401–409 of 409 posts
The NFT thing is interesting. Some things to note: - It's inherent in NFTs that they are thinly traded. If each thing is unique, there is no overall market price. Price quotes are anecdotal. There are "indexes" which list prices for transactions, but that doesn't mean you can sell at that price. - Liquidity is very limited. This works like collectables. Try to unload a million dollars worth of Beanie Babies. It may p…
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My take was always that money is a medium of exchange. A mechanism by which you can buy or sell things. Wealth is something that people want. Lawnmowers or a movie stream. One consequence of this distinction is that if money fails as a medium of exchange (eg everyone loses confidence in the dollar) then those dollars are now useless. But no wealth has been destroyed. So I conclude money is not a store of wealth.
> But no wealth has been destroyed. No, that's not true. One of the things that people want is the ability to easily acquire new things that they need. If there is no universally accepted medium of exchange, that adds friction to the economy which destroys actual wealth. It's kind of like if you drain the oil out of your car. The value of the car goes down by more than the cost of the oil.
That's an interesting but slightly pedantic point. If we continue that line of thinking, if the "end of the dollar" is actually caused by switch to (say) the euro as a currency in our hypothetical world, then the "loss of medium exchange as a loss of wealth" argument no longer holds, but your original mechanism has been destroyed, so I think my point stands.
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What you call "corrosive" (appreciation of non-value-creating assets) is 1:1 applicable to Real Estate. Compared to the appreciation of worldwide real estate, the market value of crypto is only a drop in the ocean. And countless people got unbelievable rich due to rising prices and "crowding-out" in cities without creating any value for society at all (in the opposite, making life harder for everybody struggling to k…
Comparing cryptocurrency to real estate is laughable. With real estate you have either a place to live, reducing a real world expense (rent), or an income producing property. No matter how much you dress up cryptocurrencies as stocks, by using terms like market cap, you are not buying a share of an income producing asset. You're speculating on a digital collectible. You can speculate on real estate and stocks, but yo…
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> But no wealth has been destroyed. No, that's not true. One of the things that people want is the ability to easily acquire new things that they need. If there is no universally accepted medium of exchange, that adds friction to the economy which destroys actual wealth. It's kind of like if you drain the oil out of your car. The value of the car goes down by more than the cost of the oil.
> No, that's not true. That's an interesting but slightly pedantic point. If we continue that line of thinking, if the "end of the dollar" is actually caused by switch to (say) the euro as a currency in our hypothetical world, then the "loss of medium exchange as a loss of wealth" argument no longer holds, but your original mechanism has been destroyed, so I think my point stands.
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There is no such thing as risk-free renting out your accumulated money.
Nothing in life is completely without risk, but you can get arbitrarily close. Treasury bills are commonly used as an example of an approximately "risk-free" loan since the probability of the federal government repudiating its debts is considered extremely low. Bonds with the lowest investment-grade rating, BBB, have a 1% one-year default rate, with higher grades being significantly less (0% for AAA)[1]. The vast maj…
/thread closed
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Assets are less ephemeral stored wealth. Money facilitates transactions, but it is not a factor of production, it is not a consumption good, and it is not backed up by any of these things, so it is a very nebulous type of wealth.
I would agree with a previous poster that money is a debt obligation. If you have "money" in bank, what does it mean? It means the bank has a debt-obligation to pay you back with other type of debt-obligation, the government sanctioned cash. Money is definitely an interesting concept. I'm not sure I fully understand it. But I use it.
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Nothing in life is completely without risk, but you can get arbitrarily close. Treasury bills are commonly used as an example of an approximately "risk-free" loan since the probability of the federal government repudiating its debts is considered extremely low. Bonds with the lowest investment-grade rating, BBB, have a 1% one-year default rate, with higher grades being significantly less (0% for AAA)[1]. The vast maj…
You know exactly what I meant. 1% does not even cover inflation loses and you still took a risk. This is total nonsense and has nothing to do with the initial conversation. /thread closed
While yields over the past year have been rather low at about 2% due to some very unusual circumstances, and T-bill rates are essentially negative at a mere 0.17% nominal yield, US corporate AAA bonds have a long-term average effective yield of over 4%[0] with essentially no chance of default. This is considerably higher than inflation and nearly risk-free to the investor. These corporations could instead have saved up the amount of the payments and had that money at the end of the bond period, but they wanted the money now rather than later, and that is why they're paying you interest.
[0] https://ycharts.com/indicators/us_coporate_aaa_effective_yie...
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That isn't really meaningful on its own, is it? I'm sure the parent comment actually meant in the context of how it income has increased in relation to cost of living (though they didn't indicate that explicitly) eg, https://www.investopedia.com/ask/answers/101314/what-does-cu...
The Fed's REAL income measures this. It doesn't capture that debt markets - things like housing, cars, and tuition - have gone up. This is because the debt service payments haven't gone up, because they've lowered the interest rate and made it cheaper for people to pay for those things with debt (like most people do). So, sure, if you live in a world where debt doesn't exist, and all you care about is purchasing home…
I'm sure you know you're talking to people who understand that debt exists.
But I don't think there's any world where you can be so dismissive in a serious discussion about this subject— especially when you assume everyone qualifies for the debt required to gain an advantage—and that those most likely to be unqualified are those on the losing end of the whole equation.
Personally, I don't know enough about it all, so I try to understand others' perspectives and background before moving to personal insults—or at least to be a little more direct and less passive aggressive if I have something I think is important to say.