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

#311

Post by tildeon » Tue, Apr 19, 2022, 8:10 AM UTC

vmurthy wrote: post #274

logifail wrote: post #100

Earlier quoted context omitted.

> If you want to win at life, you “save money” by purchasing non-cash assets like stocks. Except when you don't. Between 1995 and 2000 I lived in a student house in the UK and one of my housemates (who was also a student, and from my recollection almost as broke as I was back then) was really into investing into the stock market during the dot-com boom. He bought both Lastminute.com (IPO March 2000 @ 380p/share[1], s…

The problem with an example like this is that a (hypothetical) friend of yours could have bought into Apple or Amazon or MSFT back then and had a ton of money now :) . I was about to suggest index funds but looks like the FTSE-100 has been sh$t for the last 22 years, too (~10 percent total return ). No luck there for your friend even if he had invested in index funds :(

I'm afraid you've mixed up "price return" (as in the change in the level of the index - ~6200 in April 2000 to ~7600 in April 2022. (Which is a 22.5% total return)) with "total return" (as in the return when you include dividend payouts - 170% in total, or 4.6% annualized)

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

#312

Post by skinnymuch » Thu, Apr 21, 2022, 3:05 PM UTC

krisoft wrote: post #242

skinnymuch wrote: post #182

Earlier quoted context omitted.

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 ex…

Yes you’re right. I didn’t think through how of course cash will not mean much. Thanks for helping shape up my thinking about this.

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

#313

Post by skinnymuch » Thu, Apr 21, 2022, 3:09 PM UTC

ClumsyPilot wrote: post #192

skinnymuch wrote: post #182

Earlier quoted context omitted.

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…

'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.' It's a common occurence u developing countries, people hedge against it by holding foreign currencies and tangiable assets like land. Its not that rare for people to live through multiple devaluations and currency collapses. Ofcourse you don't go around tel…

As krisoft said. In such an unprecedented and extreme situation, foreign currencies would likely not mean much either. The world is globalized. America defaulting on such a huge thing would likely bring down most of the world’s economies and currencies. Possibly some isolated countries would fare better. They’d still be effected like crazy too, but they’d be something.

Yes assets like land would help. However with banks failing like this, someone with more guns and aggression than you or I could come to our homes and take them from us in areas where LEO are not being paid and thus not doing anything.

With the failing banks and such, tracking down who owns what will be much more difficult when things get better. Changing failing bank documents can’t be the hardest thing in this situation.