6 ms·

Gold Is So Popular It's Making People Nervous

59 points by walterbell 2y ago

walterbell 2y ago
https://archive.ph/59b0S https://archive.ph/59b0S
- walterbell 2y ago
  BIS Basel III is scheduled for July 2025 in US, impacting paper vs physical gold. HN ranking history for this thread, https://hnrankings.info/43809241/ https://hnrankings.info/43809241/
oakleysi 2y ago
[dead]
bix6 2y ago
Worldwide decoupling from USD? Where do we go from here?
- senectus1 2y ago
  thats the questions isnt it? Euro or Yuan is my guess. I'm inclined to say the Euro over the Yuan, if the US collpases then China is bound to follow. Their debts are tightly bound up together.
  - ncallaway 2y ago
    I think there's a option here: there could be no replacement. The fact of the world having a singular reserve currency is not guaranteed. A totally possible outcome is nothing really replaces the dollar as the reserve currency, and international trade is just... less efficient because of it. If the world moves away from the dollar, I think having a singular reserve currency replace it is probably the best case scenario
    - klodolph 2y ago
      Sure, it’s possible that international trade would be less efficient. I think it’s more likely that liquidity providers / market makers would step in. These entities have gotten bigger and bigger over the past years.
      - cbogie 2y ago
        nudge force push to dogecoin trumpbux etc quick rich, scorched earth, whatever u can keep
    - flowerthoughts 2y ago
      Agreed. Yuan is too closely regulated to stay in China. I doubt it would be viable unless China first steps up their _attitude_ towards being a currency provider. The EMU is an amalgamation of countries that barely hold together, have vastly different opinions on government spending, and isn't already a "world currency." I do think we'll eventually have a single currency on the planet, but the question is what happens in my lifetime. And that's much less certain.
  - wqaatwt 2y ago
    China has pretty strict capital controls. Wouldn’t that more or less entirely disqualify Yuan?
- drewcoo 2y ago
  We go to BRICs.
  - carlosjobim 2y ago
    Not even BRICS countries would trust BRICS. There dollar is horrible, every other currency is much worse.
  - pjc50 2y ago
    A country sanctioned by half the world, a country with capital controls and non convertible currency, a country about to fight Pakistan, and whatever is going on with Brazil? That's not stability.
  - IAmBroom 2y ago
    I assume you dropped this: /s
- klodolph 2y ago
  Diversification?
- Taniwha 2y ago
  Trade imbalances typically solve themselves because they force currency changes, if I have too many Y$ because I sell more to country Y than I buy then I can't use them easily and they become worth less, that means Y's exporters get more Y$ when they sell stuff and importers pay more - trade deficits balance out. If you have a currency that's needed for something like buying a staple like oil from other than that country then that $$ is worth more, is artificially high, and that country will tend to always have trade deficits It's very much a case of "you can't have your cake and eat it too" - it also means that Trump's tariffs are very much an incentive for the rest of the world to get off of the US oil $
- YZF 2y ago
  There is no quick decoupling from the USD. Everyone holds long term USD instruments. Nobody wants to lose their money. The US is still the world's largest economy - by a lot. Gold isn't that much more expensive than it was in e.g. 1980. It is pretty much just saying there's risk in other places at the moment and people are nervous. You should buy gold if your prediction is a complete collapse of economies along the lines of the great depression. I think this is extremely unlikely. Short gold ;) I've always wanted to get some physical gold just because it's so nice and shiny. But I'll wait for the price to go a little down. Maybe Costco selling gold bars is what's pushing up the price/demand?
  - olalonde 2y ago
    > The US is still the world's largest economy - by a lot. China is.
    - danielmarkbruce 2y ago
      No reputable source has China gdp > US gdp. World Bank, IMF, UN all have it at something like $30T US, $20T China.
      - tock 2y ago
        True but its only a matter of this at this rate.
        wqaatwt 2y ago
        Is it? China unlike US has a declining population. Also it takes a while to catch up even if you’re growing at 5% and your opponent at 3% when the starting base is much lower. Of course this might be entirely moot since US is in the process of committing economic suicide for no apparent reason.
        tock 2y ago
        I think its going to happen. We keep underestimating China. US manufacturing is in the gutter. And it certainly doesn't help that we keep deporting our best minds back to China. They already have 5x the US population. They have a lot of room to grow still.
- 01100011 2y ago
  Probably nowhere. Despite what crypto maximalists, Sino-apologists or Eurofetishists will have you believe, there is nothing like the USD in terms of function. That isn't to say that gold won't go higher in USD terms or that USD won't further weaken against some other currencies, but we are still decades away from the end of king dollar. As bad of a president as trump is, he will not destroy America. Things have been bad before, and they got better. We will see better times again. Edit: And, yes, central banks have as of late been increasing gold reserves. Expect some of those gold reserves to be liquidated in the event that those countries currencies need support. Gold can have amazing periods like we've just witnesses and then just sit there for ten years. It's good for diversification though and from what I've heard from smarter people than me, something like 10% of your portfolio in gold isn't a terrible idea. Just DCA into it instead of panic buying at a potential top. Oh and this is HN. Most of us have no clue when it comes to economics and are merely parroting our favorite twitter guru or Peter Zeihan. Trust us when we talk about software but take everything you hear in these economic related threads with a huge grain of salt.
  - csomar 2y ago
    > there is nothing like the USD in terms of function. This might have been true 10 years ago but that's not the case today. I was in Chengdu last week and I paid at a store market with a TnG wallet using Malaysia MYR. Sure this is only South East Asia, but many countries now have their own ewallet thing and they can be ready in a short time to move.
    - lores 2y ago
      "Only SE Asia" is you being modest here, SE Asia to Chengdu is like a quarter of all humans!
    - audunw 2y ago
      How is that relevant? Countries don’t hold reserves in e-wallets. You don’t get a business loan in an e-wallet. What you pay with as a consumer has nothing to do with the dollars reserve currency status. One of the most important aspects of the dollars role is the “Eurodollar”, and how debt can be issued by international banks. There is no alternative to the dollar in that regard.
6stringmerc 2y ago
Markets are completely erratic at this point - everything points to frayed nerves. GDP numbers incoming. Gold a traditional safe haven but let’s be honest, people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself. Total chaos and I’m here for it. Self imposed pending collapse is breeding black swans that have yet to hatch. Source: worked at an investment bank during 2008 collapse.
- YZF 2y ago
  Seems like the market is thinking this is man made so can be man fixed. Not the same systemic issues as we had with debt during 2008. Many businesses seems to be pretty healthy. AI still has ways to run in its bubble cycle- still huge investments into this space. Really hard to predict. Confidence has eroded but emotions can switch very quickly to fear of missing the next rally. Maybe a more fundamental question is what multiples are the new normal and where are interest rates going.
- pengaru 2y ago
  > people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself. Says you. A month ago I was trying to buy 1oz bars as gifts for my niece and nephew, from Costco of all places. They were often sold out by noon, sometimes queues for the stuff. I wasn't even trying to buy something that was going to appreciate in value quickly, it's already gone up >10% from the Costco price at the time. USD seems doomed right now, through the lens of the price of gold in USD.
- SpicyLemonZest 2y ago
  > let’s be honest, people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself. Is there data or is this speculation? After the Gamestop saga, I would 100% believe that the gold market is being driven by a liquidity crunch as lots of random individuals buy gold bars to stuff in their sock drawers.
- thelastgallon 2y ago
  > people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself. So, Gold NFTs?
IAmGraydon 2y ago
If you're thinking about buying gold, I would advise you to exercise caution. There have been a number of high profile articles like this one in the last week or so, and several of them came from people who stand to profit from you buying gold. As an example, this is one from Peter Schiff that came out Friday: https://investorsobserver.com/news/3500-gold-means-life-in-america-is-about-to-change-in-ways-few-can-imagine-economist-says/ https://investorsobserver.com/news/3500-gold-means-life-in-a... It turns out Peter Schiff owns SchiffGold, a large gold dealer. This guy is saying we all need to own gold due to economic turmoil, and then turns around and sells it by the ton. Also, it's worth taking a look at the Gold/USD since 1970 on a log chart. The rate of increase we're seeing right now is not at all unusual, and it has gone through periods of much faster growth. From 1970-1980, it increased 3000% in only 10 years. It's also worth noting that gold fell sharply in the days following the tariff announcements (6.66%, oddly enough) and then took off. The immediate reaction to economic news is typically smart money because they can estimate the longer term impact faster and price it in. The delayed reaction usually comes from dumb money. Something just feels very off about this to me.
- pjc50 2y ago
  There's a long tradition of people talking up doom so they can market supplies to preppers. If those people get anywhere near power they will create the doom so they can fulfill their marketing. On the other hand, as the Economist said, there's another 1300 days of this.
- jen729w 2y ago
  Well there's that, but also here's a ten-year graph of GOLD.AX. | / | / | / | / |/ +------
- deleted 2y ago
  [deleted]
ArtTimeInvestor 2y ago
Gold is cumbersome to handle and prone to inflation as more and more is mined. Just one example that recently caught my attention: Germany is currently discussing how to get back the part of their Gold reserves they have stored inside the USA. It is a pretty hard task. And afterwards it would be hard to use that Gold as a means of exchange, as it would have to be physically shipped around the world. Bitcoin seems to solve all the problems the Dollar and Gold have as a reserve currency. It is independent of trade deficits, can be stored and transferred easily. Cannot be printed away. What alternative future is there to Bitcoin becoming the new reserve currency?
- rafram 2y ago
  > What alternative future is there to Bitcoin becoming the new reserve currency? Bitcoin not becoming the new reserve currency.
- zeroonetwothree 2y ago
  Bitcoin has too much volatility right now. Maybe that will change one day.
- lordofgibbons 2y ago
  1) > Cannot be printed away. Why would any government want this a feature? As far as sovereigns are concerned, this is a bug, not a feature. You and I might or might not agree with it, but no sovereign government would give away its ability to print money. 2) Bitcoin has a public and transparent ledger. Why would any government want the whole world to see their reserve amounts and movements in real time?
  - johnny22 2y ago
    > Why would any government want this a feature? I'm not a sovereign and I don't want this feature either.
    - wqaatwt 2y ago
      On an selfish/individual level it’s rational to prefer no inflation or even deflation if you have a lot of cash and no debt. For the economy as a whole? Well it leads to a lot less debt amongst other things constant economic depressions (like back in the 1800s)

59 points by walterbell 2y ago

walterbell 2y ago

https://archive.ph/59b0S https://archive.ph/59b0S

walterbell 2y ago
BIS Basel III is scheduled for July 2025 in US, impacting paper vs physical gold. HN ranking history for this thread, https://hnrankings.info/43809241/ https://hnrankings.info/43809241/

oakleysi 2y ago

[dead]

bix6 2y ago

Worldwide decoupling from USD? Where do we go from here?

senectus1 2y ago
thats the questions isnt it? Euro or Yuan is my guess. I'm inclined to say the Euro over the Yuan, if the US collpases then China is bound to follow. Their debts are tightly bound up together.
- ncallaway 2y ago
  I think there's a option here: there could be no replacement. The fact of the world having a singular reserve currency is not guaranteed. A totally possible outcome is nothing really replaces the dollar as the reserve currency, and international trade is just... less efficient because of it. If the world moves away from the dollar, I think having a singular reserve currency replace it is probably the best case scenario
  - klodolph 2y ago
    Sure, it’s possible that international trade would be less efficient. I think it’s more likely that liquidity providers / market makers would step in. These entities have gotten bigger and bigger over the past years.
    - cbogie 2y ago
      nudge force push to dogecoin trumpbux etc quick rich, scorched earth, whatever u can keep
  - flowerthoughts 2y ago
    Agreed. Yuan is too closely regulated to stay in China. I doubt it would be viable unless China first steps up their _attitude_ towards being a currency provider. The EMU is an amalgamation of countries that barely hold together, have vastly different opinions on government spending, and isn't already a "world currency." I do think we'll eventually have a single currency on the planet, but the question is what happens in my lifetime. And that's much less certain.
- wqaatwt 2y ago
  China has pretty strict capital controls. Wouldn’t that more or less entirely disqualify Yuan?
drewcoo 2y ago
We go to BRICs.
- carlosjobim 2y ago
  Not even BRICS countries would trust BRICS. There dollar is horrible, every other currency is much worse.
- pjc50 2y ago
  A country sanctioned by half the world, a country with capital controls and non convertible currency, a country about to fight Pakistan, and whatever is going on with Brazil? That's not stability.
- IAmBroom 2y ago
  I assume you dropped this: /s
klodolph 2y ago
Diversification?
Taniwha 2y ago
Trade imbalances typically solve themselves because they force currency changes, if I have too many Y$ because I sell more to country Y than I buy then I can't use them easily and they become worth less, that means Y's exporters get more Y$ when they sell stuff and importers pay more - trade deficits balance out. If you have a currency that's needed for something like buying a staple like oil from other than that country then that $$ is worth more, is artificially high, and that country will tend to always have trade deficits It's very much a case of "you can't have your cake and eat it too" - it also means that Trump's tariffs are very much an incentive for the rest of the world to get off of the US oil $
YZF 2y ago
There is no quick decoupling from the USD. Everyone holds long term USD instruments. Nobody wants to lose their money. The US is still the world's largest economy - by a lot. Gold isn't that much more expensive than it was in e.g. 1980. It is pretty much just saying there's risk in other places at the moment and people are nervous. You should buy gold if your prediction is a complete collapse of economies along the lines of the great depression. I think this is extremely unlikely. Short gold ;) I've always wanted to get some physical gold just because it's so nice and shiny. But I'll wait for the price to go a little down. Maybe Costco selling gold bars is what's pushing up the price/demand?
- olalonde 2y ago
  > The US is still the world's largest economy - by a lot. China is.
  - danielmarkbruce 2y ago
    No reputable source has China gdp > US gdp. World Bank, IMF, UN all have it at something like $30T US, $20T China.
    - tock 2y ago
      True but its only a matter of this at this rate.
      - wqaatwt 2y ago
        Is it? China unlike US has a declining population. Also it takes a while to catch up even if you’re growing at 5% and your opponent at 3% when the starting base is much lower. Of course this might be entirely moot since US is in the process of committing economic suicide for no apparent reason.
        tock 2y ago
        I think its going to happen. We keep underestimating China. US manufacturing is in the gutter. And it certainly doesn't help that we keep deporting our best minds back to China. They already have 5x the US population. They have a lot of room to grow still.
01100011 2y ago
Probably nowhere. Despite what crypto maximalists, Sino-apologists or Eurofetishists will have you believe, there is nothing like the USD in terms of function. That isn't to say that gold won't go higher in USD terms or that USD won't further weaken against some other currencies, but we are still decades away from the end of king dollar. As bad of a president as trump is, he will not destroy America. Things have been bad before, and they got better. We will see better times again. Edit: And, yes, central banks have as of late been increasing gold reserves. Expect some of those gold reserves to be liquidated in the event that those countries currencies need support. Gold can have amazing periods like we've just witnesses and then just sit there for ten years. It's good for diversification though and from what I've heard from smarter people than me, something like 10% of your portfolio in gold isn't a terrible idea. Just DCA into it instead of panic buying at a potential top. Oh and this is HN. Most of us have no clue when it comes to economics and are merely parroting our favorite twitter guru or Peter Zeihan. Trust us when we talk about software but take everything you hear in these economic related threads with a huge grain of salt.
- csomar 2y ago
  > there is nothing like the USD in terms of function. This might have been true 10 years ago but that's not the case today. I was in Chengdu last week and I paid at a store market with a TnG wallet using Malaysia MYR. Sure this is only South East Asia, but many countries now have their own ewallet thing and they can be ready in a short time to move.
  - lores 2y ago
    "Only SE Asia" is you being modest here, SE Asia to Chengdu is like a quarter of all humans!
  - audunw 2y ago
    How is that relevant? Countries don’t hold reserves in e-wallets. You don’t get a business loan in an e-wallet. What you pay with as a consumer has nothing to do with the dollars reserve currency status. One of the most important aspects of the dollars role is the “Eurodollar”, and how debt can be issued by international banks. There is no alternative to the dollar in that regard.

6stringmerc 2y ago

Markets are completely erratic at this point - everything points to frayed nerves. GDP numbers incoming. Gold a traditional safe haven but let’s be honest, people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself. Total chaos and I’m here for it. Self imposed pending collapse is breeding black swans that have yet to hatch. Source: worked at an investment bank during 2008 collapse.

YZF 2y ago
Seems like the market is thinking this is man made so can be man fixed. Not the same systemic issues as we had with debt during 2008. Many businesses seems to be pretty healthy. AI still has ways to run in its bubble cycle- still huge investments into this space. Really hard to predict. Confidence has eroded but emotions can switch very quickly to fear of missing the next rally. Maybe a more fundamental question is what multiples are the new normal and where are interest rates going.
pengaru 2y ago
> people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself. Says you. A month ago I was trying to buy 1oz bars as gifts for my niece and nephew, from Costco of all places. They were often sold out by noon, sometimes queues for the stuff. I wasn't even trying to buy something that was going to appreciate in value quickly, it's already gone up >10% from the Costco price at the time. USD seems doomed right now, through the lens of the price of gold in USD.
SpicyLemonZest 2y ago
> let’s be honest, people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself. Is there data or is this speculation? After the Gamestop saga, I would 100% believe that the gold market is being driven by a liquidity crunch as lots of random individuals buy gold bars to stuff in their sock drawers.
thelastgallon 2y ago
> people are buying “funds” of gold and driving up the price, not actually stockpiling the metal itself. So, Gold NFTs?

IAmGraydon 2y ago

If you're thinking about buying gold, I would advise you to exercise caution. There have been a number of high profile articles like this one in the last week or so, and several of them came from people who stand to profit from you buying gold. As an example, this is one from Peter Schiff that came out Friday: https://investorsobserver.com/news/3500-gold-means-life-in-america-is-about-to-change-in-ways-few-can-imagine-economist-says/ https://investorsobserver.com/news/3500-gold-means-life-in-a... It turns out Peter Schiff owns SchiffGold, a large gold dealer. This guy is saying we all need to own gold due to economic turmoil, and then turns around and sells it by the ton. Also, it's worth taking a look at the Gold/USD since 1970 on a log chart. The rate of increase we're seeing right now is not at all unusual, and it has gone through periods of much faster growth. From 1970-1980, it increased 3000% in only 10 years. It's also worth noting that gold fell sharply in the days following the tariff announcements (6.66%, oddly enough) and then took off. The immediate reaction to economic news is typically smart money because they can estimate the longer term impact faster and price it in. The delayed reaction usually comes from dumb money. Something just feels very off about this to me.

pjc50 2y ago
There's a long tradition of people talking up doom so they can market supplies to preppers. If those people get anywhere near power they will create the doom so they can fulfill their marketing. On the other hand, as the Economist said, there's another 1300 days of this.
jen729w 2y ago
Well there's that, but also here's a ten-year graph of GOLD.AX. | / | / | / | / |/ +------
deleted 2y ago
[deleted]

ArtTimeInvestor 2y ago

Gold is cumbersome to handle and prone to inflation as more and more is mined. Just one example that recently caught my attention: Germany is currently discussing how to get back the part of their Gold reserves they have stored inside the USA. It is a pretty hard task. And afterwards it would be hard to use that Gold as a means of exchange, as it would have to be physically shipped around the world. Bitcoin seems to solve all the problems the Dollar and Gold have as a reserve currency. It is independent of trade deficits, can be stored and transferred easily. Cannot be printed away. What alternative future is there to Bitcoin becoming the new reserve currency?

rafram 2y ago
> What alternative future is there to Bitcoin becoming the new reserve currency? Bitcoin not becoming the new reserve currency.
zeroonetwothree 2y ago
Bitcoin has too much volatility right now. Maybe that will change one day.
lordofgibbons 2y ago
1) > Cannot be printed away. Why would any government want this a feature? As far as sovereigns are concerned, this is a bug, not a feature. You and I might or might not agree with it, but no sovereign government would give away its ability to print money. 2) Bitcoin has a public and transparent ledger. Why would any government want the whole world to see their reserve amounts and movements in real time?
- johnny22 2y ago
  > Why would any government want this a feature? I'm not a sovereign and I don't want this feature either.
  - wqaatwt 2y ago
    On an selfish/individual level it’s rational to prefer no inflation or even deflation if you have a lot of cash and no debt. For the economy as a whole? Well it leads to a lot less debt amongst other things constant economic depressions (like back in the 1800s)