patrick.net

AmericanKulak says

I think excessive optimism and magic thinking is just as bad as excessive pessimism and dooming.

False choice fallacy. I stopped reading right there.

Nomograph says

False choice fallacy. I stopped reading right there.

Get accused of the very False Choice Fallacy, exactly what I was pointing out when I said.

AmericanKulak says

I think excessive optimism and magic thinking is just as bad as excessive pessimism and dooming.

In other words, a plea that one extreme is as bad as the other. I'm presenting an argument that is very OPPOSITE of a false choice, but a GREAT EXAMPLE of trying to point out an "Excluded Middle" option.

The whole thing being a continuation of arguments like:

Sure, there is excess worry, but saving for a few weeks of food and essentials is wisdom. Since the invention of Agriculture about 8000 BPY, it was necessary in most places to survive the winter season.

Nomograph says

This isn't medieval Europe, Kulak. We have a level of opportunity that previous generations couldn't have dreamed of. It's a shame to see folks squander it by wallowing in a mindset of scarcity and victimhood. The world is our collective oyster and t's possible for just about anyone in the western world to go out and not only seek, but find their pearl.

Translation: "Let them eat cake." - Marie Antoinette (attrubuted)

Opportunity does not equal agency to be able to avail oneself to exploit said opportunity.

Nomograph says

I suppose I can talk about my own case. I would ballpark my net worth at around $10MM. Over the years I have invested in real estate, stocks, and private companies e.g. startup equity.

How much did you inherit? How did you get that initial money to invest?

Nomograph says

To address your real point, 10MM is within reach of almost anyone.

Almost anyone? Really?

Nomograph says

Patrick, I would like to hear why you think that tying currency to metal is a good practice.

@Nomograph

So that the Federal Reserve cannot steal money from everyone continuously, as they have been doing.

Nomograph says

Furthermore, low-level inflation prevents deflation.

Silver inflates, slowly, as more silver is discovered. Definitely much faster than gold does. So you can have a bit of inflation with silver.

Nomograph says

Currency deflation is one of the worst conditions for an economy because it discourages investing and encourages currency hoarding. The velocity of the currency (i.e. the number of times it changes hands pur unit time) slows to a crawl and the economy stagnates. People spend only what they absolutely need to because that dollar will be worth more tomorrow.

Maybe people should spend only what they absolutely need to.

Nomograph says

I'm confused now. How does, say, a dollar bill "rob me blind." HINT: It doesn't. If you stuff your dollar bills in a mattress for years while knowing their value slowly lessens, you have robbed yourself. Government-issued currency is just a convenient medium to facilitate the exchange of goods and services and inflation insures that it is used primarily for that purpose.

Do you really think it's the government job to grow your wealth and keep it safe for you?

So your assumption is that without the government to regulate and issue currency, we too dumb to do it ourselves? I guess you'd say same for healthcare, drugs, transportation, etc. Just curious, can you provide an example of government ever making anything better..?

As to the inflation comment, Jefferson(?) already said it best:
"If the American people ever allow the private banks to control the issue of their currency, first by inflation and then by deflation, the banks and the corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered"

Your choice to ignore history and the destruction central banking inflation causes does not change reality.

RWSGFY says

I'm pretty sure $100 invested in AAPL, GOOG, NFLX, TSLA, NVDA, AMZN and such 10-15 years ago has beaten inflation even with taxes taken into account. Heck, even plain old boring S&P index fund did that, so no stock-picking prowess or luck necessary.

I took Apple and the past 10 years. Price has gone up about 82%. Inflation as a calculation of the rate of growth of the money supply(CPI is shit), is 46% during that period. That means a realized gain of 36%. Now, if you look at the price of physical silver over that same period, it has increased about the same amount(and metals are highly suppressed).

So what does this mean? In terms of real money, your stock investments didn't gain shit. But since our economy is built on Monopoly money, and fucking no one accounts for taxes, and especially not inflation, they see more zeros and assume they've made a profit.

You aren't making more, and stuff isn't more expensive. The money is just worth-less...

https://www.zerohedge.com/personal-finance/nebraska-ends-income-taxes-gold-and-silver-declares-cbdcs-are-not-lawful-money

With Gov. Jim Pillen’s recent signature, Nebraska has become the 12th state to end capital gains taxes on sales of gold and silver.

LB 1317 is the fourth major sound money bill to become law this year, as state lawmakers across the nation scramble to protect the public from the ravages of inflation and runaway federal debt.

Under the new Nebraska law, any “gains” or “losses” on precious metal sales reported on federal income tax returns are backed out, thereby removing them from the calculation of a Nebraska taxpayer’s adjusted gross income (AGI).

Supported by the Sound Money Defense League, Money Metals Exchange, and in-state advocates, Nebraska’s sound money measure passed out of the unicameral legislature’s Revenue committee unanimously before being amended into a larger bill.

Sponsor Sen. Ben Hansen said upon news of the formal enactment of his legislation:

Gold and silver are the only forms of currency mentioned in our Constitution and with that comes the people’s ability to use it as such without penalty from the government. Saving, and using, gold and silver is our right and one of the only checks and balances to our federal government’s unending devaluation of our paper currency.

Taxpayers often realize ‘gains’ when converting the monetary metals back into Federal Reserve notes even though the ‘gains’ do not reflect an increase in real value but rather reflect the currency’s ongoing devaluation.

This is cute but they shouldʼve abolished SIT alltogether.

Life should not be made arbitrarily hard for people who are honest and work hard. Life is hard in general, but humans should not make life harder for other humans just because it's fun to watch others grovel. That was the guiding principle of the Declaration of Independence and the United States Constitution. Fuck all of you who don't believe me - read it for your commie selves.

Having to learn how to invest outside of your wheelhouse just to counter the corruption of the money that you earn through your livelihood - yes, the 1- and 2-sigma intelligent people can figure this shit out, but that's not the point. The point is, that a society that is structured to exploit the vast majority of its population for the sake of the few is doomed to fail. The Founders knew this. They tried to strike a balance so that the majority of the population could live their lives as they saw fit, without undue "government interference" AKA theft.

There are unfortunately many people who have trouble doing the basics of what needs to be done to succeed in our "modern" society. This is where I fault the so-called "Christians," for Christ says to seek a just society, a place for everyone. A society which is too greedy or too ignorant to figure out a plan whereby all members of that society can do the work that they can and earn a measure of the rewards that the society can dispense is an unjust society. I'm not talking about gravely sick people or otherwise severely but temporarily injured - I'm talking about average and below intelligence.

stereotomy says

Having to learn how to invest outside of your wheelhouse just to counter the corruption of the money that you earn through your livelihood

I agree, it's set up to exploit people who don't have time to learn about investing or the aptitude for it.

Silver by weight (not dollars, ever!) would fix this.

Weight alone, weight of 0.9999 pure silver.

RWSGFY says

This is cute but they shouldʼve abolished SIT alltogether.

I agree. Taxing income reduces the incentive to work.

Sales should also never be taxed, because commerce is good.

Land value is the only appropriate object of taxation, where "land" includes radio spectrum and other natural resources no one created. Between that and import tariffs, we could easily fund as much government as we actually need to have. Which is much less government that we currently have.

In the last 25 years since the end of 1999, gold has risen 736.2%, silver 484.4%, the Dow 248.2% and the S&P500 263.4%.

https://www.coffeeandcovid.com/p/man-up-friday-december-13-2024-c

Local News-4 Jacksonville ran a valuable story yesterday headlined, “Florida CFO announces launch of study to see how gold, silver can be used as legal tender.”

https://www.news4jax.com/news/local/2024/12/12/florida-cfo-announces-launch-of-study-to-see-how-gold-silver-can-be-used-as-legal-tender/

Florida’s Chief Financial Officer, Jimmy Patronis, announced an official Sunshine State study of an official state currency backed by precious metals not just hypothetically but “to determine the best way to get it done.” In addition to being useful as legal tender, to buy and sell goods and services in the Sunshine State, Patronis pointed out that gold and silver coins protect citizens against inflation and protect the state against a future central bank digital currency.

Concerns about proposals to issue legal coinage include precious metal price volatility, the inconvenience of safely storing them, how sale transactions could be handled elegantly and efficiently without requiring haggling over the set price, and the lurking risk of greedy Leprechauns.

Texas, is also pursuing an independent, gold-backed state digital currency, and is moving forward with its plan, which has been in the works since 2015. Making the gold-backed currency digital, if you can make it work, would resolve all the concerns over physical metal coins. Headline from the Jerusalem Post, two weeks ago:

Texas Pushes Forward with 100% Gold-Backed Transactional Currency Legislation
Texas unveils bold plan: Gold-backed digital currency. Lawmakers propose state-wide
digital coins fully redeemable in precious metals, offering alternative to traditional currency.

OK, but the digital currency should come with a HUGE warning: "Not money, only a debt, may default at any time."

Patrick says

Texas Pushes Forward with 100% Gold-Backed Transactional Currency Legislation
Texas unveils bold plan: Gold-backed digital currency. Lawmakers propose state-wide
digital coins fully redeemable in precious metals, offering alternative to traditional currency.

Which will be overruled by SCOTUS.

States can only make gold and silver legal tender, not derivatives thereof. Nor can they coin money.

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

OK, I'm fine with only gold and silver as money, as long as it is by weight of pure metal alone and not in bullshit units which can be debased.

The Constitution is nice and clear about this.

And no paper for wages and small contracts. Metal only. MAYBE a ticket to metal in a storehouse with no charges (storage charges paid by the paper giver, not receiver), not a bank, but 100% reserves.

Otherwise the big boys hoard the metal and give everybody paper to a bank, which loans out 80-90% of the metal and only has a bit actually in house.

Also, foreign holders CANT get the metal, except a receipt for paper kept at a US storehouse. They can only get paper. GREAT way to balance the trade deficit; they can only spend US Metal in the USA.

Then, foreigners can only own US real estate by buying cash in metal, and bonding the purchase price equivalent in metal stored in the USA. Including foreign companies.

And finally, residential real estate income is taxed at short-term capital gains; unless the rent is paid in one lump sum over a year or more.

The Fed is replaced by the USPS Bank, which is the only entity issuing FHA loans. FHA and VA loans will be limited 25 years, dropping a year starting two years after the 25-year is imposed to 15.

If you can't pay it off in 15 years, you can't afford it. Or get a full private.bank loan. 15 year loans used to be the standard.

Make housing affordable again.

College loans are limited to STEM fields and capped at $20k year + CPI. and only available to the top 10% of students.

AmericanKulak says

If you can't pay it off in 15 years, you can't afford it.

Bingo! Car loans should be 20% down and two years max.

The first and greatest sin was permitting fractional reserve banking. That was the lie that seeded the great corruption that is overwhelming us today.

Banks pretend they have more money to lend (1000% more under 10% reserves) than they have. Eventually, everyone is pretending to own what is on credit, including the US gub'ment.

HeadSet says

Bingo! Car loans should be 20% down and two years max.

Yep.

I certainly don't remember 72-month loans back in the day.

stereotomy says

The first and greatest sin was permitting fractional reserve banking. That was the lie that seeded the great corruption that is overwhelming us today.

Banks pretend they have more money to lend (1000% more under 10% reserves) than they have. Eventually, everyone is pretending to own what is on credit, including the US gub'ment.

Right?

The late 19th century was a deflationary period. The price of almost everything went down over several decades.

It wasn't crazy a few decades ago for ordinary people that didn't have top 10% incomes to pay cash for a NEW car, or to pay tuition out of income.

AmericanKulak says

The price of almost everything went down over several decades.

Yes, as it should when productivity increases.

But around the 1970's, all increases in productivity resulted in more money for shareholders and less than nothing for the workers who were being more productive.

Patrick says

But around the 1970's, all increases in productivity resulted in more money for shareholders and less than nothing for the workers who were being more productive.

Be careful about that statistic. For example, a small farm could have bought a tractor and replaced several workers. The labor costs have gone down for the farmer due to fewer workers, but that tractor driver gets paid more than any of the former field hands.

AmericanKulak says

If you can't pay it off in 15 years, you can't afford it.

True. All attempts at increasing "affordability" by guaranteeing loans or extending them actually make housing (or education, or whatever) less affordable by increasing the price. Suppliers always increase the price to negate any such "affordability" program. This is why housing and education prices are insane.

Banks love it. More and longer loans to collect interest on.

The public gets fucked, but is generally so stupid that they just don't understand.

I was reading the history of mortgages, and the immediate postwar decades, the mortgage was 15 years.

By 40, most men had paid off their homeloan or were about to.

Also, we need to make Credit Cards fall under the law of the state where the grantee lives.

"But states rights". No problem here. We are just changing the standard from the State Law of creditor to State Law of the grantee. Don't like it? Then Dakota credit companies don't loan in states with usury laws.

I suspect keeping people on the plantation as share-croppers was a side-effect.

There's been so many innovations, like the Grid Nail. That innovation alone reduced materials and time costs at least 15% from the suburban home builds of the 1940s-50s while increasing roof strength and reducing the need for load bearing interior walls. Yet houses are more expensive?!

Silver would be better as currency, far more abundant and of the right value for everyday currency, but still, the point is good

Domestic Silver!

Metal for the public, banknotes for banks, foreigners, and large corporations where 5% of all transactions of the company AND including it's wholly owned subsidiaries is international transfers. Metal coins can't be exported, they have to be converted to Paper or Digital Silver Certificates.

After all, banks and big money loves paper for the people, but the physical for themselves, so they won't mind this switcheroo since they're constantly telling us through history that digital and paper and other representations are as good as the real thing. The compromise is that they have the representations they assure us is safe and as good as the real thing, and have the digital and paper that's easier to move and store and track for them. The public takes on the burden of holding and using the heavy silver coins to provide relief to the big institutions. ;)

TPTB don't allow me to have an account on 'X'. Probably because I sometimes post things that just shouldn't be common knowledge.

A few years ago, anyone could inquire about how much silver the Federal Reserve held. I remember it being 25k tonnes.

Here's a website listing it as 23k tonnes.about 739 million ounces

https://www.jmbullion.com/investing-guide/facts/silver-reserves-by-country

When you ask the Google it comes up with this The Federal Reserve holds 16 million units of silver, which is a small amount compared to the total reserves and holdings of other precious metals. The silver is included in the U.S. Treasury's monetary assets. While the Fed holds silver, it is not considered a primary component of their reserves.

GROK says that the Federal Reserve losing or disposing of 25k tonnes of silver is a conspiracy theory. Since I am the only one asking about this, my question apparently triggered a Deep State response.

IMHO unelected bureaucrats gave America's 23k tonnes of silver to rich, connected bankers for our own good.

Misc says

23k tonnes of silver

"Tonnes" is an odd unit of measure, typically used by the same folks who give their body weight in "stones." Americans typically measure silver in troy ounces.

Gov. Ron DeSantis signed a bill on Tuesday that would recognize gold and silver as legal tender in the state, paving a path for Floridians to use the commodities in payment transactions.

The bill, HB 999, starts the process of allowing government or private entities, such as businesses, to voluntarily accept gold and silver as a form of debt payment. The bill also outlines sales tax exemptions on the purchase of the precious metals if they meet the purity requirements or if the sale of the gold or silver exceeds $500.

HB 999 is set to go into effect on July 1, 2026, if the Florida Legislature ratifies the rules to implement the bill before then.

In a statement on X announcing the bill's signing, DeSantis said the move was to ensure the state's financial sovereignty.

"Florida stands firmly for freedom, economic self-determination, and resistance to government overreach," the governor said. "But for too long, outdated regulations and unnecessary sales taxes have made it impractical for Floridians to enter the gold and silver market."

https://www.businessinsider.com/florida-gold-silver-legal-tender-ron-desantis-currency-2025-5

Florida's recognition of the gold and silver follows in the footsteps of states like Utah, which implemented a law in 2011 to recognize gold and silver as legal tender and exempt coins from state taxes.

The Florida bill states that gold coins must have 99.5% purity and silver coins must have 99.9% purity to be recognized as legal tender.

The coins must also be stamped with their weight and purity, according to the bill.

Sounds good to me!

They did the same thing here in Arizona. I was thinking of paying my income tax with some gold and silver, but decided the tax fellas would get uppity about it and audit me just for the hell of it.

fdhfoiehfeoi says

I took Apple and the past 10 years. Price has gone up about 82%. Inflation as a calculation of the rate of growth of the money supply(CPI is shit), is 46% during that period. That means a realized gain of 36%. Now, if you look at the price of physical silver over that same period, it has increased about the same amount(and metals are highly suppressed).

So what does this mean? In terms of real money, your stock investments didn't gain shit. But since our economy is built on Monopoly money, and fucking no one accounts for taxes, and especially not inflation, they see more zeros and assume they've made a profit.

You aren't making more, and stuff isn't more expensive. The money is just worth-less...

Since you wrote the above in April 2024, I looked at Apple stock April 2014 and April 2024. The values were, roughly, $20 and $170. So the gain is (170-20) / 20 = 750%, or 13.3% compounded yearly. So, this particular stock did very well during that period. (And that is why I am now retired!)

But I doubt cherry-picking a single stock was your intention. Let's look at the S&P500 over that time: $1883 --> $5035. That's 167% increase. Plus, if you held the S&P you would have collected dividends as well. So, I think it's fair to say the S&P handily outpaced the money supply increase.

Getting back to your Apple example, a 82% gain reduced by an increase of 46% in the money supply does not mean a gain of 82% - 46% = 36%. I don't think that's the right math. If you had a dollar that experienced 82% nominal gain you now have nominal $1.82. But an old dollar now needs to be $1.46 to buy the same goods because of the increase in money supply. So that $1.82 is now worth $1.82/1.46 = $1.25 in the uninflated currency. I suppose I just strengthened your important point!

But also, as you alluded to, the government unfairly taxes the nominal gain instead of the actual gain. That was supposed to be addressed in Trump 1.0 tax cuts of 2018 and was again floated for Trump 2.0 but failed to make the bill either time. The idea is to only tax the real capital gains, not the nominal ones. It takes nearly no additional effort to implement, too, since we already have to tell the government the purchase and sale dates of our investments; use those dates to adjust the buy and sell prices to real prices and tax that.

Since this is (was) primarily a real-estate site, I'll close in commenting that taxing the real gains of real-estate would be an eye-opener for a lot of people. My mother still touts her amazing house investment, which my parents bought in 1965 for $36k and is now worth $925k. In nominal terms, that's 5.6% compounded yearly nominal appreciation. However, adjusting that $36k to modern terms sets the house basis at $366k. So that house appreciated at a compound annual real rate of 1.5% — hardly a windfall.

Right, the stock market is almost always a better bet than the housing market.