Economy Will people be able to survive

[Eric Silva 2.0]

If that is who is ultimately going to use it, that's how valuable it will be.

For people in those countries it may make the difference between being able to buy food or not. In Argentina right now, inflation is running approx 70%. So people can save in bitcoin and maybe have a chance. I think people in other countries have use for it. I know someone (very wealthy) who moved from China and was able to take their wealth out of the country using bitcoin. I am in the U.S. and I own bitcoin. Michael Saylor owns a lot of bitcoin and he's a billionaire. I believe gold to be the best form of money but bitcoin attracted my interest in 2016 when I heard people calling it digital gold. I invested in it and i'm not sorry to be involved in crypto.

 

[tenniswhiz]

I don't understand why crypto has any value. It is just marketing and hype, but there isn't a fundamental reason for it to have any price, and a huge portion of that price is set by institutional investors. I think the whole thing is just a Ponzi scheme.

I agree, but if something goes up and down, it affords people the chance to make (or lose) money.
Also, to a certain extent, if enough people think something has value, then it has value (at that time).

 

[Cuauhtemoc]

Inflation isn't as bad as people think because usually you also start to make more money. You know, services get more expensive so employees make more.
If you're invested in stocks these also go up in price because these companies are making more in nominal value at least.
Yes, it's really hard in the beginning when prices suddenly go up but people learn and adapt.
Investing in silver or gold doesn't really help because you need to spend those and you don't make your money in silver so if your salary doesn't go up you will not be able to buy the same amount of silver regardless. But yes, if you want to stash money under your bed it's better to stash precious metals than banknotes.
Bitcoin has lost a lot more value than the US dollar in 2022 so you would be doing pretty badly if you invested in that. But hey you could be a millionaire if you invested in Shiba Inu back in 2020!

 

[kahiljabroni]

I know what inflation is, I was just saying it’s not important to this point, because it’s a graph and all you need to know is how to read a graph.

You’re just trying to create a certain narrative by saying inflation is getting worse, which is just not true because it’s actually declining.

Nothing goes up or down in a straight line. Last inflation numbers looked good because energy prices dropped drastically....probably because we're in a recession and we drained the strategic oil reserves. Many other important items like shelter and food went up by quite a bit.

 

[So Fresh]

Nothing goes up or down in a straight line. Last inflation numbers looked good because energy prices dropped drastically....probably because we're in a recession and we drained the strategic oil reserves. Many other important items like shelter and food went up by quite a bit.

I know that, I don’t think TS knows it though. Inflation lowering means it’s not getting worse (inflation).

 

[Jack V Savage]

I'm assuming you are aware that the CPI calculation has been changed over the years. The government lies so the increases are lower to things like Social Security. I follow other stats and make my own estimates which put it a little over 15% for me right now.

The calculation is often tweaked to make small improvements, though inflation is still generally overstated by official measures. It's actually the opposite with regard to SS, which gets increasingly generous over time. Other measures generally provide similar results, if they're done well. On an individual level, it's certainly possible that what you personally buy has risen more (or less) than average.

 

[Jack V Savage]

Just trying to follow there. What we did before was average YOY growth in those terms? I’m just trying to follow.

Still thinking?

 

[brackis1]

Translation: "I own bitcoin and gold, let's try to gin up support on the karate forum so I can afford some land"

 

[Cuauhtemoc]

"If I buy BTC, I can have a story about how some other sucker will buy it from me for more"
I have sold some bitcoin and other cryptos a few times already. I've been in crypto for approx 6 years now. I don't know if the people who bought from me are suckers though. If bitcoin goes to a million a coin are they a sucker? It's hard to value. If you live in Argentina, Venezuela, Zimbabwe, Nigeria, Cuba, Turkey, Sri Lanka, etc..., do you think the people putting their money in bitcoin are suckers or should they save in local currency?
Here is a hint before you answer........

People don't save money with banknotes. Back in the day we had inflation of around 90% a month in Brazil, people would put their money in a saving account that would give you a daily yield that was around inflation plus a little bit more. It's the same in Argentina. With bigger values you would buy real estate, stocks or a car, something that could keep its value or even increase in the long term. People would also try and buy as much stuff as they could in the supermarket as soon as they got their pay.
Also, I know you're using an extreme example, but current inflation has nothing to do with Zimbabwe or even Argentina or Brazil in the past. These are/were very poor countries that would print large amounts of money with no accountability and due to that their currency became mostly worthless.
For example, the Brazilian government wanted to build a new road but it had no way to pay for it so they would just print money and give it to the people working there, there would be no debt to be paid, no congressional approval, nothing, just an executive order.
Current inflation has to do with shortage of products due to disruptions caused by the coronavirus and the war in Ukraine.

 

[Jack V Savage]

People don't save money with banknotes. Back in the day we had inflation of around 90% a month in Brazil, people would put their money in a saving account that would give you a daily yield that was around inflation plus a little bit more. It's the same in Argentina. With bigger values you would buy real estate, stocks or a car, something that could keep its value or even increase in the long term. People would also try and buy as much stuff as they could in the supermarket as soon as they got their pay.
Also, I know you're using an extreme example, but current inflation has nothing to do with Zimbabwe or even Argentina or Brazil in the past. These are/were very poor countries that would print large amounts of money with no accountability and due to that their currency became mostly worthless.
For example, the Brazilian government wanted to build a new road but it had no way to pay for it so they would just print money and give it to the people working there, there would be no debt to be paid, no congressional approval, nothing, just an executive order.
Current inflation has to do with shortage of products due to disruptions caused by the coronavirus and the war in Ukraine.

Good post overall, but on the last point, I'd say that some portion of U.S. inflation is legitimately due to overheating, and there's possibly some portion that's also due to expectations (see my earlier point that 5Y breakevens suggest around 2.7%--note that we target a 2% average). The challenge for our policymakers is to stop the overheating and prevent expectations from rising above the target level, while not overcorrecting for disruptions and the Ukraine invasion, which could cause a recession.

 

[Dan O]

I’ve never sorted out the fascination with gold. I personally find it gaudy and ugly. And yet it’s the basis for so many currencies.

Land, and peoples ability to work the land is the only thing that makes sense to me

 

[Rob Battisti]

Still thinking?

Sorry was in the woods the last few days. Haven’t given it a lot of thought

 

[Cuauhtemoc]

Good post overall, but on the last point, I'd say that some portion of U.S. inflation is legitimately due to overheating, and there's possibly some portion that's also due to expectations (see my earlier point that 5Y breakevens suggest around 2.7%--note that we target a 2% average). The challenge for our policymakers is to stop the overheating and prevent expectations from rising above the target level, while not overcorrecting for disruptions and the Ukraine invasion, which could cause a recession.

I think expectations are a legit problem I hadn't thought about. The US has a lot of margin to play around with interest rates to fix it. Even if it causes a small recession that's hardly the end of the world.
2022, the US suffers from -1% growth and 10% inflation. The US dollar collapses and Bitcoin is now legal tender around the world. Americans, that didn't throw their life savings into crypto and gold, are now standing on breadlines. The EU collapses and joins Russia. Putin becomes world president. El Salvador becomes the new Switzerland where the rich save their dogecoins, shiba inus and other coins that are the new lifeblood of the world's economy.

 

[SummerStriker]

I think expectations are a legit problem I hadn't thought about. The US has a lot of margin to play around with interest rates to fix it. Even if it causes a small recession that's hardly the end of the world.
2022, the US suffers from -1% growth and 10% inflation. The US dollar collapses and Bitcoin is now legal tender around the world. Americans, that didn't throw their life savings into crypto and gold, are now standing on breadlines. The EU collapses and joins Russia. Putin becomes world president. El Salvador becomes the new Switzerland where the rich save their dogecoins, shiba inus and other coins that are the new lifeblood of the world's economy.

That's the literal world aggregate YouTube is advocating for.

 

[Jack V Savage]

Sorry was in the woods the last few days. Haven’t given it a lot of thought

What do you think now?

 

[Eric Silva 2.0]

I’ve never sorted out the fascination with gold. I personally find it gaudy and ugly. And yet it’s the basis for so many currencies.

Land, and peoples ability to work the land is the only thing that makes sense to me

Gold is the best form of money so far. Land is usually good as an investment but governments can tax away your wealth and there is a price of ownership besides taxes (maintenance etc...).

 

[Jack V Savage]

I think expectations are a legit problem I hadn't thought about. The US has a lot of margin to play around with interest rates to fix it. Even if it causes a small recession that's hardly the end of the world.
2022, the US suffers from -1% growth and 10% inflation. The US dollar collapses and Bitcoin is now legal tender around the world. Americans, that didn't throw their life savings into crypto and gold, are now standing on breadlines. The EU collapses and joins Russia. Putin becomes world president. El Salvador becomes the new Switzerland where the rich save their dogecoins, shiba inus and other coins that are the new lifeblood of the world's economy.

Yeah, the actual scale of the problem and what lunatics online are screeching about aren't really in the same universe. But that's not to say that there isn't some cause for concern.

 

[Eric Silva 2.0]

I think expectations are a legit problem I hadn't thought about. The US has a lot of margin to play around with interest rates to fix it. Even if it causes a small recession that's hardly the end of the world.
2022, the US suffers from -1% growth and 10% inflation. The US dollar collapses and Bitcoin is now legal tender around the world. Americans, that didn't throw their life savings into crypto and gold, are now standing on breadlines. The EU collapses and joins Russia. Putin becomes world president. El Salvador becomes the new Switzerland where the rich save their dogecoins, shiba inus and other coins that are the new lifeblood of the world's economy.

The U.S. dollar may collapse or it may just continue to lose purchasing power. Over the past 100 years the dollar has lost over 90% of it's value. Here is a decent article explaining it. There are many reasons current and past. Current reasons people have talked about on here are Covid and the war in Ukraine. Through the ups and downs of the inflation rate, inflation continues to destroy the purchasing power of the dollar. In 1944 when gold was fixed at 35 dollar per ounce if one person saved 35 dollars and the other one ounce of gold today the ounce of gold is almost 1800 dollars and 35 dollars can buy you a meal in a mediocre restaurant if you don't drink, don't order an appetizer and don't have dessert. The 1800 dollars gets you a dinner for 4 at a nice restaurant with drinks and a nice Bordeaux.
https://www.visualcapitalist.com/purchasing-power-of-the-u-s-dollar-over-time/

 

[Dan O]

Gold is the best form of money so far. Land is usually good as an investment but governments can tax away your wealth and there is a price of ownership besides taxes (maintenance etc...).

Land is not not usually a good an investment. It’s the only good one. We find more gold all the time. Any new land found recently?

 

[SummerStriker]

Land is not not usually a good an investment. It’s the only good one. We find more gold all the time. Any new land found recently?

The return on farmland rentals isn't great on average, and it still carries political risk. At least you can put your gold in a bag and hide it. As soon as the rulers want to pay off a supporter with your land, it is gone. The US government can use the EPA and other agencies to sieze land as it is.

I think total stock market index investing is the best tool specifically because it is the preferred wealth building tool of the elite. It ties your fate to their fate.