Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

twitter.com

Post reply on HN
Print view View original

241–250 of 313 posts

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

#241

Post by djenendik »

seizethecheese wrote: post #233
routerl wrote: post #231

Earlier quoted context omitted.

This is playing out currently, quite openly, as the FTC investigates whether companies have raised prices more than costs have risen from inflation. It's becoming increasingly clear that the academic economic consensus is, simply, disconnected from how markets actually operate. For instance, while each day has brought a new study of consolidated companies engaging in pandemic price gouging, academic establishment lum…

Larry Summers was 100% right about impending inflation. He’s been totally vindicated. I’m suspicious of where you are getting your information and suspect it’s politically motivated.

Actually he was a third right: https://www.newyorker.com/news/our-columnists/is-larry-summe...

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

#242

Post by krisoft »

skinnymuch wrote: post #182
mc4ndr3 wrote: post #179

Earlier quoted context omitted.

Banks can fail. Stocks can fail. Currencies can fail. I'm not saying it makes sense on the whole to bury your worth in cash. But there is an amount of paranoia that confuses things. The interest in my savings account is laughable. It's marginally better than keeping in a mattress. The mattress doesn't charge bullshit fees. The mattress doesn't arrest you for being the wrong color.

If you’re in the west. A major bank failing and Govt + insurance not covering the losses for customers means something we have not encountered as a modern society. That’s as close to a break down of modern society as you can get. Sure it’s possible. Cash will def be great then. However this is such an extreme situation that there’s no way to know what will be good in that situation. I would think in a situation like…

> Cash will def be great then.

In case of the banking system collapsing in a modern developed country? That’s such an extreme situation I’m not sure if holding cash would be the right hedge against it. That sounds more like a canned food and flour bags kind of time.

If a bank fails, the deposit insurance also fails and the government can’t step in either that will undercut the trust in all other banks too. I would expect a chain reaction of follow-on bank collapses and hyper-inflation.

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

#244

Post by hackernewds »

seizethecheese wrote: post #233
routerl wrote: post #231

Earlier quoted context omitted.

This is playing out currently, quite openly, as the FTC investigates whether companies have raised prices more than costs have risen from inflation. It's becoming increasingly clear that the academic economic consensus is, simply, disconnected from how markets actually operate. For instance, while each day has brought a new study of consolidated companies engaging in pandemic price gouging, academic establishment lum…

Larry Summers was 100% right about impending inflation. He’s been totally vindicated. I’m suspicious of where you are getting your information and suspect it’s politically motivated.

Larry Summers has been wrong numerous other times and this is pure confirmation by settling on one where he hasn't been. Broadly this is the basis for macroeconomics jumping from one "analyst" to another with the benefit of hindsight. Just look at how many diff predictors for recessions there are - the yield curve was supposed to be the best one. When a recession does occur, economists will prove to the one that was correlated to predict the next one.

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

#245

Post by arcticbull »

slv77 wrote: post #84
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.

High inflation usually goes hand-in-hand with some degree of corruption that immensely benefits the connected and powerful. In Venezuela the government implemented exchange rates controls which were much more favorable then market based rates. Those with privilege and connections could purchase dollars at the official rate and then sell them at market rates at 10x what they paid for them. By this method an immense me…

High inflation hurts, proportionally, higher net worth individuals more than low net worth individuals.

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

#246

Post by arcticbull »

jonhohle wrote: post #51
Retric wrote: post #40

Earlier quoted context omitted.

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.

That's the wrong way of looking at it, which is why you arrived at the wrong conclusion.

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

#247

Post by arcticbull »

memish wrote: post #48
throwuxiytayq wrote: post #7

Earlier quoted context omitted.

Quoted post unavailable.

It's a hidden, regressive tax.

It hurts people disproportionately who have more of it, so it's progressive if anything. But not in practice because right people save assets not money, and poor people are usually in debt. Debtors benefit from inflation because it reduces the real cost of their debt.

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

#248

Post by tempestn »

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…

I try to teach my kids two lessons around money. One, don't spend all of your money. Save some of it. Basically get in the habit of having some amount of money without feeling the need to spend it. Two, when you do have an amount of money that you're not spending, invest it with broad diversification. That lesson is obviously are more complex one that comes later, but it's a likewise important piece. Both to avoid the money inflating away, but also to avoid conflating the ideas of investment and speculation.

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

#249

Post by frostwarrior »

slg wrote: post #47
treeman79 wrote: post #11

Earlier quoted context omitted.

There are a lot of people that think we can print spend endless amounts of money without consequences. Heck an alarming amount of people don’t understand that bonds need to be paid back.

I made that comment because I know people are going to use the linked example of what happened in Argentina as the predicted fate of what will happen in the US. That seems to be what you are implying here by drawing parallels between the two. But I simply want to make it clear that the US is at 8% inflation for the last year while Argentina spent decades with the average annual inflation rate measured in the hundreds…

Yes. AFAIK inflation in Argentina is a chicken and egg problem.

The government prints money, not to have more, but to force economic movement from below. More money handed through social welfare means more money in lower classes hands, and that means more people buying new things and local market activity.

The government does that because most companies with the financial power to invest are be very reluctant to invest in a such unstable economy. Also, most individuals with more money will quickly move the cash somewhere abroad.

So, companies don't invest and richer people are quick ot move their money elsewhere. If the government doesn't act, the economy stalls. But now because the government printed more money, the peso is now less valuable and the economy is now more unstable, feeding this feedback loop.

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

#250

Post by jmyeet »

So there is something to be said for keeping your savings in a stable currency or asset but that doesn't necessary protect you from negative government action. Some examples:

1. Many Russians held funds in currencies other than rubles. Faced with sanctions, Putin instituted forced conversion to rubles. So far the ruble hasn't been decimated but this could still go south;

2. Venezuela essentially prevents conversion of currencies. I mean it's complicated. There's a government rate and a black market rate and the country is under completely unjustifiable sanctions; and

3. Argentina is also currently restricting access to foreign currencies;

4. Years ago, Argentinians held funds in foreign currencies. Local banks held foreign currencies against those deposits. When things went south the banks basically packed up all their money, put it on a plane, flew it out and then declared bankruptcy or just threw up their hands; and

5. Some will even point to FDR's sovereign devaluation of the US dollar as another bad example. In the 1930s, the government forced purchase gold for $20/oz (the peg at the time) and then revalued the US dollar at $35/oz.

This last one is a constant point of consternation for gold bugs turned Crypto Andys.

And no crypto isn't the answer here.

My point here is that you cannot overstate the importance of multigenerational wealth creation in the developed world. The dark truth here is that the US has often had a hand in the above events that have essentiaally stolen accumulated wealth from ordinary citizens.

Post reply on HN