http://www.riosmauricio.com/wp-conte...e-Long-Run.pdf

this is real returns (inflation adjusted), not nominal...

I am not arguing against your points, the things we have said do not have to be mutually exclusive...

Just because there were altruistic reasons for the system doesn't mean there were not also self interested ones. You're naive to think that after winning a war the victors did not write the rules in their favor.

I was not discussing France's military involvement, but rather, their financial involvement. It doesn't matter if they were objective or not. They tried to trade a bunch of paper for gold and we said no after having previously promised to do it (we rewrote the rules of the game once the game no longer suited us...).

Anyway, I don't have a bias or a misreading of history, there are great things about America, even still. But there is plenty of bad these days. America has moved away from much of what it initially got right.

This is definitely the last Rand post I'm ever going to read. /ignored

I see Rand as performance art that reaches new highs when coupled with a little audience participation.

This is definitely the last of these I'm going to read as well. This is a super productive thread for me. /ignored

If you were to put your entire net worth into gold it is impossible to go wrong doing that. If the US government decides to become fiscally responsible... Pay off its debt... And stops spending and gold goes down to 500$\oz then that just means the dollar is stronger and prices will decrease. Which will offset the dollar price of gold you think you just lost on, because in reality the dollar price of gold is irrelevant.

But since that is a fantasy and govt will continue to be reckless your wealth will remain in tact.

Again, it is impossible to go wrong with gold. Impossible. Gold is money.

Wow. Just wow. This is such an incredibly stupid ****ing post.

Gold is an extremely volatile commodity. It has no real relationship with money anymore except that people will give you money for it. If it goes up you profit and if it falls you lose (usually a lot of) money.

Investing is betting on the real world. Your ideology has no place in the real world. You can choose to believe whatever you like, but it gets a hell of a lot more serious when you decide to put your money where your delusional brain is. Based on this post you made alone I would happily fill every trade you make from today till the day you die.

The source of the value of gold is a strange thing. From what I can tell that it has very little to do with it's utility purposes. Like anything it's price is whatever people are willing to pay for it, but if peoples willingness to pay for it is in large part based on their belief that others value it how stable can it really be?

Google the past 100 years in gold prices - it's been far from completely stable, and there's no reason why it can't/won't plummet over the course of a year or two. Nobody wins when you invest all your money in gold except people who want to sell their gold.

Just flat out 100% wrong.

There is a passage in the bible on how in 600 BC a gold ounce bought you 350 loafs of bread. Now the next time you are in the grocery store go check out what the price of a loaf of bread is and do the simple math calculation of how many loafs of bread an ounce of gold will buy you today.

Spoiler alert: it will be roughly 350 loafs of bread that can be bought today for an ounce of gold.

The dollar price of gold is meaningless. All the dollar price of gold represents is how weak or strong the dollar is and how unstable the dollar is and how the dollar is not a store of value. Gold is constant always has been always will be. It is the dollar that is speculative and going up and down.

If America was never born and the dollar never came into existence... Guess what? Gold would still have value.

You guys really have absolutely no perspective at all. It's like you think that the world began 50 years ago when the unbacked fiat FRN was created. If the dollar price of gold meant anything then how come gold has been money for thousands of years and you can buy the same amount of loafs of bread with a gold ounce today as you could 2500 years ago?

The only people who can't accept this reality are those who have been absolutely and utterly brainwashed by the almighty debt instrument dollar.

Except gold isn't an investment. Gold is real money. The only ideology that anyone is buying into is you believing that paper = wealth.

See post above.

If gold were to double in the price of dollars tomorrow. All that means is the dollar is losing value. If you have an ounce of gold and the price goes from $1,200 to $2,400 you won't be able to buy more things... Because that means bread is now 8$ a loaf instead of 4$ that it is right now.

Again... Gold is constant which is why it has been money for thousands of years. You think 40 years of unbacked fiat is going to override an application that has been money for thousands of years? I mean heck, just look around you bro, fiat currencies are failing all over the world. Countries like China, Russia, India and central banks are all buying and producing gold with increasingly worthless dollars like crazy. This 40 year experiment in Keynesian unbacked fiat is currently failing.

You're using "Keynesian" like its an economic curse word you learned yesterday.

If you hold gold forever and never buy bread, you'll be really rich. You'll also put the bread producers out of business. Your idea is that gold preserves wealth, but you're ignoring producers will not have any bargaining power and you'll begin a deflationary spiral.

"By this means government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft." -- John Maynard Keynes .



There you have it...from the horses mouth.

And it is actually quite brilliant... Because you have people who complain about things like how min wage isn't enough to make ends meet, and those same people support Keynesian economic principles which actually cause the income inequality that we have... And Keynes being the anti gold standard guy that he was is actually telling you right there that he is screwing you over while you support him.

If we were still on a gold standard and the people were in charge of the money people on min wage today would still have the same purchasing power as people on min wage had 50 years ago. But since we adopted This failed keynsian system and went off the gold standard min wage earners today have only half the purchasing power as people who made min wage 50 years ago.

What happened? Well unbacked fiat is what happened and Keynes is telling you right there that his system steals the wealth for the elite. Now do you get why everyone is broke? Our purchasing power has been inflated away.

I mean why do you think they made it illegal to own gold to begin with? For fun? No, because the elite knew that if you kept your wealth in gold that they couldn't rob you of your wealth.

Yea, obv varying levels of inflation result in varying effects on wealth.

It's hard for me to read the above and "unbacked fiat" without questioning your base of knowledge. Basically everyone respected Keynes. Von Mises respected Keynes. While Keynes clearly supported stimulus, he also regularly proposed increasing taxes to pay for war and post WWII recommended a global currency issuer to prevent the reserve currency country from screwing the rest of the world. On a geopolitical level he saw concentrating wealth in too few places would destabilize the world and worked to balance trade. He probably went too far in his suggestions. It's sloppy to form opinions that Keynes was "screwing you" and "confiscating your wealth" when the facts support he viewed global equality and global trade as a way to maintain order and peace.

Goods deteriorate in value. Money inflates to very slowly match the degrading value of goods. Since we are encouraging consumers to spend, incentivized producers meet our demands and now we all have fresh bread and iPhones/androids. With all the goods and services and connection with friends and family, I'm betting I'm not alone when I say I'll take living now on minimum wage over giving all my stuff up to live 50 years ago.

What's failed? Who is starving? Min wage earners are enjoying the magic of never being lost (gps), with on call emergency service, with record long life expectancy, and lowered probability of being born under the poverty line.

Anything that can store wealth as well as you say gold stores wealth is not worth trading for bread.

So please discuss, what happens when holding gold/money is preferable to buying bread?

The elite who hold all the gold will also rob you of your wealth AND every deflationary period will destroy production so you'll have less cool stuff.

What's failed? Like i said, look around you, fiat currencies are blowing up all over the world. Fiat is failing.


GPS? So people don't get lost anymore so it's all cool that government is stealing the wealth from the bottom up by inflating away our wealth? What does technological advances in GPS have to do with min wage going half as far as min wage went under a gold standard?

Your fundamental problem is you and most don't understand what money is. It took thousands of years to discover the best good to use as money. Nothing else comes close to gold that is why gold makes the best money.

Gold still behaves as money even though governments have banished it from the monetary system.

Holding gold is just savings that can't be inflated away by governmenrs like paper is.

In 1920 gold was $20. If you went to work in 1920 for a couple weeks and made $40 and you took 20$ and bought an ounce of gold and then took that ounce of gold and the other 20$ bill and put them in a drawer and didn't touch either of them until today....

What does that 20$ bill buy you today? Not much.

If you take that ounce of gold to a coin shop and exchange it for fiat you will get $1,250 and be able to buy the same amount of goods today as you could with that $20 100 years ago.

Which stored your wealth a lot better? The paper 20 dollar bill or the ounce of gold?

I don't get what it is you are missing here or not understanding?

Nobody is saying that currency is a good store of value.
Gold is better to hold than currency - no one would disagree.

The point originally being discussed, one that you seem to have twisted into a completely unrelated issue about fiat currency and taxation, is how stable it is and how effective a tool it is at hedging against volatility.

The fact that it happens to be roughly equivalent in terms of loaves of bread as it was in the middle east 2500 years ago is mostly coincidental. You can find a huge list of commodities whose value relative to gold has gone up or down significantly.

I don't think it is a coincidence.

The one I have always heard is that an ounce of silver would buy you a nice meal and an ounce of gold would buy you a nice suit, belt and pair of shoes.

I can say that is true in modern times and I think there is historical evidence that the same was true 5 millenia ago.

Again, this is totally meaningless as no one can hold gold securely without large costs over time. Everyone who has held over those timescales would have virtually nothing left after protection/insurance/ev of loss costs, let alone enough for equivalent items.

Its an unbelievably volatile, expensive and dangerous asset to hold lots of wealth in over time.

Gold isn't volatile. All the dollar price of gold represents is how volatile and unstable fiat dollars are. Gold is as constant as the speed of light.

How exactly is gold volatile? The dollar existed long LONG before the dollar ever existed and has been money for thousands of years. Again... You need to re-wire your brain... When the dollar fails.... Whether that be tomorrow or in 100 years... Gold will still be valuable. Just like it was valuable long before the dollar existed. The paper coloured dollar price of gold is irrelevant.

Storage costs? I don't pay anything to store my gold. Is there some sort of law where if I buy gold I have to store it in a safety deposit box at a bank? Moreover, storing at a bank isn't even smart in case of a bank holiday.

You can easily store hundreds of thousands of gold at your house free of charge. Or for the tiny cost of a safe that you keep at your house.

Considering the improvements in manufacturing and agriculture over the past 5,000 years, this would mean that gold/silver have lost an incredible amount of their real purchasing power. Like, if an oz of silver buys you 5 widgets in 3000BC and 5 widgets in 2016AD, that means silver has become tremendously devalued.

PM me your address, I'd like to mail you a couple of ounces for your help in changing my view on gold.

For gold to be a completely non-volatile store of value in human society/history, it has to both:

a) be immune from laws of supply and demand

b) completely finite with all know reserves/methods of production discovered and solved

Both of these have to be true for it to be non volatile in terms of value. Both in reality are not true, and have had huge and sweeping effects on the value of precious metals throughout human history.

Are you seriously arguing that humans always have the same exact demand/faith in gold regardless of culture and circumstance? That gold stays the exact same price when a large new source is found or if someone discovers alchemy and suddenly drops 100 tonnes onto the global market?


As mentioned in my original post, you are just absorbing the EV cost of loss/theft and calling it 100% secure. Houses get burgled. People get dementia and forget where they hid things. This has an unrelenting and very real cost that gives birth to industries such as insurance, safe box providers and stealing.

Averaged over all gold owners it is constantly eating away at their wealth, whether it is absorbed in a small yearly fee, or the occasional complete loss.

Don't you just love it when you say something really horrible to someone and their response 100% proves you right?

I am point 0,0,0 on the celestial grid. I do not move, others move in relation to me!

That would be true if the supply of gold was constant from 3000BC to 2016AD.

But it has not been. Mining technology has also improved.

It is, as with much of economics, a self correcting mechanism. This has been one of my key points. Gold as money is part of a closed loop in the real economy (to get more you have to deploy labor and capital, not just punch a button on a computer).

That is why our current monetary system is so bad. It doesn't have any real tie to the economy. It is based on the decisions of the Fed...not the "economic calculus."

See my above post.

IDK that PokerJunkie (and certainly not myself) is saying that there is no volatility throughout history. Certainly there are periods of volatility (periods of transition...change) take the 1970s or today.

But that doesn't mean that eventually, from a long term perspective, that we will not revert back to the mean.

Gold has been money for most of human history and a good store of value. Let's look at a recent and very poignant example.

I am 30 and remember gas being around a buck (USD) when I was a kid (charts say it was little more). Gas prices have rallied, crashed, rallied, and crashed in the first decade and half of the 22nd 21st century.

If you held USD, like literally cash, throughout that period what happened to your cost of gas? Whereas, if you held gold, what happened?

Gold insulated you from the volatility and USD caused your gas to be either vert expensive historically or, at the top of the range you were used to in the previous 15 years.