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The money I saved as a child would buy one picogram of gold today

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Re: The money I saved as a child would buy one picogram of gold today

#51

Post by jonhohle »

Retric wrote: post #40
jonhohle wrote: post #21

Earlier quoted context omitted.

I don’t disagree that it’s not, by definition, theft. It is, however, an obscured tax on savers, a transfer of wealth from lender to debtor. At least in the US inflation is the result of decoupling dollars from gold and the direct theft of gold and silver from the citizens by the government.

It’s a tax on people holding the currency not all savers. Hold stock, a different currency, copper, paintings etc and you avoid losing out to US inflation.

I’d consider equities and real property separate from savings.

Re: The money I saved as a child would buy one picogram of gold today

#52

Post by vmception »

t43562 wrote: post #3

I remember my dad encouraging me to save my dollars and not spend them on choc-99 double ice-creams ($2.13). These were soft whip ice-creams with 2 cadbury's flake chocolates stuck in the side and they seemed like the closest thing to heaven on earth to me. What my dad said seemed logical though and I saved. When I was 16 I had a holiday job that earned me many ice-cream-worths but I kept it - didn't buy a bicycle or…

Should taught you how to dollar cost average on assets instead of just hoard the currency

Maybe next gen parents will

Re: The money I saved as a child would buy one picogram of gold today

#54

Post by dijit »

epgui wrote: post #33
Taek wrote: post #12

Earlier quoted context omitted.

It's about the lesson more than anything else. I really want my kids to learn how to save and be well practiced at it, even though the utility function doesn't make a ton of sense.

I don’t understand why so many people “save money” but then just keep cash under a mattress or in a savings or checking account. If you want to win at life, you “save money” by purchasing non-cash assets like stocks.

I mean, liquid asset vs variable and tied up asset?

I'll be the first to admit to being fiscally conservative: money I can't spend and that is sunk into something else does not guarantee that I get my money back.

I'm losing money on the savings I have every year, which is why I put nearly all my savings into a fund, but then that fund dropped in value almost immediately by 30%, if I had done nothing with my money and bought a top of the line MacBook Pro with 64G of ram, I would have more "money" than I have today; but it all depends on what the value is when I sell out of the fund, there's no guarantee that I'll even get what it currently says I "have" back either.

Savings and investments are different things.

Re: The money I saved as a child would buy one picogram of gold today

#55

Post by WanderPanda »

bombingwinger wrote: post #42
Certhas wrote: post #8

Earlier quoted context omitted.

As a childhood lesson you don't need crazy inflation for this to hold true though. Anything that takes more than a few of months to save up to just doesn't make sense as a kid. Your disposable income goes up by factors of ten every few years. You have 2$ to spend at 5, 20$ at 10, 200$ at 15. Then it slows down but you might still get to 2000$ at 25. Saving as a kid really never seemed worth it to me.

It’d make more sense if your parents directed your savings to the stock market or in some other asset. Saving by itself is worthless if you can’t put the money to work.

As a first order approximation they should maybe offer you a bond with 5-10% yield per week, month or year (depending on your age)

Re: The money I saved as a child would buy one picogram of gold today

#56

Post by shadowgovt »

clamprecht wrote: post #13

I'm from the US but I lived in Argentina for about 5 years (2013-2018). It was a great lesson, and I'm seeing things in the US now that I used to see in Argentina. At the bank recently, they had a sign about the national shortage of coins. That was common in Argentina. Sizes of products getting smaller in order to keep the price the same - "inflacion escondido" (hidden inflation).

The single greatest difference between the United States and Argentina is the world's debts, as tracked by the IMF, aren't denominated in any of the pesos or peso variants Argentina has used over the past several decades.

Were the us to try and trade out dollars for NuDollars, they would find the dollar won't go away because the world will still be using it to trade and pay down its debts.

The dollar being the world's international trade currency has a significant anchoring effect that makes it extremely difficult to extrapolate from lessons learned in other countries to the United States.

Re: The money I saved as a child would buy one picogram of gold today

#57

Post by imtringued »

jonhohle wrote: post #21
Certhas wrote: post #10

Earlier quoted context omitted.

I looked up the definitions: Theft: an unlawful taking (as by embezzlement or burglary) of property. Inflation: a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services. There you go, proved you wrong.

I don’t disagree that it’s not, by definition, theft. It is, however, an obscured tax on savers, a transfer of wealth from lender to debtor. At least in the US inflation is the result of decoupling dollars from gold and the direct theft of gold and silver from the citizens by the government.

Let's assume 50% of the population is retired and has saved money. The other 50% is working full time. A deadly virus wiped out 50% of the working population. All products are now twice as expensive.

>. At least in the US inflation is the result of decoupling dollars from gold and the direct theft of gold and silver from the citizens by the government.

No, it is caused by ignoring the fact that labor cannot be stored. Gold is just a token, it is like an entry in a balance sheet but harder to forge. It doesn't actually store anything other than itself. You can't store labor by turning it into gold. Gold was already in the ground and was dug out by labor. There is no way to get that labor back. People age. They can't be stored like gold. The inherent mismatch between gold and people is what causes inflation. The only difference is that due to its limited supply gold then swings back to deflation and then inflation again but simply introducing a gold standard doesn't solve the inflation problem, it is the origin of the inflation problem. Fiat currency is just a stretched gold standard. They are still tokens, they are easier to forge and more importantly fiat money doesn't age either. So inflation must still happen as a consequence.

> It is, however, an obscured tax on savers, a transfer of wealth from borrowers to debtors.

By this logic aging is a tax on savers. Defaulting on debt is also a tax on savers. Savers deceiving themselves is a tax on savers.

Re: The money I saved as a child would buy one picogram of gold today

#58

Post by seanmcdirmid »

epgui wrote: post #33
Taek wrote: post #12

Earlier quoted context omitted.

It's about the lesson more than anything else. I really want my kids to learn how to save and be well practiced at it, even though the utility function doesn't make a ton of sense.

I don’t understand why so many people “save money” but then just keep cash under a mattress or in a savings or checking account. If you want to win at life, you “save money” by purchasing non-cash assets like stocks.

Or real estate. But in times when interest rates were higher, saving in the bank made more sense.

Re: The money I saved as a child would buy one picogram of gold today

#59

Post by aqsalose »

Certhas wrote: post #8
t43562 wrote: post #3

I remember my dad encouraging me to save my dollars and not spend them on choc-99 double ice-creams ($2.13). These were soft whip ice-creams with 2 cadbury's flake chocolates stuck in the side and they seemed like the closest thing to heaven on earth to me. What my dad said seemed logical though and I saved. When I was 16 I had a holiday job that earned me many ice-cream-worths but I kept it - didn't buy a bicycle or…

As a childhood lesson you don't need crazy inflation for this to hold true though. Anything that takes more than a few of months to save up to just doesn't make sense as a kid. Your disposable income goes up by factors of ten every few years. You have 2$ to spend at 5, 20$ at 10, 200$ at 15. Then it slows down but you might still get to 2000$ at 25. Saving as a kid really never seemed worth it to me.

Isn't the "go up by a factor of ten" pattern you describe more of your parents spending behaviors (until you are old enough to get odd jobs by yourself) than anything else?

The concept of "save money and put your loose change coins into a piggy bank" could be much older than how much disposable income kids[1] today have. My hypothesis: Maybe the intended lesson was more coherent with the reality a century ago.

Here is the first graph I found with a search engine of USD purchasing power: https://www.statista.com/statistics/1032048/value-us-dollar-... . After the Napoleonic wars until WW2 or so the purchasing power of 1 U.S. dollar spend most of its time increasing followed by sudden drastic drops in value during ... the Civil War and WW1.

[1] Or a random HN user got as a kid.

Re: The money I saved as a child would buy one picogram of gold today

#60

Post by WanderPanda »

shadowgovt wrote: post #43
xiphias2 wrote: post #6

Earlier quoted context omitted.

I did the same thing for many years, until in 2013 the Cyprus bailouts woke me up...at that point I went all in on Bitcoin out of anger of the banking system, and haven't changed anything since.

I hope this works out for you in the long term; BTC isn't the most stable platform, but it could certainly be more stable than some national currencies.

In fact it is „more stable than some national currencies“
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