patrick.net

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Gold's annual growth rate is +10.3% compared to S&P 500 at +6.2% over the last 21 years. The last 21 years has been almost the lost decades for the S&P 500 especially the SPYV (value index ETF).

https://dqydj.com/gold-return-calculator/

https://dqydj.com/sp-500-return-calculator/

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ad says

The last 21 years has been almost the lost decades for the S&P 500

21 Years? How about 25.

If you brought the s&p500 in January of 1995, it was over $600. Today it's about $3500, a gain of almost 600%. During that time you would have collected dividends as well, something gold doesn't pay.

If you brought Gold in January of 1995, it was $400/oz. Today it's, to be generous, shy of $2000/oz. That's a 500% gain, but during all those years, you never received a dividend. In fact, the average price of gold was a lot lower last year at $1200, so only a 300% gain. Once the Corona China Cooties blows over, not long after the election, it'll be back down towards $1200.

NoCoupForYou says

21 Years? How about 25.

Yes, but 2000 to 2020 has been the lost decades (dot com bubble, 9/11 and war on terror, Clinton housing bubble and great recession, the Chicom virus, etc.).

This period is almost as bad as 1929 to 1949.

/

Sorry if the resolution doesn’t come out well. I’m posting this from my phone.

From a historical perspective, 2000-2012 was the lost decade for the S&P. However, if history is any indication, the stock market should perform well this decade. As Warren Buffett said “Don’t bet against America.”

Paypal/Venmo is entering the crypto business:
https://www.forbes.com/sites/nicholasgans/2020/06/23/buzz-of-paypal--venmo-to-facilitate-crypto-buyingselling/#51001acf4df3

Square invested 50M USD into Bitcoin:
https://www.cnn.com/2020/10/08/business/square-bitcoin-crypto-investment/index.html

I want to buy Bitcoin as well. What apps/sites do you guys use to purchase it?

All money is only the power to make other people work for you.

Gold and Bitcoin have no inherent value in themselves, since they produce nothing, but as long as they are in demand, they will be in demand because people will work for you to get them.

Patrick says

All money is only the power to make other people work for you.

Gold and Bitcoin have no inherent value in themselves, since they produce nothing, but as long as they are in demand, they will be in demand because people will work for you to get them.

Bitcoin is especially funny to me. Everybody that is "investing" in it, have never actually done a transaction in it.

When you do a transaction, you have to access other people's wallets to verify that your coin is valid and this process is slow, because you're not accessing one wallet but I think hundreds. The time it takes to do a transaction can take minutes, even hours - and to do a transaction, you have to pay a transaction fee.

It's entirely unworkable for buying groceries, gas, pizza, or anything trivial. You can use it to buy a car, or a house, because the transaction times for those is days or even weeks for that anyhow.

Who knows what valuation bitcoin will go to, but it will never, ever be a currency. It's like a stock for a company with no product. It's basically a ponzi scheme.

richwicks says

It's basically a ponzi scheme.

Agree.

Patrick says

Gold and Bitcoin have no inherent value in themselves

Disagree.

Both require massive amounts of energy to create but with one you have a shiny relic with the other you get a flashdrive full of zeros and ones. If gold is not intrinsically valuable nothing is.

What would the intrinsic value of gold be?

OK, some value for electronics (very low resistance) and dental work (does not corrode).

Aside from that, though, it's not very useful in itself, like oil is, or land, or certain software.

Patrick says

What would the intrinsic value of gold be?

Intrinsic value is defined as the cost to recover or create the item. With bitcoin, it's the cost of the energy to make it, with gold it's the cost to mine it. Bitcoins can have enormous cost, but it cannot be easily exchanged. It's like a giant rock, moving it requires a bit of effort.

This is why you have bitcoin exchanges, you know - BANKS. Central authorities that just verify the currency once, then allow trading, and who knows, they do fractional reserves.

Gold inflates at about 2% per year and by inflates I mean that's about how much gets mined.

Consider this: You buy all of the gold in the world on year-1. About a hundred years later you only own about 15% of all of the gold.

Gold hasn't kept up with the FED either.

I think if it starts to become a broadly accepted store of value (and it seems that is the case) that bitcoin is going to go much higher. It doesn't have that unforunate feature gold has. It sucks as a method of payment but I've seen several high profile finance people lately state that they think what will happen to it is that it'll be the peg. So something like etherium will use a bitcoin 'standard', much like $ used to use gold as a standard.

I think people will want those or some variant of crypto vs. Fed Coin or Ripple or some other bullshit our governments/IMF are going to force us onto during the upcoming 'Great Financial Reset'.

richwicks says

Intrinsic value is defined as the cost to recover or create the item.

That's not how I would define intrinsic value. I don't care what it costs to create or recover the item. I care how useful it is.

just_adhom_preaching says

It sucks as a method of payment

If some other crypto-currency gets invented with better features (like instant usability) then Bitcoin may go to zero. Hard to be sure.

just_adhom_preaching says

Gold inflates at about 2% per year and by inflates I mean that's about how much gets mined.

That's the target inflation rate of the Federal Reserve.

Yet, the Nixon Shock happened, and convertibility to gold was ended in 1971.

Because the Federal Reserve keeps engaging in fraud.

just_adhom_preaching says

Gold hasn't kept up with the FED either.

And that is why it's such a good buy. The Fed has been engaging in fraud for a century, not just 5 decades. When the fraud is revealed, it will be like the French Revolution, where people were killing bankers first then targeted the aristocracy second. You're never told that, are you?

The question though is how long can the Fed, with the co-operation of the government, keep the fraud going? It's been a century.

Patrick says

If some other crypto-currency gets invented with better features (like instant usability) then Bitcoin may go to zero. Hard to be sure.

There already are those cryptos. There are others that are 'stable' like stable coin. That's why it'll never be used to buy starfucks coffee. But it is well suited for a store of value like gold. Can't buy coffee with gold either.

- Queue the bitcoin kid that was on here recently pumping it.

I still like cash but considering that's going to go away soon I'm rethinking things. Like a Faraday cage.

Try this out Pat, go here:

https://usdebtclock.org/

See that 27 trillion? Okay now on the top right click on the time machine and select 2024 only 4 years from now. I've been told that 48 trillion you see is based on outlays. It could be worse.

The $ is hosed. Should have let those fucking zombie banks and corporations fail in 08.

just_adhom_preaching says

The $ is hosed. Should have let those fucking zombie banks and corporations fail in 08.

What? And admit the government has done no oversight of the financial system for 30 years?

Unthinkable!

Eventually the dollar goes to zero - because our politicians are worthless scum.

richwicks says

Eventually the dollar goes to zero - because our politicians are worthless scum.

Yeah, if bitcorn is a ponzi scheme the $ is a worse ponzi scheme.

just_adhom_preaching says

richwicks says

Eventually the dollar goes to zero - because our politicians are worthless scum.

Yeah, if bitcorn is a ponzi scheme the $ is a worse ponzi scheme.

They are the same. Do you know who created the Fed and controls it?

No? That's bitcoin - but the "source code is available" - do you understand it?

If you make $10 million in bitcoin, go buy a plot of land in the middle of nowhere and build a vacation home, or a shack. Before the foundation is built, bury around $800,000 in silver and you're set for life. No farmer is trading food for bitcoin, but they'll trade for silver at that point. You will want to see the foundation being poured.. $800,000 of silver - that's not a trivial amount of weight, and it's hard to procure.

You want to look at the bitcoin source code? https://github.com/bitcoin/bitcoin

I don't even think crypto is all that edgy anymore. I think the uptake will continue slowly for a while and then quickly.

What's more interesting is the tZERO network. It's the other side of crypto. Summary: The idea is to digitally tokenize everything. Videos of me Toobin, some model's legs, each division of the company I work for, a painting, the San Antonio Spurs, etc., and gets rid of the need for CEOs who fuck over their companies and just do buybacks.

https://news.bitcoin.com/overstock-coms-t0-regulated-security-token-exchange/

It's really weird that overstock is into as is Thermo a biotech I used to work for.

I don't fully understand it yet.

richwicks says

They are the same. Do you know who created the Fed and controls it?

Watch the FED start buying it lolz!

I get your point though. There is a lot of cringe on the interwebs about Etherium for a very similar reason. We know who wrote that code and controls it. Good point. I have a feeling that might not be something to worry about with bitcorn, but maybe so.

richwicks says

do you understand it?

If I dug in yeah. But I work in git repos all day long so.

richwicks says

but they'll trade for silver at that point.

I do plan to get some silver for this reason. I have some old silver dollars the grandparents hid in Easter eggs when I was a hunting wee one. I think the $1 are worth around $20 now. I could probably trade some of it for bread during Cannibal Anarchy.

just_adhom_preaching says

richwicks says

do you understand it?

If I dug in yeah. But I work in git repos all day long so.

Do you? Do you understand why ECC is is associative? I don't. I spent some time reading about it until I ran across Christopher Paar's book "Understanding Cryptography" and have gone through multiple videos of his:

www.youtube.com/embed/JWskjzgiIa4

It's never explained why ECC is associative, and it very well may be, but I'm just saying, very few people actually understand bitcoin. RSA I understand, ECC - there's a big gap.

Ahhhh, nope, I dunno that! I did a bit of crypotography in school but that is it.

For the price of one bitcoin you can buy 6 1 oz gold coins or 400 one oz silver coins. Which would you choose?

I am old school from back when currency was easily exchangable for goods ($ still is crypto is not) and backed by something real.

I'll take the silver.

just_adhom_preaching says

Yeah, if bitcorn is a ponzi scheme the $ is a worse ponzi scheme.

Nope. The $ is backed by the good faith and credit of the US government. Bitcoin is backed by international "miners" and the willingness of the greater fool. The US dollar is a ponzi scheme but nothing compared to crypto.

Onvacation says

The $ is backed by the good faith and credit of the US government.

That's a problem. You could say that is THE problem.

just_adhom_preaching says

Onvacation says

The $ is backed by the good faith and credit of the US government.

That's a problem. You could say that is THE problem.

Yep.

The system has a couple more centuries at best. But bitcoin will not be the currency of choice after the dollars demise.

Onvacation says

The $ is backed by the good faith and credit of the US government.

What this really means is the power to force people to pay taxes in US dollars, putting them in prison if they refuse.

And that means the power to compel people to labor, and the power to compel labor is the only real value of all money.

So the US dollar, even though the Fed is routinely inflating it away, will still be necessary to use if you want to stay out of jail.

If you buy the right stocks, you can avoid the worst effects of inflation. A Chinese friend recommended that I buy stock in Visa and other credit card companies as an inflation hedge, because they take a percentage of each transaction. Whatever the value of a dollar is, they still get the same percent of it.

The truth of bitcoin and all other crypto currencies is that they are valued in the US dollar and other fiat currencies. If the dollar crashes bitcoin will be worth a lot of dollars, but no one will want to trade anything for your flash drive full of bits.

Onvacation says

just_adhom_preaching says

Onvacation says

The $ is backed by the good faith and credit of the US government.

That's a problem. You could say that is THE problem.

Yep.

The system has a couple more centuries at best. But bitcoin will not be the currency of choice after the dollars demise.

Such confidence!

Interesting discussion. I get Bitcoin as a store of value ("digital gold"). I also doubt Bitcoin will be a currency used to pay for day to day stuff in the near future. On the other hand, Nasdaq companies like PayPal/Venmo and Square are heavily investing in crypto's means that they probably see a future in cryptos used for peer to peer payments etc.
I signed up for the Coinbase app (US based crypto exchange) and will throw a few grand into Bitcoin.

I was pretty sure, the minute I buy Bitcoin it will lose value.
Its pumping (13.7k ) - fun to watch. Anyone else in the Crypto game?

Patrick says

richwicks says

Intrinsic value is defined as the cost to recover or create the item.

That's not how I would define intrinsic value. I don't care what it costs to create or recover the item. I care how useful it is.

Doesn't matter how you define it.

That's the definition of intrinsic value. It's a fairly well known concept in Austrian economics.

www.youtube.com/embed/GtfS3GCRwtU

I'm sure you're right, but I think it's a misnomer.

G36 says

Anyone else in the Crypto game?

No, but it was dropping quite a bit about a month ago. Just never reached my low-low buy price.

just_adhom_preaching says

G36 says

Anyone else in the Crypto game?

No, but it was dropping quite a bit about a month ago. Just never reached my low-low buy price.

It's a trading vehicle. That's all I see it as with a huge downside. There's no "value" to hold it long term. It's basically a MPRPG. Once you get to the top of the mountain the game no longer becomes fun to play and it gets old. Once it's fully mined you can no longer get any more. So people move on. That's when the bottom drops out. It will happen 100%. If you can make money off it, go ahead. It's simply not an investment in the traditional sense.

WookieMan says

It's simply not an investment in the traditional sense.

It's a ponzi scheme dependent on the greater fool.

I bought through the Robinhood App and I'm on the waiting list on PayPal.