No the thesis of cash is that it's a legally enforced means to extinguish debts within a certain legal jurisdiction.
A court cannot generally find that I must furnish someone with some weight of gold for example but they can find a monetary value in sovereign currency which I must supply.
The thesis of cash is that governments and their influencers can turn some knobs and decrease its value and enrich themselves simultaneously by creating more of it. A lot of it as debt for the normals.
It's just not the same when your crew has another ship's crew at its mercy, loaded blunderbusses at the ready, waiting for the leather sacks and chests full of bitcoin to be turned over.
I think the point is that when it comes to investment vehicles, gold generally beats cash. Oh and that means that in the last 20 years or so (ie. including the period where it didn't appreciate much), physical gold beats a balance in bank accounts.
Inflation means "interest" on gold, measured in reliable currencies like USD or EUR, is at least 4%. Far more than you will get from any bank.
Of course this goes for anything, so you might want to select something with less regulation attached to it. On the other hand, gold is really dense and "liquid" (easy to sell), which are great advantages to have for a store of wealth. And then there's the recent history of gold prices (which is due to the third world attempting to use anything but dollars but not succeeding at it, but one assumes it will end)
But yes, gold makes less than you'll probably get on the S&P500.
Only for very large amounts of money. It can't easily be subdivided. Oh and this is illegal in most countries.
But yeah, what people forget is that gold is incredibly dense. Nearly double lead's density. This means 1kg of gold is about the size of a nokia 3360, and worth close to 150,000$. A very large amount of gold doesn't take up much volume at all.
... which also means that people "stealing gold" like in the bond movies is totally unrealistic. If you loaded a pallet of gold bars (12.5 kg a piece, 200 gold bars, about 2.5 tons, 375 million USD) into a standard van, that van would probably just break down. And carrying 10 gold bars, 20 million USD in a backpack? Not happening.
(which frankly Trump is abusing because of course the density of gold means that any facility storing gold, including Fort Knox, is going to "look empty")
You have a point. And yet, today, you can buy even more bread and clothes and materials with an ounce of gold than you could 2000 years ago. Meanwhile, what happened to all of the businesses and currencies over the last few millennia? Where will the FCF of any random company be in 50 years? Will gold still be valuable then?
You don’t get any of the FCF or earnings for owning equity, if a stock doesn’t pay dividends it’s the same thesis that someone will pay more for it later
Correct: gold is a store of value, not an investment.
In an ideal world gold would be convertible to and from currency tax free so it could be used as such. A gold-backed currency is too constrained by the supply of gold in the world, but tax-free gold would allow people to avoid currency depreciation and the credit collapses of our current debt-based system without paying a penalty.
Gold is popular as jewellery. The price is determined largely by the cost of mining it and so has remained somewhat stable compared to the cost of things like houses for centuries, far more so than other money like things.
Paper/plastic currency (cash) has 0 FCF, 0 earnings, 0 dividends. The whole thesis is you trade it at a deprecated rate later.
You can trade gold and cash with people a lot more easily than an equity in your brokerage account.
No the thesis of cash is that it's a legally enforced means to extinguish debts within a certain legal jurisdiction.
A court cannot generally find that I must furnish someone with some weight of gold for example but they can find a monetary value in sovereign currency which I must supply.
The thesis of cash is that governments and their influencers can turn some knobs and decrease its value and enrich themselves simultaneously by creating more of it. A lot of it as debt for the normals.
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The thesis for gold is that it holds its value in times of war when companies and governments fall apart.
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It's just not the same when your crew has another ship's crew at its mercy, loaded blunderbusses at the ready, waiting for the leather sacks and chests full of bitcoin to be turned over.
Yeah man you missed the point. Gold is not good as an investment vehicle.
As a daily currency, it also has sharp downsides, but at least it’s not all bad.
I think the point is that when it comes to investment vehicles, gold generally beats cash. Oh and that means that in the last 20 years or so (ie. including the period where it didn't appreciate much), physical gold beats a balance in bank accounts.
Inflation means "interest" on gold, measured in reliable currencies like USD or EUR, is at least 4%. Far more than you will get from any bank.
Of course this goes for anything, so you might want to select something with less regulation attached to it. On the other hand, gold is really dense and "liquid" (easy to sell), which are great advantages to have for a store of wealth. And then there's the recent history of gold prices (which is due to the third world attempting to use anything but dollars but not succeeding at it, but one assumes it will end)
But yes, gold makes less than you'll probably get on the S&P500.
I'm sorry, I didn't make my point well, that's on me. My point was that gold isn't just an investment.
"You can trade gold ... easily"
Only for very large amounts of money. It can't easily be subdivided. Oh and this is illegal in most countries.
But yeah, what people forget is that gold is incredibly dense. Nearly double lead's density. This means 1kg of gold is about the size of a nokia 3360, and worth close to 150,000$. A very large amount of gold doesn't take up much volume at all.
... which also means that people "stealing gold" like in the bond movies is totally unrealistic. If you loaded a pallet of gold bars (12.5 kg a piece, 200 gold bars, about 2.5 tons, 375 million USD) into a standard van, that van would probably just break down. And carrying 10 gold bars, 20 million USD in a backpack? Not happening.
(which frankly Trump is abusing because of course the density of gold means that any facility storing gold, including Fort Knox, is going to "look empty")
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You have a point. And yet, today, you can buy even more bread and clothes and materials with an ounce of gold than you could 2000 years ago. Meanwhile, what happened to all of the businesses and currencies over the last few millennia? Where will the FCF of any random company be in 50 years? Will gold still be valuable then?
The staying power of gold is a value in itself.
You don’t get any of the FCF or earnings for owning equity, if a stock doesn’t pay dividends it’s the same thesis that someone will pay more for it later
Or they will pay dividends later.
Correct: gold is a store of value, not an investment.
In an ideal world gold would be convertible to and from currency tax free so it could be used as such. A gold-backed currency is too constrained by the supply of gold in the world, but tax-free gold would allow people to avoid currency depreciation and the credit collapses of our current debt-based system without paying a penalty.
Gold is popular as jewellery. The price is determined largely by the cost of mining it and so has remained somewhat stable compared to the cost of things like houses for centuries, far more so than other money like things.
That's ok - given central banks' continued love of gold, I have no qualms of there being a buyer in my lifetime and probably my kids'
When equities are priced in gold, they peaked in 1999, and have broadly been downhill since then. For reference, see the price of SPY/XAUUSD.