4 ms·
savings are a thermodynamical impossibility. real wealth decays (livestock will die, the roof over your head will leak, the bushel of corn will rot, ...). savin
by trgn 1y ago
savings are a thermodynamical impossibility. real wealth decays (livestock will die, the roof over your head will leak, the bushel of corn will rot, ...). savings must be invested for it to have future value.
- tastyfreeze 1y agoIf only there was some material that didn't degrade over time and is hard to produce. Somebody should invent something like that.
- analog31 1y agoIts value goes up and down, and is as speculative as anything else.
- tastyfreeze 1y agoPrice does not equal value. One oz today will buy you about the same as 1 oz 100 years ago.
- analog31 1y agoYes, it'll buy you an oz of gold. https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart https://www.macrotrends.net/1333/historical-gold-prices-100-... What does equal value?
- tastyfreeze 1y agoWhatever people buy. If you are looking at the dollar value of gold you have to look at what a dollar would buy that year. That is the value. You will find that a similar amount of gold buys the same amount of things throughout time regardless of the dollar price. Another way to say that is that the dollar price of gold is correlated with the cumulative inflation of the dollar0 over time.
- analog31 1y agoThats the inflation adjusted curve, meaning it's what gold can buy relative to what a dollar can buy.
- tastyfreeze 1y agoIn 1900 a 20 dollar coin contained 0.9675 ounces of gold. An ounce of gold was legally defined as $20.67. No free floating gold price. A dollar coin contained 1.672 grams of gold. 1900 $1 is equal to 2025 $172 So a single dollar today will buy 1/172 of what it would in 1900. That is inflation. Not an inflation adjusted curve. Just the drastic devaluation of the dollar.
- analog31 1y agoThe curve suggests that there would also be periods of inflation and deflation, for instance of a market basket of goods and services, under a gold standard.
- AnimalMuppet 1y agoA single dollar today will buy 1/172 of what it would in 1900, as long as what you're buying is gold. If you are buying anything else, though, your number is not relevant. And that means that your number is useless, because it's only the number if you're buying gold, and gold is almost never what we actually want to buy.
- trgn 1y agoIt's circular. Sure it's pegged to metal, but won't tell you how much corn or land or homes you can buy with it. What should one oz of gold, hoarded in 2025, be able to buy you in 2050? Many factors will determine that. Theres no such thing as fixed value, unless the definition is self referential. The only thing to do is turn present day savings in capital, it's the only claim one can have on wealth in the future.
- immibis 1y agoAn underrated fact. The only savings that doesn't decay is someone else's debt, too.
- trgn 1y agoyes thank you, I paraphrased Soddy, and for him debt was virtual wealth (and not subject to decay).
- BirAdam 1y agoMoney was traditionally a way to store value, and not all things decay at a rate that matters. Roman roads still exist. The Parthenon still exists. Roman coins still exist. In any inflationary currency value erodes, and it also encourages the production of less durable goods as time pressure encourages speed of production and not durability.