Costco gold bars are selling out within hours(cnbc.com)
cnbc.com
Costco gold bars are selling out within hours
https://www.cnbc.com/2023/09/27/costco-is-selling-gold-bars-and-they-are-selling-out-within-a-few-hours.html
505 comments
You can see it happening right now in Argentina: the local currency is worthless, and people are flocking to ... US Dollars. Not gold, not bitcoins, but good old benjamins.
So gold isn't even a good inflation hedge: if you walked the streets of a failing economy (pick one: Argentina, Venezuela, Sri Lanka, there's plenty more) and tried to exchange gold for goods, you're not gonna get far (and will probably get mugged). You have to figure out how to convert that gold into something somebody will actually take, and that seems like the hard part.
So gold isn't even a good inflation hedge: if you walked the streets of a failing economy (pick one: Argentina, Venezuela, Sri Lanka, there's plenty more) and tried to exchange gold for goods, you're not gonna get far (and will probably get mugged). You have to figure out how to convert that gold into something somebody will actually take, and that seems like the hard part.
I notice this when travelling the world and it's one of the main reasons I think the many of the arguments for cryptocurrency are flawed. I've used decades old dollar bills in SE Asia that have been pretty much detached from the US economy for decades and have held value better than bitcoin ever has. The value of the dollar is linked not just to the US economy but also a global black economy and that has some unoffical influence on exchange rates & dollar value.
This will be true right up until the point it is not. The US dollar dominance is not a feature of the universe, it's a social agreement that, like any such agreement, will eventually come undone.
Eventually, but that eventually shows no sign of stopping soon. There are two cases where it stops: the US decides to replace the dollar with something else, and there is a clear trade in program (the EU went to the Euro, and India did something similar); or things change slowly over time so you will have plenty of time where your dollar maybe isn't worth what it was yesterday but still is worth almost a dollar - odds are you don't hold dollars long enough or that loss of value to matter.
Or, the mostly likely result and the path we are on, hyperinflation.
We hyperinflate the currency by printing $trillllions a year and hading it out to countries at war, businesses that have failed and defending the oceans.
USD has already been hyperinflated, its just the affects are being felt slowly as the money "trickles down" from the 1% to the rest of us.
It's why collectables, real estate and such were the first assets to inflate, because that's what the rich buy, food inflation is much slower.
Hyperinflation is coming, I've been saying it and buying gold since QE1 back in '08.
We hyperinflate the currency by printing $trillllions a year and hading it out to countries at war, businesses that have failed and defending the oceans.
USD has already been hyperinflated, its just the affects are being felt slowly as the money "trickles down" from the 1% to the rest of us.
It's why collectables, real estate and such were the first assets to inflate, because that's what the rich buy, food inflation is much slower.
Hyperinflation is coming, I've been saying it and buying gold since QE1 back in '08.
You're forgetting the case where the US dollar gets hyperinflated or highly inflated due to something like a debt crisis. Speaking of which...$33 trillion.
A hundred years ago a US silver dollar would buy you a decent steak dinner, and naturally a US $10 gold eagle coin would serve 10 people.
Now that same kind of dinner can still be had for the same silver dollar, but the amount of gold in the small 1923 gold eagle[0] would be enough to serve 30 today, not merely the 10 diners of 100 years ago.
And some of these are nice restaurants.
Today if your dollar does not contain the full ounce of silver it was originally intended to, and all you have is a $1 bank note instead, it still buys a kid-sized ice cream cone at McDonald's. Now sometimes only during special promotions depending on market.
[0] Regular ordinary legal tender, but were all confiscated by the government because they were gold in 1933, when the ownership of gold by Americans was outlawed until decades later (only after its backing of the dollar was discontinued).
Now that same kind of dinner can still be had for the same silver dollar, but the amount of gold in the small 1923 gold eagle[0] would be enough to serve 30 today, not merely the 10 diners of 100 years ago.
And some of these are nice restaurants.
Today if your dollar does not contain the full ounce of silver it was originally intended to, and all you have is a $1 bank note instead, it still buys a kid-sized ice cream cone at McDonald's. Now sometimes only during special promotions depending on market.
[0] Regular ordinary legal tender, but were all confiscated by the government because they were gold in 1933, when the ownership of gold by Americans was outlawed until decades later (only after its backing of the dollar was discontinued).
Thanks for the info, I didn't know back in the 19th century that the US also used bimetallic currency where 10 US silver dollar is equivalent to 1 gold coin.
This has been (more or less) the standard since like forever, for at least several thousand of years including in major world's empires including the Greek, Persian, Roman (Rome and Byzantine), Islamic (Rashidun, Umayyad, Abbasid, Ottoman) and British Empire until 19th century where bimetallic currency namely silver coin (dirham) and gold coin (dinar) were pervasive.
Fun facts, the word dirham in Islamic empire is derived from the word drachma with the same meaning in Greek, while dinar is derived from the Roman word denarius.
This has been (more or less) the standard since like forever, for at least several thousand of years including in major world's empires including the Greek, Persian, Roman (Rome and Byzantine), Islamic (Rashidun, Umayyad, Abbasid, Ottoman) and British Empire until 19th century where bimetallic currency namely silver coin (dirham) and gold coin (dinar) were pervasive.
Fun facts, the word dirham in Islamic empire is derived from the word drachma with the same meaning in Greek, while dinar is derived from the Roman word denarius.
Bimetallic currencies were a hairball for every major economy for decades. If you tie a currency to gold or silver alone, and the other a sort of token sense, it generally works.
When you try to do both, you end up with situations where the government gets incentivized to take a metal that's fairly low value, and stamp a design into it to infuse it with new value. Silver bullion in the 1880s that might be worth 60 cents an ounce suddenly went up to a buck and change when you turned it into a Morgan or Trade Dollar. I suspect the introduction of the $20 gold piece in 1849 (and possibly the $3 in 1854) were in part to sop up a glut on the gold market.
When you try to do both, you end up with situations where the government gets incentivized to take a metal that's fairly low value, and stamp a design into it to infuse it with new value. Silver bullion in the 1880s that might be worth 60 cents an ounce suddenly went up to a buck and change when you turned it into a Morgan or Trade Dollar. I suspect the introduction of the $20 gold piece in 1849 (and possibly the $3 in 1854) were in part to sop up a glut on the gold market.
I like yours but, the rule of thumb for gold I've heard is that from Roman time until today, a 1 oz gold coin is enough to buy a suit of clothes and a fancy dinner.
This may change tomorrow when the republicans again hold the economy hostage demanding increasingly unhinged political concessions. They can do this till the dollar isn’t a useful currency anymore.
It probably won’t come to that but we don’t know. And uncertainty is bad for business.
It probably won’t come to that but we don’t know. And uncertainty is bad for business.
What political concessions are they demanding? The primary one is reducing government spending. The US Govt cannot keep its current rate of spending and the democrats in the House of Representatives don’t yet see that. Interest on the government debt has grown to $640 billion dollars in 2023. That is 16% of all government revenues now (in 2023). The outstanding debt only grows due to the ~$1.5 Trillion dollar deficit between revenue and the reckless spending. To say congress has been spending like a drunken sailor would be an insult to drunken sailors. I hope congress changes that in the new budget bill by cutting spending.
Not to sound hyperbolic but I feel once the US Dollar crashes entirely to the degree that it no longer serves as a "default currency" of sorts, that society will have broken down far enough that even the gold will be relatively worthless and the predominant goods of choice will be cans of dog food and beans.
For a year you will be correct. However after a year what is left will start to rebuild, and gold works better than beans (remember the cans are all eaten by now - we are talking beans someone actually grew). The problem with beans is they spoil (even carefully stored): eventually someone says "I have all the beans I need now, but I still want to sell my shoes". Using something like gold as an agreed medium of exchanges means the bean grower and shoe maker can make an exchange without trying to put together a complex trade involving a dozen people just to get enough of various goods to satisfy the show maker. Instead the shoemaker can get some gold and then buy everything as an individual transaction - and the people he buys from can in turn go to the bean grower if they want beans.
Or instead of gold they can just trade the empty cans and if you happen to have enough of a functioning society they can also just trade on debt (see Tallysticks [1]).
Investing in gold as a hedge for the collapse of society is imo a really piss-poor idea. Either invest in stuff you can use (i.e. food) or stuff that will be demand (Ham radios, firearms). Gold is just not going to be the future medium of currency there isn't enough of it in practical sized values.
[1]: https://en.wikipedia.org/wiki/History_of_money#Overview
Investing in gold as a hedge for the collapse of society is imo a really piss-poor idea. Either invest in stuff you can use (i.e. food) or stuff that will be demand (Ham radios, firearms). Gold is just not going to be the future medium of currency there isn't enough of it in practical sized values.
[1]: https://en.wikipedia.org/wiki/History_of_money#Overview
Gold - because it is pretty - will always have some value.
Ham radio is only useful if you can power it and find someone else with one who can also power it, my guess not enough people will have them to be useful. firearms are only useful if you have ammo - while you can make bullets and black power it is hard to say if it is worth it. I doubt there will be much firearm trade unless there is an ammo manufacturing (no longer society collapse - though a much more likely scenereo) - people who have ammo will keep the guns that go with it.
I'm not disagreeing that there are plenty of things other than gold to hold onto. However gold is still a reasonable choice for post disaster trade for the same reasons society settled on it in the first place. (note that society also used copper and silver for trade)
Ham radio is only useful if you can power it and find someone else with one who can also power it, my guess not enough people will have them to be useful. firearms are only useful if you have ammo - while you can make bullets and black power it is hard to say if it is worth it. I doubt there will be much firearm trade unless there is an ammo manufacturing (no longer society collapse - though a much more likely scenereo) - people who have ammo will keep the guns that go with it.
I'm not disagreeing that there are plenty of things other than gold to hold onto. However gold is still a reasonable choice for post disaster trade for the same reasons society settled on it in the first place. (note that society also used copper and silver for trade)
The price of gold is only relative to the dollar. We don't spend money in the current economy with ounces of gold. We do know how much stuff should roughly cost in US dollars (or local currency). So if I go to the barber, I'll get a hair cut on credit, to be paid later by either direct barter or from credit that I paid someone else.
Roman currency (both the coinage and the numeric value promixal to goods) lasted for years after the empire fell. It was just easier to use that relative value, and rely on local credit
Roman currency (both the coinage and the numeric value promixal to goods) lasted for years after the empire fell. It was just easier to use that relative value, and rely on local credit
It's possible another power will peacefully take that place, kinda like how the US Dollar usurped the British Pound without a war between those countries.
The pound wasn’t really displaced peacefully (WWII being rather the polar opposite of peace), even though the replacement happened to be from a friendly power.
Compared to
> "society will have broken down far enough that even the gold will be relatively worthless and the predominant goods of choice will be cans of dog food and beans.
it absolutely was peaceful, especially in those two countries.
> "society will have broken down far enough that even the gold will be relatively worthless and the predominant goods of choice will be cans of dog food and beans.
it absolutely was peaceful, especially in those two countries.
WW2 and the period just after wherein the British Empire experienced rapid disassembly—the context for the collapse also of the Pound Sterling as the primary global currency—were not a period that was “absolutely peaceful” in the USA and the British Empire, or the world in general.
Again, yes, it was peaceful BETWEEN the US ans UK, but your thesis that the primary global currency can collapse peacefully without a catastrophic global crisis is... well, picking the transition of the Pound to make that point is not a choice I would have gone with.
Again, yes, it was peaceful BETWEEN the US ans UK, but your thesis that the primary global currency can collapse peacefully without a catastrophic global crisis is... well, picking the transition of the Pound to make that point is not a choice I would have gone with.
At that point the guys with guns take what they want so nothing you have is worth anything any more.
Cryptocurrencies are inherently bad currencies because of price volatility (except stable coins).
That also makes them good speculative assets fwiw
That also makes them good speculative assets fwiw
The price volatility is an aspect of the fact that existing cryptocurrencies aren't very useful for paying for things, so that the only thing they're useful for is speculating. A cryptocurrency that lacked speculation and which was widely used for payment would be much more stable.
Stanlecoins are even worse. When they unpeg as all must, everything falls apart.
and stablecoins are always fraudulent
Interesting. You sound like you know a lot about the subject, to be so confident. Could you please explain how, for example, DAI is fraudulent?
Usually. But only if they offer you an intetest rate dramatically above the short-term rate on the corresponding govt bill/bond - e.g USD 2yr.
> it's a social agreement that, like any such agreement, will eventually come undone
unless we agree for it not to. it took faith in a social structure to put the system together, and as long as it's maintained, it will stay together.
there's likely no invisible hand that builds and then ruins all of our achievements (unless we want to believe there is one (which makes it just us again in the end))
unless we agree for it not to. it took faith in a social structure to put the system together, and as long as it's maintained, it will stay together.
there's likely no invisible hand that builds and then ruins all of our achievements (unless we want to believe there is one (which makes it just us again in the end))
Well yeah, but of course it's kinda hard to just go ask the people who make monetary policy for the global black-market economy, since they wouldn't want to admit to any of it.
The dollar system is bad, but it’s the least bad we can see. There isn’t even a close second. It will take generations at the rate every possible competitor is also self destructing.
> I've used decades old dollar bills in SE Asia that have been pretty much detached from the US economy for decades and have held value better than bitcoin ever has.
I'm not sure what makes you feel that way. Gold and Bitcoin are up against the dollar in the past decade, and by a significant margin. Bitcoin is up ~225x against the dollar. Gold is up ~50x against the dollar going back five decades. The US dollar is pretty terrible at holding value.
I'm not sure what makes you feel that way. Gold and Bitcoin are up against the dollar in the past decade, and by a significant margin. Bitcoin is up ~225x against the dollar. Gold is up ~50x against the dollar going back five decades. The US dollar is pretty terrible at holding value.
If you had bought something productive like the S&P500 50 years ago, would have outperformed gold easily. No-one wants to long-term just store value unproductively (which is also bad from a macro perspective).
> If you had bought something productive like the S&P500 50 years ago, would have outperformed gold
That's correct. Almost everything beats the US dollar (except other fiat currencies).
That's correct. Almost everything beats the US dollar (except other fiat currencies).
As I said, currency is by design (targeted positive inflation) not there to be a long-term store of value. Not sure anything but productive assets could really be that.
> Not sure anything but productive assets could really be that.
reply
I just mentioned one: gold. It's a bit early to tell for Bitcoin, of course it's probably not going to be doing 225x every decade, but I could see it holding its value better than the US dollar does.
I just mentioned one: gold. It's a bit early to tell for Bitcoin, of course it's probably not going to be doing 225x every decade, but I could see it holding its value better than the US dollar does.
Not sure about gold in the really long-term. There is some data but those comparisons are quite difficult and often flawed. For example, the amount of work you can buy per unit weight of gold might very well be down noticeably from the middle ages.
Bitcoin we can come back to in another 150 years or so.
Bitcoin we can come back to in another 150 years or so.
> For example, the amount of work you can buy per unit weight of gold might very well be down noticeably from the middle ages.
Interesting, I didn't know that. On the other hand, it's hard to imagine what other asset would have successfully preserved its value all the way back to the Middle Ages. Certainly not company shares. Real estate maybe? Although that would require maintaining ownership through numerous wars, revolutions and tax regimes.
Interesting, I didn't know that. On the other hand, it's hard to imagine what other asset would have successfully preserved its value all the way back to the Middle Ages. Certainly not company shares. Real estate maybe? Although that would require maintaining ownership through numerous wars, revolutions and tax regimes.
Time in the market is the dumbest thing ever propagated on society by the media. Seriously it's so easy to buy low and sell high if you pay the people who watch markets. I find the issue with knowledge workers is er overestimate our skill and don't realize how dumb we really are. For example I helped Tesla and should have sold last year but didn't listen to to the guy I'm paying $1500/month yet if I did I could have bought in January and sell again today. Next time I'll be better prepared.
Same with gold, buy low and sell high.
Same with gold, buy low and sell high.
Yes… but it’s a great currency, unlike gold or Bitcoin.
You could also find individual stocks or maybe even the S&P500 and compare those to the dollar as well (and to each other).
You could also find individual stocks or maybe even the S&P500 and compare those to the dollar as well (and to each other).
Sure. If you want to buy a pad Thai in Thailand, US dollars are probably going to be more widely accepted. On the other hand, if you have savings in an inflating currency, you might want to convert them to a medium that holds value well in the long term, rather than US dollars. That does include S&P500 stocks but those are not bearer instruments and not easily accessible, especially in foreign countries.
Well you can sell the stock and convert it into dollars and then use those. That's something I can do easily today if I wanted regardless of the country I'm in so long as I have the Internet and an ATM.
Gold you can't travel with (weight and loss due to theft and also probably actually illegal) and is also not accessible, and Bitcoin you can't buy a coffee with. Other available crypto currencies just do worse jobs than Bitcoin or dollars at their respective functions.
The key here is to understand that monetary instruments have pros/cons. Dollars have the con that they aren't a great store of value (and this is by design). Dollars have the pro that they are widely accepted, hold their value in the short term (i.e. not volatile), and are highly liquid. Bitcoin has the pro that it's a great store of value, but has cons like inability to transact. Stocks are liquid but volatile, etc.
Gold you can't travel with (weight and loss due to theft and also probably actually illegal) and is also not accessible, and Bitcoin you can't buy a coffee with. Other available crypto currencies just do worse jobs than Bitcoin or dollars at their respective functions.
The key here is to understand that monetary instruments have pros/cons. Dollars have the con that they aren't a great store of value (and this is by design). Dollars have the pro that they are widely accepted, hold their value in the short term (i.e. not volatile), and are highly liquid. Bitcoin has the pro that it's a great store of value, but has cons like inability to transact. Stocks are liquid but volatile, etc.
> That's something I can do easily today if I wanted regardless of the country I'm in so long as I have the Internet and an ATM.
That's not the case for most people in most countries. There are billions of people who are not even able to open a bank account, let alone a US stock brokerage account. Bitcoin and gold are way more accessible to the average person.
I agree that every instrument has a different set of tradeoffs though.
That's not the case for most people in most countries. There are billions of people who are not even able to open a bank account, let alone a US stock brokerage account. Bitcoin and gold are way more accessible to the average person.
I agree that every instrument has a different set of tradeoffs though.
KYC/AML has made this much worse (on purpose - limit access to financial services without any real effect on terrorism or money laundering).
Your bank knows you, perhaps for many years. Then you move country, or lose your phone, and suddenly they have forgotten you, and you face an uphill nightmare to retain your old accounts.
A share certificate should be a bearer asset, but it is not accepted anywhere outside the original jurisdiction (e.g. EEA for UK/European shares).
Your bank knows you, perhaps for many years. Then you move country, or lose your phone, and suddenly they have forgotten you, and you face an uphill nightmare to retain your old accounts.
A share certificate should be a bearer asset, but it is not accepted anywhere outside the original jurisdiction (e.g. EEA for UK/European shares).
> Gold you can't travel with (weight and loss due to theft and also probably actually illegal)
Which country? Last week I travelled on planes in USA and may have carried 35 pounds of silver coin, about a pound of gold coin, and >$10k cash. No problems other than being careful putting bag in overhead bin.
Travelling in/out of countries like Turkey with metal in carry-on has always been easy. One time the screener was curious and wanted to see some coin, but no problem.
Diversified bearer instruments are a prudent way to proceed into the coming government chaos in next ten years.
> Well you can sell the stock and convert it into dollars
How well did that work the entire week after 9/11?
Which country? Last week I travelled on planes in USA and may have carried 35 pounds of silver coin, about a pound of gold coin, and >$10k cash. No problems other than being careful putting bag in overhead bin.
Travelling in/out of countries like Turkey with metal in carry-on has always been easy. One time the screener was curious and wanted to see some coin, but no problem.
Diversified bearer instruments are a prudent way to proceed into the coming government chaos in next ten years.
> Well you can sell the stock and convert it into dollars
How well did that work the entire week after 9/11?
There are numerous countries with controls over money entering or, more often, leaving the territory. This can apply to cash, gold, or other valuables. The issue generally falls under the general realm of customs regulations though also capital controls. Domestic travel generally as fewer, and often (but not always) no limits. Risks of seizure, forfeiture, and outright theft should also be considered. It's generally recommended to not check valuables.
Shipping valuables as insured cargo is another option.
Shipping valuables as insured cargo is another option.
> Risks of seizure
That happens with account balances in USA. Try to fight an account seizure after the fact in courts in USA, and be prepared to lose.
Tangible items including metal are diversification, and bitcoin and ethereum are incredible across borders.
That happens with account balances in USA. Try to fight an account seizure after the fact in courts in USA, and be prepared to lose.
Tangible items including metal are diversification, and bitcoin and ethereum are incredible across borders.
Currency is currency.
Assets are assets.
Claiming that an asset is better than a currency because it’s better at what assets are supposed to do and currencies are explicitly not supposed to do is strange to say the least.
Assets are assets.
Claiming that an asset is better than a currency because it’s better at what assets are supposed to do and currencies are explicitly not supposed to do is strange to say the least.
Whilst true, there are distinct classes and types of assets, with differing characteristics.
Currency is exceptionally liquid (interchangeable) and nearly-universally accepted within a particular region.
Stocks, bonds, and other financialised instruments tend to be better inflation hedges, as currency will, does, and should inflate and deflate to meet actual transaction needs, and to dilute excessively burdensome debts.
Real estate is exceptionally durable, tends to hold value well (excepting speculative bubbles), and serves excellently as collateral for debt. Other long-term tangible property (e.g., industrial plant and equipment) can play a similar role.
Commodities tend to be intermediate between cash and other forms of financialised instruments, generally having inherent liquidity (that is, the commodity can be sold for use-value), as well as its investment role.
Collectables ranging from fine arts to wines to luxury automobiles tend to have hold value well (again, modulo speculative bubbles), and are both more readily stored and transported than real estate.
Cryptocurrencies tend to most strongly resemble the latter, in both their intrinsic durability (which is NOT the same as price stability), and their portability, which is to say that they serve as a highly effective way of moving financial wealth between jurisdictions, often without any external visibility, though of course blockchain transactions, like diamonds, are forever.
Currency is exceptionally liquid (interchangeable) and nearly-universally accepted within a particular region.
Stocks, bonds, and other financialised instruments tend to be better inflation hedges, as currency will, does, and should inflate and deflate to meet actual transaction needs, and to dilute excessively burdensome debts.
Real estate is exceptionally durable, tends to hold value well (excepting speculative bubbles), and serves excellently as collateral for debt. Other long-term tangible property (e.g., industrial plant and equipment) can play a similar role.
Commodities tend to be intermediate between cash and other forms of financialised instruments, generally having inherent liquidity (that is, the commodity can be sold for use-value), as well as its investment role.
Collectables ranging from fine arts to wines to luxury automobiles tend to have hold value well (again, modulo speculative bubbles), and are both more readily stored and transported than real estate.
Cryptocurrencies tend to most strongly resemble the latter, in both their intrinsic durability (which is NOT the same as price stability), and their portability, which is to say that they serve as a highly effective way of moving financial wealth between jurisdictions, often without any external visibility, though of course blockchain transactions, like diamonds, are forever.
Yea I read the Sovereign Citizen too
> internet and atm
Power and ATMs were out for two weeks on Puerto Rico, which is basically run by the USA. Maybe keep a couple weeks of cash under the mattress.
https://www.cnn.com/2022/10/01/us/hurricane-fiona-puerto-ric...
Power and ATMs were out for two weeks on Puerto Rico, which is basically run by the USA. Maybe keep a couple weeks of cash under the mattress.
https://www.cnn.com/2022/10/01/us/hurricane-fiona-puerto-ric...
Bitcoin claims to be a great store of value, but is terrible at it.
Seriously look at the last 10 year chart of Bitcoin vs USD (or if you want purchasing power) - its far, far too volatile to be a store of value.
Seriously look at the last 10 year chart of Bitcoin vs USD (or if you want purchasing power) - its far, far too volatile to be a store of value.
Your talk about gold being “up against the dollar” shows that you simply don’t understand what a currency is.
But don’t worry, there’s an entire scam industry (the other thing you mention) built almost entirely on people not understanding the difference between an asset and a currency and the almost diametrically opposite roles and purposes of the two.
But don’t worry, there’s an entire scam industry (the other thing you mention) built almost entirely on people not understanding the difference between an asset and a currency and the almost diametrically opposite roles and purposes of the two.
The USD retains its value because it's used as a global currency, it's as simple as that.
Not because US bills are used in SE Asia or other places but because big transactions (like oil) are done in USD.
Not because US bills are used in SE Asia or other places but because big transactions (like oil) are done in USD.
I agree that USD, regardless of its waining value, is fairly universal. If I was going to start a country, I would start with USD as the currency instead of risking insane volatility. However, as discussed in the Bitcoin whitepaper, one of its pinnacle features is it is (supposedly) not controlled by a single entity or government or private institution, or really any institution. So the advantage of USD being tethered to the USA government is both a feature and a flaw, and BTC not being tethered to anything is both a feature and a flaw.
That might be a thing in countries with less stable currencies. You won't see anyone with dollars in Europe or Japan.
Bitcoin has greatly increased in price while the USD has dumped in value exclusively for decades. The dollar has lost 95%+ of it's original purchasing power when they took it off the gold standard. The dollar doesn't hold value at all, it's losing value due to inflation every single day. Just less rapidly than some other currencies that are manipulated to an even higher degree. Do you pay attention to food, housing, or insurance prices? They have increased _significantly_ in just the past 3 years.
I don't understand, Bitcoin has gone up in value much more than any currency you must be referring to.
Not exactly. I just sent this link to my (Argentine) friends with a different observation. My observation was: The United States is starting to look like Argentina.
You must understand: Most Americans are not accustomed to shoving a third party currency under their mattress, or buying physical gold. The phenomenon of hyperinflation is foreign to them, and there's a steep learning curve.
The actual significance of this is that metal is being offered at a "blue dollar" rate by one of the three largest retailers in America. Prior to there being any concept of blue dollars here. This is going to influence spot prices. The people buying this are too stupid to even go to their local coin dealer. (Which I do, sometimes, go to my local coin dealer - and trust me - the people there to buy are generally pretty stupid).
If I had an hour, I'd like to expound on the significance of Americans buying precious metal at a loss through a giant vertical monopoly. But I'll leave it at the fact that they seem to be starting to alert themselves to the one critical thing that has defined Argentinian inflation for the past 20 years: Bullshit figures from the government saying the currency is stabilized, at the same time as the government takes obvious punitive measures to curb inflation. This leads to distrust which leads to the demolition of the currency.
Argentines can take a 20% drop in the Peso with a morning medialuna. Americans have no fucking idea what's going on. Americans have barely begun to put together the networks to measure it - and is evidenced by Costco taking advantage here, Americans have absolutely no peer-to-peer ways of negotiating the value of a dollar against value anymore. That's quite a dangerous situation, because it means prices are psychologically still thought of as an "act of God" as opposed to any true understanding of who is outpacing whom.
Like I said, inflation and hyperinflation especially are a steep learning curve.
If I were living in BsAs, I'd begin looking for something else to put under the floorboards besides USD. And voting for that clown who wants to tie ARS to USD as if it was 1983 is probably like trying to get tickets to the Titanic right before it sinks. You can do better than resurrecting Menem's economy. (Then again, the Fernandez are even bigger clowns, which is why I refuse to engage in anyone's politics in Argentina).
You must understand: Most Americans are not accustomed to shoving a third party currency under their mattress, or buying physical gold. The phenomenon of hyperinflation is foreign to them, and there's a steep learning curve.
The actual significance of this is that metal is being offered at a "blue dollar" rate by one of the three largest retailers in America. Prior to there being any concept of blue dollars here. This is going to influence spot prices. The people buying this are too stupid to even go to their local coin dealer. (Which I do, sometimes, go to my local coin dealer - and trust me - the people there to buy are generally pretty stupid).
If I had an hour, I'd like to expound on the significance of Americans buying precious metal at a loss through a giant vertical monopoly. But I'll leave it at the fact that they seem to be starting to alert themselves to the one critical thing that has defined Argentinian inflation for the past 20 years: Bullshit figures from the government saying the currency is stabilized, at the same time as the government takes obvious punitive measures to curb inflation. This leads to distrust which leads to the demolition of the currency.
Argentines can take a 20% drop in the Peso with a morning medialuna. Americans have no fucking idea what's going on. Americans have barely begun to put together the networks to measure it - and is evidenced by Costco taking advantage here, Americans have absolutely no peer-to-peer ways of negotiating the value of a dollar against value anymore. That's quite a dangerous situation, because it means prices are psychologically still thought of as an "act of God" as opposed to any true understanding of who is outpacing whom.
Like I said, inflation and hyperinflation especially are a steep learning curve.
If I were living in BsAs, I'd begin looking for something else to put under the floorboards besides USD. And voting for that clown who wants to tie ARS to USD as if it was 1983 is probably like trying to get tickets to the Titanic right before it sinks. You can do better than resurrecting Menem's economy. (Then again, the Fernandez are even bigger clowns, which is why I refuse to engage in anyone's politics in Argentina).
> If I had an hour, I'd like to expound on the significance of Americans buying precious metal at a loss through a giant vertical monopoly.
Costco occasionally sells gold below spot if Reddit is to be believed. Most of the time it's right around spot. These 1oz bars were going for $1900 give or take, which is spot give or take. It's fairly common to see a small ~$50 ish premium on small quantities like this, around 2-3%.
Costco is also not a monopoly, and it's not really vertically integrated - these bars come from PAMP, a Swiss company.
You can get gold for exactly spot if you have a lot of money - just buy a futures contract and stand for delivery.
Costco occasionally sells gold below spot if Reddit is to be believed. Most of the time it's right around spot. These 1oz bars were going for $1900 give or take, which is spot give or take. It's fairly common to see a small ~$50 ish premium on small quantities like this, around 2-3%.
Costco is also not a monopoly, and it's not really vertically integrated - these bars come from PAMP, a Swiss company.
You can get gold for exactly spot if you have a lot of money - just buy a futures contract and stand for delivery.
Costco's not a monopoly by the current definition, but they do occupy a very cozy spot between wholesale and retail, and they do vertically control everything Kirkland from mayonnaise to roast chicken. We have a strange situation right now, in the US, in which any company with at least one major competitor is considered good for the free market; and it takes a hell of a lot of work to show that those two competitors are working together. But they don't actually need to be price-fixing with each other in a classical way. One has $5 roast chickens and the other has free oil changes. This, then, is the apotheosis of consumer choice? Fuckit, I own stocks of both of them and I just hope the American consumer goes broke before I do.
> But they don't actually need to be price-fixing with each other in a classical way.
Spot on. There doesn't have to be a conspiracy. Like entities with like goals and finite ways to maximize will follow similar or like paths.
The example I like to use are starlings (birds) and murmurations. Obviously, the birds aren't conspiring in any way. And yet they magically move in sync. Business competitors can do the same. So do political parties.
It's not a conspiracy. It's murmuration.
p.s. There's actually a more scientific term. I think it's in the math theory field about the study of such patterns. Starlings are simply the goto example.
https://m.youtube.com/watch?v=uV54oa0SyMc&pp=ygUVc3Rhcmxpbmd...
Spot on. There doesn't have to be a conspiracy. Like entities with like goals and finite ways to maximize will follow similar or like paths.
The example I like to use are starlings (birds) and murmurations. Obviously, the birds aren't conspiring in any way. And yet they magically move in sync. Business competitors can do the same. So do political parties.
It's not a conspiracy. It's murmuration.
p.s. There's actually a more scientific term. I think it's in the math theory field about the study of such patterns. Starlings are simply the goto example.
https://m.youtube.com/watch?v=uV54oa0SyMc&pp=ygUVc3Rhcmxpbmd...
Thank you for reading what I was actually saying.
Yes; flocking behavior is sufficient to explain how two or three supposed competitors can simulate a free market while profiting from monopolistic behavior. And it's also a fantastically nifty adaptation to allow any one entity to skirt the legislative hammer.
Yes; flocking behavior is sufficient to explain how two or three supposed competitors can simulate a free market while profiting from monopolistic behavior. And it's also a fantastically nifty adaptation to allow any one entity to skirt the legislative hammer.
Cronie Capitalism does help as well. When the gov puts it thumb on the scale and clears a clear-enough path, only a fool wouldn't follow the path of least resistance.
Suppose the government did put its thumb on the scale here, how would it impact consumers? Will they now be able to shop for lower prices at a business that earns 1% profit margin or less instead of the 2.6% profit margin that Costco has managed to climb to?
The government is not supposed to be in the favoritism business. When that happens, as we're seeing, there are unexpected and/or unwanted consequences. The government is supposed to level the playing field, not the other way around.
How does the government favoritize Costco?
Technology and economies of scale favor Costco, and Walmart and etc. And people obviously like the low prices due to the economies of scale.
Technology and economies of scale favor Costco, and Walmart and etc. And people obviously like the low prices due to the economies of scale.
Two examples come to mind...
Regulation. Be it local, state and/or federal. The larger the organization, the more resources it has to mitigate / remedy such friction.
The irony? Regulation is also self-serving to gov in the sense it perpetuates ththe gov's need to prove it needs to exit, "create more jobs", etc. But that's another discussion for another day.
Two, lack of national *affordable* universal healthcare. Again, larger companies are better able to fill this gap, offer the benefit, and thus draw better employees, etc.
Regulation. Be it local, state and/or federal. The larger the organization, the more resources it has to mitigate / remedy such friction.
The irony? Regulation is also self-serving to gov in the sense it perpetuates ththe gov's need to prove it needs to exit, "create more jobs", etc. But that's another discussion for another day.
Two, lack of national *affordable* universal healthcare. Again, larger companies are better able to fill this gap, offer the benefit, and thus draw better employees, etc.
>But they don't actually need to be price-fixing with each other in a classical way.
Because they operate with 2% and 3% profit margins.
How much better do you think the prices can get for buyers?
>they do vertically control everything Kirkland from mayonnaise to roast chicken.
No, they do not. They hire other businesses to make everything that is branded Kirkland. They do not own any factories or poultry farms.
If anything, Costco spreads horizontally. They sell groceries, car tires and batteries, medicines (pharmacy), clothing, electronics, etc.
Because they operate with 2% and 3% profit margins.
How much better do you think the prices can get for buyers?
>they do vertically control everything Kirkland from mayonnaise to roast chicken.
No, they do not. They hire other businesses to make everything that is branded Kirkland. They do not own any factories or poultry farms.
If anything, Costco spreads horizontally. They sell groceries, car tires and batteries, medicines (pharmacy), clothing, electronics, etc.
> We have a strange situation right now, in the US, in which any company with at least one major competitor is considered good for the free market; (...)
Wasn't Amazon just sued by the FTC due to anticompetitive practices?
Wasn't Amazon just sued by the FTC due to anticompetitive practices?
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Argentina has 100% annual inflation and going up while the US has less than 10% and going down. The USD is not going anywhere spectacular, because there is no more stable country to flee to.
The one thing that can reliably trigger inflation in almost any country is oil/gas shortages on the global market, and you can't hedge that with precious metals nor store a 20 year supply in your house.
The one thing that can reliably trigger inflation in almost any country is oil/gas shortages on the global market, and you can't hedge that with precious metals nor store a 20 year supply in your house.
>> the US has less than 10% and going down
First of all, there's no evidence it's going down. Secondly, 10% is a wild figure. That's far over the breach for the population to begin to alter their behaviour by either hoarding or spending.
My point was, the mentality of coping with even 10% inflation is very foreign to Americans. But it's a learned skill, and people will learn it. When they do, it will resemble Argentina during the 10% phases (2003-2012 for instance). That's not necessarily terrible if you're coming down from 100%, but it's a brand new experience that Americans haven't come around to.
And it does a lot of very weird things to your politics.
It makes everything more populist far-right or far-left than it would need to be otherwise. It feeds into conspiratorial thinking. It is a regressive tax.
10% is a HUGE regressive tax right now on American citizens, and it's kind of a miracle that they haven't rioted more.
First of all, there's no evidence it's going down. Secondly, 10% is a wild figure. That's far over the breach for the population to begin to alter their behaviour by either hoarding or spending.
My point was, the mentality of coping with even 10% inflation is very foreign to Americans. But it's a learned skill, and people will learn it. When they do, it will resemble Argentina during the 10% phases (2003-2012 for instance). That's not necessarily terrible if you're coming down from 100%, but it's a brand new experience that Americans haven't come around to.
And it does a lot of very weird things to your politics.
It makes everything more populist far-right or far-left than it would need to be otherwise. It feeds into conspiratorial thinking. It is a regressive tax.
10% is a HUGE regressive tax right now on American citizens, and it's kind of a miracle that they haven't rioted more.
> there's no evidence it's going down
https://www.statista.com/statistics/273418/unadjusted-monthl...
Prices won't go down, but the rate of change of prices can go down.
> begin to alter their behaviour by either hoarding or spending.
Median savings is not huge: https://www.usnews.com/banking/articles/the-average-savings-...
Not to mention that middle America has fixed rate 30 year mortgages, an absolutely extraordinary product that means their payments are fixed in nominal dollars for a huge length of time. So if they get a raise that keeps up with inflation, inflation actually makes them "richer".
The effects are largely dominated by gas and energy prices, which Americans really will get upset over but seem to be recovering. I don't think there's any realistic way you can prevent against 10% gas price jumps and still have a free market.
https://www.statista.com/statistics/273418/unadjusted-monthl...
Prices won't go down, but the rate of change of prices can go down.
> begin to alter their behaviour by either hoarding or spending.
Median savings is not huge: https://www.usnews.com/banking/articles/the-average-savings-...
Not to mention that middle America has fixed rate 30 year mortgages, an absolutely extraordinary product that means their payments are fixed in nominal dollars for a huge length of time. So if they get a raise that keeps up with inflation, inflation actually makes them "richer".
The effects are largely dominated by gas and energy prices, which Americans really will get upset over but seem to be recovering. I don't think there's any realistic way you can prevent against 10% gas price jumps and still have a free market.
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A fair amount of Americans where adults in the second half of the 1970s and early 1980s... it isn't that new of an experience for them.
You should look at inflation rates in the 70s and 80s. This didn't destroy the US, though it was painful.
Yes, it's a wild figure for the US (as a comparison, the US had an year with higher inflation than Brazil). But that lasted for a short period, and it's been measured going down.
Anyway, hoarding gold is not a natural behavior for a population at 10% inflation. It's natural for a population that distrusts the government and the financial markets. Inflation by itself pushes people into banks.
Anyway, hoarding gold is not a natural behavior for a population at 10% inflation. It's natural for a population that distrusts the government and the financial markets. Inflation by itself pushes people into banks.
Why would inflation push people into banks? In my (EU) country, banks don’t offer anything that matches current inflation besides speculative investments.
It pushes people into high-liquidity short-term investments.
Banks are the main place you find those.
Banks are the main place you find those.
In USA at banks near me, I don't find high liquidity with decent returns. Rates on savings accounts are paltry, and CDs are only liquid if ignoring early withdraw penalties.
I use bank to accept revenue and transfer it to brokerage houses where it sits in highly liquid money market with better returns than bank savings.
I use bank to accept revenue and transfer it to brokerage houses where it sits in highly liquid money market with better returns than bank savings.
> one thing that can reliably trigger inflation in almost any country is oil/gas shortages
I am convinced we are making a huge mistake by conflating shortage of raw material with general inflation.
If there was shortage of food tomorrow, the correct responce is not to raise interest rates - that would cause even greater problems and famine.
The correct responce is immediate intervention to expand supply - build greenhouses, accelerated permits, zero interest finance for agriculture, etc.
This issue will lead to disaster as climate change bites - we are only managing fictisious financial parameters and ignoring what is happening to physical atoms.
I am convinced we are making a huge mistake by conflating shortage of raw material with general inflation.
If there was shortage of food tomorrow, the correct responce is not to raise interest rates - that would cause even greater problems and famine.
The correct responce is immediate intervention to expand supply - build greenhouses, accelerated permits, zero interest finance for agriculture, etc.
This issue will lead to disaster as climate change bites - we are only managing fictisious financial parameters and ignoring what is happening to physical atoms.
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> the US has less than 10%
if you read the plea from the Argentine above.. they say "peer networks to measure value" .. it implies that the entire inflation is NOT one single number. It is in sector by sector, with local "shadows" .. In the USA, it is housing obviously in large populated areas, but also health care and the cost of a University education. Those measures have climbed triple digits while yes, petrol and candy-bars are the same.
if you read the plea from the Argentine above.. they say "peer networks to measure value" .. it implies that the entire inflation is NOT one single number. It is in sector by sector, with local "shadows" .. In the USA, it is housing obviously in large populated areas, but also health care and the cost of a University education. Those measures have climbed triple digits while yes, petrol and candy-bars are the same.
Sectoral inflation is a real issue! But that's the one thing that buying gold can't help you with, because it necessarily means there's something different about that market rather than the money supply as a whole.
> health care and the cost of a University education
See "Baumol cost disease" - things which require highly skilled human inputs tend to get more expensive as automation makes everything else cheaper.
> health care and the cost of a University education
See "Baumol cost disease" - things which require highly skilled human inputs tend to get more expensive as automation makes everything else cheaper.
I don't believe you that the inflation rate for housing or education is at 100%. If you mean that there's been 100% inflation since some point in the past then, well, yes that's true but it's also true of every other good. But when we say that Argentina has 100% inflation it means that the nominal price of goods doubles every year.
> inflation rate for housing or education is at 100%.
not per year, but .. there are residential housing listings here in California that have doubled in not very long.. I think the point is, that price increases are not uniform.. and it is related to structural forces of money, as well as markets
not per year, but .. there are residential housing listings here in California that have doubled in not very long.. I think the point is, that price increases are not uniform.. and it is related to structural forces of money, as well as markets
It's not uniform. The inflation of housing prices in SF over the last decade has averaged somewhere around 6% leading to a ~100% increase, way higher than the roughly 2% average inflation. But comparing a ~100% increase over a decade to a ~100% increase over a year is very misleading
except that there are houses in other places besides San Francisco.. and that those prices have volatility not seen in San Francisco.. is there is a motivated-reason behind defending the house prices here? projecting stability ?
I was using SF because it's known to have had a much higher house price inflation than other places, in order to try to be charitable to your case. If you look at the overall US housing market then you need to go back a lot further than a decade to see 100% inflation.
actually I tracked housing prices directly here in California on a large scale.. the key to resolving the two positions here is that, volatility is exactly how a one hundred percent increase in price happens.. first drop, the rise, then drop a lot, then rise alot. Meanwhile in the most desirable a.k.a. most expensive zip codes (or similar). the rise has been steady, even at 2008, and as you say, not one hundred percent. Lastly, ordinary people like you and I are not privileged to see the vast amount of cheating that goes on with residential valuation, loans and the like. Loans for more than a realistic value on a property, are as old as Sicily.
This concept is so important, but people are so unwilling to embrace it because regime economists dismiss it as nonsense.
> Argentina has 100% annual inflation and going up while the US has less than 10% and going down.
Also, most of the world, including western Europe, has been experiencing >8% inflation rates.
Also, most of the world, including western Europe, has been experiencing >8% inflation rates.
How is it a 'blue dollar' rate?
Firstly the bars are being sold only a couple of percentage points above spot. This is a perfectly normal price for decent bars or coins in small sizes.
Secondly the 'blue dollar' concept refers to the fact that Argentines are restricted from buying more than a certain amount of US dollars. They pay much higher prices to buy dollars illegally. US citizens can buy as much gold as they like, and Costco is not an underground or illicit market.
Firstly the bars are being sold only a couple of percentage points above spot. This is a perfectly normal price for decent bars or coins in small sizes.
Secondly the 'blue dollar' concept refers to the fact that Argentines are restricted from buying more than a certain amount of US dollars. They pay much higher prices to buy dollars illegally. US citizens can buy as much gold as they like, and Costco is not an underground or illicit market.
Comparing the US with Argentina is wild. Americans are buying gold because there's a lot of propaganda about how the country is going to hell, the economy is fucked and there's plenty of marks out there that fall for this, while unemployment is historically low and the mcdonalds close to me is offering 17 an hour for line workers.
There's been a huge increase in ads about "buying hold to protect yourself" instead of buying US government bonds, that will actually make you money, because these grifters feed off fear and there's plenty of people there that will believe in it. These people will all lose money on this gold when they decide to sell it.
There's been a huge increase in ads about "buying hold to protect yourself" instead of buying US government bonds, that will actually make you money, because these grifters feed off fear and there's plenty of people there that will believe in it. These people will all lose money on this gold when they decide to sell it.
This isn't some fear grift, just so you know. I lived in Argentina for many years, my family is from there, and I've been saying for awhile that America is on the brink of making the same mistakes that Argentina makes that lead to cycles of hyperinflation, default, and instability.
It's clear that it's "wild" in the sense that everyone in the world pegs their economy to USD, and as long as you expect that to continue you have nothing to worry about. Fundamentally, though, in its divided politics and its willingness to oscillate between propping up the economy and going hog-wild with privatization, the US is the same as Argentina and has been for a long time. The only difference is the ability to project military power and enforce the value of its currency through bribery and fear; Argentina doesn't have that ability. (Nor would we think it would be great for the free market if she did).
It's clear that it's "wild" in the sense that everyone in the world pegs their economy to USD, and as long as you expect that to continue you have nothing to worry about. Fundamentally, though, in its divided politics and its willingness to oscillate between propping up the economy and going hog-wild with privatization, the US is the same as Argentina and has been for a long time. The only difference is the ability to project military power and enforce the value of its currency through bribery and fear; Argentina doesn't have that ability. (Nor would we think it would be great for the free market if she did).
I’m Brazilian and I lived through our hyperinflation over the 80s and 90s, it’s not the same at all, if it was the economy would already be underground given how much money was printed
Brazilian here, I've also experienced the hyperinflation at the 80's and 90's.
The US has recently been moving on the exact opposite direction from hyperinflation. At least on the short term, they don't have exploding debits, they are removing money from the economy, and have a concerned monetary regulator.
The US has recently been moving on the exact opposite direction from hyperinflation. At least on the short term, they don't have exploding debits, they are removing money from the economy, and have a concerned monetary regulator.
> unemployment is historically low
This is a marker of a coming recession. The spikes happen after recessions begin, and it's bizarre that it's been so low for so long: https://fred.stlouisfed.org/series/UNRATE
Not exactly the same thing everyone's talking about here, but "historically low unemployment" isn't exactly a good thing overall - IIRC the theory behind why it signals a coming recession is something like "reduced job mobility because people are afraid of losing their jobs", because it only counts people who are unemployed and looking for a job.
This is a marker of a coming recession. The spikes happen after recessions begin, and it's bizarre that it's been so low for so long: https://fred.stlouisfed.org/series/UNRATE
Not exactly the same thing everyone's talking about here, but "historically low unemployment" isn't exactly a good thing overall - IIRC the theory behind why it signals a coming recession is something like "reduced job mobility because people are afraid of losing their jobs", because it only counts people who are unemployed and looking for a job.
> The phenomenon of hyperinflation is foreign to them, and there's a steep learning curve.
LOL. What the US has is in no way, shape, or form hyperinflation. I've lived in a place with hyperinflation and less than 10% ain't it, chief :-)
LOL. What the US has is in no way, shape, or form hyperinflation. I've lived in a place with hyperinflation and less than 10% ain't it, chief :-)
You’re absolutely correct.
It’s just irrelevant since you don’t need anything even approaching hyperinflation to have real world impact on people, and the real wage loss over the past several years is clearly in that category.
It’s just irrelevant since you don’t need anything even approaching hyperinflation to have real world impact on people, and the real wage loss over the past several years is clearly in that category.
Just as with the people who wake up every morning expecting the Second Coming, or indeed a Nuclear War, these folks fixate on a hyperinflationary US economy so much they begin to hallucinate.
Everything must be a sign. Strong job figures? Those are a precursor to hyperinflation. More mortgages fail than average? Hyperinflation on the horizon. Trump gets elected? He'll certainly cause hyperinflation. Trump loses? Democrat policies lead to hyperinflation.
They're not capable of understanding that they're wrong. JWs for example believe that the end of the world is extremely imminent... and it has been for over a hundred years. I know JWs who were taught as kids that their grandparents would live to see "God's Kingdom" and now, having lost those grandparents, they're still preaching the same nonsense and their own grandkids will be brought up to do the same.
Everything must be a sign. Strong job figures? Those are a precursor to hyperinflation. More mortgages fail than average? Hyperinflation on the horizon. Trump gets elected? He'll certainly cause hyperinflation. Trump loses? Democrat policies lead to hyperinflation.
They're not capable of understanding that they're wrong. JWs for example believe that the end of the world is extremely imminent... and it has been for over a hundred years. I know JWs who were taught as kids that their grandparents would live to see "God's Kingdom" and now, having lost those grandparents, they're still preaching the same nonsense and their own grandkids will be brought up to do the same.
Poster you're responding to, here. I completely agree that the US is not in imminent danger of hyperinflation, so long as it continues to assert itself through foreign policy and maintains the bully pulpit of democracy and the inertia of empire it's developed by putting boots on the ground anywhere its material interests are seriously threatened. Do you see me buying Argentine bonds? No, I have a Roth and a 401k.
Does that mean that I don't believe this country is trending - psychologically in terms of its money supply - toward an Argentine way of thinking and battling?
To become Argentine isn't a total collapse in any sense. It's the disappearance of trust in the currency - on and off, slowly, over years - without actually ceasing to use the currency for day to day transactions. That is what I'm referring to, and that is what is indicated by people buying gold bars at Costco. So yes, I agree that there isn't a better economy or market to put my money in. But that's not a ringing endorsement, either.
[edit] Also, to portray what I made as a fairly nuanced argument about Americans losing faith in the dollar, as if I were a Watchtower devotee or a maniacal doomsday conspiracy theorist, is disingenuous, and a poor-faith argument.
Truly, you don't really get how it works in Argentina or how similar it is to 10% inflation here, unless / until it were to hit 20% inflation here, and smart people would begin to look at what the dynamics were in a similar scenario, in another western country, and how they played out economically and politically. It's something you should look at whether you believe it's possible here or not. There's a vast degree of hubris associated with your declaration that it can't happen in America.
Does that mean that I don't believe this country is trending - psychologically in terms of its money supply - toward an Argentine way of thinking and battling?
To become Argentine isn't a total collapse in any sense. It's the disappearance of trust in the currency - on and off, slowly, over years - without actually ceasing to use the currency for day to day transactions. That is what I'm referring to, and that is what is indicated by people buying gold bars at Costco. So yes, I agree that there isn't a better economy or market to put my money in. But that's not a ringing endorsement, either.
[edit] Also, to portray what I made as a fairly nuanced argument about Americans losing faith in the dollar, as if I were a Watchtower devotee or a maniacal doomsday conspiracy theorist, is disingenuous, and a poor-faith argument.
Truly, you don't really get how it works in Argentina or how similar it is to 10% inflation here, unless / until it were to hit 20% inflation here, and smart people would begin to look at what the dynamics were in a similar scenario, in another western country, and how they played out economically and politically. It's something you should look at whether you believe it's possible here or not. There's a vast degree of hubris associated with your declaration that it can't happen in America.
Lots of things could happen. Gamma Ray bombardment sterilisation of the solar system for example. That's the set up for the main plot of Greg Egan's "Diaspora".
But since neither becoming a Gleisner Robot nor Polis Citizenship are possible for me it's futile to spend time worrying about a nearby Gamma Ray burst. If it happens I would likely die instantly, but even if not there's no reason to plan for that.
I care about contingency planning a great deal but it makes no sense to plan for events which are both extremely unlikely and very difficult to successfully ameliorate.
But since neither becoming a Gleisner Robot nor Polis Citizenship are possible for me it's futile to spend time worrying about a nearby Gamma Ray burst. If it happens I would likely die instantly, but even if not there's no reason to plan for that.
I care about contingency planning a great deal but it makes no sense to plan for events which are both extremely unlikely and very difficult to successfully ameliorate.
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JWs are still on about all that? Figured they would have switched that up over the years. Their "flock" is still vulnerable to various roving con-men then as long as they promote that crap. Anyone could swoop in there, slowly fleece a congregation, and move on to the next. Sad.
HN seems to have a lot of kooks these days, or maybe the kind of people who would push back have just stopped.
I've seen a surprising amount of vaccine denialism, xenophobia, unsubstantiated pop Econ takes, Peter Zeihan bullshit, etc.
YC should just cut the cord on this forum tbh. It's not about "Hackers" or "News" anymore.
I've seen a surprising amount of vaccine denialism, xenophobia, unsubstantiated pop Econ takes, Peter Zeihan bullshit, etc.
YC should just cut the cord on this forum tbh. It's not about "Hackers" or "News" anymore.
Segments of HN have been predicting the imminent collapse of the US dollar for at least the last decade. One thing 10-years-ago HN had but today doesn’t is the constant predictions of the imminent collapse of the VC startup model in general, or maybe I’m just looking in the wrong threads these days.
That said, you may be correct in that the voices have gotten louder. Also, the Covid conspiracy stuff drives me up the wall, and I didn’t remember older HN being like that.
That said, you may be correct in that the voices have gotten louder. Also, the Covid conspiracy stuff drives me up the wall, and I didn’t remember older HN being like that.
Many of the threads I see recently (like 6-8 months) no longer predict the collapse of the VC startup model. They claim that it's already here. The free money days are over, that sort of thing.
It's not because HN changed, but rather because conspiracy theory, especially the covid stuff, is no longer niche.
> I didn’t remember older HN being like that.
It was stuff like mass surveillance, the TSA, etc. Went away after Snowden.
It was stuff like mass surveillance, the TSA, etc. Went away after Snowden.
I think you're talking about me, for saying America is starting to remind me of Argentina in certain ways? I assure you I'm not a kook, or a doomsayer. I'm just someone who's lived in both countries through several economic crises, each of which had very different characteristics. Maybe I didn't express myself eloquently enough. You're free to rebut anything I said or to contact me personally. I don't think slandering me by way of slandering the entirety of HN is the exact right way to show you know what you're talking about.
> YC should just cut the cord on this forum tbh. It's not about "Hackers" or "News" anymore.
It's a marketing tool for them, always was. Probably fairly cheap to run, too.
It's a marketing tool for them, always was. Probably fairly cheap to run, too.
It was PG's pet project. Plenty of YC startups don't use HN anymore aside from their 1 Demo post and on the outside it looks like Bookface and other initiatives are given more headcount than HN within the entire YC organization.
Kooks? The flip side of that coin is the NPC (Non playing characters) that have trouble dealing with any information that could harm their little "comfort cocoon". Nobody has your best interest in mind, not even yourself if you step back far enough.
I appreciate this place.
I appreciate this place.
This piece seems like it was written by someone writing strictly from American perspective without seeing what happens elsewhere.
Inflation in America is not, and was not anywhere in this post-Covid episode, worse than in any other developed nation except Japan, which has so many problems hardly anyone will want to use it as a point of reference. U.S. economy is in better shape than almost any other advanced nation (and poor countries may be doing better but exactly because they are poor, they are playing technology catch-up, once they are caught up they have no avenues for quick growth and are stuck on Eastern European level). It is both currently richer, and grows faster, and is more stable, and provides more ways for an everyday, layman person to invest. Europeans don't buy stocks of European companies - because they know those companies are ridden with protectionist rules and omnipowerful unions - in all of which they actively, and cynically, participate - and will never give a good return. They buy American stocks.
America is virtually insulated from global warming because it's so big and diverse: some places may be wrecked but others will even win - no other nation is like that. It is virtually insulated from potential wars or invasions due to protection of the oceans. It is safe from any demographic issues because it has a guaranteed stream of immigrants with a lot more brains and money than any other country can hope attracting. It has an attitude to politics where people don't expect politicians to do much, apart from entertaining them, an expectation current generation of politicians fulfils brilliantly. Because there is no way America can be wrecked by politicians NOT doing something (as everything was built from the ground up with exactly that expectation - the government not doing anything), only threat comes from government actuallY DOING very wrong things - but American political system is built to very effectively prevent that.
All in all, comparing America to other rich places, it is evidently the best place to be for the rest of XXI century, at least as long as you have cash.
Inflation in America is not, and was not anywhere in this post-Covid episode, worse than in any other developed nation except Japan, which has so many problems hardly anyone will want to use it as a point of reference. U.S. economy is in better shape than almost any other advanced nation (and poor countries may be doing better but exactly because they are poor, they are playing technology catch-up, once they are caught up they have no avenues for quick growth and are stuck on Eastern European level). It is both currently richer, and grows faster, and is more stable, and provides more ways for an everyday, layman person to invest. Europeans don't buy stocks of European companies - because they know those companies are ridden with protectionist rules and omnipowerful unions - in all of which they actively, and cynically, participate - and will never give a good return. They buy American stocks.
America is virtually insulated from global warming because it's so big and diverse: some places may be wrecked but others will even win - no other nation is like that. It is virtually insulated from potential wars or invasions due to protection of the oceans. It is safe from any demographic issues because it has a guaranteed stream of immigrants with a lot more brains and money than any other country can hope attracting. It has an attitude to politics where people don't expect politicians to do much, apart from entertaining them, an expectation current generation of politicians fulfils brilliantly. Because there is no way America can be wrecked by politicians NOT doing something (as everything was built from the ground up with exactly that expectation - the government not doing anything), only threat comes from government actuallY DOING very wrong things - but American political system is built to very effectively prevent that.
All in all, comparing America to other rich places, it is evidently the best place to be for the rest of XXI century, at least as long as you have cash.
>Not exactly. I just sent this link to my (Argentine) friends with a different observation. My observation was: The United States is starting to look like Argentina.
As someone who is studying economics in Argentina... You're pretty much the polar opposite of Argentina when it comes to the economy.
As someone who is studying economics in Argentina... You're pretty much the polar opposite of Argentina when it comes to the economy.
> I'd like to expound on the significance of Americans buying precious metal at a loss through a giant vertical monopoly.
I am more interested in when Costco got into the gold mining business.
I am more interested in when Costco got into the gold mining business.
A truly vertical business would own the stars manufacturing gold, and cut out the middle man entirely.
Omg, we could slice up the sun and charge people for our solar rays. Genius!!
No. The easier explanation is that Costco whose customers are regularly middle class and above, love to buy whatever Costco shoves in front of them. There are other observations to be made based on cultural demographics that could also explain why these get sold so quick. I don’t think any of it has to do with your conspiracy theories though.
This is almost exactly it. Costco shoppers will buy whatever they push. And I suspect the cultural factors you’re talking about are the large number of middle class Indian and Chinese Costco shoppers who will buy gold regularly culturally, and if they see gold being sold in Costco I suspect they will buy it instantly.
> large number of middle class Indian and Chinese Costco shoppers who will buy gold regularly culturally
Gold hoarding wasn't much of a Chinese thing, and Indian gold purchases were a mix of regional biases (South Indian families seemed to purchase way more gold than equally well off North Indian families) and tend to skew more towards jewelery (why buy a store of wealth when you can buy a store of wealth and show off to the other aunties as well).
This is just being used to take advantage of deflated consumer expectations, as the article itself said
Gold hoarding wasn't much of a Chinese thing, and Indian gold purchases were a mix of regional biases (South Indian families seemed to purchase way more gold than equally well off North Indian families) and tend to skew more towards jewelery (why buy a store of wealth when you can buy a store of wealth and show off to the other aunties as well).
This is just being used to take advantage of deflated consumer expectations, as the article itself said
Costco is their hobby.
> The actual significance of this is that metal is being offered at a "blue dollar" rate by one of the three largest retailers in America
Or, it’s a novelty item to get PR buzz.
Or, it’s a novelty item to get PR buzz.
Well, Argentina had plenty of opportunities to get itself in order (and could still do so), but I'm not sure that the US would let things slide so badly over a long period - they (and the rest of the world) would rather take the short term pain.
Possibly being a reserve currencies adds an additional burden to US policymakers, so they can't always take the easy way out.
Possibly being a reserve currencies adds an additional burden to US policymakers, so they can't always take the easy way out.
> If I had an hour, I'd like to expound on the significance of Americans buying precious metal at a loss through a giant vertical monopoly.
The only thing Costco has a monopoly on is $1.50 hotdogs. Also, inflation in the US has dropped by more than half in the last year. I think this is the opposite of countries like Argentina.
The only thing Costco has a monopoly on is $1.50 hotdogs. Also, inflation in the US has dropped by more than half in the last year. I think this is the opposite of countries like Argentina.
stopped reading at: The United States is starting to look like Argentina.
It is nothing like Argentina.
It is nothing like Argentina.
The current monetary policy in the US seems unlikely to lead to hyperinflation.
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I bet the vast majority of gold being purchased at Costco is by Indian and Chinese immigrants who buy gold culturally and not as a response to global financial events and movements.
Why do Indian and chinese buy "gold culturally"?
Would it be the same reasons african americans rejected the covid shots in greater numbers than the rest of the US population?
Maybe they perceive something "culturally" , or maybe something historically....which has not been forgotten?
Would it be the same reasons african americans rejected the covid shots in greater numbers than the rest of the US population?
Maybe they perceive something "culturally" , or maybe something historically....which has not been forgotten?
These are cultures of saving. Saving in fiat is typically worthless.
The Indians and Chinese buying gold are most likely much older and not as well educated or trusting of brokerage accounts and ETFs.
Why do you think that people in Argentina are flocking to Dollar and not to Bitcoin or Gold?
When I look at the search trends in Argentina, I see Bitcoin in a very volatile longterm uptrend, Gold in a longterm downtrend and the Dollar being constantly a distant third:
https://trends.google.de/trends/explore?date=all&geo=AR&q=go...
Over the 20 years which the Peso has been devaluing, Bitcoin has outpaced the others by far in terms of searches.
What other indicators could we look at to get a better picture?
When I look at the search trends in Argentina, I see Bitcoin in a very volatile longterm uptrend, Gold in a longterm downtrend and the Dollar being constantly a distant third:
https://trends.google.de/trends/explore?date=all&geo=AR&q=go...
Over the 20 years which the Peso has been devaluing, Bitcoin has outpaced the others by far in terms of searches.
What other indicators could we look at to get a better picture?
How are search trends the same as ownership of the currency?
Also in Argentina it's "dólar," not "dollar": https://trends.google.com/trends/explore?date=all&geo=AR&q=g...
Also in Argentina it's "dólar," not "dollar": https://trends.google.com/trends/explore?date=all&geo=AR&q=g...
Good to see that myth busted.
Having spent enough time in the country people buy dollars to save money, there is no other way except investing in real estate and other large investments that are typically only available to people that are already rich.
Having spent enough time in the country people buy dollars to save money, there is no other way except investing in real estate and other large investments that are typically only available to people that are already rich.
Since we are here, why "gold" and not the actual Spanish word "oro"?
https://trends.google.com/trends/explore?date=all&geo=AR&q=g...
https://trends.google.com/trends/explore?date=all&geo=AR&q=g...
Do people in the USA do a Google search for Visa or Mastercard when they want to pay for something? Of course not, they just use their credit card.
It’s the same with dollars in places where it’s an actively used alternative to devaluating national currencies. You don’t search for “dollar” online, you just buy and sell in the street and use it to pay for things directly.
It’s the same with dollars in places where it’s an actively used alternative to devaluating national currencies. You don’t search for “dollar” online, you just buy and sell in the street and use it to pay for things directly.
People do have an interest in Bitcoin as it's the only way to do transfers abroad that really works. But typically they just hoard dollars. Bitcoin also fluctuated way more than dollars in the last few years, people that buy dollars are typically middle and higher class people that want to save money for their house, going on vacation and that kind of stuff. Risk avoiding people.
There are a variety of dollars, the one most people talk about is the "blue" (meaning black market). It trades for twice the official rate, but since you can also sell it at around that price it doesn't impact you that much when you're saving in it. It does hurt when you want to spend that money when for example traveling abroad.
https://dolarhoy.com
There are a variety of dollars, the one most people talk about is the "blue" (meaning black market). It trades for twice the official rate, but since you can also sell it at around that price it doesn't impact you that much when you're saving in it. It does hurt when you want to spend that money when for example traveling abroad.
https://dolarhoy.com
Nope. Searches for oro (Spanish for gold) and dólar (dollar?) far outstrip Bitcoin. Searches for gold and dollar (English) terms are effectively flat and paint a very different picture.
A very direct, relatively reliable indicator we could look at to see if this has happened at all anywhere recently is the gold premium in China, which has gold import restrictions. Just days ago people were willing to pay ~$100/oz over the international mark price, so there are people willing to spend >5% above the mark on a high volume asset in order to have a physical hedge in the event of a catastrophic failure of the yuan.
https://www.bloomberg.com/news/articles/2023-09-27/chinese-g...
https://www.bloomberg.com/news/articles/2023-09-27/chinese-g...
Try now: https://trends.google.com/trends/explore?date=all&geo=AR&q=g...
Not even "Messi" can beat the "dolar blue"
Not even "Messi" can beat the "dolar blue"
That's impressive! Thanks for introducing me to this term/idea.
People in underprivileged countries have a lot more experience in keeping the value of what they have when push comes to shove
Dollar means liquidity, stability and "money in pocket". Dollar inflation is nothing compared to Peso inflation
Bitcoin can help with some of those aspects but with much less liquidity and more volatility.
Dollar means liquidity, stability and "money in pocket". Dollar inflation is nothing compared to Peso inflation
Bitcoin can help with some of those aspects but with much less liquidity and more volatility.
> What other indicators could we look at to get a better picture?
Depends how you look at that picture. Let me ask this, if 100 people buy bitcoins and 100 people buy the equivalent dollar value, what proportion of each group will generally be checking how much their purchase is worth on a daily basis?
Depends how you look at that picture. Let me ask this, if 100 people buy bitcoins and 100 people buy the equivalent dollar value, what proportion of each group will generally be checking how much their purchase is worth on a daily basis?
[deleted]
They don't think people in Argentina are flocking to Gold, they wrote:
> and people are flocking to ... US Dollars. Not gold,
> and people are flocking to ... US Dollars. Not gold,
Yup, sorry, fixed.
The search trends are the same for Dollar vs Bitcoin. Strongly in favor of Bitcoin.
The search trends are the same for Dollar vs Bitcoin. Strongly in favor of Bitcoin.
Because nobody needs to search "dollar", everyone knows and uses it.
[deleted]
Using Google trends as a proxy is absurd and a total non-starter. This reeks of SV minset.
What are you basing that claim on? Do you have evidence that Argentinians are not buying gold nor Bitcoin? I don't know about Argentina, but Turkey also has a massive inflation problem and Bitcoin is huge over there. They probably have the highest rate of Bitcoin ownership per capita in the world (or it has to be close).
>2050
>Turkey is richest country on the planet due to bitcoin ownership.
>Turkey is richest country on the planet due to bitcoin ownership.
> You have to figure out how to convert that gold into something somebody will actually take
You need coins. You can't walk around with a gold bar. I would say silver coins to keep the value down, too.
As a "my government made our money useless" back up. USD cash are good too unless you are American, obviously.
You need coins. You can't walk around with a gold bar. I would say silver coins to keep the value down, too.
As a "my government made our money useless" back up. USD cash are good too unless you are American, obviously.
>As a "my government made our money useless" back up.
I think that's where you first get into "some other governments money may be less useless" as a first stage backup. Precious metals in direct ownership are really a hedge against all or most other governments money collapsing.
Until you reach a global societal collapse, having gold in your possession seems like a negative ROI and I wonder if, should that case happen, would precious metals again become the medium of exchange or something else (peoples' opinions have changed and a fist full of diamonds might not be as valuable to me as say fresh drinking water should such a thing happen). It would likely depend on the cause of global collapse and what people consider valuable (obviously, but it probably needs stated).
Precious metals seem to be a good medium of exchange historically only at a certain level of assumed societal infrastructure, similar to our fiat currencies. Cavemen and small tribes cared little of precious metals and would rather trade land, access rights, livestock, etc.
I think that's where you first get into "some other governments money may be less useless" as a first stage backup. Precious metals in direct ownership are really a hedge against all or most other governments money collapsing.
Until you reach a global societal collapse, having gold in your possession seems like a negative ROI and I wonder if, should that case happen, would precious metals again become the medium of exchange or something else (peoples' opinions have changed and a fist full of diamonds might not be as valuable to me as say fresh drinking water should such a thing happen). It would likely depend on the cause of global collapse and what people consider valuable (obviously, but it probably needs stated).
Precious metals seem to be a good medium of exchange historically only at a certain level of assumed societal infrastructure, similar to our fiat currencies. Cavemen and small tribes cared little of precious metals and would rather trade land, access rights, livestock, etc.
In collapsed societies gold isn't great either. You would want to have things that people actually need. Some gold might buy you some antibiotics but the valuable thing isn't the gold and the antibiotics seller would know that.
To add on to this, when I think about a situation where you're trying to hedge against all government-backed fiat collapsing; I feel like you're already down to cold-hard bartering. The saying of "booze, bullets, and bandages" comes to mind.
These aren't really "bars" like ingots. Trading sealed packages of 1oz gold tabs is probably better than trying to trade gold coins of unverified composition/weight.
It's actually better to trade coins which are easily verifiable in weight and size than bars that you can't measure (size or weight) because they are in packages.
All you have to verify on the packed gold is that the package hasn't been tampered with. Loose gold would also need metallurgical purity tests. Who cares if the weight is right if it's just lead with a thick gold plating.
No. You have no idea what you are talking about. You are doing a huge diservice to anyone who read your comment and didn't know any better.
They are not placing fake gold into real packaging. They are manufacturing the counterfiet packaging themselves.
Gold-plated lead would instantly be discovered if it was measured by weight AND dimensions.
They are not placing fake gold into real packaging. They are manufacturing the counterfiet packaging themselves.
Gold-plated lead would instantly be discovered if it was measured by weight AND dimensions.
Seems if you’re an American, having your money in USD would be doubly useful!
You can't use coins without someone enforcing rules against counterfeit.
You do it trade 1 oz gold bars for goods. You are not trying to buy sugar with them.
They are for paying off the border guard when a family member does not have the right docs or the low level soldier checking lottery numbers to see if you can get on the escape vehicle or enter the bunker.
These are real “world is going to fall apart” hedges. I am not expecting a crisis of that level in my neighbourhood but they have certainly happened before ( crossing borders in WWII took a few diamond earrings perhaps ) and there are risks now that are bigger than ever.
They are for paying off the border guard when a family member does not have the right docs or the low level soldier checking lottery numbers to see if you can get on the escape vehicle or enter the bunker.
These are real “world is going to fall apart” hedges. I am not expecting a crisis of that level in my neighbourhood but they have certainly happened before ( crossing borders in WWII took a few diamond earrings perhaps ) and there are risks now that are bigger than ever.
It's unclear to me why so many people seem to think it is difficult to sell precious metals? I can sell my silver gold down the street for 95% of spot any day, or if I want to wait for a check in the mail I can send it overnight to Max and get 99% spot.
Within 48 hours I can easily convert my precious metal to bitcoin, cash or get a check. People's general fear of holding and using gold seems to be very similar to the unfounded concerns with Bitcoin. I think people just don't trust themselves with money.
Within 48 hours I can easily convert my precious metal to bitcoin, cash or get a check. People's general fear of holding and using gold seems to be very similar to the unfounded concerns with Bitcoin. I think people just don't trust themselves with money.
Another speculation: people hate making financial decisions with any perceived risk. Fear of Shame.
So imagine the cognitive dissonance when a sizable "team" picks a product that's not part of the perceived friendly and safe. These "alternative" products also require responsibility without anyone else to blame but yourself for mistakes.
So imagine the cognitive dissonance when a sizable "team" picks a product that's not part of the perceived friendly and safe. These "alternative" products also require responsibility without anyone else to blame but yourself for mistakes.
To my knowledge, Crypto is pretty big in Argentina, with Bitcoin, Tron, and tether the biggest players.
I have some friends who are into owning gold. Their rule of thumb is:
You can own gold mines on paper, but gold, only in hand.
There is a belief that there exists a lot more paper gold than actual gold. So when the run on the reserves starts, the price of gold will explode as billions of dollars worth of gold in the market disappears.
Although I’m not sure if Costco buyers are thinking like that.
You can own gold mines on paper, but gold, only in hand.
There is a belief that there exists a lot more paper gold than actual gold. So when the run on the reserves starts, the price of gold will explode as billions of dollars worth of gold in the market disappears.
Although I’m not sure if Costco buyers are thinking like that.
> There is a belief that there exists a lot more paper gold than actual gold. So when the run on the reserves starts, the price of gold will explode as billions of dollars worth of gold in the market disappears.
very good sales pitch!
very good sales pitch!
The same pitch used for GameStop stock.
Its not just a belief. The ratio is something in the region of 100x. Its also not just a precious metal thing, most markets function that way due to long and short positions. The paper market is always quite a lot larger then the actual one.
> due to long and short positions
Those cancel each other. The important number is how it compares to the net amount. I don't think anybody does fractional reserves of commodities.
Those cancel each other. The important number is how it compares to the net amount. I don't think anybody does fractional reserves of commodities.
I dont think that is the case and fractional reserve seems to be the name of the game for some of the ETFs. Would love some numbers regarding the long/shorts if you have them.
I dunno how it works on the US, as a don't invest there. But when I buy some commodity, I get a certificate from the holder saying that it is on their physical possession.
That certificate ensures the commodity is mine even if the holder gets bankrupt or some other disaster. Not having it there would be fraud, and my government does go around checking it.
I have a quite strong suspicion that this is universal. But well, I haven't checked this.
That certificate ensures the commodity is mine even if the holder gets bankrupt or some other disaster. Not having it there would be fraud, and my government does go around checking it.
I have a quite strong suspicion that this is universal. But well, I haven't checked this.
Thats not necessarily the case. Somebody described the situation for GLD a bit down.
[[citation needed]]
Edit: This should do
>The ratio of iron-ore derivatives to physical trading volume was about 25 times, far lower than the 80-100 time for more mature commodities such as gold and copper, according to a study by Hong Kong Exchanges & Clearing.
https://www.bloomberg.com/professional/blog/expect-chinas-fu...
Silver is quite a lot worse btw
Might be worth pointing out that this isnt surprising given the activity of speculators in the market. Without markets would get cornered for investment and industry would cease.
edit1: There is however also an incentive to keep individuals from investing into precious metals due to monetary considerations. Derivate induced volatility is one way to do that. https://wikileaks.org/plusd/cables/1974LONDON16154_b.html
edit2: Also worth considering is that the large central bank holdings can and will be loaned out to maintain price stability if push comes to shove and gold were to rise drastically.
>The ratio of iron-ore derivatives to physical trading volume was about 25 times, far lower than the 80-100 time for more mature commodities such as gold and copper, according to a study by Hong Kong Exchanges & Clearing.
https://www.bloomberg.com/professional/blog/expect-chinas-fu...
Silver is quite a lot worse btw
Might be worth pointing out that this isnt surprising given the activity of speculators in the market. Without markets would get cornered for investment and industry would cease.
edit1: There is however also an incentive to keep individuals from investing into precious metals due to monetary considerations. Derivate induced volatility is one way to do that. https://wikileaks.org/plusd/cables/1974LONDON16154_b.html
edit2: Also worth considering is that the large central bank holdings can and will be loaned out to maintain price stability if push comes to shove and gold were to rise drastically.
Derivatives are not the same thing as paper gold and conflating the two is just a sales tactic to push the oversubscription meme.
Paper gold is something like the gold ETFs where a share represents gold in the fund’s vault. If those were actually fraudulent in reserves, then you would have a point.
Every commodity that has a futures and options market will have a huge ratio of derivatives to the underlying. That’s the nature of producers and consumers locking in prices and speculators getting in between.
Paper gold is something like the gold ETFs where a share represents gold in the fund’s vault. If those were actually fraudulent in reserves, then you would have a point.
Every commodity that has a futures and options market will have a huge ratio of derivatives to the underlying. That’s the nature of producers and consumers locking in prices and speculators getting in between.
If i am not mistaken those gold ETFs are backed by derivatives. Please do share a differing definition for "paper".
I also didnt disagree with derivative overhang being normal. Not sure why you thought it necessary to repeat.
I also didnt disagree with derivative overhang being normal. Not sure why you thought it necessary to repeat.
It’s like two seconds of googling. The biggest ones are backed by the asset. https://www.ssga.com/us/en/intermediary/etfs/funds/spdr-gold...
This one even lets you convert: https://www.vaneck.com/us/en/education/investment-ideas/phys...
I thought it necessary to spell it out because your understanding is clearly based on the false assumption that most of the gold investments aren’t backed.
This one even lets you convert: https://www.vaneck.com/us/en/education/investment-ideas/phys...
I thought it necessary to spell it out because your understanding is clearly based on the false assumption that most of the gold investments aren’t backed.
Another poster (tim333) made a great summary of the concept behind GLD (your first link) a few posts up. Those backed assets are otherwise owned and loaned against. IShares is the other one with a similar concept. You can read up on this in the context of Basel 3's net stable funding ratio and the exemption LBMA (the biggest backer of COMEX) achieved.
https://www.gold.org/goldhub/gold-focus/2021/06/basel-iii-an...
Or directly from the LBMA:
https://cdn.lbma.org.uk/downloads/Pages/NSFR-PRA-Letter-fina... https://www.lbma.org.uk/articles/pra-clearing-banks-may-now-...
This is not to say that all ETFs work this way. I believe Xetra is one example of being fully physically backed. But this naturally increases running cost due to storage. Last i checked i believe you pay in the rough region of 0.1% a year in storage cost at the reputable physical gold bullion storage sites as a large customers (tons / room). That sums up. This also explains why physical copper is not something you can easily invest in.
But again, this kind of misses the point, i would really appreciate a definition of paper differing from backed by derivatives. I think you might be onto something here, i ran into this argument a few times now so i believe i might be missing something.
I would also like to reiterate that i do not share the conclusion the initial post made about run away gold prices. I elaborated on that in the other posts.
Sorry for the late edits, had to double check the numbers.
https://www.gold.org/goldhub/gold-focus/2021/06/basel-iii-an...
Or directly from the LBMA:
https://cdn.lbma.org.uk/downloads/Pages/NSFR-PRA-Letter-fina... https://www.lbma.org.uk/articles/pra-clearing-banks-may-now-...
This is not to say that all ETFs work this way. I believe Xetra is one example of being fully physically backed. But this naturally increases running cost due to storage. Last i checked i believe you pay in the rough region of 0.1% a year in storage cost at the reputable physical gold bullion storage sites as a large customers (tons / room). That sums up. This also explains why physical copper is not something you can easily invest in.
But again, this kind of misses the point, i would really appreciate a definition of paper differing from backed by derivatives. I think you might be onto something here, i ran into this argument a few times now so i believe i might be missing something.
I would also like to reiterate that i do not share the conclusion the initial post made about run away gold prices. I elaborated on that in the other posts.
Sorry for the late edits, had to double check the numbers.
“Paper gold” is meant to refer to a claim on real gold. I.e. if the ETF share exists, there is a small piece of gold backing that and only that share.
A /GC futures contract—-even with physical settlement—- is not paper gold because two parties can create the contract without any actual gold existing anywhere.
A /GC futures contract—-even with physical settlement—- is not paper gold because two parties can create the contract without any actual gold existing anywhere.
When people say things like that what they usually mean is the volume of bets on the price of gold in the futures markets is much larger than the trading in either physical gold or ETFs representing physical gold.
Which doesn't mean ETFs like GLD are not real. It just means that if I say I'll bet you the price goes up, we settle the bet at $100 for each dollar the price moves, that is independent of us actually owning any gold.
Which doesn't mean ETFs like GLD are not real. It just means that if I say I'll bet you the price goes up, we settle the bet at $100 for each dollar the price moves, that is independent of us actually owning any gold.
>Which doesn't mean ETFs like GLD are not real. It just means that if I say I'll bet you the price goes up, we settle the bet at $100 for each dollar the price moves, that is independent of us actually owning any gold.
Whats your definition of real if it doesnt involve physical gold? An ISIN existing? Sorry if that sounds passive aggressive, i cant figure out how else to word it.
There seems to be another definition of paper gold i am missing? I always assumed it was clear we are talking about derivatives.
Whats your definition of real if it doesnt involve physical gold? An ISIN existing? Sorry if that sounds passive aggressive, i cant figure out how else to word it.
There seems to be another definition of paper gold i am missing? I always assumed it was clear we are talking about derivatives.
Ok fair enough - I was unclear on the definition of paper gold. But the idea that
>There is a belief that there exists a lot more paper gold than actual gold. So when the run on the reserves starts, the price of gold will explode as billions of dollars worth of gold in the market disappears.
is probably not representative of what would happen. Derivative bets can come and go without really moving the spot price.
>There is a belief that there exists a lot more paper gold than actual gold. So when the run on the reserves starts, the price of gold will explode as billions of dollars worth of gold in the market disappears.
is probably not representative of what would happen. Derivative bets can come and go without really moving the spot price.
While again i dont disagree with your conclusion, i believe your arguing here is flawed. The derivatives can and do move the price significantly. JPMorgan payed quite hefty fines for manipulating the precious metal markets (as well as treasuries) through spoofing¹. Thats now happening by dumping significant volumes of derivatives onto the market at times its especially thin. Which can be in the order of magnitude of yearly productions. Combining this with bots trading trends prices can be moved significantly.
But again, due to golds importance from the monetary perspective, significant price increases are not going to happen. It could be seen as currencies devaluing, thus lending out central bank gold reserved to achieve price stability is very much on the table. I believe it was Greenspan that talked about this in the past.
¹ https://www.reuters.com/article/jp-morgan-spoofing-penalty-i...
But again, due to golds importance from the monetary perspective, significant price increases are not going to happen. It could be seen as currencies devaluing, thus lending out central bank gold reserved to achieve price stability is very much on the table. I believe it was Greenspan that talked about this in the past.
¹ https://www.reuters.com/article/jp-morgan-spoofing-penalty-i...
You can buy things like GLD https://www.spdrgoldshares.com/
an ETF backed by physical gold. Probably safer and cheaper than getting bars from Costco.
an ETF backed by physical gold. Probably safer and cheaper than getting bars from Costco.
Physical gold might have value in situation where financial institutions and markets start to lose any trust in themselves. Either by manipulation, government confiscation or fraud.
But, things will be pretty bad at that point from every viewpoint. As essentially global markets are crashing. On other hand, in even bigger crisis gold won't be that valuable at least for a while. If food and fuel are first priority people are unlikely to trade them for shiny metal...
But, things will be pretty bad at that point from every viewpoint. As essentially global markets are crashing. On other hand, in even bigger crisis gold won't be that valuable at least for a while. If food and fuel are first priority people are unlikely to trade them for shiny metal...
I don't understand why people keep thinking that a financial meltdown means societal meltdown. There's plenty of places where the economy is or has already melted down even right now -- Sri Lanka, Argentina, Venezuela, etc. We can observe what happens when political institutions completely and utterly collapse, because it's happened multiple times already. What happens is not immediate apocalypse where people riot and society breaks down; it's mass protests, shows of solidarity, people help each other out, etc. The prepper scenario of "I've gotta defend myself against mobs out to raid for food" really doesn't happen.
If we stretch it back a few decades we see things like the Wiemar republic, complete anarchy during the Russian civil wars when blacks, whites, reds, etc all marched across the countryside, Chinese civil war, or even just recently we have Yemen, ISIS, Ethiopia, and in none of these cases have a zombie apocalypse-style "have to defend myself with my gun and ammo" societal breakdown occured and people bartered with gold. It turns out that people organise very quickly, and a every-man-for-himself-style situation like in stories just doesn't happen.
Maybe a civil war breaks out, maybe there are food shortages, but for the most part if violence breaks out, it's organised, mainly in the form of civil wars or local power struggles. One guy with a gun is not gonna help. Food protests are common, but rarely end violently. People keep thinking that "this time is different", and they're wrong every time.
If we stretch it back a few decades we see things like the Wiemar republic, complete anarchy during the Russian civil wars when blacks, whites, reds, etc all marched across the countryside, Chinese civil war, or even just recently we have Yemen, ISIS, Ethiopia, and in none of these cases have a zombie apocalypse-style "have to defend myself with my gun and ammo" societal breakdown occured and people bartered with gold. It turns out that people organise very quickly, and a every-man-for-himself-style situation like in stories just doesn't happen.
Maybe a civil war breaks out, maybe there are food shortages, but for the most part if violence breaks out, it's organised, mainly in the form of civil wars or local power struggles. One guy with a gun is not gonna help. Food protests are common, but rarely end violently. People keep thinking that "this time is different", and they're wrong every time.
Sri Lankan here. I personally experienced this last year and was very surprised. We Sri Lankans love to criticise ourselves for our wonky moral compasses, so when the early protests started, I stocked up on food and installed an extra CCTV camera, expecting widespread riots and looting. They never came. There were many organised protests, and protesters did clash with riot police around government buildings, but people overall were unusually helpful toward each other.
Several times, I had taxi drivers refuse to accept fare when they picked me up from a bus stop late at night (both petrol/gasoline and buses were in short supply for a while). Once a motorcyclist literally stopped by and handed me his spare helmet saying "If you're heading my way, I can take you". Many people (including my wife and I) drove around distributing food and supplies to folks we felt were in need. It's hard to describe what came over us, but it seemed like a common phenomenon that affected a lot of people.
I still think if food became really scarce, selfish, violent behaviour would have emerged. But fortunately it never came to that and the country managed to go into a debt restructuring program with the IMF.
Several times, I had taxi drivers refuse to accept fare when they picked me up from a bus stop late at night (both petrol/gasoline and buses were in short supply for a while). Once a motorcyclist literally stopped by and handed me his spare helmet saying "If you're heading my way, I can take you". Many people (including my wife and I) drove around distributing food and supplies to folks we felt were in need. It's hard to describe what came over us, but it seemed like a common phenomenon that affected a lot of people.
I still think if food became really scarce, selfish, violent behaviour would have emerged. But fortunately it never came to that and the country managed to go into a debt restructuring program with the IMF.
Very positive post. Thank you for sharing.
My spouse and I both had a short part of our childhood in a poor and wonky South Asian country. We both feel that people (and ourselves) are far less helpful to our neighbours and strangers in the west vs. back home. It actually felt different in the 90s vs. today. I recall being in the west and someone offering me a ride when the subway was closed (like 25 years ago). I just can't see that happening today. Just too many MLM schemes have been pushed on me, and too many reports of crazies on the news .. I dunno.
My spouse and I both had a short part of our childhood in a poor and wonky South Asian country. We both feel that people (and ourselves) are far less helpful to our neighbours and strangers in the west vs. back home. It actually felt different in the 90s vs. today. I recall being in the west and someone offering me a ride when the subway was closed (like 25 years ago). I just can't see that happening today. Just too many MLM schemes have been pushed on me, and too many reports of crazies on the news .. I dunno.
Thanks for sharing. That reminded me of another experience: around 2012, the front left wheel of my car ended up in a ditch by the side of the road. I was considering calling a tow truck, when a crowd gathered and told me to get in the car and hit reverse when they gave the signal. Then they proceeded to literally lift the car out of the ditch. I had barely enough time to mumble thanks before the crowd dispersed as quickly as it had assembled.
On the other hand, once in the New York subway, I was running toward the closing doors of a train, and some of the folks inside tried to keep the door open (which was not really possible) and clapped when I made it in by a hair's breadth. But then again it was a Friday night and many passengers at that time were a bit sloshed and quite friendly.
On the other hand, once in the New York subway, I was running toward the closing doors of a train, and some of the folks inside tried to keep the door open (which was not really possible) and clapped when I made it in by a hair's breadth. But then again it was a Friday night and many passengers at that time were a bit sloshed and quite friendly.
The car and ditch thing is still very common in the Midwest when it snows. I swear the pastime there is to hide in the snow waiting for someone to get highcentered in an u plowed parking lot given how many people appeared out of nowhere to push.
> I stocked up on food and installed an extra CCTV camera, expecting widespread riots and looting. They never came.
Turns out, most people aren't psychos and at one extreme, some would rather end themselves than hurt others.
> I still think if food became really scarce, selfish, violent behaviour would have emerged.
That does emerge, as you said, but it needs to be SUPER extreme. By SUPER extreme I mean gulag or shipwrecked crew on an island with no food. In human history these scenarios are very rare, probably since the dawn of agriculture.
And, I mean, we could implode that badly, but we're talking regressing 3+ thousands of years. It looks more like a post-apocalyptic nuclear wasteland or Earth being hit by an asteroid than a "regular" economic meltdown.
Turns out, most people aren't psychos and at one extreme, some would rather end themselves than hurt others.
> I still think if food became really scarce, selfish, violent behaviour would have emerged.
That does emerge, as you said, but it needs to be SUPER extreme. By SUPER extreme I mean gulag or shipwrecked crew on an island with no food. In human history these scenarios are very rare, probably since the dawn of agriculture.
And, I mean, we could implode that badly, but we're talking regressing 3+ thousands of years. It looks more like a post-apocalyptic nuclear wasteland or Earth being hit by an asteroid than a "regular" economic meltdown.
Reminds me of this comment from Dee Xtrovert on Metafilter, who survived the seige of Sarajevo: https://www.metafilter.com/78669/What-if-things-just-keep-ge....
“But here's the main point: 'Preparing' for the disaster really didn't do anyone much good. Those who 'prepared' ate a little better for a while. They stayed warmer for a few extra days. They enjoyed the radio for a while longer (via batteries.) But in the end, they ended up hungry, cold and bored too, just like the rest of us. Guns and weapons helped no one directly and were even of little to no use in the defense of Sarajevo, since they were toys compared to the shells, bombs and high-powered armaments of the attacking forces. The worst parts of war were psychological - the fear, anxiety, boredom, loneliness, paranoia, bad dreams. Respite from those things came with sharing food with a neighbor, finding a piece of clothing that would fit someone you knew, commiserating with others in your position, figuring out how to make make-up from brick or french fries from wheat paste and spreading this newly-acquired war knowledge around the mahala.
We knew who had extra food and supplies. For the most part, they weren't attacked or hassled or bothered. Contrary to what these survivalists say, those in dire times generally hold on to their personal sense of pride even more than they do in normal times. I'd take a bite of a friend's salad without bothering to ask in normal times. I'd never have done that in wartime, no matter how hungry I was.
Within the domain of those trapped in the city, civility greatly increased.”
“But here's the main point: 'Preparing' for the disaster really didn't do anyone much good. Those who 'prepared' ate a little better for a while. They stayed warmer for a few extra days. They enjoyed the radio for a while longer (via batteries.) But in the end, they ended up hungry, cold and bored too, just like the rest of us. Guns and weapons helped no one directly and were even of little to no use in the defense of Sarajevo, since they were toys compared to the shells, bombs and high-powered armaments of the attacking forces. The worst parts of war were psychological - the fear, anxiety, boredom, loneliness, paranoia, bad dreams. Respite from those things came with sharing food with a neighbor, finding a piece of clothing that would fit someone you knew, commiserating with others in your position, figuring out how to make make-up from brick or french fries from wheat paste and spreading this newly-acquired war knowledge around the mahala.
We knew who had extra food and supplies. For the most part, they weren't attacked or hassled or bothered. Contrary to what these survivalists say, those in dire times generally hold on to their personal sense of pride even more than they do in normal times. I'd take a bite of a friend's salad without bothering to ask in normal times. I'd never have done that in wartime, no matter how hungry I was.
Within the domain of those trapped in the city, civility greatly increased.”
People vs the corrupt govt of Rajapaksa - we are all in this together fosters this.
The question of course is the very same people who voted in these clowns in the first place.
The question of course is the very same people who voted in these clowns in the first place.
How is the situation currently in Sri Lanka? I'm considering going there for a vacations.
I think that prepper scenario is way more likely in a «I got mine, screw you» society like the US. All the countries you list have their issues, but their base level of societal egalitarism is orders of magnitude higher.
I would not be surprised if the US is one of the few countries to end up like Mad Max if the world order should fully collapse due to climate change or other large scale events.
I would not be surprised if the US is one of the few countries to end up like Mad Max if the world order should fully collapse due to climate change or other large scale events.
I’ve lived in two dozen countries and the US is the most community oriented of them all outside major cities.
US charitable giving alone suggests your view of the country as individualism run amok is likely not the whole story.
US charitable giving alone suggests your view of the country as individualism run amok is likely not the whole story.
The biggest share of US charitable giving goes to megachurches and other religious institutions who don't need it.
A fair amount of the rest goes on political lobbying and influencing.
The proportion that goes on direct no-strings plain simple humanitarian work is not all that huge.
Most of the US population lives in cities. If the US wasn't "individualism run amok" it wouldn't have tent cities of homeless people, and its health industry wouldn't be bankrupting half a million people a year. (For example.)
A fair amount of the rest goes on political lobbying and influencing.
The proportion that goes on direct no-strings plain simple humanitarian work is not all that huge.
Most of the US population lives in cities. If the US wasn't "individualism run amok" it wouldn't have tent cities of homeless people, and its health industry wouldn't be bankrupting half a million people a year. (For example.)
You're correct that the largest share of giving goes to religiously-affiliated organizations, but the idea that the largest shares goes specifically to megachurches seems unlikely to me. If you've seen this reported somewhere I'm primed to change my mind.
And I don't think it's totally fair to exclude religious donations as somehow "not valid", especially in the context of the critique that Americans don't value community with each other. Religious charities tend have less access to alternative funding sources, so rely on these donations more. Note: I'm very much not religious.
> A fair amount of the rest goes on political lobbying and influencing.
I get a little mixed-up on whether donations to non-tax-deductible non-profits "count" in the metrics (e.g., does my donation to the ACLU which has a lobbying arm count just as my donation to the ACLU Foundation which cannot be used that way?). Nevertheless, I think it's wrong-minded to discredit charitable giving to organizations that influence public policy given the multiplicative impact that policy has on the lives of people and communities. Some of the biggest impacts to the lives of people came out of organized efforts to influence policy.
> If the US wasn't "individualism run amok" it wouldn't have tent cities of homeless people, and its health industry wouldn't be bankrupting half a million people a year.
This feels like a pretty uncharitable and over-simplification of very complex issues that also get into inter-state dynamics. I also think there's an error made in treating US culture as some sort of homogenous cultural construct. More than many other countries, the US is constantly at war with itself culturally.
And I don't think it's totally fair to exclude religious donations as somehow "not valid", especially in the context of the critique that Americans don't value community with each other. Religious charities tend have less access to alternative funding sources, so rely on these donations more. Note: I'm very much not religious.
> A fair amount of the rest goes on political lobbying and influencing.
I get a little mixed-up on whether donations to non-tax-deductible non-profits "count" in the metrics (e.g., does my donation to the ACLU which has a lobbying arm count just as my donation to the ACLU Foundation which cannot be used that way?). Nevertheless, I think it's wrong-minded to discredit charitable giving to organizations that influence public policy given the multiplicative impact that policy has on the lives of people and communities. Some of the biggest impacts to the lives of people came out of organized efforts to influence policy.
> If the US wasn't "individualism run amok" it wouldn't have tent cities of homeless people, and its health industry wouldn't be bankrupting half a million people a year.
This feels like a pretty uncharitable and over-simplification of very complex issues that also get into inter-state dynamics. I also think there's an error made in treating US culture as some sort of homogenous cultural construct. More than many other countries, the US is constantly at war with itself culturally.
Charity is peak individualism. In real communal places helping those in need is handled structured and organized, not just hinging on individual decisions.
Charity is not individualism. You’re making a false equivalence between collectivism and the government. There are huge collectivist communities in the US (generally centered around religions) that have very structured and organized ways of helping those in need.
It is peak collectivism to accomplish this without requiring the monopoly on violence and the taxation that comes with it.
It is peak collectivism to accomplish this without requiring the monopoly on violence and the taxation that comes with it.
>You’re making a false equivalence between collectivism and the government
And you are imagining things and claiming its what I am thinking.
You literally said charity is individualism, with the implication being that anything voluntary (which is charity) is not collectivism. for it to not be voluntary, you need the monopoly on violence to force it.
Charity used to structured and organized locally with Local churches, rotary clubs, and Samaritan organizations working to help less well off people in a town/neighborhood/city.
All this has fallen to the wayside in the US as we have some weird form of individualism permiating on both sides of the political spectrum.
All this has fallen to the wayside in the US as we have some weird form of individualism permiating on both sides of the political spectrum.
We’ve had localized collapse due to hurricanes and other disasters in the USA and it didn’t go mad max and in fact people helped each other.
There’s always a few bad apples but there’s always some counter pressure, too. The story of the deuce and half owner who drove into a hurricane comes to mind.
There’s always a few bad apples but there’s always some counter pressure, too. The story of the deuce and half owner who drove into a hurricane comes to mind.
I also think that the fact the prepper vision is a large part of the cultural zeitgeist makes it somewhat of a self-fulfilling prophecy.
It's not a large part of it. There's a large vision of self-reliance, which is definitely not the whole country, or more than half the country, but that's not quite the same thing.
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except prepping mostly isn't "I got mine, screw you" but "I need to protect myself and my family". even then, US society isn't even "I got mine, screw you". I don't understand where that even came from because its not even close to true. maybe europeans thinking they're somehow more collectivist even though I've found Americans to be far more friendly and collectivist than europeans.
The US is the only major Western country where its citizens buy guns to protect themselves from other citizens with guns.
I'm not really seeing how that counts as "friendly and collective", but I live in the EU so perhaps I just don't understand these things.
I'm not really seeing how that counts as "friendly and collective", but I live in the EU so perhaps I just don't understand these things.
Being prepared for a robbery has zero relationship with how you treat people in general.
I think you're saying the same thing as this, but, to me ... The prepper fantasy clearly says more about the ethics/ideology of the person having that fantasy than it does about what a crisis-society looks like. By adopting that lifestyle they're basically giving an early look at how they might behave in crisis, and how they see their fellow man.
And I think you're right; if you look at how people behave in times of flood or famine, they do tend on the whole to come together.
From the outside looking in, I think in part it has to do with the history of parts of the US as a slaveholding society. In a society where a large minority (or in some places even a majority) are under the thumb of coercion, when order breaks down, there will be reprisals and violence. And I think this history has formed a cycle in some parts of the US long after the end of slavery, and also informs a lot of the gun ownership self-defense fetish there. e.g. for me, growing up in rural Canada guns were just a rather boring part of life because people hunted or had farms. But since then the have clearly become a kind of shibboleth, or cultural marker. Gun ownership is apparently at an all time high but actual hunting for meat is at an all time low.
And I think you're right; if you look at how people behave in times of flood or famine, they do tend on the whole to come together.
From the outside looking in, I think in part it has to do with the history of parts of the US as a slaveholding society. In a society where a large minority (or in some places even a majority) are under the thumb of coercion, when order breaks down, there will be reprisals and violence. And I think this history has formed a cycle in some parts of the US long after the end of slavery, and also informs a lot of the gun ownership self-defense fetish there. e.g. for me, growing up in rural Canada guns were just a rather boring part of life because people hunted or had farms. But since then the have clearly become a kind of shibboleth, or cultural marker. Gun ownership is apparently at an all time high but actual hunting for meat is at an all time low.
When smaller countries collapse (as measured by percentage of global GDP) then the IMF, neighboring allies, etc can step in and keep things stable. If the US economy collapses, that's 25% of global GDP, not to mention the ripple effects on other economies and possible power struggles as countries try to adjust to a post US world.
If you think the US is at risk of collapsing however I would suggest you buy a gun before gold.
If you think the US is at risk of collapsing however I would suggest you buy a gun before gold.
> If you think the US is at risk of collapsing however I would suggest you buy a gun before gold
You need friends and allies before you need guns.
You need friends and allies before you need guns.
> You need friends and allies before you need guns.
In one short sentence you may have summarised the difference between other societies and the USA.
In one short sentence you may have summarised the difference between other societies and the USA.
Friends and allies are no longer sold in the USA, but guns still are.
As someone pretty well marinating in "right wing" - based on where I live and the social circles I tend to run in - you're mostly right. They aren't mutually exclusive; you can have guns and friends at the same time. You can even have friends with guns.
Of course, but from what I can tell, all the "preppers" seem to know that they need to buy supplies and weapons, but all of that is useless if you are not part of a community tight knit enough to be willing to defend you, and that takes years of work to build up and constant maintenance of relationships.
There's a weird place between "preppers" and "homesteaders" that's pretty much this.
I'd say I'm "prepper" enough that I'm heavily armed and have enough shelf-stable food to feed by family for a few months in an emergency - but I'm also "homesteader" enough that our garden seems to get bigger each year, I know all of my neighbors, and we regularly share skills and information.
I don't think anything catastrophic is likely to happen, but it's had an overall very positive impact on my day-to-day life. If something does happen, I have far more tools to deal with it than either approach alone would give me.
I'd say I'm "prepper" enough that I'm heavily armed and have enough shelf-stable food to feed by family for a few months in an emergency - but I'm also "homesteader" enough that our garden seems to get bigger each year, I know all of my neighbors, and we regularly share skills and information.
I don't think anything catastrophic is likely to happen, but it's had an overall very positive impact on my day-to-day life. If something does happen, I have far more tools to deal with it than either approach alone would give me.
In all of these scenarios, the prepper stuff like stockpiling ammo and canned food wouldn't have been much help, but storing your wealth in gold bars for the time after would have been a great choice, certainly compared to cash.
The fact that society didn't descend into complete apocalyptic anarchy made it even better for the gold hoarders, because they didn't get robbed and murdered for their savings.
The fact that society didn't descend into complete apocalyptic anarchy made it even better for the gold hoarders, because they didn't get robbed and murdered for their savings.
> The prepper scenario of "I've gotta defend myself against mobs out to raid for food" really doesn't happen.
> Maybe a civil war breaks out, maybe there are food shortages, but for the most part if violence breaks out, it's organised, mainly in the form of civil wars.
If a war breaks out, the tradition is that the armies will raid you for food. The issue was never that other locals would do it. A war breaking out is what people are afraid of.
> Maybe a civil war breaks out, maybe there are food shortages, but for the most part if violence breaks out, it's organised, mainly in the form of civil wars.
If a war breaks out, the tradition is that the armies will raid you for food. The issue was never that other locals would do it. A war breaking out is what people are afraid of.
Ah yes, my gun and my gold will protect me against the organised army out to raid for food.
That's what I meant -- people get organised very quickly. In Rwanda, people quickly formed armies and militias, the same in Ethiopia, Columbia, and literally every other time this has happened before. One guy is not gonna accomplish much.
Civil war is also, by most measures, the least likely outcome. Usually civil war causes the breakdown, not the other way around. Usually it's really a deterioration of state capacity that leads to a powerless central government (see Venezuela, Yemen, Syria), or repeated coups that lead to unstable governance (all of west africa basically). Things are mostly stable, by and large.
That's what I meant -- people get organised very quickly. In Rwanda, people quickly formed armies and militias, the same in Ethiopia, Columbia, and literally every other time this has happened before. One guy is not gonna accomplish much.
Civil war is also, by most measures, the least likely outcome. Usually civil war causes the breakdown, not the other way around. Usually it's really a deterioration of state capacity that leads to a powerless central government (see Venezuela, Yemen, Syria), or repeated coups that lead to unstable governance (all of west africa basically). Things are mostly stable, by and large.
You’re pointing out yourself the usefulness of being one guy with a gun.
Once you need to form a militia, you bring your gun and join your neighbors. That way you can actually resist the army. They will do more than just raid for food. They raid for people: conscription, slavery, and “comfort”.
Once you need to form a militia, you bring your gun and join your neighbors. That way you can actually resist the army. They will do more than just raid for food. They raid for people: conscription, slavery, and “comfort”.
In South Africa we strict gun laws - getting a 9mm sidearm is difficult enough - don't bother with something like an AR-15.
But we have per capita probably the largest number armed private security companies - what happened when we had unrest in one of provinces - the owners of these companies formed self defense groups where they lived with their staff and had AK'47/AR-15 and stuff not available to normal citizens.
Our suburbs are still racially segregated so they turned around those folks who did not fit the profile.
They kept the looters out - but some got out of control and shot up innocent people that was in the wrong place at the wrong time.
The army was eventually mobilized and the sight of soldiers and wheeled APC's convinced them it is was time to go home now that the professionals were here.
But we have per capita probably the largest number armed private security companies - what happened when we had unrest in one of provinces - the owners of these companies formed self defense groups where they lived with their staff and had AK'47/AR-15 and stuff not available to normal citizens.
Our suburbs are still racially segregated so they turned around those folks who did not fit the profile.
They kept the looters out - but some got out of control and shot up innocent people that was in the wrong place at the wrong time.
The army was eventually mobilized and the sight of soldiers and wheeled APC's convinced them it is was time to go home now that the professionals were here.
Thankfully haven't experienced it but my parents and relatives were in challenging situations during some parts of their lives. The point of Gold (as I was taught) is not to store your hoard of wealth but to facilitate getting out.
>t for the most part if violence breaks out, it's organised, mainly in the form of civil wars or local power struggles.
Yes, as we all know Sri Lanka, Argentina and Venezuela are all known for their low degree of violence.
Yes, as we all know Sri Lanka, Argentina and Venezuela are all known for their low degree of violence.
Violent places are not violent all the time, to all the people, in all the regions. Violence is frequently very localized, even in those very violent places.
Because governments indoctrinate people into thinking they're needed to keep society stable and safe. I'd argue the opposite is true.
I suggest reading Larken Rose - The Most Dangerous Superstition.
I feel way safer in places with a neighbourhood watch and local people banding together to fend off criminals over places where the police may show up some times, if they're done fining people for going 5km over the ridiculously low speed limit or jailing people for selling pot.
Source: the EU pays my government to allow into the country jobless economic migrants, males in their 20s-30s, and local people have to defend themselves because the police won't do shit.
I suggest reading Larken Rose - The Most Dangerous Superstition.
I feel way safer in places with a neighbourhood watch and local people banding together to fend off criminals over places where the police may show up some times, if they're done fining people for going 5km over the ridiculously low speed limit or jailing people for selling pot.
Source: the EU pays my government to allow into the country jobless economic migrants, males in their 20s-30s, and local people have to defend themselves because the police won't do shit.
most of the prepper fantasies seem to revolve around societal collapse - not financial - loss of electrical power grid etc.
secondly it is true that most short term instability results in people pulling together, but I do remember a study from about 30 years ago on long term multi-generational social collapse (I think it was Eritrea) in which the population became much less let's pull together to get through this and much more f* you I got mine.
secondly it is true that most short term instability results in people pulling together, but I do remember a study from about 30 years ago on long term multi-generational social collapse (I think it was Eritrea) in which the population became much less let's pull together to get through this and much more f* you I got mine.
> it's happened multiple times already. What happens is not immediate apocalypse where people riot and society breaks down; it's mass protests, shows of solidarity, people help each other out, etc
What a bizarre interpretation.
To this date more than 20% of Venezuelans left the country.
What happens over and over is that fiat currency becomes worthless and that people who have the means to leave leave.
Obviously if you own some gold you have a better chance of being able to escape to another country.
What a bizarre interpretation.
To this date more than 20% of Venezuelans left the country.
What happens over and over is that fiat currency becomes worthless and that people who have the means to leave leave.
Obviously if you own some gold you have a better chance of being able to escape to another country.
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If things have collapsed far enough where physical gold is the only currency, physical gangs will be out there confiscating said gold from physical corpses not in said gangs. The word for a catastrophe where middle-class people survive without being press-ganged into a military or otherwise being placed under the thumb of a strongman is "contrived" or, perhaps, "fictional". If you want a collapse, look at what happened in Russia in 1917, or Cambodia in 1970.
You don't need to lose trust in the system as a hole. Only in the fact that the system serves you.
Bank accounts gets frozen all the time and for a variety of reasons.
Bank accounts gets frozen all the time and for a variety of reasons.
Like supporting the free speech rights of some truckers (now matter how misguided and annoying they might have been). De-banking people for wrongthink is absolutely terrifying, because any of us could be next depending on the mood of the current government.
Define "supporting the free speech rights"?
It's not the free speech rights of the truckers that was the issue in Canada.
The problem came with the freedom of assembly, which is bound up with the right to protest ... and long curtailed with restrictions from causing substantial disruption.
That last part was the line crossed when roads were shutdown for days on end, horns blared round the clock, etc.
Additionally, IIRC, the Canadian Gov't didn't debank individuals for the act of donating .. they froze accounts that donations were flowing into. The last time this came up in a forum several people linked to discussions in the Canadian Question time (or some equivilant) where "gotcha" questions were being posed about whether the law in question could be used to debank individuals .. as it was broad legislation targeted toward shutting down the protests by drying up funds the answer "yes, but ..." .. followed by a general failure to produce any non core individuals that had their general savings frozen - just the accounts used to collect donations and some(?) organisers taking part (again, IIRC).
The problem came with the freedom of assembly, which is bound up with the right to protest ... and long curtailed with restrictions from causing substantial disruption.
That last part was the line crossed when roads were shutdown for days on end, horns blared round the clock, etc.
Additionally, IIRC, the Canadian Gov't didn't debank individuals for the act of donating .. they froze accounts that donations were flowing into. The last time this came up in a forum several people linked to discussions in the Canadian Question time (or some equivilant) where "gotcha" questions were being posed about whether the law in question could be used to debank individuals .. as it was broad legislation targeted toward shutting down the protests by drying up funds the answer "yes, but ..." .. followed by a general failure to produce any non core individuals that had their general savings frozen - just the accounts used to collect donations and some(?) organisers taking part (again, IIRC).
"Protests are meant to be disruptive". It was a very effective protest, and from my memory almost entirely peaceful, which is way more than can be said of other protests in 2020-21. Honking horns somehow caused more media outrage than actual riots
It was surprising to see how quickly people turned around into saying that blue collar workers uniting and striking was a bad thing (with several suggestions that they be forced to work somehow), that protesting government authoritarianism is in fact fascism, that calling someone a Nazi is somehow supporting Naziism, and that the government coercing people by threatening their livelihoods due to their political activities (or refusing medication), and deciding what is and isn't "legitimate" political views, is actually defending democracy
And I have no faith in "yes the law has technical pathological cases but obviously nobody would do that". I used to, but I've just seen enough cases of the letter of the law being twisted with complete disregard to the spirit. E.g. practically any law to do with terrorism
It was surprising to see how quickly people turned around into saying that blue collar workers uniting and striking was a bad thing (with several suggestions that they be forced to work somehow), that protesting government authoritarianism is in fact fascism, that calling someone a Nazi is somehow supporting Naziism, and that the government coercing people by threatening their livelihoods due to their political activities (or refusing medication), and deciding what is and isn't "legitimate" political views, is actually defending democracy
And I have no faith in "yes the law has technical pathological cases but obviously nobody would do that". I used to, but I've just seen enough cases of the letter of the law being twisted with complete disregard to the spirit. E.g. practically any law to do with terrorism
> I have no faith in "yes the law has technical pathological cases but obviously nobody would do that". I used to, but I've just seen enough cases of the letter of the law being twisted with complete disregard to the spirit. E.g. practically any law to do with terrorism
I actually count this as the primary positive outcome of COVID.
So many people woke up to the reality of state power during that period. No more "this couldn't possibly happen here" or "they'd never!".
And even more after COVID, once the propaganda relented and the veil dropped even further. You'd have to be really obtuse (or otherwise invested) to not get the memo by now.
The pool of people who got a taste of the oppressive medicine has extended from "fringe" / "criminal" to wide swathes of "normal", middle class population. A costly lesson for sure, but extremely valuable.
I actually count this as the primary positive outcome of COVID.
So many people woke up to the reality of state power during that period. No more "this couldn't possibly happen here" or "they'd never!".
And even more after COVID, once the propaganda relented and the veil dropped even further. You'd have to be really obtuse (or otherwise invested) to not get the memo by now.
The pool of people who got a taste of the oppressive medicine has extended from "fringe" / "criminal" to wide swathes of "normal", middle class population. A costly lesson for sure, but extremely valuable.
You somehow missed the cold war, the draft, ... Societies have a lot of power and at times use it; and such use might not be wrong. People believing those things don't exist were just ignoring history. If you want to check out of society that will need quite a bit of doing.
I did not miss the cold war (I was born under communism), I do believe that societies exist and have power, and I do not want to check out of society.
What a bizarre non-sequitur.
What a bizarre non-sequitur.
You might have missed how the West was during the cold war then.
But why then complain when societies act? Having strong reactions to pandemics is historically normal nor can I see anything to wake up to in terms of oppression.
But why then complain when societies act? Having strong reactions to pandemics is historically normal nor can I see anything to wake up to in terms of oppression.
> blue collar workers uniting and striking
don't get to close off access to and from work sites for days and weeks on end, nor do they get to block customers.
> protesting government authoritarianism is
A-OK in my book - but blocking intersections and pissing off fellow citizens and stopping their free travel is not.
The line crossed, in the view of many people who might have otherwise supported them, was the nature of their protest - not the fact that they were protesting and not the words that they were saying.
don't get to close off access to and from work sites for days and weeks on end, nor do they get to block customers.
> protesting government authoritarianism is
A-OK in my book - but blocking intersections and pissing off fellow citizens and stopping their free travel is not.
The line crossed, in the view of many people who might have otherwise supported them, was the nature of their protest - not the fact that they were protesting and not the words that they were saying.
> The line crossed, in the view of many people who might have otherwise supported them, was the nature of their protest
Am I understanding this right? They think the government should step in and freeze the bank accounts of people who haven't been tried or found guilty of a crime, and who just inconvenienced them?
Am I understanding this right? They think the government should step in and freeze the bank accounts of people who haven't been tried or found guilty of a crime, and who just inconvenienced them?
Not the personal accounts of people - the accounts used to land donations in to fund the continued blockading of public thoroughfares.
I mean, that's still terrible, but how do they feel about the freezing the personal accounts of people[0]?
[0] https://www.bbc.co.uk/news/world-us-canada-60383385
[0] https://www.bbc.co.uk/news/world-us-canada-60383385
So clearly you would have supported the same things - suspension of Charter/Constitutional rights, during the BLM protests when businesses were burnt down?
Please don't paraphrase and assume my position, it weakens your position to strawman in that manner.
Depends on the circumstances - which specific protest in the US continuously occupied and blocked off major transport thoroughfares in the USofA for a month?
Depends on the circumstances - which specific protest in the US continuously occupied and blocked off major transport thoroughfares in the USofA for a month?
I’m not paraphrasing and assuming, I’m drawing conclusions from your statements.
What do you mean “blocked off transport”? Is that the only form of protest deserving of harsh measures?
Do you not think rioting in commercial centers and setting fire to businesses would rise to a similar level as blocking downtown streets as was done in Ottawa?
Clearly you feel blocking city streets is sufficient, so burning down businesses must as well?
What do you mean “blocked off transport”? Is that the only form of protest deserving of harsh measures?
Do you not think rioting in commercial centers and setting fire to businesses would rise to a similar level as blocking downtown streets as was done in Ottawa?
Clearly you feel blocking city streets is sufficient, so burning down businesses must as well?
That's the rights, I'm asking about the supporting.
I heard about freezes for people doing the protesting (including organizing). But that's an extremely different thing from supporting the free speech rights of the protesters.
I heard about freezes for people doing the protesting (including organizing). But that's an extremely different thing from supporting the free speech rights of the protesters.
OK, the government debanked people for organizing peaceful protests against them. That's hardly reassuring
When the accusation was thought crime, I find it pretty reassuring.
Sometimes governments jail people for protests, and locking a bank account seems similarly or slightly less bad to me. Not great but not newly worrying.
Or is it that you don't consider direct organizational efforts to be a subset of taking part in a protest? I'm generally fine with it, I think. Do you have anyone in particular in mind that was in this role but shouldn't count?
Sometimes governments jail people for protests, and locking a bank account seems similarly or slightly less bad to me. Not great but not newly worrying.
Or is it that you don't consider direct organizational efforts to be a subset of taking part in a protest? I'm generally fine with it, I think. Do you have anyone in particular in mind that was in this role but shouldn't count?
Locking someone’s bank account means you can’t pay your rent/mortgage (become homeless), can’t buy food, can’t purchase your medicine, can’t work.
Exactly, it's much worse on many accounts.
Were accounts locked for much longer than the protest?
And sticking someone in jail does those too.
And sticking someone in jail does those too.
“system as a hole” is my new band name.
Shiny metal is better for trade than bartering because it is rare and easy to break down into smaller chunks. Its value is that people other than the persons trading with it are also willing to trade with it. Guns and ammo sound like a better alternative but their rarity is unknown and unpredictable and even less people might be willing to trade with them on a regular basis unless it's a literal warzone. Food perishes and it's rarity is also an unpredictable.
paying with a gun seems like a perfect recipe to get hold up for the things you just bought.
When society gets to that point looters and robbers get bullet.
There’s a class of crime that can only really exist in a rule-of-law situation, without that people just get summarily executed.
There’s a class of crime that can only really exist in a rule-of-law situation, without that people just get summarily executed.
But what if the looters are all armed? Their power in numbers means if you shoot one the resr will overwhelm you so they can expect to not be shot for that reason alone. In reality, the looters become gangs you pay for "protection" and they will be your "police" against others
You don't load them with bullets and you load your gun (not the one you are trading) and be ready to fire it western style.
Yes, I don't understand why people think that gold has some sort of intrinsic value.
It only has value because we collectively agree it's valuable. But in itself it's not super useful, yes there are some industrial applications where it's better than other metals but if it was only valued on this basis it would be worth much, much less.
It only has value because we collectively agree it's valuable. But in itself it's not super useful, yes there are some industrial applications where it's better than other metals but if it was only valued on this basis it would be worth much, much less.
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It's not actually that stable of an investment vehicle, sure price have generally been going up over the past ten years, but if you bought gold in around 2012, you would have lost money if you where not able to hold on to it for another eight to ten years.
Personally I think the prices might be to high and a drop is coming. To keep the market moving someone is now trying to create a new market segment and is attempting to pull in new customers, apparently via Costco. This is either to prevent a slump in sales or to offload gold holdings before the price starts dropping.
Personally I think the prices might be to high and a drop is coming. To keep the market moving someone is now trying to create a new market segment and is attempting to pull in new customers, apparently via Costco. This is either to prevent a slump in sales or to offload gold holdings before the price starts dropping.
> I'd love to see an economists take on the value to a consumer of holding gold in this form, at the price
Directly-held gold is mostly a scam. In good times, vault gold trades at a premium. (Like diamonds, try to sell your ingot of gold for anywhere close to commodity spot.) In bad times, someone will stab you for it.
Unless you have $100+ million, where you can charter your own logistics outside government-sanction lines to e.g. aerolift you [1], your family and your gold across national borders, directly-held gold isn’t doing anything for you.
There are vanishingly few cases where your vault-held gold certificates are valueless while your directly-held gold has value.
[1] Also, news flash, when dictators flee they carry dollars. Gold is heavy and traceable if you’re using proper bars.
Directly-held gold is mostly a scam. In good times, vault gold trades at a premium. (Like diamonds, try to sell your ingot of gold for anywhere close to commodity spot.) In bad times, someone will stab you for it.
Unless you have $100+ million, where you can charter your own logistics outside government-sanction lines to e.g. aerolift you [1], your family and your gold across national borders, directly-held gold isn’t doing anything for you.
There are vanishingly few cases where your vault-held gold certificates are valueless while your directly-held gold has value.
[1] Also, news flash, when dictators flee they carry dollars. Gold is heavy and traceable if you’re using proper bars.
If you do not want gold to be traced, surely it is worth taking a hit in value and melting down the stamped ids?
Fictional Auric Goldfinger made parts of a car body out of gold right? But isn’t tracking metal more refined than just reading a number molded or stamped in an ingot?
Gold is a scam. It’s an awful inflation hedge.
Success in the market as far as selling it to retail is more a demonstration at how successful certain elements in society have been peddling fear.
Success in the market as far as selling it to retail is more a demonstration at how successful certain elements in society have been peddling fear.
Dunno. For a scam it's been held by an awful lot of central banks, for many decades, who you might think would figure these things out.
Re inflation it has historically been good at being fairly constant in value in real terms which is not usually what you actually want in an investment - you want them to go up.
Here's the famous graph from Stocks for the Long Run with the 200 year track record https://occaminvesting.co.uk/wp-content/uploads/2021/01/Stoc...
That shows stocks as the best, though for a reasonably enterprising private investor rental property probably wins.
Re inflation it has historically been good at being fairly constant in value in real terms which is not usually what you actually want in an investment - you want them to go up.
Here's the famous graph from Stocks for the Long Run with the 200 year track record https://occaminvesting.co.uk/wp-content/uploads/2021/01/Stoc...
That shows stocks as the best, though for a reasonably enterprising private investor rental property probably wins.
Totally. It is 100x oversold on paper. There’s a short squeeze coming. It has nothing to due with the intrinsic value of gold and everything to do with four decades of hype convincing American rubes to buy it.
No it’s not, that 100x includes cash settled derivatives.
As an inflation hedge, maybe you don't even care if you loose money on your gold. As long as you don't loose as much money you would have on inflation. Sometimes it's just good to have anything left rather than nothing.
I'm really left scratching my head about people who buy gold to hold physically and personally rather than as an investment.
In any situation where it might be relevant, how are you going to sell your gold?
For example, if you bought one of those bars right now, how would you then sell that bar again right now?
And, if things really are completely collapsing, nobody wants gold. They'll want something much more immediately useful--food, clothing, ammunition, etc.
I did look at this to see if it was cheaper than any jewelrymaking gold I could buy, but the prices are bang on identical per ounce.
In any situation where it might be relevant, how are you going to sell your gold?
For example, if you bought one of those bars right now, how would you then sell that bar again right now?
And, if things really are completely collapsing, nobody wants gold. They'll want something much more immediately useful--food, clothing, ammunition, etc.
I did look at this to see if it was cheaper than any jewelrymaking gold I could buy, but the prices are bang on identical per ounce.
> And, if things really are completely collapsing, nobody wants gold. They'll want something much more immediately useful--food, clothing, ammunition, etc.
I'm not sure I buy that. Barter for an intermediary is fundamentally useful. In a case of societal collapse, people with food/clothing/ammunition--or people who can provide useful services (like driving me to the nearest border) aren't going to want more food/clothing/ammunition--they're going to want something fungible that they can trade for what they need!
So, sure, there's probably some rare scenario where gold (ideally in small, easily verifiable discrete units, not big bars) is useful.
I'm not sure I buy that. Barter for an intermediary is fundamentally useful. In a case of societal collapse, people with food/clothing/ammunition--or people who can provide useful services (like driving me to the nearest border) aren't going to want more food/clothing/ammunition--they're going to want something fungible that they can trade for what they need!
So, sure, there's probably some rare scenario where gold (ideally in small, easily verifiable discrete units, not big bars) is useful.
Right now it’s not hard to sell. There are reputable gold traders who will pay cash, usually at market prices (minus some margin).
But presumably if the shit hits the fan and the USD is worthless, it’s a form of trade.
I don’t disagree not a great one. My biggest issue is if you want to buy food what do you do with a $2,000 piece of gold? Buy $2000 in food? You can’t really divide it up (a random chunk of gold is much less valuable than a minted coin).
But presumably if the shit hits the fan and the USD is worthless, it’s a form of trade.
I don’t disagree not a great one. My biggest issue is if you want to buy food what do you do with a $2,000 piece of gold? Buy $2000 in food? You can’t really divide it up (a random chunk of gold is much less valuable than a minted coin).
I’d guess threat model is less “there is a zombie apocalypse” and more “you need to flee to another country”.
But then you need cold coins, not a gold bar. Or, multiple foreign currencies.
Bars can be traded for coins. There are not many who can do that, but you can find them anywhere if you look. You won't always get a great deal, but I'm confident that you can find someone who buy your gold bars for cash most places in the world.
Easy buying is great, but it's only useful if there is also an easy and lossless selling. And there isn't.
I’m not sure an economist (a mainstream economist) would really care that much about an individual holding gold. Maybe there’s an interesting behavioral question about why people become so paranoid about the value of the dollar when it’s proven to be so incredibly stable (yes, even with the recent spike in inflation—it’s nothing close to hyperinflation). But people going to Costco and buying gold doesn’t have an effect on the wider economy. Costco’s business isn’t even really affected. Gold is not money. It’s never going to be money again. So why care?
> Maybe there’s an interesting behavioral question about why people become so paranoid about the value of the dollar when it’s proven to be so incredibly stable
Because we live in very uncertain times: a land-grab war in continental Europe, a serious and credible threat of both the US and a lot of European countries to fall to fascism, the threat of the US government going into an unprecedented shutdown yet again, and if that were not enough, it's reasonable to assume there will be an actual hot war with China in a few years' time.
Historically, people have always fled towards gold in uncertain times.
Because we live in very uncertain times: a land-grab war in continental Europe, a serious and credible threat of both the US and a lot of European countries to fall to fascism, the threat of the US government going into an unprecedented shutdown yet again, and if that were not enough, it's reasonable to assume there will be an actual hot war with China in a few years' time.
Historically, people have always fled towards gold in uncertain times.
>I’m not sure an economist (a mainstream economist) would really care that much about an individual holding gold.
Roosevelt seemed to care quite a bit: https://en.wikipedia.org/wiki/Executive_Order_6102
Apparently this lasted until 1974 (not sure about the details though, I always hear about the executive order in 1933 but never about the impossibility of owning gold between 1933 and 1974 - but that's what the articles seem to say) so a lot of mainstream economists have at least implicitly agreed.
https://www.nytimes.com/1974/08/15/archives/bill-signed-to-a...
Roosevelt seemed to care quite a bit: https://en.wikipedia.org/wiki/Executive_Order_6102
Apparently this lasted until 1974 (not sure about the details though, I always hear about the executive order in 1933 but never about the impossibility of owning gold between 1933 and 1974 - but that's what the articles seem to say) so a lot of mainstream economists have at least implicitly agreed.
https://www.nytimes.com/1974/08/15/archives/bill-signed-to-a...
> why people become so paranoid about the value of the dollar when it’s proven to be so incredibly stable
Every fiat currency that ever existed collapsed at some point.
> Gold is not money. It’s never going to be money again. So why care?
Gold survived all of them. It’s still being used as a financial instrument, after thousands of years, countless wars, changes of government, complete societal collapse and reorganization…
Gold is definitely a safer long-term bet.
Every fiat currency that ever existed collapsed at some point.
> Gold is not money. It’s never going to be money again. So why care?
Gold survived all of them. It’s still being used as a financial instrument, after thousands of years, countless wars, changes of government, complete societal collapse and reorganization…
Gold is definitely a safer long-term bet.
Gold as a long term bet: https://www.reddit.com/r/FluentInFinance/comments/16upmcj/go...
What’s your point? I can also point to timespans where gold outperformed any other currency. If you make the period long enough, it is all of them.
"Direct gold ownership is rife with risks"
Every kind of ownership comes with "risks". It is stupidity not to own gold "directly". Buying a gold ETF is likely a bad idea like having your cryptocurrencies not under personal control.
Precious metals ETF charge a yearly fee. A buddy of mine once developed a financial instrument, where the ETF really owns the metal and does not mimic its spot price but also pays a dividend. (And yes, it was legit and a great idea)
Every kind of ownership comes with "risks". It is stupidity not to own gold "directly". Buying a gold ETF is likely a bad idea like having your cryptocurrencies not under personal control.
Precious metals ETF charge a yearly fee. A buddy of mine once developed a financial instrument, where the ETF really owns the metal and does not mimic its spot price but also pays a dividend. (And yes, it was legit and a great idea)
Where does the money come from for the dividend? If company profit or gold price goes down does the dividend become negative?
> Where does the money come from for the dividend?
They loan it out.
They loan it out.
Nope. But please understand that I can't elaborate this since I still think it is a nice idea. But I give you a hint: I talked about precious metals, not gold. :-)
Plutonium ETF, where you literally can't hold it?
If you heat it up does it expand in volume?
Since GP won't say, my guess is the idea was to explicitly not target capital growth, but a fixed value ('does not mimic spot price') - so you buy in at spot or with some some spread, and the dividend pays out by selling the underlying as spot goes up, with some buffer for fees and being able to buy a certain amount as it falls.
If the dividend were also a function of volume & prices of (filled) ETF orders, it could tolerate up to 100% loss.
But that doesn't account for the 'I said precious metals, not gold' hint.
If the dividend were also a function of volume & prices of (filled) ETF orders, it could tolerate up to 100% loss.
But that doesn't account for the 'I said precious metals, not gold' hint.
I just think it's neat to have
I've been thinking about this.
People invest/collect gold like this and it clearly only profitable for the people who buy and sell gold who charge you to do both.
I also think it's a hobby. Like people collect this or coins or stamps or Pokémon cards. I think as far as things to spend your time on for entertainment, you loose the lease amount on this compared to collecting other things or spending the time you spend on this entertainment doing another form of entertainment.
It's not investment unless your scrooge mcduck and have a big gold factory, it's really entertainment like collecting baseball cards.
People invest/collect gold like this and it clearly only profitable for the people who buy and sell gold who charge you to do both.
I also think it's a hobby. Like people collect this or coins or stamps or Pokémon cards. I think as far as things to spend your time on for entertainment, you loose the lease amount on this compared to collecting other things or spending the time you spend on this entertainment doing another form of entertainment.
It's not investment unless your scrooge mcduck and have a big gold factory, it's really entertainment like collecting baseball cards.
People value those when they don't trust the finance institutions to keep their paper-gold promises.
Why people are distrusting those institutions, and on the US for all places... that's a question for sociology or psychology. I strongly suspect the social network cultural bubbles are behind this, but don't have much to say there.
(Anyway, I'm not an economist, but I've studied it a bit. This question is quite simple anyway, and it's something that has happened before, so it's pretty well covered.)
Why people are distrusting those institutions, and on the US for all places... that's a question for sociology or psychology. I strongly suspect the social network cultural bubbles are behind this, but don't have much to say there.
(Anyway, I'm not an economist, but I've studied it a bit. This question is quite simple anyway, and it's something that has happened before, so it's pretty well covered.)
Costco really doesn’t have any appreciable margin on their products. Their net profit[0] is only a tiny bit more than their membership fees - effectively they sell their merchandise “at cost” (including overhead).
0: https://www.reddit.com/r/Costco/comments/16tae6a/how_does_co...
0: https://www.reddit.com/r/Costco/comments/16tae6a/how_does_co...
Sounds like people who buy currency from a high street currency exchange or bitcoin from coinbase (or a high street bitcoin ATM!) Even if the theory of investing may be sound they haven't really thought through how they're going to sell it later. No doubt they have heard investing in the particular thing is a good idea but lack the knowledge to properly apply it.
I don’t imagine you’d ever sell these, but what beats having a gold bar in your home? A very tiny one, but still.
I dunno, a 1956 Fender Stratocaster, maybe?
Something you can actually do something with?
Something you can actually do something with?
Anything with utility? Anything at all?
Most people have things in their home, that they paid for, that have negative utility.
Televisions, video game consoles, etc.
A 1/2 oz gold coin is a superior investment to a PlayStation 5. Sure, it won't generate any yield, and has some degree of illiquidity, but it won't waste N hours per day of your limited, and rapidly expiring life, that you could have spent on more productive pursuits.
Televisions, video game consoles, etc.
A 1/2 oz gold coin is a superior investment to a PlayStation 5. Sure, it won't generate any yield, and has some degree of illiquidity, but it won't waste N hours per day of your limited, and rapidly expiring life, that you could have spent on more productive pursuits.
Yeah, why have fun when I could
be Generating Profit? Sorry I enjoy recreation.
Many people play games that are not fun and actually make them angry and triggered.
That's a skill issue and it's not common by any means
Where did you get the impression generating profit is the goal?
Before 2008 quite a few people around me were purchasing physical gold. I even know of one guy who bought 20000€ worth of gold. AFAIK none of them had any idea afterwards what to with that stuff. I assume it is rotting (or keeps on shining) in their basements and will only be touched when they die or move out.
One of the nice things about gold (one reason it is so valuable) is that it doesn't "rot" or degrade, like, at all. Naturally, it does not tarnish.
So unless you have a lot of aqua regia lying about in your house, it will remain exactly as is.
So unless you have a lot of aqua regia lying about in your house, it will remain exactly as is.
1. Pure gold will react with mercury and halogens. Yes, pure gold does "rot", just at lower rate, but still happens.
2. Most of the physical gold products, even at 99.99% pure, has 0.001% other elements which do rot too.
I bought a gold bar worth a couple grand just yesterday. It hardly takes up any space in my nightstand drawer. There’s no need to come up with an idea of what to do with it, it’s not like 20k worth of gold is a huge brick or something.
Just looked it up, if that one guy needs money today his 2008 €20k gold would buy him >€40k today. Not so bad.
Doubling your money over 15 years is a pretty low ROI. Even conservative investments are expected to double every decade.
That would be under 1 kg of gold. For that small an amount, there will only be a small handful of private buyers, and their offers won't be anywhere near the amounts shown on commodities exchange tickers.
Maybe it's better understood as plate, not coin. Dishwear put it in a burghers display case most of the year, that can, in times of war or distress be used as money. It has a sentimental value primarily, nonetheless, it has a veneer (pun intended) of true intrinsic value as well.
It’s a prepper thing, isn’t it?
Laypeople hear professionals talk about how gold is a good investment, but they don't realize that professionals are trading gold ETFs and futures. Ill informed lay people then go buy a gold bar from Costco.
For laypeople there are two reasons to trade gold: to show it off, or in event of society collapse. Both of them require you to have the physical gold in your possession. Professionals can trade gold futures and make money, but that is a very different type of investment that laypeople generally should stay out of because of how complex it is.
In most of the under developed world were financial systems are unstable/dont control the economy, they dont convert gold into local currency. They use it as currency. "You want that cow, give me that nose ring".
Ofcourse in the "developed world" the problem is, one fuckhead will show up, who wants to own all the cows, for no logically reason other than he just has too. Naturally gold wont work.
Ofcourse in the "developed world" the problem is, one fuckhead will show up, who wants to own all the cows, for no logically reason other than he just has too. Naturally gold wont work.
Quite a lot of the "less developed" world has person to person mobile payment systems such as M-Pesa.
Only in your fantasy world. In the real world they trade dollars.
Not always.
My friend in Vietnam was saying how it wasn’t that long ago (10-20 years maybe?) when property was purchased directly with gold talens.
You exchanged Vietnamese dong for gold, then transferred that to the seller.
I assume it was done to avoid the crazy inflation and concern over validating that a massive stack of bills didn’t include counterfeits. And the lack of foreign currency to convert to.
My friend in Vietnam was saying how it wasn’t that long ago (10-20 years maybe?) when property was purchased directly with gold talens.
You exchanged Vietnamese dong for gold, then transferred that to the seller.
I assume it was done to avoid the crazy inflation and concern over validating that a massive stack of bills didn’t include counterfeits. And the lack of foreign currency to convert to.
When I looked into this, the consensus seemed to be that the best form of gold, if you want to physically hold it yourself, is gold coins minted by reputable national mints. American Gold Eagles, South Africa Krugerrands, etc. These trade at close to spot.
And a 1 oz Krugerrand or Gold Eagle is about $20,000. If you can afford enough volume of those that it’s difficult to secure them, you can afford to secure them.
And a 1 oz Krugerrand or Gold Eagle is about $20,000. If you can afford enough volume of those that it’s difficult to secure them, you can afford to secure them.
It's $2,000, not $20,0000 (I assume USD). Gold coins are pretty easy to come by in my experience.
You are correct. My mistake.
Funny story: when we bought our second house we found the previous owners had left high in a cupboard a small trumpet case containing a trumpet, a set of freemasons regalia and about 20 krugerrands.
We took it round to the old owners new house and passed it all over. They seemed happy. I think I'd have struggled to keep it the law not withstanding.
Three months later we found a box of (from what I am told, illegal, modified) small arms bullets hidden behind the wardrobe. We handed that into the police.
We took it round to the old owners new house and passed it all over. They seemed happy. I think I'd have struggled to keep it the law not withstanding.
Three months later we found a box of (from what I am told, illegal, modified) small arms bullets hidden behind the wardrobe. We handed that into the police.
Sort of. You want minted bullion. Usually they're capital gains free too. Nonetheless I don't think gold is a great investment for preppers or for just normal investing. There are also some very serious environmental/human rights concerns with gold that keep me out.
The only reason for keeping it personally would be barter in case of a total economic collapse. I mean; my precious metal ETF, nuclear energy ETF and accidental USD currency purchase at the right time kept me fully clear of any inflation here in the EU, but I doubt physical gold would do anything like it. However for barter….
I always bring up Somalia. The government crumbled and they continued to use local paper currency even after the printing presses were destroyed and there was nothing backing it. In the actual global collapse scenario, physical cash is likely to be more fungible and still have value than gold.
So if you really want to prepare for that (which should be like step 156 in terms of prepping), the right solution after you have all your direct physical needs (canned food, medicine, etc.) is simply a cash stockpile.
So if you really want to prepare for that (which should be like step 156 in terms of prepping), the right solution after you have all your direct physical needs (canned food, medicine, etc.) is simply a cash stockpile.
I think the true use of physical gold is as a means of carrying wealth from a collapsing financial system to a new one.
That is, it's not a hedge against inflation, it's a hedge against financial system instability/collapse of which severe inflation can be a harbinger.
That is, it's not a hedge against inflation, it's a hedge against financial system instability/collapse of which severe inflation can be a harbinger.
As well as collapse I think there's a case to be made for hedging against loss of access to the normal financial system.
E.g. maybe one day the CIA will believe very strongly that you are a terrorist. In that situation a kilo of gold might be extremely useful!
Actually this is probably an even stronger case - gold will lose almost as much value as money in the case of economic collapse. Whereas wanted terrorists can probably still get a fairly decent price.
E.g. maybe one day the CIA will believe very strongly that you are a terrorist. In that situation a kilo of gold might be extremely useful!
Actually this is probably an even stronger case - gold will lose almost as much value as money in the case of economic collapse. Whereas wanted terrorists can probably still get a fairly decent price.
That still assumes that gold would hold its value in a total economic collapse. Why would it?
It's a relatively rare element that has a lot of practical and social value, consistently throughout almost the entire history of humanity. It is also extremely stable compared to things which may have more practical value such as food or water, which grants it a unique value as bartering currency without central governments. It is also fairly easy to appraise to a rough degree of purity due to its stability, softness, and density.
If everything breaks down (like not just a blackout etc but all of society disapears) you are probably better off bartering with useful stuff like guns, food, tools etc
In the current market, you can invest and make interest in gold and silver: https://monetary-metals.com/
>I'd love to see an economists take on the value to a consumer of holding gold in this form, at the price.
I doubt you will find any unbiased opinion. Its important to remember that economists arent solely focused on the IS state. Its not a science, its perception management. The narrative is self fulfilling.
I really enjoy the npr article on the Brazilian inflation on this https://www.npr.org/sections/money/2010/10/04/130329523/how-...
The tldr is that the economy is what you think it to be.
I doubt you will find any unbiased opinion. Its important to remember that economists arent solely focused on the IS state. Its not a science, its perception management. The narrative is self fulfilling.
I really enjoy the npr article on the Brazilian inflation on this https://www.npr.org/sections/money/2010/10/04/130329523/how-...
The tldr is that the economy is what you think it to be.
Totally correct. Was watching an interesting town hall by the Fed for educators, and it was interesting to hear JP say "we have so many fine [Econ] textbooks", and in a different sentence say "it takes a few editions to catch up to our innovations". It was perfectly illustrating what I learned in undergrad Econ .. it is the science of explaining what happened. Extrapolation is fine but under no warranty. I have made major personal blunders relying on established econ theory to hold (especially around housing). My new take is the govt will bail out the masses in some instances, so just follow the trend.
>My new take is the govt will bail out the masses in some instances, so just follow the trend.
Unless they are too incompetent or corrupt to keep the ship sailing. Which you could also reword into the problem becoming too complex and the process missing means to counter steer.
Especially with the later framing it becomes clear that one might have unrealistic expectations for the process the problem got delegated to. Stuff is complicated and checks and balances in form of the fourth estate are currently dysfunction due to a lack of a financing.
Unless they are too incompetent or corrupt to keep the ship sailing. Which you could also reword into the problem becoming too complex and the process missing means to counter steer.
Especially with the later framing it becomes clear that one might have unrealistic expectations for the process the problem got delegated to. Stuff is complicated and checks and balances in form of the fourth estate are currently dysfunction due to a lack of a financing.
This is strange, apparently they're selling at a significant loss?
Current online price, $1930. Spot gold, $1872.59. So a little less than a $58 premium.
My credit card gives me 2% back, and my Costco membership 2% on top of that, for a total of 4%. I assume that Costco probably pays a bit more than 2% for card processing, and of course they're the ones actually paying me the 2% back from the membership.
So that's at least 4%, not including the minter's profits, shipping and security costs, warehouse worker wages and overhead, insurance, shrinkage, etc, which are surely at least a few percent more of the sales price.
But just 4% of $1930 is $77, meaning I would recognize a hypothetical profit in an immediate spot sale of $77 - $58 = $19 per bar. Costco's actual loss is certainly more than that, realistically probably more like $50+ per bar, or most likely $100+ per member.
Weird. The article mentions preppers, I guess they really want them as members.
Current online price, $1930. Spot gold, $1872.59. So a little less than a $58 premium.
My credit card gives me 2% back, and my Costco membership 2% on top of that, for a total of 4%. I assume that Costco probably pays a bit more than 2% for card processing, and of course they're the ones actually paying me the 2% back from the membership.
So that's at least 4%, not including the minter's profits, shipping and security costs, warehouse worker wages and overhead, insurance, shrinkage, etc, which are surely at least a few percent more of the sales price.
But just 4% of $1930 is $77, meaning I would recognize a hypothetical profit in an immediate spot sale of $77 - $58 = $19 per bar. Costco's actual loss is certainly more than that, realistically probably more like $50+ per bar, or most likely $100+ per member.
Weird. The article mentions preppers, I guess they really want them as members.
"Costco's credit card policy is all about saving money. It negotiates a partnership agreement with a single payment network in exchange for much lower processing fees. As part of its current deal with Visa, it pays transaction fees of only 0.4%. By saving on fees, Costco is able to keep prices low."
https://www.fool.com/the-ascent/credit-cards/articles/why-do...
They actually secure a very nice low rate via their credit card policy
https://www.fool.com/the-ascent/credit-cards/articles/why-do...
They actually secure a very nice low rate via their credit card policy
By not demanding better legislation, you're still being ripped off. What you describe as a "very nice low rate" is higher than the legislated EU wide limit.
https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
But I get minimum 2% cash back when I use my card. Prices are 0.4% higher because of the fee, but I still come out way ahead. You can easily get 5% back on gas, groceries, Amazon purchases, etc. American credit cards are awesome if you know how to use them.
> I get minimum 2% cash back when I use my card. Prices are 0.4% higher because of the fee, but I still come out way ahead.
You, and people who use such cards, do. But everyone else is having to pay for your cash back.
You, and people who use such cards, do. But everyone else is having to pay for your cash back.
Funny thing is I'm still getting between 3% and 5% cashback on my US cards that I use in the EU. Those interchange fee limits are probably EU issued cards only.
That is probably your card issuer loosing money because US cards used in Europe is a small enough segment to not demand any policy changes.
In particular the articles talks about exemptions:
> provides for a limited number of exemptions, such as business cards used only for business expenses being charged directly to the account of the company;
In particular the articles talks about exemptions:
> provides for a limited number of exemptions, such as business cards used only for business expenses being charged directly to the account of the company;
In EU, credit card processing is way more than 0.3%.
Fascinating. Visa-subsidized gold I guess.
Don't worry, Visa isn't subsidizing anything. At 0.4% they're most likely still making money, at a low margin, but still taking home a profit.
Credit card transaction fees in Europe are capped at 0.30%[1] and visa operates here.
[1] https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
Credit card transaction fees in Europe are capped at 0.30%[1] and visa operates here.
[1] https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
Visa never takes on any risk, the card issuing bank would be subsidizing, if that.
The cashback from cards isn't pad by the retailers, it paid by the issuing bank and consequently by the poor sods who carry a balance at rates up to 36%.
Costco's cashback is probably some variation of the same scheme, or a similar loyalty scheme.
So ultimately Costco only pays the processing fee of 0.4% or whatever.
Costco's cashback is probably some variation of the same scheme, or a similar loyalty scheme.
So ultimately Costco only pays the processing fee of 0.4% or whatever.
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I was wondering why these were selling out like that… I see gold for sale occasionally @ spot price but I’m not personally interested.
But with the 4% you mention it makes a lot more sense.
But with the 4% you mention it makes a lot more sense.
Other than what the others have said about credit card fees, I thought in general the whole business plan of Costco was to basically sell things at nearly no profit, and make most of their money from the members fee.
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My understanding is that holding physical gold is a big hassle when you want to sell. Sensible buyers will want to verify that it is real and not gold-plated tungsten.
Fake gold bars are common.
If you want to hold gold as a hedge against high inflation then you want "good delivery" gold, which stays in a vault with chain of custody records.
Fake gold bars are common.
If you want to hold gold as a hedge against high inflation then you want "good delivery" gold, which stays in a vault with chain of custody records.
Unless high inflation topples the banks.
If one bank collapsed you can collect your non-can assets because they are custodians not owners.
If the entire system collapsed then you should be holding food, not gold.
If the entire system collapsed then you should be holding food, not gold.
> If the entire system collapsed then you should be holding food, not gold
Or hoard bullets and high explosives to redirect food from the rubes who collected gold.
Or hoard bullets and high explosives to redirect food from the rubes who collected gold.
And if the banks topple... good luck finding someone who will take your gold.
I think you mean "finding someone who will pay you for your gold". WROL means people will just be looting your corpse.
Yep they will be converting a couple hundred grams of lead into a gold fortune if society collapses if they're aware you're hoarding it :(
That’s exactly my question as well. If you turned around and immediately tried to sell the bar, what kind of loss is likely? The dealer is not going to trust a random lump of gold is legit, so they have to have some testing/risk to hedge.
I used to buy gold bullion as a sneaky way to get credit card points on the cheap (and then use them for first class flights around the world). You could usually do the trade profitably and quickly and quite safely with insured shipping via USPS. $50k at a time. It was a bit sketchy to have that much in bullion at home, and I quickly got bored of it.
The things you do when you're young…
The things you do when you're young…
Who would you sell the bullion to to cash out?
Somehow when I was about 13 I ended up buying about 2k worth of silver in various places when spot was about $15 USD. One place was even an antique coin shop in my hometown. When spot went up to $20 a bit later, the same vendor bought it all off me at market price. Precious metals are a strangely easy thing to liquidate.
One of the strangest financial anecdotes of my life. To this day I wonder what the vendor thought seeing a literal child buying bars of silver bullion, then selling them at a 25% markup later.
One of the strangest financial anecdotes of my life. To this day I wonder what the vendor thought seeing a literal child buying bars of silver bullion, then selling them at a 25% markup later.
They must charge a spread or fees?
There are various precious metal trading companies that will buy the bullion from you at close to spot if it's kept in its original assay and has documentation. If not in assay, they will have to test its purity and potentially remelt it so that adds to the spread.
Did the same with those $1 US coins when the mint was allowing you to purchase them for $1 free shipping. We would get as much as possible and then turn around and deposit into the bank.
why would you pay $1 each for $1 coins and turn around and put that in the bank? I mean what's the purpose? I could see if you were keeping them as collectors items that might be worth more in the future, but once dropped in the bank you're back to where you started??
It’s called manufactured spending and the idea is to be able to buy something and liquidate at the same price with no risk. The intent is to rack up points on credit cards for free travel or to manipulate credit scores.
Did you just jump into a sub comment and it read prior comment? Lol credit card points. Then deposit and pay off what you spent.
infecto(1)
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My dad, near the end of his life, was "convinced" by his UBS money managers to move most of his assets into gold. He had a signficant amount of money, and this yielded a major payday for the fucktard at UBS that told him to do it. I can't see any reason for it!
That's really strange. I've spoken to UBS investment managers, and they're incredibly cautious about everything they suggest. There's a lot of red tape, almost wonder if something dodgy was going on.
> and they're incredibly cautious about everything
Have you ever heard a precious metals ad? The line between cautious and paranoid can wear thin, and that's who the target market is.
Have you ever heard a precious metals ad? The line between cautious and paranoid can wear thin, and that's who the target market is.
Predatory ads are shown 24/7, with some infotainment filler, to the elderly.
While doing familial eldercare, I have to wear earplugs, to protect myself from the sensory overload.
While doing familial eldercare, I have to wear earplugs, to protect myself from the sensory overload.
Are USB money managers fiduciaries?
Certain cultures are known for gifting gold bars at weddings. Professional thieves know this and target the houses of families meeting this demographic. There's been an organized crime syndicate in my part of New Jersey that has been successfully hitting houses. Local detectives do nothing, aren't any help at all.
Are there any news articles about that? Bob Menendez has taken over all searches for "New Jersey" with "gold bars".
"gold bars" "new jersey" -"menendez" robberies. ?
That only gets one "relevant" story (quotes and negations don't really work on Google, Brave, or DuckDuckGo anymore), about a scammer who was not "hitting houses".
why wouldn't you put them in safety deposit boxes? I know there are issues with that but seems safer than under your mattress when it's know that thieves are breaking in and stealing them.
Sounds like Indians. The craze for gold in India is unbelievable. It’s common thing for Indians to buy gold from middle east and bring it to India.
Something I like about India is they actually use gold, unlike many other gold purchasers.
India is a great source for beaten leaf gold - you can buy "books" of hand beaten tissue thin gold which is useful both for gilding idols and for other craftwork (eg: glassblowing).
India is a great source for beaten leaf gold - you can buy "books" of hand beaten tissue thin gold which is useful both for gilding idols and for other craftwork (eg: glassblowing).
This is something I haven't thought of! Growing up in India, I know that majority of the Indians have their gold in the form of jewelry, and man I've seen people with so much jewelry it's borderline insane (coming from a guy who'd call himself minimalist). I certainly haven't seen people in any other country use gold/jewelry as much as Indians do.
If you'd travelled to Africa prior to 1930 (ish) you'd have seen many areas where copper and bronze bangles, rings, Manilla's were worn on the body being a dominant form of currency in a number of regions for some centuries.
With gold, IIRC, some 45% of annual extraction goes to jewelry {decoration | investment}, roughly 10% goes to actual 'practical' use, and the rest goes to pure investment hoarding.
In many ways the vast amounts of energy and resource spent on gold mining are wasted almost entirely just to have something shiny that is conventionally deemed 'precious' because it is shiny (and noble - doesn't react).
The total practical use of gold is about 12% of total gold (10% new gold per annum, 2% recycled gold) with 88% of gold going to some form of hoarding | possession.
With gold, IIRC, some 45% of annual extraction goes to jewelry {decoration | investment}, roughly 10% goes to actual 'practical' use, and the rest goes to pure investment hoarding.
In many ways the vast amounts of energy and resource spent on gold mining are wasted almost entirely just to have something shiny that is conventionally deemed 'precious' because it is shiny (and noble - doesn't react).
The total practical use of gold is about 12% of total gold (10% new gold per annum, 2% recycled gold) with 88% of gold going to some form of hoarding | possession.
So there's more parallels between PoW cryptocurrency and gold than the skeptics claim. TIL.
These bars are being posted on Xiao Hong Shu with quite a lot of comments and interest.
Pfft, why settle for a 1oz bar when you can get a
Mother and Baby Kangaroo 2023 2oz Gold Bullion Coin
https://www.perthmint.com/shop/bullion/bullion-coins/mother-...
from the Perth Mint?
( Or Dillon Gage, Texas: https://dillongage.com/coins/perth-kangaroo/ )
Buy one for your mother and two for your girlfriend, they're so cute you'll want more!
Don't turn over if you're not into monarchies
Caveats when biting the gold: https://www.perthmint.com/news/media-announcements/corporate...
Mother and Baby Kangaroo 2023 2oz Gold Bullion Coin
https://www.perthmint.com/shop/bullion/bullion-coins/mother-...
from the Perth Mint?
( Or Dillon Gage, Texas: https://dillongage.com/coins/perth-kangaroo/ )
Buy one for your mother and two for your girlfriend, they're so cute you'll want more!
Don't turn over if you're not into monarchies
Caveats when biting the gold: https://www.perthmint.com/news/media-announcements/corporate...
I love the idea of coins, but I wish they didnt have a value written on them - 200 AUD in that case - about 30x less than its material value.
I can just imagine someone inheriting my coins and spending them for face value!
I can just imagine someone inheriting my coins and spending them for face value!
Surprised you didn't go with the 5oz 'Super Pit' at $9,500 USD.
https://www.perthmint.com/shop/bullion/bullion-coins/super-p...
The regent on the obverse is a standard feature of all Australian coins.
https://www.perthmint.com/shop/bullion/bullion-coins/super-p...
The regent on the obverse is a standard feature of all Australian coins.
As it is a 2023 coin, why doesn't it have Charlie?
I like that Perth Mint considers "Australian legal tender" a feature of a $6,000 coin
The British mint explains that this makes their bullion coins exempt from capital gains tax: https://www.royalmint.com/invest/bullion/uk-coin-ranges/sove...
There are probably similar rules in other countries.
There are probably similar rules in other countries.
thanks for the info, I hadn't realised that it's so blantant easy to avoid tax like that
It's a 'feature' 49 coins @ $200 each is less than $10,000 in legal tender and doesn't have to be declared as a cash transaction or carry on cash.
Also handy for reducing transfer taxes on house purchases - you can have a higly qualified QC (fancy lawyer) swear affidavits that they witnessed the purchase of a house for an absurdly low amount and therefore the required tax is correct despite being so low.
Also handy for reducing transfer taxes on house purchases - you can have a higly qualified QC (fancy lawyer) swear affidavits that they witnessed the purchase of a house for an absurdly low amount and therefore the required tax is correct despite being so low.
I don't think I'll be retaining you as my tax advisor.
As a point of law it comes down to jurisdiction and whether the gold loophole has been closed.
If a seller offers a house for $6,000,000 and an offer is made to pay $200,000 in legal tender of that country .. and the seller accepts ... what is the sales tax?
Is it calculated from the $200,000 in legal tender which was witnesed by officers of the highest standing, or is it calculated from the metal value of the coins ($6 million)?
You really don't want a tax advisor on this, you want an authoritive legal opinion.
It is a loophole that has been exploited in various countries at various times - but you'd want to be sure of current laws if you're tempted to go that route.
If a seller offers a house for $6,000,000 and an offer is made to pay $200,000 in legal tender of that country .. and the seller accepts ... what is the sales tax?
Is it calculated from the $200,000 in legal tender which was witnesed by officers of the highest standing, or is it calculated from the metal value of the coins ($6 million)?
You really don't want a tax advisor on this, you want an authoritive legal opinion.
It is a loophole that has been exploited in various countries at various times - but you'd want to be sure of current laws if you're tempted to go that route.
I struggle to find the value in keeping gold.
You can't eat it.
You can't use it as a tool.
You can't even buy groceries with it (well at least today. Point is: it's not a liquidity).
But yes, maybe you'll be able to make a profit in the future, by selling it to people who can't eat it or use it as a tool either. Or I guess trade it to save your life in a hypothetical future scenario.
It's just a weird way of keeping value. Wouldn't you rather buy a piece of land? At least you can pitch your tent or grow potatoes there.
Am I missing something?
You can't eat it.
You can't use it as a tool.
You can't even buy groceries with it (well at least today. Point is: it's not a liquidity).
But yes, maybe you'll be able to make a profit in the future, by selling it to people who can't eat it or use it as a tool either. Or I guess trade it to save your life in a hypothetical future scenario.
It's just a weird way of keeping value. Wouldn't you rather buy a piece of land? At least you can pitch your tent or grow potatoes there.
Am I missing something?
Holding Gold is kinda just like holding a foreign, well accepted, currency. As many unofficially countries use dollars because they are more stable than their own currency.
You can buy and sell gold anytime at the bank (at least here in central Europe) just like any other currency.
So if you don't trust your own currency it kinda seems like a logical next step. Should the dollar crash it's likely gold won't crash at the same rate, at least not for long.
You can buy and sell gold anytime at the bank (at least here in central Europe) just like any other currency.
So if you don't trust your own currency it kinda seems like a logical next step. Should the dollar crash it's likely gold won't crash at the same rate, at least not for long.
What's the spread in a local bank for different transactions sizes (100g, 1kg, etc..)?
Its value has gone up in most currencies in most time frames. People don't buy gold to buy groceries, to eat it, or to use it as a tool. They buy it so that 20 or 30 years later it has roughly kept its value, i.e. it has performed much better than holding currency.
Buying land requires maintenance, and probably comes with some ongoing tax implications.
Buying land requires maintenance, and probably comes with some ongoing tax implications.
Also 'anyone' knows which land you own, nobody knows how much gold you hide in your closet.
Could you not say the same thing about cash? The one difference here is it a defacto nation-agnostic currently that can (because we decided to) be easily traded nearly anywhere in the world. One advantage of it is the relatively fixed supply. It's still all made up but at least you can touch it and carry it with you. Land is great, but you can't take it with you.
> Could you not say the same thing about cash?
Cash is how taxes, payments for state services, public workers salaries, and public investments are specified. If the goal of cash is to serve as money then those all on themselves already set very concrete measures of value.
Cash is how taxes, payments for state services, public workers salaries, and public investments are specified. If the goal of cash is to serve as money then those all on themselves already set very concrete measures of value.
We can probably thank Senator Bob Menendez for this. After getting indicted (again!) for taking bribes, his defense is that owning physical gold bars is a great idea.
As an aside, unfortunately for Bob they have him dead to rights this time, there's not gonna be a hung jury.
As an aside, unfortunately for Bob they have him dead to rights this time, there's not gonna be a hung jury.
US inflation is about to run away long-term but Costco's gold bars are only useful to conspiracy theorist preppers, bribing Sen. Bob Menedez, and money launderers. (Bob only accepts 1 kg bars though.)
Note, folks we normally find it an expansive lesson to speculate on those items with huge store costs such as Oil and Gold.
In case of gold, part of the store costs is the fact that its not legal tender and direct gold ownership has several large obstacles. Not to mention gold coin where the cost to take that non-pure gold and convert it is expensive.
If you are looking at this buy a meal for a commodity trader and use that meal time to get an education on these issues before jumping into it!
In case of gold, part of the store costs is the fact that its not legal tender and direct gold ownership has several large obstacles. Not to mention gold coin where the cost to take that non-pure gold and convert it is expensive.
If you are looking at this buy a meal for a commodity trader and use that meal time to get an education on these issues before jumping into it!
Government can take away all your gold: https://theconversation.com/how-the-us-government-seized-all...
https://en.wikipedia.org/wiki/Executive_Order_6102
https://en.wikipedia.org/wiki/Executive_Order_6102
> The limitation on gold ownership in the United States was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars, and certificates by an Act of Congress, codified in Pub. L.Tooltip Public Law (United States) 93–373,[1] which went into effect December 31, 1974.
[ibid.]
[ibid.]
Sure but it can just as easily be passed again.
The government can do whatever it wants as long as they pass a law and you respect it.
The government has armies so not respecting whatever laws they pass is hard and potentially deadly. In some cases it is worth it, but typically people are better off respecting whatever laws that are put in place.
What if you hid it well? How are they going to find it?
"Hi, Costco. We would like to subpoena you for the customer records for every person that bought gold. Note that 'would like to' means 'are going to, and you will comply'. Love, the US Government."
"Hello I'm agent smith from federal agency group, costco said you bought some gold, where is it?"
"lost it"
"Mind if we search your house?"
"i've known you were going to ever since I bought the gold; knock yourself out. Just please don't disturb my antique collection of locked filing cabinets. They're all empty but the keys are in that big pile over there"
"lost it"
"Mind if we search your house?"
"i've known you were going to ever since I bought the gold; knock yourself out. Just please don't disturb my antique collection of locked filing cabinets. They're all empty but the keys are in that big pile over there"
You sound overly confident. It's not as if federal agents never had to look for hidden money stashes before...
Here in Greece when people want go they'll go to a bank and buy British gold pounds (https://en.wikipedia.org/wiki/Sovereign_(British_coin)). I'm not sure there's a limit; you can buy as many as you want.
I found a bank web page (in english https://www.piraeusbank.gr/en/idiwtes/ependyseis/agora-polis...) with more info about buying gold sovereigs. A gold sovereign is sold by the bank at 480 euros (https://www.piraeusbank.gr/en/Idiwtes/Epitokia-Deltia-Timon/...)
This is very popular here because gold sovereigns here in greece are traditionally given as presents from close relatives on very important moments like marriage, child birth etc (i.e when a child is born its grandparents will give a gold sovereign to its parents)
This is very popular here because gold sovereigns here in greece are traditionally given as presents from close relatives on very important moments like marriage, child birth etc (i.e when a child is born its grandparents will give a gold sovereign to its parents)
In Britain they're called "gold sovereigns", though I've never heard of anyone owning one — only from references in James Bond films and so on. I wasn't aware the nominal value was £1.
Lots of wealthy buy these by the tube. Being legal tender they are free of VAT and CGT on sale, which isn't true of investment grade gold biscuits.
False, you pay CGT on investment gold in almost all countries.
But not on UK gold, silver, and platinum coins in the UK. https://www.royalmint.com/gold-price/capital-gains-tax-on-in... ; mine have, to my surprise, done better than my stock portfolio and almost as well as my house as investments.
(just don't buy new ones, you have to pay 20% VAT on those which is silly)
(just don't buy new ones, you have to pay 20% VAT on those which is silly)
The Q suitcase with the 50 gold sovereigns from From Russia With Love, was it?
Ironically the plot of Goldfinger relies on something which no longer exists: capital controls. The evil Auric Goldfinger was trying to circumvent British control of the export of money by hiding gold in car panels.
Ironically the plot of Goldfinger relies on something which no longer exists: capital controls. The evil Auric Goldfinger was trying to circumvent British control of the export of money by hiding gold in car panels.
When I watched Goldfinger as a kid I really did not understand the plot at all. It was only when I was a bit older and heard about some of these things did it actually make sense.
There was a more recent Bond movie whose evil plot was about water rights... which had happened, legally, while the movie came out, I think.
The next Bond villain's evil plan will involve either local zoning law or capital repatriation taxes.
I think there are two perspectives on this. Either this is a very good PR campaign so that these retail companies can sell literally anything to any customer. Or people are concerned about the inflation rates so that they went back to the roots of the USD which is gold. In both of the cases, this should be researched in-depth
>Rose noted that the company seems to have accelerated its offerings of dried foods and other survivalist goods at a time when worries about the future are running high
>For example, the company markets a 150-serving emergency food preparedness kit that could come in handy, you know, just in case. Gold meshes with that type of product.
>“They’ve done their market research. I think it’s a very clever way to get their name in the news and have some great publicity
This is the crux of the trend. I actually pick up one of these food preparedness kits every time I make a trip to Costco. They have a 25 year shelf life and have 25 servings of food. At $60 each (in the store, the online price is higher for some reason), that's the cheapest insurance policy I can think of, I'll take it.
But really they are cashing in on the growing sense of uncertainty about the future that many Americans are feeling.
>For example, the company markets a 150-serving emergency food preparedness kit that could come in handy, you know, just in case. Gold meshes with that type of product.
>“They’ve done their market research. I think it’s a very clever way to get their name in the news and have some great publicity
This is the crux of the trend. I actually pick up one of these food preparedness kits every time I make a trip to Costco. They have a 25 year shelf life and have 25 servings of food. At $60 each (in the store, the online price is higher for some reason), that's the cheapest insurance policy I can think of, I'll take it.
But really they are cashing in on the growing sense of uncertainty about the future that many Americans are feeling.
> At $60 each (in the store, the online price is higher for some reason)
Shipping is included in the online price.
Shipping is included in the online price.
Gold got it's reputation before we had efficient aluminum production methods. For a while, aluminum was the most useful and valuable metal on earth, it caps the Washington monument for that reason. Nothing has really changed other than gold is more scarce. In a "prepper" situation, aluminum ingots are fundamentally more useful for every use but trade, and it's trade value is only because it has trade value. It isn't like they will be making new electronics after the fall.
Over 100 years of the value being propped up by a social narrative alone. Boggles the mind. Reminds me of no-vote no-dividend stocks.
Over 100 years of the value being propped up by a social narrative alone. Boggles the mind. Reminds me of no-vote no-dividend stocks.
I wonder if one can arbitrage using credit card to buy gold then sell it back later.
If you assume gold prices can fluctuate a few percent, one can imagine making profit purely through the credit card rewards.
Essentially credit card funded benefits.
If you assume gold prices can fluctuate a few percent, one can imagine making profit purely through the credit card rewards.
Essentially credit card funded benefits.
I'm wondering if these are exempt from costco's legendary return policy.
I'm just imagining someone walking in and asking to return some items, then plonking five of these on the counter. Granted, From what I've heard, ~$10k sales/returns at costco are not that uncommon.
I'm just imagining someone walking in and asking to return some items, then plonking five of these on the counter. Granted, From what I've heard, ~$10k sales/returns at costco are not that uncommon.
> Regardless of the price, gold is selling like hotcakes
This is symmetrical / zero-sum, right?
Consumers are (allegedly) buying lots of gold for $x. And Costco is getting rid of lots of gold for $x.
This is symmetrical / zero-sum, right?
Consumers are (allegedly) buying lots of gold for $x. And Costco is getting rid of lots of gold for $x.
I think Costco is making profit from selling these, but their margin is smaller than other places. I wonder how they paid for transportation? Gold is not light.
What's the real spread on these things (i.e. how much can you sell the gold for directly after you buy it)?
Well... you cannot divide gold, unless you are using it specifically for barter. In today's market, if you split the gold bar, people will buy it from you at a lesser value than if the bar was whole.
If you sell the gold whole, I don't know of anyone that will buy it for it's true value in weight.
The best strategy for gold is buy and hold until the buyers will offer more than what someone bought it for.
If you sell the gold whole, I don't know of anyone that will buy it for it's true value in weight.
The best strategy for gold is buy and hold until the buyers will offer more than what someone bought it for.
Physical gold is absolutely a "long-term" strategy.
IMHO, coins from reputable national mints are best b/c easy to verify w/o assay.
IMHO, coins from reputable national mints are best b/c easy to verify w/o assay.
It's based on the current spot price. Depending on the form of the gold, you can sell very quickly to a trader at a little higher or lower than spot, I'd say 1-2%?. You'd get more if you sell directly to someone, but that's risky of course. Retailers sell at a premium above spot, around 3-4% for regular bullion and more for coins like American Eagles or Maple Leafs.
Purchase limit 2 per customer.
i wonder if people are buying these to meet minimum spend requirements for credit card sign up bonuses and reselling right away("manufactured spend")
Costco only takes cash and debit, not credit.
Costco accepts all VISA credit cards and offers a Costco Citi VISA card
VISA only charges 0.4% fees to Costco
Huh? That’s not true at all. I use my credit card at Costco all the time.
I’m just assuming they aren’t that familiar with Costco and are misunderstanding that they only accept VISA cards as they don’t accept credit cards
The only good reason to buy gold is to make an extremely expensive set of dumbbells.
Aren’t cigarettes a more stable currency?
i came hoping for some good ideas about how to prepare for societal collapse.
left with the knowledge of arguments about storing gold for collapse, and that i might be an idiot for preparing for a collapse. also have some knowledge of argument totally unrelated to "costco gold bars are selling out within hours"
luv u hacker news.
ps wut i do prepare for collapse ?
left with the knowledge of arguments about storing gold for collapse, and that i might be an idiot for preparing for a collapse. also have some knowledge of argument totally unrelated to "costco gold bars are selling out within hours"
luv u hacker news.
ps wut i do prepare for collapse ?
Hacker News users are always wrong when it comes to things that matter. This is not going to age well.
Going to wait for gold to drop as that's what always happens with HN topics like Bitcoin and Tesla and DropBox and so many others.
The next year buy it at half and hold for 10 years seems guaranteed.
Funny how Americans who voted Biden in probably still think they have 10% inflation when Inflation is almost 40%.
Going to be fun.
Going to wait for gold to drop as that's what always happens with HN topics like Bitcoin and Tesla and DropBox and so many others.
The next year buy it at half and hold for 10 years seems guaranteed.
Funny how Americans who voted Biden in probably still think they have 10% inflation when Inflation is almost 40%.
Going to be fun.
It's a trick of currency risk though. The denomination can make things weird.
The price of a gold piece could be $1000USD or $100USD . But if it buys you a loaf at either point of time, has the gold changed in value?
I have a joke that I believe BTC is going to $1M USD. But my fear is that so is a price of bread.
To explain the joke, I'm suggesting that Bitcoin might hit $1M each, but that it will actually be nearly worthless compared to todays purchasing power (alongside the USD)
The price of a gold piece could be $1000USD or $100USD . But if it buys you a loaf at either point of time, has the gold changed in value?
I have a joke that I believe BTC is going to $1M USD. But my fear is that so is a price of bread.
To explain the joke, I'm suggesting that Bitcoin might hit $1M each, but that it will actually be nearly worthless compared to todays purchasing power (alongside the USD)
That's what happens to all currencies once people lose faith in them. Being invested in US Dollars means you trust the federal reserve and the U.S. president and that's got to require an absurd level of naivety based on the recent and historical events.
Spot price appears to be manipulated for quite a while. Lots of demand for precious metals, yet the price isn't really going up, especially with inflation.
Yes, it's incredibly odd. Most US large ETFs and crypto have basically been in lockstep for much of the last few years. Same with housing, delayed a bit. It seems to indicate that that we're seeing when we look at the price of these assets is largely just a map of inflation rather than a substantial increase in value (i.e. just a graph of non-USD assets going up in terms of USD as real value of USD decreases). The easiest thing to check against, though, is gold, which has barely budged in comparison. Metals are not moving in lockstep. Given inflation, and the uncertainty at the beginning of COVID, you would've really expected something there. Genuinely don't get it.
There are whisperings in the investment community that the market is manipulated. Almost all gold trading is ETFs, and their gold holdings are managed by a chain of custodians several layers deep, none of which conduct public audits. The terms of the ETFs make it clear that they are completely absolved from any risks and responsibility for the holdings. At the same time, the practice of leasing out the gold in the vaults is well documented, so it is impossible to know who (or how many) 'own' a given gold bar at any given time.
The industry could counter these misgivings, by making the holdings publicly auditable, but chooses not to.
The industry could counter these misgivings, by making the holdings publicly auditable, but chooses not to.
S&P is up 4 times since its low in 2002. Gold is up 6 times since 2000. And you call that "barely budged"?
Prices went up a lot following 2020 (way above the inflation numbers). I think they are finding a new spot around the inflation numbers (maybe a bit higher but not too much).
Why assume manipulated? Could be just lots of supply.
The supply of new gold at least is pretty high: https://twitter.com/LynAldenContact/status/17066072297915888...
The supply of new gold at least is pretty high: https://twitter.com/LynAldenContact/status/17066072297915888...
[deleted]
“Lots of Demand”
[citation needed]
[citation needed]
Gold as a store of value works better when the world is using it as a reserve, but they don’t anymore so it is just like any other limited supply commodity and doesn’t necessarily need to go up in price due to inflation. It only will go up due to emotion.
In 2022 alone, central banks purchased 1,136 tons of gold[1]. The us government holds over $500b in gold[2]. Gold is still valuable as a reserve asset because it’s highly liquid, demanded by every economy, and has low inflation. Central banks frequently do settle balances between each other by transferring gold (often just involve moving the gold from one part of a warehouse in London to another part). Gold hasn’t gone away, and it’s not fading out either.
[1] https://www.reuters.com/markets/commodities/central-banks-bo... [2] https://www.fiscal.treasury.gov/reports-statements/gold-repo...
[1] https://www.reuters.com/markets/commodities/central-banks-bo... [2] https://www.fiscal.treasury.gov/reports-statements/gold-repo...
It is not true that central banks "frequently" settle balances between each other by transferring gold. This is an event rare enough that it would typically be reported in financial newspapers if it happened.
If only there was a way to teleport something with the characteristics of gold over the internet and a simple hash check to verify its purity and if there was no elasticity in supply in relation to demand. That would be so awesome.
A couple days ago I was admiring the heavy aluminum pan I was throwing out because of nonstick coating issues.
Over a hundred years ago, that pan would have been something only for the most wealthy in the world.
Only a matter of time before the same happens to gold
Over a hundred years ago, that pan would have been something only for the most wealthy in the world.
Only a matter of time before the same happens to gold
Aluminum is 3rd most abundant element in earth crust. Gold is 75th most abundant. I don't think so.
https://en.m.wikipedia.org/wiki/Abundance_of_elements_in_Ear...
https://en.m.wikipedia.org/wiki/Abundance_of_elements_in_Ear...
Who says anything about Earth's crust? I am talking about space mining. I can see gold crashing in 100 years just like aluminium.
just for fun: https://theprint.in/opinion/giant-asteroid-has-gold-worth-70...
also in the article:
> Diamonds used to be exceedingly rare, until large deposits were discovered in the 1800s in South Africa. The British businessman and colonial government official Cecil Rhodes consolidated all South African diamond mining under the De Beers company, an effective monopoly which later was controlled by the Oppenheimer family. Over the years, De Beers managed to defend this monopoly against challenges from various upstarts, by hoarding diamonds when prices were low and flooding the market to destroy competitors
also in the article:
> Diamonds used to be exceedingly rare, until large deposits were discovered in the 1800s in South Africa. The British businessman and colonial government official Cecil Rhodes consolidated all South African diamond mining under the De Beers company, an effective monopoly which later was controlled by the Oppenheimer family. Over the years, De Beers managed to defend this monopoly against challenges from various upstarts, by hoarding diamonds when prices were low and flooding the market to destroy competitors
pure gold does exist in nature, pure aluminum not so much
Right, that's exactly why aluminum had such a wild swing in value.
Gold is not hard to extract, so that won't happen with it. Instead it's hard to get in any form, so people can dig out more but the cost of extraction keeps increasing.
Gold is not hard to extract, so that won't happen with it. Instead it's hard to get in any form, so people can dig out more but the cost of extraction keeps increasing.
> the cost of extraction keeps increasing
seems logical given the diminishing supply, suggesting some "peak gold".
is it rooted in fact thou? you know, could be that humanity just hasn't found as much and is underestimating the remaining quantity.
seems logical given the diminishing supply, suggesting some "peak gold".
is it rooted in fact thou? you know, could be that humanity just hasn't found as much and is underestimating the remaining quantity.
It's a fact, from the first large scale Rio Tinto mines in Roman times that used hydralic washing (redirected rivers) to todays mega super pits, the total resource requirements per unit gold have climbed.
Today you can see this (subject to access | subscription) in industry Production All-in Sustaining Cost (AISC) Data
People write essays such as:
https://www.coindesk.com/markets/2014/06/28/under-the-micros...
and articles such as:
https://www.xetra-gold.com/en/gold-news/news/gold-production...
You can see decade long snapshots such as:
https://www.gold.org/goldhub/gold-focus/2023/04/gold-miners-...
which might convince you that gold is somehow cyclically hard to recover and the cost per unit ebbs and flows .. but the long term (50 year, 100 year) truth is that gold becomes increasingly more resource intensive to extract.
Which makes sense when you consider that it no longer just lies about on the surface in the same frequency as it once did (yes, you can still find surface nuggets .. but they are fewer and fewer).
Today you can see this (subject to access | subscription) in industry Production All-in Sustaining Cost (AISC) Data
People write essays such as:
https://www.coindesk.com/markets/2014/06/28/under-the-micros...
and articles such as:
https://www.xetra-gold.com/en/gold-news/news/gold-production...
You can see decade long snapshots such as:
https://www.gold.org/goldhub/gold-focus/2023/04/gold-miners-...
which might convince you that gold is somehow cyclically hard to recover and the cost per unit ebbs and flows .. but the long term (50 year, 100 year) truth is that gold becomes increasingly more resource intensive to extract.
Which makes sense when you consider that it no longer just lies about on the surface in the same frequency as it once did (yes, you can still find surface nuggets .. but they are fewer and fewer).
It's possible we could find some very easy deposits, but it's very unlikely they'd be enough to crash the price, and even less likely to permanently crater the price.
> Aluminum is 3rd most abundant element in earth crust. Gold is 75th most abundant. I don't think so.
If you want to cite wikipedia, you might want to cite the article on the history of aluminium, where it says in no uncertain terms that aluminium was more expensive than gold prior to the development of industrial refinement methods in the 19th century.
https://en.wikipedia.org/wiki/History_of_aluminium
If you want to cite wikipedia, you might want to cite the article on the history of aluminium, where it says in no uncertain terms that aluminium was more expensive than gold prior to the development of industrial refinement methods in the 19th century.
https://en.wikipedia.org/wiki/History_of_aluminium
People will be irrational about gold longer than civilization can remain solvent
Not if we can figure out how to bring tons of it down from the heavens
I'm no so sure. Gold has always been used as a mechanism for intrinsic value. While the dollar is not backed by the dollar anymore there is still sentiment around the world that gold is the relaible asset.
Gold has an important economic role as a means of exchange should currency collapse. So I wouldn't see it going anywhere anytime soon. Until maybe i have a gold skillet that I'm throwing out someday!
Gold has an important economic role as a means of exchange should currency collapse. So I wouldn't see it going anywhere anytime soon. Until maybe i have a gold skillet that I'm throwing out someday!
Just a bit pick, there’s no such thing as intrinsic value. All value is subjective. Gold has strong and common utility aiding in its valuation, but there is no intrinsic value.
Investment gold is usually kept in vault, and you trade ownership arms length. Direct gold ownership is rife with risks: fineness, substitutions and overpriced purchase. Yes, you can always sell at a mall gold trader but that's way way off market price.
So it's an inflation hedge with a lot of cost and risk and demands huge upswing in gold price to pay off. And securing it at volume is a nightmare. Plus Costco wants to limit you to 2, and have a margin.