Gold took big hit

RogerB

@davidk said:
Gold is not an investment, gold is money. The correct debate frame is not gold vs equities, it’s gold vs imaginary fiat.

Warren Buffet gets the frame incorrect as well.

Gold, silver, or any other metal are commodities. Gold stopped being money when nations could no longer control the value. It is not "money" any more than a fried egg is "money."

Mr. Buffet has it right -- as usual.

davidk

@RogerB said:

@davidk said:
Gold is not an investment, gold is money. The correct debate frame is not gold vs equities, it’s gold vs imaginary fiat.

Warren Buffet gets the frame incorrect as well.

Gold, silver, or any other metal are commodities. Gold stopped being money when nations could no longer control the value. It is not "money" any more than a fried egg is "money."

Mr. Buffet has it right -- as usual.

Fiat is paper. See Zimbabwe, Venezuela, Weimar Republic...

RogerB

All "money" is a fiat - an agreement to accept something defined as "money" in exchange for many things not so defined.

Your examples are of little practical value except to show what happens when those defining "money" abrogate their public trust and ignore economic reality.

dcarr

@Boosibri said:
What is the thesis for owning an asset class which does not generate cash flow in a period where interest rates will be surely rising. What must be true for gold to then become a good relative investment?

Think about what will happen if and when interest rates "normalize":

There will be pressure on corporations and equities, unless there is also significant inflation;

Real estate prices will decline, unless there is also significant inflation;

The cost of servicing the national debt will rise dramatically resulting in greater deficit spending.

The largest bubble of all time (bonds) will burst, with bond prices having nowhere to go but down in a rising interest rate environment, especially if inflation is increasing;

Translation:
There really is no easy way out. The apparent least-painful path will be to allow debts to be inflated away. Interest rates will lag far behind true inflation rates until such time that a large amount of public, corporate, and private debt has been cleared (inflated away).

blitzdude

@RogerB said:
All "money" is a fiat - an agreement to accept something defined as "money" in exchange for many things not so defined.

Your examples are of little practical value except to show what happens when those defining "money" abrogate their public trust and ignore economic reality.

Hows this for economic reality? lol