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Gold hits all time high

goldprice.org

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Re: Gold hits all time high

#121

Post by throw0101c »

jack_h wrote: post #114
throw0101c wrote: post #111

Earlier quoted context omitted.

> If you increase the number of dollars but the size of the economy itself doesn’t increase then the underlying prices would go up and the value of individual dollars would go down. Just looking the number of dollars, without looking at what they're doing, is like thinking you will gain weight because your fridge/pantry is stocked: > But also – why do so many people insist that inflation is an increase in the money s…

I fully admit what I said was simplistic and not meant to indicate the true complexity of the system. I agree with everything you’ve posted as inflation is not immediate merely because the money exists. I was presenting a rough zeroth order approximation because I didn’t understand how the value of money could be completely divorced from assets/the economy.

> I was presenting a rough zeroth order approximation because I didn’t understand how the value of money could be completely divorced from assets/the economy.

Money has no value except in what it can buy you, the most important of which are shelter, water, and food for survival. After that you get into what can help you achieve happiness / fulfillment.

As a percentage of household spending, food (even with recent risen prices) have never been lower:

* https://www.npr.org/sections/thesalt/2015/03/02/389578089/yo...

and clothing:

* https://www.bls.gov/opub/ted/2006/may/wk5/art02.htm

* https://www.aei.org/carpe-diem/as-a-share-of-household-spend...

We've never lived longer, with fewer diseases, and had an easier (and safer) time to travel.

Sadly shelter (especially if you want to buy) has gotten more expensive (at least in the Anglo-sphere), but that's more about things like zoning policy and such rather than money supply.

So what exactly has dropped in "value" in human life/lives with the increased amount of money that's supposedly bouncing around? When in human history have things been better? If you could jump in a time machine that goes 88 mph, what period of history would you rather be in to live your life?

Re: Gold hits all time high

#122

Post by eadmund »

MountDoom wrote: post #75
pizlonator wrote: post #45

Earlier quoted context omitted.

Bingo So then the question is - how long can this continue before something snaps

Pretty long, given that the US had a fully-fiat currency for 50+ years, and many European countries had it for longer than that. Per CPI, your dollar is worth 8x less than what it was worth in 1970. This, in itself, doesn't mean anything profound. There's nothing to "snap" if the expectation of stable, modest inflation is baked into the markets. Fiat currencies usually implode only when something else undermines the…

> your dollar is worth 8x less than what it was worth in 1970.

A dollar in 2025 is not worth -7 (i.e. eight times one less than one) dollars from 1970; it is worth ⅛th of a dollar from 1970.

Yes, I know what you mean. But ‘×’ is multiplication, not division — and phrases like ‘¼ less than’ and ‘3 less than’ have clear meanings inconsistent with using ‘8× less than’ to mean ‘⅛th.’

Re: Gold hits all time high

#123

Post by eadmund »

d1sxeyes wrote: post #108
ambicapter wrote: post #44

Earlier quoted context omitted.

This really feels like the original sin to me (I am not remotely an economist). Perhaps it can just be fixed with taxes to take money out of circulation.

“We’re going to increase taxes!” “To spend on better public services?” “Nah, we’re just gonna burn it” Easier said than done, I think.

Is it possible that a fair amount of government expenditures are just a fancy way of burning money? E.g. cowboy poetry festivals.

Re: Gold hits all time high

#124

Post by eadmund »

paulpauper wrote: post #104
johnohara wrote: post #82

The price of gold fluctuated significantly in 1979 due to concerns over whether inflation could be brought under control. It started the year at ~$250.00 per ounce and ended the year at ~$850.00 per ounce. It was a presidential election year and consumers were getting squeezed hard by rising energy prices. Russia invaded Afghanistan, Carter suspended participation in the Olympics, and there was a general feeling of c…

Yes, adjusted for inflation, gold has done much worse than the media hype would suggest.

Of course, adjusted for inflation the dollar has done much, much worse than gold!

Not that one should put all of one’s portfolio into gold. That would be pretty insane. But a certain fixed allocation within a balanced portfolio? I think that makes sense.

Re: Gold hits all time high

#125

Post by onlyrealcuzzo »

Ancapistani wrote: post #105
onlyrealcuzzo wrote: post #68

Earlier quoted context omitted.

Because normal people mainly use money to pay rent and utilities and taxes and buy corn from the grocery store, not to buy future cash flows.

At any given time, most of the money isn't in the hands of "normal people", though. It's in the hands of banks, states, and large companies.

The amount of money isn't relevant. Money is fake.

The real economy isn't.

Re: Gold hits all time high

#126

Post by theturtle »

I like making young bros' heads spin by explaining how little intrinsic value gold actually has.

They all start out with "if the shit comes down, gold will --" and I cut them off by saying "-- still have almost zero intrinsic value."

Can't eat it. Can't burn it. Can't really make shelter or a weapon out of it. Useful for tiny microcircuits, but that's not something the preppers will be doing in Montanam

"Well, it'll always be valuable, because people think --"

Aha, dudebro, now you're in the realm of "perceieved value." Whole different game in the end times...

Re: Gold hits all time high

#127

Post by AnimalMuppet »

mrguyorama wrote: post #103
AnimalMuppet wrote: post #56

Earlier quoted context omitted.

Basically, the chemical composition of the earth's crust isn't going to change any time soon. That means that the supply of gold is going to increase only slowly. In contrast, Trump has been making noises about wanting to replace Powell as chair of the Fed, because Powell won't dance to Trump's tune. I do not want a world where Trump can determine (even if indirectly) the value of the dollar, or the interest rate, or…

The problem with this is that if you live in the US and Trump does something that stupid then owning a bunch of gold will not save you, because you still live in this society (assuming you live in the US of course!) All the Germans who had great gold reserves in 1930 still ended up fighting in WW2. Hell, many of them were Jewish and had that gold stolen and sent to the Swiss for safekeeping by the Nazi state. The dan…

Well, it will save you from inflation. From bullets? Not so much.

Re: Gold hits all time high

#129

Post by kragen »

defrost wrote: post #118
kragen wrote: post #74

Earlier quoted context omitted.

One of the eminently attackable facets of that claim is the varying availability of goods over the millennia, making it impossible to have a really stable and precise measure of value against which to measure gold's purchasing power. You can't buy silphium or Roman concrete today for any price, for example, nor a ticket to a gladiatorial match, and, from a certain point of view, most of the functions fulfilled by han…

Dying a kilo of fabric with real Tyrian purple is still an expensive process today. Knock off purple is cheap, as are machine stitched fabrics .. neither pass the eye of those who judge such things though.

Sure, and the greatest thing about modernity is that during the Roman Empire you would have been executed for wearing Tyrian purple, while now anyone who cares to spend the money is entitled.

Re: Gold hits all time high

#130

Post by kragen »

kmeisthax wrote: post #78
Muromec wrote: post #23

Earlier quoted context omitted.

An ounce is what -- 3800 USD now? That is indeed a nice suit.

The problem with the "nice suit" metaphor is that the cost of clothing has actually plummeted since the height of the Roman Empire. Also, they didn't wear suits. The reason why money printing doesn't immediately translate into lowered dollar value (and thus, higher gold prices) is that other goods and services are getting cheaper around it. If supply is flexible then the price of some goods won't change much, while t…

Most of this is not correct, but some of it is. I'm glad it got unbanned, though.
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