3 ms·

Gold is not "real money", come on.

by IshKebab 10mo ago

PlatoIsADisease 10mo ago
The analytical philosopher in me says: "Define real money" I think everyone can agree if you specify your definition.
maerF0x0 10mo ago
It's a lot less Fiat than USD.
- hagbarth 10mo ago
  How so?
  - maerF0x0 10mo ago
    I guess because gold isn't created by decree?
    - BlarfMcFlarf 10mo ago
      Supply is only one half of value. The demand for gold is almost entirely speculative, whereas dollars can be directly used for almost anything.
      - maerF0x0 10mo ago
        The issue isn't it's usefulness in small transactions. The issue is who decides. In the case of gold a huge distributed system decides the valuation of Gold. Yes we usually use USD as the comparator. But there is a Gold:RealEstate ratio, Gold:Oil Ratio, Gold:Bread ratio. No single or small number of actors can change that in a meaningful/reliable way.[1] Whereas USD can, and has been, printed at an exponential rate. [1] -(Let's exclude intentional market manipulations like if a world leader were to buy a bunch of gold and then saber rattle to drive up fear).
znnajdla 10mo ago
A goat or a sheep cost roughly the same in gold today as it cost 2000 years ago during the Roman Empire. Gold is the only “real money” in the sense that it is the only stable measure of the value of basic needs over centuries. https://chatgpt.com/share/696fb3e8-91d4-800a-9b2b-32eacdadebc5 https://chatgpt.com/share/696fb3e8-91d4-800a-9b2b-32eacdadeb...
- spicyusername 10mo ago
  First link to ChatGPT as a "source" that I've seen in the wild. Times they are a-changing. I can't say that anyone is going to find that very convincing, even if it's a compelling idea to consider gold inflation over the centuries.
  - gamacodre 10mo ago
    Yeah, I saw that link and had a few thoughts immediately collide in my head: - Wait, WTF? Really?? - But but but it's a *chatbot*, not an authority - We're doomed
  - duskwuff 10mo ago
    Unless there's something I'm missing, there isn't even a response at the link - just a question. (And if that was how the user posed the question, I'd be concerned that priming the chat with "is it true that..." biased the response towards "yes, it's true".)
- RealityVoid 10mo ago
  Ahh, yes, gold and the speed of light in a vacuum - the only real constants in the real universe.
- tyuu 10mo ago
  A goat costs exactly (not roughly) the same in goats today as it cost 2000 years ago. So by that measure a goat is the only stable measure of the value of basic needs over centuries.
  - 10mo ago
tyuu 10mo ago
That chart is also really weird. With log scale turned off and expanded to all time... https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart Makes it look like the US peaked at Sep 2000 and has been downhill ever since. Doesn't track at all with GDP which has almost doubled since 2000. I.e. it doesn't track with growth, but does track with dollar index somewhat, which makes sense because it's tracking a dollar value intermediate when considering "how much gold it takes to buy S&P 500", which means it really ends up tracking something else entirely. > Compared to real money (Gold) the S&P500 is down over the past 10 years. [4] Isn't this the real chart to look at for that? Completely different story when you select max on the timeline. https://www.perplexity.ai/finance/%5EGSPC?comparing=GCUSD https://www.perplexity.ai/finance/%5EGSPC?comparing=GCUSD Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives. (Albeit to be fair, the trend is towards conservative advice...my life was uniquely affected in terms of limiting upside, so I am at least grateful that most online posts work very hard to limit downside.)
- dcl 10mo ago
  S&P gets you dividends though, so the interpretation of that chart is tricky. Holding the S&P, you can still do better than holding gold, even when the GOLD/S&P ratio is positive.
- derangedHorse 10mo ago
  > Isn't this the real chart to look at for that? No, the perplexity chart is actually a really bad one to look at. It tracks a derivative of gold from 1975 onwards from which the S&P already accrued over 350% in returns. They also started the gold derivative off at a price of $178 while using the initial price of $17.57 to calculate S&P returns. > Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives. Ideally no one would blindly follow advice they don't understand or can't accept into their own mental model.
  - tyuu 10mo ago

Gold is not "real money", come on.

PlatoIsADisease 10mo ago

The analytical philosopher in me says: "Define real money" I think everyone can agree if you specify your definition.

maerF0x0 10mo ago

It's a lot less Fiat than USD.

hagbarth 10mo ago
How so?
- maerF0x0 10mo ago
  I guess because gold isn't created by decree?
  - BlarfMcFlarf 10mo ago
    Supply is only one half of value. The demand for gold is almost entirely speculative, whereas dollars can be directly used for almost anything.
    - maerF0x0 10mo ago
      The issue isn't it's usefulness in small transactions. The issue is who decides. In the case of gold a huge distributed system decides the valuation of Gold. Yes we usually use USD as the comparator. But there is a Gold:RealEstate ratio, Gold:Oil Ratio, Gold:Bread ratio. No single or small number of actors can change that in a meaningful/reliable way.[1] Whereas USD can, and has been, printed at an exponential rate. [1] -(Let's exclude intentional market manipulations like if a world leader were to buy a bunch of gold and then saber rattle to drive up fear).

znnajdla 10mo ago

A goat or a sheep cost roughly the same in gold today as it cost 2000 years ago during the Roman Empire. Gold is the only “real money” in the sense that it is the only stable measure of the value of basic needs over centuries. https://chatgpt.com/share/696fb3e8-91d4-800a-9b2b-32eacdadebc5 https://chatgpt.com/share/696fb3e8-91d4-800a-9b2b-32eacdadeb...

spicyusername 10mo ago
First link to ChatGPT as a "source" that I've seen in the wild. Times they are a-changing. I can't say that anyone is going to find that very convincing, even if it's a compelling idea to consider gold inflation over the centuries.
- gamacodre 10mo ago
  Yeah, I saw that link and had a few thoughts immediately collide in my head: - Wait, WTF? Really?? - But but but it's a *chatbot*, not an authority - We're doomed
- duskwuff 10mo ago
  Unless there's something I'm missing, there isn't even a response at the link - just a question. (And if that was how the user posed the question, I'd be concerned that priming the chat with "is it true that..." biased the response towards "yes, it's true".)
RealityVoid 10mo ago
Ahh, yes, gold and the speed of light in a vacuum - the only real constants in the real universe.
tyuu 10mo ago
A goat costs exactly (not roughly) the same in goats today as it cost 2000 years ago. So by that measure a goat is the only stable measure of the value of basic needs over centuries.
- 10mo ago

tyuu 10mo ago

That chart is also really weird. With log scale turned off and expanded to all time... https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart Makes it look like the US peaked at Sep 2000 and has been downhill ever since. Doesn't track at all with GDP which has almost doubled since 2000. I.e. it doesn't track with growth, but does track with dollar index somewhat, which makes sense because it's tracking a dollar value intermediate when considering "how much gold it takes to buy S&P 500", which means it really ends up tracking something else entirely. > Compared to real money (Gold) the S&P500 is down over the past 10 years. [4] Isn't this the real chart to look at for that? Completely different story when you select max on the timeline. https://www.perplexity.ai/finance/%5EGSPC?comparing=GCUSD https://www.perplexity.ai/finance/%5EGSPC?comparing=GCUSD Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives. (Albeit to be fair, the trend is towards conservative advice...my life was uniquely affected in terms of limiting upside, so I am at least grateful that most online posts work very hard to limit downside.)

dcl 10mo ago
S&P gets you dividends though, so the interpretation of that chart is tricky. Holding the S&P, you can still do better than holding gold, even when the GOLD/S&P ratio is positive.
derangedHorse 10mo ago
> Isn't this the real chart to look at for that? No, the perplexity chart is actually a really bad one to look at. It tracks a derivative of gold from 1975 onwards from which the S&P already accrued over 350% in returns. They also started the gold derivative off at a price of $178 while using the initial price of $17.57 to calculate S&P returns. > Personally I am about $10M USD poorer for listening to people on the internet. I wish people would not spread falsities about finance that can actually ruin lives. Ideally no one would blindly follow advice they don't understand or can't accept into their own mental model.
- tyuu 10mo ago