The money I saved as a child would buy one picogram of gold today • Hacker News Board

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

#291

Post by ZoomZoomZoom » Mon, Apr 18, 2022, 9:08 AM UTC

zacherates wrote: post #285

ZoomZoomZoom wrote: post #240

Earlier quoted context omitted.

And how could he have done it, being in Argentina in 1976? Not even asking about Vanguard. Just accessing s&p500 or NASDAQ is not easy even today, don't think it was much easier then.

If the thesis of the thread was "Gee, it sure sucked to grow up in Argentina in the 70s with no access to high-quality financial products." that would be extremely relevant... but the thesis is much more expansive than that ("Prepare for a fantastic lesson about the power of inflation." / "Takeaway: may the sign of the exponential be ever in your favor. Positive, you own the world. Negative, you get diluted into nano…

> The folks [...] reading this thread almost certainly can invest even very small amounts in high quality investment products.

...and then the stock market gets stopped for a couple of weeks and exchange rate of international currencies becomes practically state-controlled.

> There's no need to get fatalistic about saving

There absolutely is a need, when the life just doesn't work like people here are pretending it does.

It's all just an extremely US-centric view, people there are just lucky to live in a fantastically economically stable environment, but this leads to them being unprepared to potential economic shocks, including not enough support for the discussions of ways to evade the consequences for regular citizens.

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

#292

Post by razius » Mon, Apr 18, 2022, 10:14 AM UTC

nly wrote: post #262

wildrhythms wrote: post #234

Earlier quoted context omitted.

2008 is calling and wants to talk to you.

2008 property crash was mostly a US phenomenon

No post body was provided.

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

#293

Post by arcticbull » Mon, Apr 18, 2022, 10:57 AM UTC

jonhohle wrote: post #260

arcticbull wrote: post #252

Earlier quoted context omitted.

Savings is not idle money. Savings is stored value. Currency is an intentionally lossy short-term store of value designed to incentivize allocation of capital into long-term savings vehicles like stocks, bonds and real estate that are productive and help the economy. Idle cash hurts the economy. That's why even in a savings account, idle cash isn't idle, it's collateralizing loans. A savings account is more of a bond…

Idle money is literally the definition of savings: - https://www.investopedia.com/terms/s/savings.asp - https://www.wellsfargo.com/goals-investing/saving-vs-investi... - https://financial-dictionary.thefreedictionary.com/saving I agree that fiat is intentionally lossy. I also have no problem with the idea of my idle money being, in fact, borrowed out at no risk to myself (and at recent interest rates there wouldn’t b…

Again, using your definition, savings must be limited to cash, physical cash, in a mattress. It cannot be even in a checking or a savings account as those are technically variable-coupon perpetual bonds. [1] CDs are bonds too. The only reason they're not listed as bonds is there is a carve-out in securities law that if they're issued by banks, they're exempt from registration. They're not really zero risk, because in theory, the FDIC could go under. They won't but for the purposes of our discussion, a bond or bond fund in a brokerage account is the same as a savings or checking account. So then why is one "savings" and one "investment?"

> From the saver’s perspective, it’s idle.

That's just a fun illusion, not a useful or meaningful distinction.

> If you are holding more than 100% of your total net worth in assets, the cash in your bank account isn’t yours, nor is anything else above that 100%.

Nope, it's mine - because the margin loan is collateralized by the contents of my portfolio. The cash that comes out is separate. Nobody has a claim on my cash but me - if there's a 90% drawdown across all markets my portfolio will be liquidated to cover, but the cash will remain mine.

According to investopedia the only real difference between savings and investments - as they view them - is liquidity, risk profile and time horizon. All of which you can achieve in a brokerage account by constructing your portfolio to meet your goals.

The thing is, saved currency will go down in value unless deployed because the point is to save your value. You can save your value in all sorts of ways, but currency ain't it. One keeps a small cash cushion in the event of emergencies, but you're paying a premium for that liquidity (inflation - interest).

[1] https://www.youtube.com/watch?v=5QgKM8MtbBQ

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

#294

Post by razius » Mon, Apr 18, 2022, 12:01 PM UTC

bombcar wrote: post #210

paganel wrote: post #152

When Ceausescu's regime fell in late 1989 a piece of bread was costing 3.75 lei. About 10 years later, late '90s-early 2000s, a piece of bread was costing 3,000 lei. Hight inflation is a bitch.

An, but it wasn’t the same piece of bread. :) I’ve always wondered what happened to mortgages and loans during those periods. Did borrowers effectively get free houses? Did borrowers not exist?

No post body was provided.

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

#295

Post by teddyh » Mon, Apr 18, 2022, 12:18 PM UTC

imtringued wrote: post #14

teddyh wrote: post #2

Ah, the magic of interest: http://www.threepanelsoul.com/comic/at-the-bank

Why exactly do we want to reward already rich people at the expense of poorer people? Somehow, people convinced themselves that giving money to those who don't need it is efficient.

I assure you that the bank is making good money out of using that capital. Are you suggesting that it’s better that the bank keep all the profits rather than some of it going to the person lending the bank that money?

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

#296

Post by dreamcompiler » Mon, Apr 18, 2022, 1:42 PM UTC

PheonixPharts wrote: post #167

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.

> even though the utility function doesn't make a ton of sense. What if it never makes sense? One thing I didn't realize until embarrassingly too late in life is that savings should only function as a buffer for emergencies. Anything else is just burning your money since there haven't been savings accounts that consistently beat inflation even in the US. I was fed these same myths as a kid, and earnestly believed tha…

I knew a guy who had saved his way to millionaire status when he retired. His salary was in the high 5 figures. He never bought anything, lived like a hermit, and just socked it all away in a savings account (back when savings accounts earned decent interest).

Kind of an extreme way to live but it used to be possible.

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

#297

Post by shadowgovt » Mon, Apr 18, 2022, 2:17 PM UTC

anonporridge wrote: post #180

UncleMeat wrote: post #166

Earlier quoted context omitted.

The mathematical certainty of the issuance of BTC won't really mean much if nobody wants to trade it for goods. BTC's volatility is not just volatility w.r.t. USD.

The value of anything as a medium of exchange and store of value always depends entirely on whether or not a critical mass of people want to use it as such. Once you establish that a thing satisfies all the properties of money, or close enough, then the only question is network effect. Even if minor theoretical improvements could be made, it has to be 10-100x better to overcome runaway network effect. Sea shells and…

> an analog foundation defended by guns and tight cliques of trusted human gangs

Question: when one exchanges Bitcoin for a real-world good or service, what enforces the good or service be provided? And on the flip-side of that question: if one provides a good or service before Bitcoin payment clears, what guarantees payment?

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

#298

Post by kache_ » Mon, Apr 18, 2022, 2:57 PM UTC

kbenson wrote: post #284

kache_ wrote: post #105

Earlier quoted context omitted.

Well, you don't buy individual stocks; you buy slices of slices of everything to dissipate your risk towards variance. And you definitely don't hold cash. Holding cash has a lot of risk as well

Ah, like slices of slices of mortgages. :/

There are degrees to it. Slices of all mortgages are less risky than a single mortgage. Slices of all tech stocks are less risky than individual tech stocks. Slices of all American stocks is less risky than slices of one industry in America. And slices of all equities trades across the world is less risky than slices of America

Bet on humanity :)

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

#299

Post by kingcharles » Mon, Apr 18, 2022, 3:07 PM UTC

jjeaff wrote: post #163

kingcharles wrote: post #46

Earlier quoted context omitted.

Funny side note: the State of Illinois spent a decent amount of public funds trying to decide whether to charge me with $100 trillion in currency fraud. The state crime lab said the currency I owned was the "most sophisticated piece of currency forgery" they had ever encountered. It was a single (real) $100 trillion bill from Zimbabwe that I carried in my wallet for fun. I assume they thought for some reason it was U…

That sounds insane. Did no one just do a quick Google search and see that you can buy them all day long all over the internet? I think we need some more details on why they were going through your wallet and how and why they even considered a charge in this case.

I was arrested for something totally unrelated. It was only later my lawyer showed me a piece of paper one day titled 'ILLINOIS STATE CRIME LAB' which detailed the analysis they had done. There were like 9 factors they analyze fake currency on (e.g. paper, ink, metal strip, holograms, hidden dots, etc) and my bill matched for 8 of the 9, which is what prompted the comment about it being such a sophisticated fake, I guess.

I'll try and get a copy. This was 8 years ago, but the lab will probably still have a copy. I felt like Dr Evil... one hundred trillion! All I could think of was this skit:

https://www.youtube.com/watch?v=U0hTrnaa8aE

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

#300

Post by kingcharles » Mon, Apr 18, 2022, 3:08 PM UTC

MerelyMortal wrote: post #97

kingcharles wrote: post #46

Earlier quoted context omitted.

Funny side note: the State of Illinois spent a decent amount of public funds trying to decide whether to charge me with $100 trillion in currency fraud. The state crime lab said the currency I owned was the "most sophisticated piece of currency forgery" they had ever encountered. It was a single (real) $100 trillion bill from Zimbabwe that I carried in my wallet for fun. I assume they thought for some reason it was U…

Did they at least give it back to you? I don't know how much they sell for now, but I was lucky to get one for $20 when they were normally going for $40 on eBay. I forgot the exact result, but I once calculated the value of a 100 trillion Zimbabwe dollar bill when it was printed, and it came to something like 0.06 USD (6 cents).

They didn't give it back. I'll have to give them a call. This was 8 years ago, but I know they still have it. I didn't know they'd gone up so much in value. I don't think I'd want to sell it though. I remember paying about $10 + shipping for it.