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Gold hits all time high

goldprice.org

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Re: Gold hits all time high

#71

Post by onlyrealcuzzo »

paxys wrote: post #63
onlyrealcuzzo wrote: post #50

Earlier quoted context omitted.

Fiat money is not going down as much as asset prices are going up, though. So it's part of the story, money losing value in the real economy. That's been happening since moving off the gold standard at roughly similar rates. There's something that happened during ZIRP & Negative Real Interest Rate Policies that completely divorced the value of money in the real economy from the value of assets & future cash flows, an…

> Fiat money is not going down as much as asset prices are going up, though. I'm assuming you are referring to CPI, but that is just a single measure of inflation and serves a very specific purpose. One could argue that "real" inflation in fact is the US dollar's value relative to gold or other similar assets.

If one was not someone who lived in the real economy and spent most of their money on things in the real economy, and instead was a billionaire, and spent most of their money buying future cash-flows, then sure.

Re: Gold hits all time high

#72

Post by wcfrobert »

paxys wrote: post #30
snickerbockers wrote: post #19

What is it about gold, anyways? None of its useful properties were known until recently (and mostly overhyped and upsold tbh, at least as far as those stupid cables go). Are we really just instinctively attracted to shiny metals? Or do people like it as a status symbol? (not to act like im above it all, i still have my gold-plated pokemon jigglypuff trading card from burger king in 1999 and i often use golden paint o…

What is it about Bitcoin over the thousands of other altcoins that have the exact same properties? A large enough group of people picked Bitcoin and said "this is the one". That's basically it. Same thing happened with gold at some point in human history and we just stuck to it.

Bitcoin is different.

Who is Satoshi Nakamoto? How come his Bitcoin holdings - now worth more than $100 billion dollars - have remained untouched since 2010? How can any one human resist that kind of temptation? I would be digging landfill sites if I lost my wallet worth $100 billion. The launch of Bitcoin also coincided with the 2008 financial crisis. The first block had the text: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" embedded, etc.

None of the altcoins have this level of myths and legend. You need this kind of supernatural story to start a new fiat, digital gold, religion, and whatever collective fiction you can think of.

Re: Gold hits all time high

#73

Post by howmayiannoyyou »

Its not about the USD.

It is about certain regimes nearing their end and folks converting assets into something fungible they can use and enjoy while exiled in Geneva, Dubai, Phnom Penh, etc.

As just one example (of many) of why its not about the USD - most global debt is dollar denominated and settled in dollars. Even if they don't reside or transact in the US, most large financial transactions settle (or are hedged) in USD. Again, just one example.

Also, understand export economies like China cannot avoid dollar settlement for goods exported to the US. They can settle in USD and covert to another asset, but only as a secondary step.

I could go on about this, but Carnegie Endowment Prof Michael Pettis explains this and more much better than I can.

Re: Gold hits all time high

#74

Post by kragen »

lomase wrote: post #41
Muromec wrote: post #23

Earlier quoted context omitted.

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

A hand made suit would fit better in this case.

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 handmade Roman togas are today fulfilled by mass-produced machine-stitched US$200 wool suits, or even a cheap sports coat, jeans, and T-shirt. And no amount of gold would have bought you penicillin 100 years ago, much less in Roman times.

Re: Gold hits all time high

#75

Post by MountDoom »

pizlonator wrote: post #45
paxys wrote: post #25

Gold, silver, stocks, real estate, Bitcoin, baseball cards, fine art, Rolexes - everything is trading at or near their all time highs. The value of the US dollar is simply going down.

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 confidence in the issuing government.

Re: Gold hits all time high

#76

Post by jhrmnn »

tossandthrow wrote: post #62
onlyrealcuzzo wrote: post #50

Earlier quoted context omitted.

Fiat money is not going down as much as asset prices are going up, though. So it's part of the story, money losing value in the real economy. That's been happening since moving off the gold standard at roughly similar rates. There's something that happened during ZIRP & Negative Real Interest Rate Policies that completely divorced the value of money in the real economy from the value of assets & future cash flows, an…

> Fiat money is not going down as much as asset prices are going up, though. How do you measure this? What is this claim founded in? You could indeed say that inflation should be defined by the asset prices. This would couple fiat and asset prices definatorically.

I’m guessing what was meant is that the price of things that are to be invested in is growing wrt the price of things that are to be consumed. Which naively makes sense to me in an economy based on growth where the total consumption starts to stagnate—the surplus still has to go somewhere. Is it so or is reality more complicated than that?

Re: Gold hits all time high

#77

Post by kragen »

dingnuts wrote: post #70
cousin_it wrote: post #33

Earlier quoted context omitted.

> 02020 Funny how this "long now" date format will stop working in 99999, but the normal way of writing years as integers will keep working just fine.

it's so half-assed, why just tack a zero onto the Christian year? in the Yoruba calendar it's 10,067 -- use that and it puts things in a real perspective. We're ten thousand years from the beginning of civilization, not two thousand. Now THAT gives some perspective on the "long now"

TIL: https://en.wikipedia.org/wiki/Yoruba_calendar

Maybe more like twelve thousand years from the beginning: https://en.wikipedia.org/wiki/G%C3%B6bekli_Tepe. The real crucial question is whether we're two years from the end of civilization or two trillion.

Re: Gold hits all time high

#78

Post by kmeisthax »

Muromec wrote: post #23
kragen wrote: post #14

Earlier quoted context omitted.

Gold has a pretty stable value over long periods of time; the famous quote is: > an ounce of gold in Roman times bought a nice suit, and today, an ounce of gold buys a nice suit. Consequently it's the standard safe store of value investors flee to when the world is in upheaval, a role it has played since well before Roman times. Its price being high is a standard indicator of investors fearing miserable times ahead.…

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 things with fixed supply will skyrocket in price. That's why we basically didn't see much inflation in the 2010s despite printing shittons of money and having a zero-interest rate policy for most of it. All that money went straight into equities and real estate.

Likewise, there are also goods like oil that are part of basically every supply chain, so when the price of oil goes up, the price of everything goes up. Owning gold will not hedge against this kind of inflation. "BuT tHe SuPpLy Of GoLd Is FiXeD!" you say. Yes, but oil has something stronger than a fixed supply: centralized supply. Every oil producing nation in the world is part of a large supply-restricting cartel that has proven to be frustratingly resilient to all the usual things that are supposed to break cartels. They even managed to bring American shale oil producers to heel (because fracking is too expensive to be economic in a cheap oil environment).

As a result, the ratio of gold to oil prices is very volatile[0], way moreso than you'd expect from something sold as an inflation hedge. Because, with few exceptions, everything in the economy runs off oil, you'd expect to see either a fixed line (if oil is as fixed as gold) or a rising line (if oil grows like dollars). Instead we see ups and downs everywhere.

[0] Apologies for the infographic spam, but this was the easiest chart to find: https://elements.visualcapitalist.com/visualizing-the-gold-t...

Re: Gold hits all time high

#79

Post by paxys »

onlyrealcuzzo wrote: post #71
paxys wrote: post #63

Earlier quoted context omitted.

> Fiat money is not going down as much as asset prices are going up, though. I'm assuming you are referring to CPI, but that is just a single measure of inflation and serves a very specific purpose. One could argue that "real" inflation in fact is the US dollar's value relative to gold or other similar assets.

If one was not someone who lived in the real economy and spent most of their money on things in the real economy, and instead was a billionaire, and spent most of their money buying future cash-flows, then sure.

There are plenty of people in this economy who sit somewhere in between having to spend their entire paycheck on rent and groceries and deciding which one of their yachts to take on the next vacation. I'd wager most people reading this are in the middle category, and so deeper analysis on inflation and long-term stores of money is absolutely relevant.

Re: Gold hits all time high

#80

Post by saulpw »

dingnuts wrote: post #70
cousin_it wrote: post #33

Earlier quoted context omitted.

> 02020 Funny how this "long now" date format will stop working in 99999, but the normal way of writing years as integers will keep working just fine.

it's so half-assed, why just tack a zero onto the Christian year? in the Yoruba calendar it's 10,067 -- use that and it puts things in a real perspective. We're ten thousand years from the beginning of civilization, not two thousand. Now THAT gives some perspective on the "long now"

Seriously, they could have stuck a '1' on the front instead of a '0' and it would have been a) more accurate, b) less weird, and c) more perspective.
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