4 ms·

Economic stagnation for over a decade? Aligns with the vibes, IMO.

by xeckr 9mo ago

stephen_g 9mo ago
Gold is just one of many commodities these days, mostly unconnected from most monetary systems for many decades. Treating it as the benchmark of value is really quite arbitrary, and I expect someone could compare the S&P to other random commodities and come up with completely different conclusions...
- xeckr 9mo ago
  I'd definitely be curious to see the S&P valued in different commodities over time. With that said, gold certainly feels like a special indicator given its history as a universally recognized store of value.
  - ajross 9mo ago
    > history as a universally recognized store of value. History of what now? Gold is a volatile commodity. It has crashed, many times, often catastrophically, and had bear markets that dwarf anything you see in stocks.. A quick search tells me that inflation-adjusted gold prices dropped like 80% between 1979 and 2000. And given its value right now, it's probably due for another.
    - cyber_kinetist 9mo ago
      To add some context, gold was actually something backed by the US government during the Bretton Woods era (40s-70s), where 1 ounce of gold was pegged to 35 dollars. This was only possible because the US accumulated so much wealth relative to rest of the world after WWII, so they controlled the majority of the gold supply. After the golden age of Keynesian America ended with stagflation in the 70s, the US government had to stop all of their gold from fleeing the country, so this guarantee had to end. Which leads to the Nixon shock, where the dollar (and all other currencies as well) became free-floating, and we enter a brave new world where humanity hasn't lived before (neo-liberalism). Given all that, it's easy to see why the value of gold has plummeted during the 70s - 00s. Though I could see two reasons as to why gold prices are rising during the last decade: - Gold is actually just a part of the asset bubble (in the same group as housing, stocks, and crypto), and investment in it is aided by too much money printed by the US government not being used towards productive ends but towards rampant asset speculation. - The current era of neo-liberalism is going to end pretty soon, and some goldbugs are rooting for the revival of late 19th-century classical capitalism, where gold was actually the international standard. I think this is very unlikely though, even if the US dollar loses its status with the end of the petrodollar system. My guess is we're going to deal with free-floating currencies for quite some time, especially when wars are going to happen and governments have to print more money to sustain their war efforts. (I think the best monetary system would be neither gold or crypto, but instead something like the Bancor (https://en.wikipedia.org/wiki/Bancor https://en.wikipedia.org/wiki/Bancor))
      - ajross 9mo ago
        This is one of those bell curve memes. All your text sits in the middle. The Jedi and I are off on the ends screaming "Gold is just a bubble!"
- OutOfHere 9mo ago
  Not really. Gold is not a random commodity. It is historically the primary compact store of value, only recently to meet competition with Bitcoin.
stego-tech 9mo ago
I mean, yeah, but the parallels OP is drawing really kinda feel like the lingering whispers of the “gold standard” crowd rather than anything more substantial. For the working classes, the peak was the dotcom bubble - everything after that has been repeated speculative bubbles attempting to create explosive growth from nothing of substance, as much a deliberate decision of Capital to weaken the working classes while extracting wealth as it was a desperation gambit by an increasingly stable (but not yet stagnant circa mid-2000s) western hemisphere and its governments. Gold alone isn’t an indicator of this, so much as all asset prices skyrocketing to the moon while worker wages remained relatively flat and precarity increased. Metals, securities, housing, land, all of it has appreciated faster than working wages have kept pace, reflecting a siphoning of that wealth into fewer hands. Gold just makes the story “neater” to tell to folks lamenting the heyday of Breton Woods.

Economic stagnation for over a decade? Aligns with the vibes, IMO.

by xeckr 9mo ago

Economic stagnation for over a decade? Aligns with the vibes, IMO.

Gold is just one of many commodities these days, mostly unconnected from most monetary systems for many decades. Treating it as the benchmark of value is really quite arbitrary, and I expect someone could compare the S&P to other random commodities and come up with completely different conclusions...

xeckr 9mo ago
I'd definitely be curious to see the S&P valued in different commodities over time. With that said, gold certainly feels like a special indicator given its history as a universally recognized store of value.
- ajross 9mo ago
  > history as a universally recognized store of value. History of what now? Gold is a volatile commodity. It has crashed, many times, often catastrophically, and had bear markets that dwarf anything you see in stocks.. A quick search tells me that inflation-adjusted gold prices dropped like 80% between 1979 and 2000. And given its value right now, it's probably due for another.
  - cyber_kinetist 9mo ago
    To add some context, gold was actually something backed by the US government during the Bretton Woods era (40s-70s), where 1 ounce of gold was pegged to 35 dollars. This was only possible because the US accumulated so much wealth relative to rest of the world after WWII, so they controlled the majority of the gold supply. After the golden age of Keynesian America ended with stagflation in the 70s, the US government had to stop all of their gold from fleeing the country, so this guarantee had to end. Which leads to the Nixon shock, where the dollar (and all other currencies as well) became free-floating, and we enter a brave new world where humanity hasn't lived before (neo-liberalism). Given all that, it's easy to see why the value of gold has plummeted during the 70s - 00s. Though I could see two reasons as to why gold prices are rising during the last decade: - Gold is actually just a part of the asset bubble (in the same group as housing, stocks, and crypto), and investment in it is aided by too much money printed by the US government not being used towards productive ends but towards rampant asset speculation. - The current era of neo-liberalism is going to end pretty soon, and some goldbugs are rooting for the revival of late 19th-century classical capitalism, where gold was actually the international standard. I think this is very unlikely though, even if the US dollar loses its status with the end of the petrodollar system. My guess is we're going to deal with free-floating currencies for quite some time, especially when wars are going to happen and governments have to print more money to sustain their war efforts. (I think the best monetary system would be neither gold or crypto, but instead something like the Bancor (https://en.wikipedia.org/wiki/Bancor https://en.wikipedia.org/wiki/Bancor))
    - ajross 9mo ago
      This is one of those bell curve memes. All your text sits in the middle. The Jedi and I are off on the ends screaming "Gold is just a bubble!"
OutOfHere 9mo ago
Not really. Gold is not a random commodity. It is historically the primary compact store of value, only recently to meet competition with Bitcoin.

stego-tech 9mo ago

I mean, yeah, but the parallels OP is drawing really kinda feel like the lingering whispers of the “gold standard” crowd rather than anything more substantial. For the working classes, the peak was the dotcom bubble - everything after that has been repeated speculative bubbles attempting to create explosive growth from nothing of substance, as much a deliberate decision of Capital to weaken the working classes while extracting wealth as it was a desperation gambit by an increasingly stable (but not yet stagnant circa mid-2000s) western hemisphere and its governments. Gold alone isn’t an indicator of this, so much as all asset prices skyrocketing to the moon while worker wages remained relatively flat and precarity increased. Metals, securities, housing, land, all of it has appreciated faster than working wages have kept pace, reflecting a siphoning of that wealth into fewer hands. Gold just makes the story “neater” to tell to folks lamenting the heyday of Breton Woods.