

Cash is a thing that has, at its base, value in so far as you can pay your taxes with it. If the whole world (including American citizens) stopped using USD tomorrow, it would still have value since the US Government still demands it.

matwood 2y ago
Makes you wonder if Vanguard will change their position if the new administration gives crypto any sort of US backing. So far it seems like the new admin has only been interested on the scam side of crypto though.
cyberax 2y ago
I dislike that take. Taxes don't really matter, and there are examples of currencies that are worth something and that are not used for taxation. Cigarettes in prison is an example of a currency that is not taxed per se, the early US dollars are another example. Currency is useful because people have faith in its properties: scarcity and ubiquity as a medium of exchange. Dollar is important because people have faith in the US government to not dilute it (too much), and because everyone in the world accepts it. Bitcoin _is_ a currency. Its scarcity is limited by its construction, and it's widely accepted. But it's a bad currency, that is mostly backed by illicit transactions, and its "mechanical" usability just sucks due to delays and transaction fees.
- selectodude 2y ago
  >Cigarettes in prison is an example of a currency that is not taxed per se. Yes, cigarettes, like the dollar have an intrinsic value. You can smoke them and nicotine makes you feel good. It is similar to the way that I can pay my taxes in USD and feel comfort in the fact that I won't have to barter for cigarettes in federal prison. Bitcoin is not a currency because it no longer meets the primary economic definition of currency - a medium of exchange. It is a speculative asset. A security, if you will. It can be used as a currency in the same way as gold bars and bricks of cocaine can (barter system) but it's not a currency.

marchie_uk 2y ago

Cash is backed by a government that can exert influence and control over its population and counterparts with policy, laws or - at the extreme end - force.

deleted 2y ago

[deleted]

randerson 2y ago

That money market account is backed by bonds, which are assets. Why not also make the argument that stocks are an article of faith. You have faith that the business will act in your interests and the currency you invested in will still exist when its time to sell. If your old manager went bankrupt by mis-timing the market with a handful of tech stocks, then he most certainly didn't invest the Vanguard way: diversify and hold on for the long haul.

bluecalm 2y ago

>> I'm talking about cash here. Cash is literally an article of faith and nothing else. It's not backed by any asset. It's backed by contracts to pay it back. There are powerful institutions employing people with guns and other means to make you pay back. "Faith" undersells the situation. We developed the whole system to force people to pay their loans back.