2019 and 2020 books are in the
Odds and Ends
It's important to know what you like
24 5, 4:43am
1) Gold coins security.
There is always ways to overcome it, but tungsten aren’t undetectable either. It weight almost but not quite the same as gold. And there is also the simply cost-benefit difference.
A sufficiently advanced maple leaf forgery is not worth the cost, at least not at present values. When we do see a forgery it is usually in the big 400 oz good delivery bars. And it is exactly because of that forgery risk that the Shanghai gold exchange have adopted the 1kg 9999 gold bar standard. The old good delivery bars of the London bullion exhange have to go through a refinery before they can arrive at the Shanghai market, and that guarantees their authenticity.
2) Third parties.
Electronic transfer of ownership requires a third bank-like party, there is no way around that. I know thou art in love with Bitcoin but as I have also repeatedly said, it is not connected to reality, and if it were connected to realty then the thing whose ownership is being transferred have to be in some physical location.
I havn’t invested in gold money because at the moment I prefer to spend my countries fiat currency when I shop and save in gold, and I like to have it physically, and don’t have much use for banking, but if I were to transfer huge amounts of cash, in the many millions of dollars, then someone like them would be ideal.
“It works as long as gold is a gimmick and not a widely used currency”
No it works better when it have become more widely used, but it can also work now as it functions like a hybrid with dollars or euroes.
“"could lose thy farm to government confiscation"
Same goes for gold.”
Yes but the point is that they have to find it first. They always knows where my farm is, and the same is true for electronic assets like stocks and bonds, but physical moveable objects like gold, that requires them to both know where it is and to send a swat team to collect. Gold is the hardest thing in the world for government to confiscate because it is so easy to hide, which is why they usually don’t bother, unless it is for a particular large horde, one worthy of a dragon.
3) Gold vs real estate
“One million US dollars would be about 25kg of gold at current price. If Ben is not shot while illegally crossing the border at night, in new place of residence he will have to assay the gold and, most likely, prove it's provenance, unless he is relieved from it by local criminals. More likely is that before he can bolt across the border, government thugs will come for him because someone informed them about a guy that was buying gold before. Even if gold is stashed away securely, Ben is likely to tell where it is after they use a hammer on his fingers or bastard file on his teeth. Opponent has a say in your plans too.”
Yea, wrong currency calculator. 25 kg is harder to carry but still possible, but the smartest thing in that situation will properly be to bury it in many different places.
It is a bad situation in any case, and if the situation is truly this bad, just getting out of the country will be a win, but remember a devisable gold horde works a lot better as a bribe then a farm. A thug can’t put a farm in their pockets and then look the other way the way they can with a couple of gold eagles.
No, difference was that FRS uses inflation targeting and Gideon Gono is not the sharpest tool in the shed.
Thou cannot control inflation. 98% of all currency in circulation is in the form of bank deposits Only 2% is M0 physical base currency. If people don’t borrow and banks don’t lend the money supply shrinks even if M0 doubles or triples.
And then we haven’t even taken the velocity into consideration that have a lot to do with peoples mood.
If we are in a deeply deflationary environment and the central banks makes sufficiently extreme extraordinary measures to change the direction, then it will be like opening Pandora’s box, because that is where hyperinflation start.
I like to define hyperinflation as “loss of faith in the currency”. A hyperinflation starts the moment a currency goes from something to be treasured to a hot potato that one have to get rid of as fast as possible.
As soon as this mentality sets in it is game over for that currency, nothing the central bank can do at that point can turn it around.
One of the old Roman emperors tried to issue a decree promising the death penalty for anyone that took more than a certain amount for their goods and it didn’t help because their choice was die in the gallows if they get caught or die for certain by starvation if they follow the edict.
So we have historical precedence that shows that not even a credible death threat can stop a hyperinflation once it starts.
5) "and gold proved itself to be the primary safe heaven in the west."
So much that Great Britain could pull itself out of recession only when gold standard was abandoned.”
The British recession following world war one was caused by dishonesty, they had printed a lot of pound but thought that they could be held at the same price as before the war. Had they devalued the pound properly to what it now were worth there wouldn’t be a deflation. And their “abandoming the gold standard” was in reality the stealing of their citizens gold and then defaulting on their promise. It was the same thing FDR did in America.
Government shouldn’t have been involved with money at all. And gold were a safe heaven for the private individuals that held on to theirs despite their governments urging.
"But why would there ever be greater adoption when it don’t fulfil the primary need of a currency. In a time of greater and greater uncertainty, people desire security."
Sucks to be them.
Sucks more to be a bitcoin “investor” Because if Bitcoin can’t provide that, (and it can’t) then people will abandon it, when they need their money for something more pressing. I understand that thou feel smug, because thou art ridding a bubble up at the moment, but I have seen the peak and I know what lies in the bottom.
I hope for thysake that thou art only gambling with the houses money at this point. If thou don’t understand the metaphor, it comes from the casino where people come with their own cash going in, and the smart gambler puts some of his winnings away, until it equals his starting bankroll. As soon as he have put that away, and committed to not touch that again, he is only gambling for the houses money, the money he have won in the casino, so if he gets unlucky later at least he wont have lost money.
" it might be true that the Big Mac is going to become cheaper, but is that really a bad thing"
Yes, if you were the one who trusted in Mac Standard. You could have invested the same money in, I don't know, burger flipping robot manufacturer and get a much better return on investment.”
Yes and I agree, but thou don’t get my point. The point of the Mac is not that it should be an investment, it is not supposed to give a return on investment, it is supposed to be money and maintain its purchasing power.
Bitcoin shouldn’t give a return on investment either, for their to be a return on investment there have to be a growth.
For instance the return of investment in a cow is a calf. If we want to look at return on investment we have to look at businesses.
The purpose of stocks, the real purpose of stocks is the dividends they give. If the only reason why we buy a stock is that we think it will be worth more later but it don’t give dividends it will be like investing in a sterile cow that don’t produce milk, sooner or later the illusion breaks, and all that is left is to slaughter the cow and fight for the scraps (bankruptcy)
"But that is the risk, because there is always risk."
Bingo. So either you do not trust in any gold or mac standard and hold and manage your investments in stock and/or own business carefully or don't save at spend about as much as you earn”
It is about recognizing undervalued and overvalued assets. Of course gold can go into a bubble as anything else, but right now it is one of the most undervalued assets there is. Stocks real estates and bonds are likewise all very overvalued and due for a crash.
It is said that there are four places where one can invest
2) Real estate
4) Precious metal
Paper is the worst place to be because it is risky without offering any control. To invest in a business is a great idea if thou know what thou art doing, as the risk is moderate and thou hast full control. As the owner of a business thou can decide what to do with it.
To own a stock is just a way to get a share the profit of another man’s great ideas, but it offers no control so if he screws up, thou loses.
The key to successful investment is to have as much control over ones portfolio as possible.
As I am not rich enough to own businesses, and only moderately so with real estate, I have invested most of my energy in understanding precious metals. At least until I can afford to invest in the other two categories properly.