If you want a gold IOU, you'd be better off just buying some USDs. They are no more connected to the value of gold than a GLD ETF or other. You're putting a LOT of trust that someone is going to give you another currency in exchange for your GLD or actual gold. Which is why I raise the question, IF you just buy straight up real gold, for years, as a diversification strategy, then who amongst us actually knows how to trade gold, an amount of any real value, like what you'd need to buy a house or car or pay for a surgery. Anything more than a few hundred dollars. Who you gonna trade with. And don't think pawn shop, because that guy isn't going to give you but about 50% the valuation, and only about $200 bucks, once, maybe twice.
My only point is I can have a self custody wallet with my coins. At the same time I can have a IRA I trade individual stocks and funds. If I wanted to capture a 500% gain btc has but not sell my coins I could. I can then take that profit and put it into something else and buy more when btc tanks again. People have done with with gold for decades. Have a stack of gold in the safe and buy and sell GLD or AIU in a brokerage when gold is up or down or just for a little extra liquidity. Idk why this idea is so taboo.
GBTC is the stock symbol for Grayscale Bitcoin Trust, an example of what is called a "closed-end fund". They claim to hold some number X of bitcoin, when you buy shares on the stock market you are buying a slice of their bitcoins. There are similar trusts for many physical commodities, for example GLD holds physical gold.
Honestly the market is down so much in Bitcoin it's hard for me to justify buying anything else right now. My approach is to DCA a chunk of paycheck into whatever is down in the marketplace, of a basket consisting of VTI/betterment, gold either GLD or safe deposit bars, and Bitcoin. Right now Bitcoin is tasty and nothing else is. When Bitcoin does its next bull run, there will be plenty of time to wish I'd bought more while plowing DCA funds into a dying stock market.
A global depression is infact a vehicle for growth of assets like Bitcoin and Gold. Its just a matter of time until people realize US Government cannot keep servicing its debt infinitely and with stocks tanking there are really no ways to go. My advice invest in both BTC and GLD heavily like there is no tomorrow.
Contrarian view. I think it’s a reasonable choice to hold GBTC vs BTC. Same reasons one might own SLV or GLD vs physical. Not a good option for SHTF, but reasonable if you want to speculate on spot in the short/mid term. Also…although not looking great at the moment, if GBTC does eventually get approval to become and ETF, you should see a quick 35% jump in price to close the discount.
> I'm not buying it and leaving it on some exchange to be manipulated like it has for the past few decades How has GLD been manipulated? > Everyone should be doing the exact same thing with their bitcoin Why? For the vast majoirty of individual investors, their decision would have a negligible impact on the Bitcoin price. Shouldn't individual investors choose whatever method minimizes their risk and storage/insurance costs?
> do people honestly buy paper gold What do you mean by "paper gold"? People trade a variety of financial assets related to gold. > like a note from a bank saying you own "X" amount of gold? These are no longer widely used. Instead, people use brokerages and futures exchanges to trade digital representations of financial assets. > That to me is the stupidest shit I've ever heard of. Gold-backed digital assets like GLD (an ETF) are cheaper to trade, easier to access, and often less risky to store. For example, you can spend value from GLD while traveling; with physical gold, you'd have to carry the coins/bars with you and find a local gold dealer.
> this encourages Right, but that is different from force. > Legal tender laws also prevent free choice You can choose to denominate your contracts using alternative units of accounts. If you sign a USD-denominated contracts, then the legal system will force you to accept USD legal tender. > look what happened to three liberty dollar That didn't involve legal tender laws. > luckily we have some options they can't stop You can't pay taxes in Bitcoin though. There are plenty of alternative currencies and stores of value that "they" don't stop, including precious metals, foreign currencies, stocks, etc. You are even free to short USD against these. For example, some companies enter Gold-denominated contracts. It's about as easy to trade and store value in GLD (a digital asset fully backed by physical Gold) as it is to move USD into a savings account. > the currency should be defined and owned by society USD is defined and controlled by the US government, which is how society in the US currently governs itself. > through voluntary exchange in a free market We have this today except for taxes and money transmitter regulations (for which a main motivation is preventing tax evasion). Well, there are also regulations, licencing requirements, etc., but those don't have much to do with Fiat. > hopefully Bitcoin solves this Solves what -- that you have to denominate your taxes in USD? I'd much prefer to denominate my taxes in something predictable relative to my budget that won't moon on me. If taxes were in a unit of account that could moon, everyone would be forced to immediately hedge any taxed economic activity to avoid bankruptcy risk.
Ok, but I’m all seriousness, BTC tanks as much or more than tangible assets. Look at BTC yesterday during the bloodbath that happened after CPI. Even GLD dumped, but only 1.3% compared to BTC’s 9%+. This guy might be asking for bag holders.
> Fiat money is not "backed by" anything at all. It is. Fiat money represents liabilities, and these liabilities are backed by assets. It is because of these assets that the Fed is able to raise interest rates and burn money as needed to keep inflation on target. > Within the context of "money" the term "backed by" has a specific meaning, and in "gold backed" or "silver backed". I think you are referring to a peg here. USD used to be pegged to Gold, but there was much more USD than Gold -- the Gold wasn't sufficient to *back* all the USD. Instead, even on the Gold standard, most USD was backed by debts. Of course, a problem with this is that if Gold moons, the USD debtors go bankrupt and the backing debts disappear. By pegging USD to the CPI instead, debtors can have a better idea of what they will need to repay, businesses can better predict their future income in USD, consumers can better predict their future expenses in USD, etc. If you want a currency backed by Gold, you are more than welcome to store your wealth in GLD, which is cheap and easy to trade and fully backed by Gold.
> The central bankers and their buddies cannot "print" actual wealth Correct. > They can and do "print" fiat currency from thin air, backed by nothing, then use the newly created currency to purchase actual wealth Correct, except the actual wealth they purchase is what backs the money that was printed. The institution that "prints" the money ends up with a liability (the printed money) and an asset (the real wealth the purchased with the money). These institutions are required to have more assets than liabilities. You can do the same thing by going on modern brokerage (e.g. IBKR) and taking out a margin loan to buy assets like stocks. The stocks you end up buying are yours, but you need to keep them in the brokerage account to back your margin loan. This is also how GLD works: it's issuers create new GLD shares out of thin air and use them to buy physical Gold (which backs the new GLD shares). Is this theft from GLD holders? > In other words, the bankers get to steal from the rest of us. Only people who choose to hold USD, right? You are welcome to short USD against a wide variety of assets or stay neutral USD. > Now, if you or I "printed" currency and tried to spend it like the bankers, we'd get arrested and locked in cages for a long, long time People do this all the time with margin loans, HELOCs, etc. Do you understand that banks also must pay interest on the money they create, and that they are responsible for maintaining sufficient assets and liquidity to back the created money? > Because "printing" money is counterfeiting Are Bitcoin miners counterfeiting when they print Bitcoins? > it is still a form of theft Theft from whom? Are you are that there are an equal number of short USD positions and long USD positions? The Fed's job is to ensure USD behaves as advertised for both the shorts and longs (and everyone else who has entered USD-denominated contracts). > those criminal gangs/cartels cannot "print" any Bitcoin from thin air They also can't "print" a wide variety of other assets that you are free to save. USD is designed to be a unit of account suitable for denominating predictable debts. You aren't supposed to use it to store value: that is what *virtually all other financial assets* are for.
> You dont appear to understand how the USD rentseeks from most other nations via bank funding and debt issuance. How is bank funding and debt issuance "rent seeking"? Other nations choose to hold USD reserves, usually to stabilize their currencies in USD. This is because their businesses often borrow USD and enter other USD-denominated contracts. > largely via the issuance of debt out of thin air Debt is issued out of people's legally enforced promises to pay, their ability to pay, and their collateral (capital). > undermining the free market allocation of private savings-capital People can allocate their private savings wherever they want. For example, if you want to allocate savings to a company, you can easily buy that company's stocks and bonds. Companies issue both stocks and bonds: if you don't want to express an opinion about USD, you'd probably want to match the company's ratio of issued stocks to issued bonds. If you want to allocate savings to consumer debt, you can use platforms like LendingClub. If you want to allocate to real estate, you can use platforms like FundRise or REITs. If you want to allocate to Gold, you can buy physical gold or GLD, which is fully backed by physical gold and easy to trade. If people choose to use a savings account, they are choosing to allocate their savings to a commercial bank. The commercial bank then mainly allocates to base money, mortgages, and business debt, assuming some of the risk and keeping some of the expected return. You don't need to allocate to a savings account to use USD. For example, you can buy goods and services on a credit card which you pay off every month using another asset. If you need to hold USD in a checking account (or money transmitter account) to make ACH/Zelle/Venmo payments, you can offset this position by borrowing against just about any other asset (e.g. margin loans).
> Most vault held gold is imaginary. Citation needed. GLD is regularly audited. Where did you get the 700:1 number? Paper Gold typically refers to Gold futures and positions on Gold commodities exchanges. These are understood by all participants to not be backed by current physical Gold. > You cannot send an anonymous payment to another person in GLD So? I see we're going back the "evading tax and AML laws" use case. > a big worthless nothing It closely tracks the price of Gold and can be easily and cheaply traded. You can use it to help establish whatever Gold position you want. > Comparing that to an independent gold networks like egold and liberty reserve shows clear differences. Yeah, one was designed to circumvent AML regulations. > Its obvious why the latter were destroyed by the government Yeah, it was becoming a hotbed for fraud, scams, and money laundering. > having negative value How can USD have negative value? That means you'd be better off *throwing away* a dollar than keeping it. Do you really believe that? > If everyone was shorting USD by only spending it and never accepting it, then that would be an ideal end game for the USD: 0 value. Well, yeah, but interest rates would rise before that would happen. > you have to rely on people being idiots and continuing to value your currency They value *interest-bearing USD assets*, not USD itself (as an investment / store of value). The performance of interest-bearing USD assets depends on interest rates. Real interest rates are ultimately set by the market. You might think they are too low to justify holding USD assets, but the market doesn't. > You have to trick, lie What's the trick? What's the lie? > They can continue to accept it in trade, and spend it to purchase Exactly. > but once they no longer keep it in savings then it will start to lose value rapidly. No, interest rates will start to rise until the market again reaches equilibrium between savers/lenders and borrowers.
> Sure, but it's fully backed by Gold and can be freely and cheaply traded without ever going long USD. Its "fully backed" when paper/electrion gold is 700:1 vs actual gold. Most vault held gold is imaginary. But thats not the bad part; the gold, in addition to not being real, is only accessible on some highly regulated servers you cannot access. In general only big brokerages houses can even own the shares of the fake-gold ETF, and you only "own" it to the extent they allow, can only trade at the times they allow, at the prices they allow, etc. You cannot send an anonyous payment to another person in GLD, you cannot setup a lemonaid stand that only accepts GLD, its basically a big worthless nothing and cannot function as a competing currency in any way. Comparing that to an independent gold networks like egold and liberty reserve shows clear differences. You could send anonymous payments direct to individuals. You could accept grains of gold for lemonaid. You could trades 24/7 without being limited to stock market hours. No brokerage existed between you and the ETF provider, and no KYC was needed to make an account. Its obvious why the latter were destroyed by the government: The government does not tolerate competing currencies, and those were quite easy to kill. > Doesn't it make sense to compare BTC to all the other assets that you can store value in though which aren't USD though? If they have the properties I outlined above, those lacked by GLD. > What do you mean by "not valuing the dollar"? By correctly seeing it as having negative value. > Would you say that people who are short USD are "not valuing the dollar"? Depends on what kind of shorting. If you had the ability to create money by wiring numbers on a scrap of paper, you would be very keen to ensure your "formal-explorer-2718" bills retain value, despite the fact that you constantly and exclusively short them, and you would never long them by trading away real wealth for them. What is really valued in that case is "The ability to create money that other people will trade their wealth for", while you the issuer know that your bills have no other value to you. Many people who short the USD create just such a debt bubble. while they are shorting USD, they still depend on it having value to other idiots, so they can extract real wealth from them in exchange for newly minted USD. If everyone was shorting USD by only spending it and never accepting it, then that would be an ideal end game for the USD: 0 value. The main weakness of the USD, and any fiat, is that you have to rely on people being idiots and continuing to value your currency. Its not something you can force them to do; in fact attempting to force it only causes it to lose value faster. You have to trick, lie, and market the dollar to them. You have to prevent it from losing value too quickly or too obviously. Once people gain enough intelligence, they will see what its true nature is, like a tick or mosquito stealing their life's blood, and they will stop offering themselves up for it. And to do so, all they have to do is stop saving it. They can continue to accept it in trade, and spend it to purchase; but once they no longer keep it in savings then it will start to lose value rapidly. Bitcoin can win through perfectly voluntary means; the revolution can be quiet and peaceful and of huge benefit to all mankind. IMO, bitcoin is the key technology that will bring on the space age.
> It wasn't an excuse: they really weren't complying with money laundering laws. Money laundering laws are not possible to comply with, and they are always an excuse. With no evidence, no trial, and no other crime committed, and amount of money you have can be frozen or stolen from you extrajudicially. And you can be imprisoned and jails - now freshly broke so being also unable to afford a lawyer and now thus being assigned a government lawyer - meaning they control your entire trial from all side, guaranteeing a ulbright-like sentence. > GLD is an ETF, traded over legacy fiat infrastructure. its not an indepdent network. > means of production. you arent actually devloving into obsolete commie jargon are you? > What monopoly? Yes, copyright monopolies and government spending. > Yet no one is forced to save or store dollars for any meaningful length of time today! Yes! that is the key behind our hopes for bitcoin. Ultimately you cannot force people to value something. If the dollar is finally seen as something inferior and of low value (which it has always been) and there is a viable competitor (that hasnt been until recently) we can finally end the tyranny. Simply by not valuing the dollar, people can reclaim their sovereignty.
> Gold was outlawed for almost 40 years I agree that US persons didn't have monetary freedom then. > Gold based online currencies were shut down using "money laundering" as an excuse It wasn't an excuse: they really weren't complying with money laundering laws. > Any one trying to revive a metallic money system gets raided and shut down, fined into insolvency, or its operators imprisoned until it ceases to function. Yet GLD is a fully backed metallic money which is actively and freely traded. Could you provide some examples of systems which were shut down? > Without taxes the rich would not have the income from which to pay anything in taxes. How so? The rich get their income from owning means of production. > If you understand the different between money and wealth this becomes obvious. Exactly, wealth is means of production, money is just a unit of account for communicating prices and denominating debts. > Those who do not do productive work are the tax parasites, whether their income comes from regulatory capture, government spending, debt bubbles, or direct welfare. What if their income comes from owning profitable businesses? > When you see an indolent billionaire, such as bill gates Lol. > How can someone who squanders so much wealth be lavishly wealthy Because he owns a large part of a profitable company, Microsoft. > The answer is taxation and regulation. Huh? Microsoft is a business that produces services which people buy on the open market. > The purpose of the monopoly is so that money printing is possible. What monopoly? In what ways is the Government preventing people from using alternative media of exchange, units of account, and stores of value *today*? Aren't you free to trade BTC and use it as a medium of exchange? > more importantly noone would save or store dollars for any meaningful length of time Yet no one is forced to save or store dollars for any meaningful length of time *today*! In what way are you forced to save or store dollars for any meaningful length of time?
> Modern government needs a monopoly on money to exist at its present scale. How so? US persons are free to denominated contracts however they like. For example, some companies issue Gold-denominated debts, and many companies borrow in EUR and other Fiats. US persons are free to exchange PMs, cryptos, etc. They are also free to exchange financial assets like GLD, which is fully backed by Gold. US persons are free to store value in a wide variety of property. > If you believe in monetary freedom, government will necessarily have to shrink a lot. In what ways do US persons not have monetary freedom today? > taxes are a pretty word for stealing from the poor to give to the rich The rich pay far more taxes than the poor, both in absolute terms and as a percentage of income. The poor disproportionately benefit from many Government services (e.g. Social Security, Medicaid, and Medicare; these are the bulk of Gov't spending). > Contract law and order are good things, but the government is terrible at them. IMO better than all the alternatives. > Thats a good description of whats happeing in california, oregon, and other places where the government decided to enable lots of crime. I disagree with those policies, and voters have recently recalled several of the progressive prosecutes who implemented them.
Perhaps "gets representation value from" would be a better description. This is what being "backed by" means for just about all other financial assets (i.e. stocks being backed by companies, liabilities being backed by assets, futures being backed by delivery obligations, etc.). I don't see why this meaning of "backed by" shouldn't also apply to a a particular financial asset (USD) which people often use as a unit of account for denominating contracts/debts/prices and as a trading pair for other assets. If USD were directly redeemable for a fixed amount of another asset, that would just make USD equivalent to the other asset. Why not just let people use the other asset directly (or a financial asset backed by it) in contracts, prices, debts, exchanges, etc.? People enter Gold-denominated contracts, store value in Gold, and exchange physical Gold and GLD today, for example. That is, why force people who actually want to use a stablecoin tied to CPI inflation to use a different asset instead? Wouldn't that be unfair to everyone who has entered USD contracts expecting it to behave how it has been advertised (and also how the market expects it to)?
GLDs price is pegged to gold, GLDs share count is not pegged to the amount of gold they hold. The entire thing would collapse overnight if every large share holder took ownership of gold from GLD. No one is suggesting stablecoins are sound money. The thing about gold that made it a good peg/currency is it's scarsity and transportability, storability. Energy is not scarse, transportation is limited to around 500 miles, and our storage technologies are pretty bad. An ounce of gold is roughly $1700 around the world. Energy varies VASTY just around the United States. In Louisiana energy is around $0.07 a kilowatt hour, and in Hawaii it's around $0.27. Which enery are you pegging to? One is very costly to produce, the other is cheap. Are people in Hawaii buying the same energy token as they're in Louisiana? Can people in Louisiana buy the token low and sell high in Hawaii? All energy is not equal; while the production of gold is roughly equal as mines that cannot produce under the spot price shutdown. Powerplants cannot compete in that way. (Bitcoin can) What your suggesting is simply nothing other than local power companies selling coupons to the locals that are later redeemable on their Powerbill. So what's the point?....
Ok, here's the shorter version: > A peg is designed to limit production I don't follow. How does GLD's peg to Gold or USD's peg to 2% CPI inflation limit production? > to force fiscical responsibility How do pegged stablecoins force fiscal responsibility? I'm not following the logic. > There is nothing limiting about the amount of energy we can produce The increasing marginal costs of running more power plants limits the amount of energy we can profitably produce. The scarcity of capital limits how fast power plant capacity can grow. > there would be no limit to the amount of these currency units that could be produced. So? If they are all reliably pegged to the price of energy, who cares: wouldn't the currency be functioning as advertised and expected?
> Why would they do it? To buy low and manipulate the market and sell high. This doesn't make sense. How would corporation manipulate the entire energy market? The market for energy is massive and global. If corporations were able to drive down energy costs, why wouldn't they be doing this now? Most corporation pay for energy, cutting into profits. If corporations drove down energy costs and bought a bunch of energy-backed currency, the issuer(s) of the energy-backed currency would be responsible for buying new backing energy (or new backing power generation capacity in a "fractional-reserve" system). Both these activities would drive the costs of energy back up. It might be that the issuer of the energy-backed currency couldn't store enough real energy (e.g. in batteries) to satisfy demand for the currency. In this case, they would need to use negative interest rates: in other words, they would need to charge holders of the energy-backed currency for the service of storing the energy in batteries. Note that GLD also has "negative interest rates" in the sense that you "earn" a small negative Gold-denominated APR on your GLD which funds storage costs for the physical Gold. If the issuer(s) of the energy-backed currency could do this without imposing an excessively high negative interest rate, then large corporations would need the energy-backed currency in the first place: the could simply - "drive down" energy prices - buy a bunch of batteries and fill them up with cheap energy - "drive up" energy prices - discharge their batteries and profit Of course, this doesn't make sense. > A peg is designed to limit production What? How is GLD's peg to Gold designed to limit production? > to force fiscical responsibility How do stablecoins force fiscal responsibility? I'm not following the logic. There are all kinds of pegged assets out their: inflation-linked bonds, ETFs like SPY pegged to stock indices, various commodities funds pegged to various commodities, etc. > There is nothing limiting about the amount of energy we can produce The increasing marginal costs of running more power plants limits the amount of energy we can profitably produce. The scarcity of capital (and the profit motive of investors) limits how fast we can build new power plants. > there would be no limit to the amount of these currency units that could be produced. So? If they are all reliably pegged to the price of energy, who cares?
> so creating a technology that creates cheap energy destroys the value of the currency The currency is just a representation of energy. If energy becomes less valuable, then the representation of energy will also become less valuable. That's the point: it's also the case that if Gold becomes less valuable, so does GLD; if food becomes less valuable, so do food futures and supply contracts, etc. For example, one use case of an energy-backed currency could be to allow power companies to borrow against their future energy production. Power companies might want to use the energy-backed currency to do this because they'll have a good idea of what they'll have to repay (represented energy) in terms of their income (actual energy). > otherwise large corporations drive up energy costs to inflate its value? Why would large corporations want to do this?
> the reality that it is the only version of "sound" money in the current currency ecosystem What do you mean by "sound money"? Is Gold sound money? GLD is a digital asset that is fully backed by Gold, liquid, and easy to trade/transfer. Is Silver sound money? SLV is fully backed by Silver and is also liquid and easy to trade. Are commodities sound money? There are a wide variety of liquid commodities you can easily save, trade, and transfer on brokerages. Is land sound money? You can already save and trade shares of income-generating land. Are closed end funds sound money (these are funds with a fixed number of shares)? These are also readily available and liquid. > At present it is a currency amongst many currencies that are all in competition with each other How so? Currencies like USD are designed to be a liquid unit of account suitable for communicating stable prices and denominating predictable debts and other contracts (salaries, rents, insurance policies, lines of credit, taxes, etc.). Can you think of a single contract governing any real economic activity that uses a currency which is competing with Fiat? I know some Gold companies occasionally issue Gold denominated bonds to raise capital, but it's tiny compared to Fiat -denominated contracts. What other currencies are used to communicate prices? Maybe you are talking about competition as an investment or store of value? Fiat is not an investment, and the performance of USD assets designed to store value (like savings accounts) is determined by real interest rates, not inflation. Real interest rates are ultimately set by the market between people who want to long USD (savers/lenders) and people who want to short USD (borrowers). > when fiat money is poorly managed What makes you say this? The market's 5 year CPI inflation expectations are currently ~2.2%, just barely above target. USD is still liquid, nonvolatile, relatively predictable, widely used to communicate prices, and widely used to denominate contracts. It is functioning exactly as designed. > But that doesn't mean fiat doesn't have ways to perform better than sound money so there is this back and forth. Yeah, USD assets perform better when the Fed raises interest rates. The whole point of raising interest rates is to increase demand for USD assets and reduce supply (i.e. borrowing), and the whole point of lowering rates is the reverse. That is, USD assets perform as well as they need to to attract enough demand to keep inflation on target, and no better. > It is after all centralized and controlled in a way that BTC is not. Exactly, this makes it more predictable and is the reason why so many rely on it in contracts. If I were a business, why would I take out a debt or agree to pay a salary in a unit of account that might moon and drive me to bankruptcy? > To your point, at some point in the future BTC will be easier to use for transactions because it's value will be normalized to the global market Yet Gold is highly liquid and globally traded, yet it's value is far more volatile than USD and it is not widely used in contracts. The global market itself is pretty liquid (e.g. global index funds), yet these are also far more volatile than USD. USD is a stablecoin. It is predictable precisely because its issuer manipulates it to remain that way. > When the world is denominated in satoshis, there won't be massive fluctuations in perceived value of a BTC When the world was denominated in Gold, there were often substantial fluctuations in the perceived value of Gold, and Gold mooning caused a series of financial panics and mass bankrupcies.
> You mean all the bad debt they buy up Why do you say the debt is bad? > If no one else will buy the bad debt it has zero value in the market. The debt helps the Fed maintains the dollars value independently of its market value: - The debt creates a contractually guaranteed demand for dollars: for mortgage payments backed by houses/homeowners, corporate bond payments backed by companies, tax payments backed by the IRS taking your assets if you don't pay [and other Government resources], etc. - This demand is also a "burn rate" for USD: these dollars disappear unless the Fed / the banking system makes new loans to replenish them. This relatively fixed demand for USD allows the Fed to target the promised 2% medium term CPI inflation by calibrating the supply of new loans (mainly through interest rate policy). - Most USD used as savings/investment yield interest from the backing debt. In addition to reducing supply of new loans, raising interest rates also increases demand for (interest-bearing) USD for this reason. > So you're saying the banks database entries are backed by other contract liabilities that no one will bid for? If interest rates were infinity, you are right that the USD wouldn't be sound. For example, if we learned that the world would end in one year, >1 year bonds would have infinity APR, banks would be insolvent, and needless to say the Fed probably wouldn't be able to meet its inflation target. Other assets would also have bad returns though. > Yes, fiat is just a medium of exchange and unit of account but not the actual utility money had for 5000 years which is to store value through time. Right, so don't store value in it. For example, if you like the old utility money you can buy GLD, which is a "currency" (well, ETF) that is fully backed by Gold. Individuals and companies are free to denominate contracts in Gold, and trade physical and financial Gold freely, and many do. > You must get rid of all excess fiat and buy anything to beat inflation. Yeah, if only just to maximize returns. There's never a reason you should save non-interest-bearing USD: unless interest rates are literally zero, you're better off with at least a savings account. There's nothing you can buy that is guaranteed to beat inflation, though. > Everything else becomes the money in a fiat world and carries a monetary premium. What do you mean by "becomes the money"? What else are people using to denominate contracts or communicate prices? What else are people using as a liquid medium of exchange? Are you referring to people storing value in investments? People have done this since antiquity, and it is how economic growth happens and the means of production (capital) are built. > Debasement is merely a tax to extract your earnings. Huh? You don't have to store your earnings in USD. USD is one of the easiest and safest assets to short against all kinds of collatoral (land, Bitcoin, Gold, stocks, cars, etc.). If you choose to have a long USD position, that's up to you. USD is really a market between USD savers and USD borrowers. Borrowers pledge the collateral that backs the USD savers' savings. If you think USD savers are getting a bad deal, you are free to exit the market or enter on the other side (i.e. become a USD borrow and benefit from the "too low" savings rates). By borrowing USD against your Gold or Bitcoin, you are essentially pledging these as collateral to back the newly created USD asset. Whoever buys the USD asset won't get a huge return, but they also don't take on the risk of Bitcoin or Gold performing badly in the short term (i.e. worse than USD). This is the whole point of USD: short term stability and long term predictability are prioritized over long term returns. > Whilst pushing your entire net worth into risk assets. You are free to put your net worth into whatever assets you want! It sounds like your complaining about the market reality that higher returning assets and enterprises are riskier. For example, when we were really on the Gold standard, inflation and interest rates were much more volatile. If you can tolerate this increased volatility, you can pick similar assets today.
> what the peasantry calls block chain, is just a bunch of data concatenated in blocks, signed by a CRYPTOGRAPHIC signature. This is not true. Individual transactions are signed with a cryptographic signature: this signature of the person who is sending the coins. The CRYPTOGRAPHIC key used to produce this signature is derived from the individual's seed phrase / hard wallet. Blocks consist a bunch of transactions signed by different individuals using different cryptographic keys (wallets). The blocks themselves are not signed by anyone. Instead, blocks are only *hashed*, and anyone can hash block (in fact, miners hash many trillions of blocks every day). > which brings to the final point: bitcoin is the only real crypto currency, because all the others use, one way or another, authority of a centralized entity as the final say so: only bitcoin relies solely on cryptographic signatures. This isn't true though. There are many blockchains that have clients which rely solely on cryptographic signatures to verify transactions and proof of work hashing to verify blocks. For example, there are several infamous clones of Bitcoin which use almost exactly the same software as the Bitcoin client. Hence, they verify their blockchains in almost the exact same manner as the Bitcoin client does. > bitcoin is not about efficiency, but removing intermediaries from the transfer of wealth between people Bitcoin itself *is* an intermediary though. That is, the Bitcoin network is one tool that can be used to transfer wealth between people, and it has its pros and cons depending on the specifics of the use case. There are other intermediaries that you can use with different pros and cons. > people that control the latter tend to get mad corrupt by this privilege Who controls this now? You can send value through many intermediaries today, including banks (through Zelle, which is usually feeless), Venmo, Cashapp (which is Bitcoin-friendly), etc. as well as via brokerages, where you can send stocks, bonds, GLD, SLV, commodities, REITs, etc. You can also use and trade a variety of physical assets including Gold coins.
> Save what you cam and transact too, we could have both worlds. We already do. It's already easy to trade dollars for Gold-backed "sound monies" like GLD -- not much harder than transferring money to a savings account, for example.
> All of what you said is based on the fractional reserve paradigm tho I'm not a fan of fractional reserve and I don't think it's a good model for the current USD system. IMO, a better model is that all dollars in checking and savings accounts are "real" interest-bearing dollars (as "real" as cash) created by the Fed and backed by loans to banks. Banks are essentially deputies of the Fed: instead of the Fed issuing new dollar through loans directly to homeowners/businesses/etc., the Fed issues loans to banks and the banks issue loans to the individuals/businesses. > Why do we need to earn interest? Because the dollar is designed to have a predictable value. Time preferences are determined by the market and can vary, so if the dollar's value is going to be fixed/predictable, then interest rates have to be variable. Otherwise, USD would moon when demand for savings increases and crash when demand for savings decreases (and this in fact happened with Gold and happens with fixed-supply cryptocurrencies today). > Thinking more primitively, you don’t think people sought to have a store of wealth in their money? What do you mean by "a store of wealth in their money"? There are a wide variety of assets ranging from savings accounts and CDs to bonds, stocks, Gold that people can and do use to store wealth. The job of the USD is to be a unit of account that enables stable prices and predictable debts. It is not the primary job of the USD to be a store of wealth: that is what just about every other financial asset is for. > You don’t think that’s possible with a currentcy backed by a hard asset It is: as I said, GLD is already a "currency" backed by a hard asset (Gold) and SLV is already a "currency" backed by a hard asset (Silver), both of which are pretty easy to use today. No one is stopping you from using these to store wealth.
> if dollars were redeemable for gold (or any hard / scarce actual backing) they could be a store of wealth This would be redundant: there are already widely used, liquid financial assets which are redeemable for Gold (GLD, IAU, etc.), for silver (SLV, etc.), and for other commodities. It is already straightforward and nearly free to trade dollars (USD) for gold-backed "dollars" (GLD) or silver-backed "dollars" (SLV) as desired. > They can’t be a store of wealth bc they are inflatable Dollars which don't bear interest aren't a *long term* store of wealth, yeah. Dollars in a savings account or dollar-denominated bonds *can* be a long term store of wealth when inflation is sufficiently predictable and real interest rates are good (or better than risk-adjusted alternatives). Dollars themselves aren't supposed to be a long term store of wealth: they are just supposed to be a predictable unit of account, designed to target 2% medium term CPI inflation while minimizing volatility in prices and interest rates. It is in terms of this predictable unit of account that stores of wealth like bonds or savings accounts are defined. The interest rates on these stores of wealth are ultimately determined by the market so that supply (savers/lenders) matches demand (borrowers). Lower interest rates discourage saving/lending dollars and encourage borrowing dollars, higher interest rates do the opposite. For example, if you believe interest rates are too low, you are free to buy GLD, SLV, or just about any other financial asset on margin at slightly above the "too low" rates. > aren’t backed tho They are fully backed by debt: mostly Treasuries (backed by tax revenue and Government assets), mortgages (backed by homeowners' income and houses/land), and corporate debt (backed by corporate income and corporate assets). That is, every dollar is backed by a promise to take that dollar out of circulation in the future, and these promises create a guaranteed *demand* (a "burn rate") for dollars. The Fed then ensures that the USD's value stays (roughly) on target by calibrating the *supply* of new dollars by tightening or loosening credit (e.g. by setting short term interest rates). So long as there is sufficient assets/income behind the backing debt, raising interest rates and tightening credit is very effective at reducing inflation to keep USD on target (and even triggering substantial deflation if taken to excess).
Well it is true that if you check it for the past 20 years it’s meh. It could be used during down stocks or crypto markets to sell it and get back into crypto or stocks at discounts. In 2022 don’t expect to make huge money with gold. However it is most likely to be better than just holding cash that is losing value due to inflation. It depends on what you are looking for. Some people would say go physically buy gold. Others would get into ETFs. GLD is the oldest one but it depends on where you are located as well
Of course they don't explain anything. To do that, they would have to explain all the scandals and crap that's been around USDT, at least since 2017. I prefer not so well known stablecoins, but backed and fully audited like eMoney, or assets like PAX GLD.
"Is btc a hedge against inflation?" No..............Try GLD, or inflation linked bonds, although now is probably not the time to buy them. ;-) Generally speaking you need to buy these things when the reason for buying them does not exist.
I mean, one of my python class projects was running correlations between BTC ETH GLD and SPY. It wasn’t a huge correlation between SPY and the cryptos. It was positive, but minimally, under .2 There was a cross of the moving averages of gold and spy that seemed to be a bit of a leading indicator to BTC.
Well, holding 100% cash had its own risks. Are saying that you are saving for a house, and your house fund is 100% crypto? And that you have tens of thousands in crypto? If you are up since 2017, why not diversify your house fund into stocks (VOO or VOOG), bonds (AGG or TLT or TIPS), Gold (GLD), Cash, or other assets. If you put $1,000 in each you would still have a ton of crypto. Plus, your crypto holdings are fairly well diversified. So if you diversify into a multi asset portfolio, chances are you will be up somewhere even if most or some of the market is falling. Your advisor is right though, rising interest rates are coming in a big way, and it is hard to find a return in that environment, especially on riskier assets. There’s been free money flowing out of the fed for 2 years propping up the stock market and crypto. It’s hard to say what will happen next. Your best bet is to diversify. But, I don’t know that I would go 100% cash, especially when you are so knowledgeable on how to earn yield, staking, market making, etc with your crypto. Why go 100% cash when exchanges like Gemini are making it easy enough for dummies like me to earn 6.9% on stables. I am not going 100% cash when I can get 6.9% for doing almost nothing. And, you know a lot more about crypto than me. Still, you should diversify, even just a little. Sites like M1 make it easy to do.
GLD is under those regulations as well, and it does show sufficient gold inventory on its balance sheet to back its shares. However, what is not public knowledge is how many *other* claims have been made on those same gold bars. I fear a similar scenario unfolding in bitcoin, which will be undetectable until a black swan event reveals the deception and ruins a bunch of people.
Does it? YTD: S&P500: -7.93% GLD: 8.34% BTC: -15.44% vanguard retirement 2060 fund: -8.24% TIPS: -1% Looks like it’s not that great of a asset if it performs poorly in the exact environment it’s suppose to perform well in…
It is a closed end fund. They hold 3.4% of all BTC. It like a mutual fund that is backed by BTC. Sometimes it trades at a premium and sometimes at a discount. IMO their typical investor knows little about BTC so they are influenced by emotion which is why it is more volatile than actual BTC. You can’t actually withdraw BTC from the fund, only buy shares backed by BTC, for this reason, it doesn’t not reflect BTC price 1:1 and trades at a 25% discount. IF they receive an OK to convert to a spot etf, they will then track the price of BTC, similar to spot gold ETFs (GLD,BAR, etc)
$GLD and $UCO/$USO All day real shit needs real shit This is the 70’s all over again. They are going to try and keep the narrative that this is short term or that oil is going to go lower or is only temporary. Supply is supply and there is nothing available to make any significant impact anytime soon and that’s priced in but the near term is not! Buckle up bitches time to reallocate
Yeah too bad I lost my stack in an unfortunate boating accident last year. No but seriously look into the 1933 confiscation...many complied but many more did not, hence the availability of constitutional gold and silver. Unless you buy GLD or SLV type ETFs that are custodial it's really up to you in that situation
The entirety of human history up to 2009. Thus "historically". Land is the source of all resources, when assessing the value of land you have to account for it's productive capacity. It's only relatively recently that speculative trading has surpassed productive investment. Land is, and always has been, the ultimate value investment. Its what wars are fought over. Bitcoin has been financialised by wall street. They have created derivatives such as etf's and options which are being traded in the place of the underlying. As long as capital is captured by these derivatives then bitcoin will not behave as the limited supply would imply. Look at gold. The mechanisms through which wall street leeches value are "rehypothecation" and leverage. You should understand now that BTC behaves more like QQQ than GLD.
> It's not a tax. If you hold Bitcoin for a year and it declines in value by 5%, is that a tax? It’s unbelievable that I have to explain this to you. Do you realize there is a difference between say, apple stock going down 5%, and the board of directors creating more shares out of thin air, causing the value of each unit to decrease by 5%? One is a natural market condition that is out of anyone’s control, the other is direct dilution at a chosen rate. The fact that you think inflation is just some unrelated natural market force says everything about where your argument comes from. It isn’t changing based on speculation, it’s changing based on someone literally printing themselves dollars out of thin air and spending that. If you don’t understand how that’s a tax on every other existing dollar in the system, you don’t understand dilution at all. > Except it's not force. Yes it is. Taking 10% of my buying power as a penalty of saving is a force. you are literally penalized for saving. How are you that blind to this? You are like the biggest fed reserve bootlicker I have ever encountered > The money was always in the system. "Money in the bank" (bank deposits) is actually a de-risked form of debt (it is backed -- overcollateralized in fact -- mainly by mortgages, corporate bonds, and Treasuries). Similarly, cash itself is backed by Treasuries held by the Fed. What a dumb take. Yes of course you got the money from the system. The point is you either have to risk it in the system again, or lose massive % of your buying power if you want to simply save it. All because they are printing new money and spending it by the trillions. > For example, buying Treasuries, corporate bonds, or mortgage backed securities with money just means taking one form of debt (issued by the Fed and banks) and "unwrapping" it into its slightly riskier backing. It allows you to get a little more return for a little more risk and has virtually no effect on "the system". Then you go on to explain how you can make more by risking more. No fucking shit. But the point is people shouldn’t be forced to take risks *just to keep what they’ve already fucking earned*. You are paid in a decaying dollar that you have to find ways to risk it so that it doesn’t die. Amazing system. > Or until real interest rates become positive again. Oh yeah because that just stops inflation in its tracks doesn’t it. It’s fine guys, your salary may have lost 3% of its buying power this year but at least it’s not the 7% from last year! Be grateful! > Not really. It might cause the Fed to have to redeem more dollars or raise rates sooner to keep medium term inflation on target. Unless you printed so many dollars that USD became unsound, the Fed likely wouldn't have trouble keeping the USD's value on target. Do I really have to explain to you how this works. When the economy is measured in units and you increase the number of units massively, but the economy doesn’t change, what happens to the value of the units? Printing off massive amounts of dollars devalues the rest of them. This is a fact. This is literally how inflation has been working since before you were born. I can’t believe I have to explain this to you. What is the buying power of a dollar in 1950 compared to now? You do realize that devaluation because of money printing, right? > The dollars that the Federal Reserve issues are fully backed by high quality collateral. The USD is a stablecoin; the Federal Reserve issues and redeems dollars as needed to target 2% medium term CPI inflation. Oh are they? So the 13 trillion they printed last year, they have collateral for all of it. Lmao. The entire reason the value of the dollar is bleeding every single year is because these dollars are being printed out of thin fucking air. If they were bringing in shipments of gold in synchrony with the amount of money they’d be printing, the USD value compared to any scarce asset wouldn’t have lost a vast majority of its value over time. But it has, because these dollars aren’t backed by jack shit. Are you really going to claim inflation is a myth? Like your entire line of argument is proven wrong by every single economic measurement in the world for all of history. > When the issuers of the GLD ETF create a bunch of new shares of GLD out of thin air and sell them to buy physical gold, are they "diminishing the value of everyones GLD"? Of course not. The whole point of GLD is to track the price of physical gold. The whole point of the USD is to track 2% medium term CPI inflation. It's a unit of account, not an asset! Savings accounts, CDs, bonds, etc. are the assets, and their real rate of return is determined by the market for saving/borrowing. Oh really has an ounce of gold lost it’s buying power massively over the last 50 years? The fact that you actually think these 2 things are the same thing is incredible, and explains why you have such a terrible understanding of this. Yes, the fed printing off 20 trillion dollars is the same as a fund using money to buy gold. LMFAO holy fucking shit that’s hilarious. > Then what I said doesn't apply. Remember, I said "If you have a savings account which is large enough that losses due to negative real interest rates are significant". Yeah, exactly, you think the losses are inconsequential because you’re comparing that amount of money to your own income, which again, is not how the world works AT ALL. > inflation rose her grocery bill 10% and her minimum wage isn’t keeping up Then minimum wage should be tied to inflation and/or an additional social safety net should be put into place. Historically, real wages increase most during inflationary environments, not deflationary ones. Oh, how’s that been going? You’re now going with the argument that minimum wage has scaled with inflation? Again, categorically wrong by every single metic you would possibly find. Do you know what happens to minimum wage workers with a deflationary unit of account? Mass unemployment and bankruptcy. Read up on the Great Depression. > I was clearly referring to the market for savings/investment. That doesn't apply here. The effect of inflation on $11 of savings is negligible. Again, negligible because 10% of her paycheck is negligible to you. But it isn’t negligible to her. God damn you have a sheltered and privileged view of the world. > A 7% decline in real wages matters. We have actually seen real wages increase at their fastest pace in decades for lowest wage workers in this more inflationary environment. A 7% inflation rate without a 7% pay raise *is a decline is real wages*. And for a ton of people out there, that’s a reality. you realize there are people working for minimum wage out there, right ? That is a thing that exists. And minimum wage hasn’t scaled for inflation, at all, for years and years now.
> By paying a tax of between 2-7% per year. It's not a tax. If you hold Bitcoin for a month and it declines in value by 5%, is that a tax? > That’s the implied force. Except it's not force. > put your money back into the system The money was always in the system. "Money in the bank" (bank deposits) is actually a de-risked form of debt (it is backed -- over collateralized in fact -- mainly by mortgages, corporate bonds, and Treasuries). Similarly, cash itself is backed by Treasuries held by the Fed. For example, buying Treasuries, corporate bonds, or mortgage backed securities with money just means taking one form of debt (issued by the Fed and banks) and "unwrapping" it into its slightly riskier backing. It allows you to get a little return for a little more risk but has virtually no effect on "the system". > we’re going to bleed your value until you do Or until real interest rates become positive again. > Would it be theft if I printed off a billion dollars at home for myself? Yes, because the dollar you print would not be backed by high quality assets. > But you think because it’s the federal reserve doing it, it’s not theft lol. The dollars that the Federal Reserve issues are fully backed by high quality debt. The USD is a stablecoin; the Federal Reserve issues and redeems dollars as needed to target 2% medium term CPI inflation. > somehow because they have the name federal, them printing off trillions of dollars and diminishing the value of everyone’s money, isn’t stealing When the issuers of the GLD ETF create a bunch of new shares of GLD out of thin air and use them to buy physical gold, are they "diminishing the value of everyones GLD"? Of course not. The whole point of GLD is to track the price of physical gold. The whole point of the USD is to track 2% medium term CPI inflation. It's a unit of account, not an asset! > What about the single mom who has $11 left in her paycheck for savings because they’re stretched so thin Then what I said doesn't apply. Remember, I said "If you have a savings account which is large enough that losses due to negative real interest rates are significant". > inflation rose her grocery bill 10% and her minimum wage isn’t keeping up Then minimum wage should be tied to inflation and/or an additional social safety net should be put into place. Historically, real wages increase most during inflationary environments, not deflationary ones. > Yeah, she just needs to “tAke iT uP wITh tHe mArKet" I was clearly referring to the market for savings/investment. That doesn't apply here. The effect of inflation on $11 is negligible (literally cents per year). > You literally think 7% doesn’t matter to poor people because that amount of money relative to what YOU have, is inconsequential A 7% decline in real wages matters. We have actually seen real wages increase at their fastest pace for lowest wage workers in this inflationary environment after a decade of stagnation.
I also think it's unlikely to be approved, but at some point the scenario you mention will happen (assuming you think a spot ETF is inevitable, and there's no reason to think it won't because GLD exists). After a long line of BTC spot ETF rejections, the SEC will one week accept one of them. It will be incongruous with their previous decisions, but it will nevertheless their decision for that ETF.
1) We're talking about stores of value and alternatives. The goal of investing is to not lose money right. You have to compare BTC to other cryptos, to gold, to everything to determine where best to put your money. We both agree it's a risk asset, so if you are risk off then you shouldn't invest. If you are "risk on" then you need to consider other crypto which is bewildering, other growth stocks, etc. 2) I agree it's much easier to secure a crypto coin than a physical bar of gold, but most people that buy gold to hold will just put it into a safe deposit box which is super secure. If owned a bunch of gold bars I'd probably just have an oversized safe deposit box so it would be be a non-issue. If you want to buy/sell gold frequently then you can use the gold ETF which does indeed have the time and day limitations you mention. The liquidation of GLD within the business day is milliseconds tho which is way faster than BTC. When I sold my BTC last year, it was a nightmare trying to transact it and get it to my bank account. Granted I am a noob at the process, but I don't see how it is doable on a regular basis.
Bitcoin has a lot of new money driven in part because people see it as a store of value during this inflationary period. If the masses lose confidence in this stored value idea, then the money will flow out into stuff like SLV and GLD, the more traditional stores. That will send BTC down at least temporarily.
Don't let these goober "diamond hand" comments change your opinion on this matter. Yes BTC is a great idea, but at the end of the day everyone looks at it and sees "my BTC = X amount of USD". This is the right move when you need the $ to turn into hard assets. No asset is the end all be all whether it's BTC, GLD, SLV, or any other store of value. Good for you and best of luck!
When was gld not a safe investment? When something else is making more money then GLD isn't the vehicle of choice because it is simply a safe investment, not a money maker. When something else is tanking or underperforming GLD is the vehicle of choice because, well, it is simply a safe investment not a money loser. This has been the majority opinion for a few decades now.
From what I read it just means that whatever amount you own of PAXG it’s actually backed by a physical amount of gold that I believe can be traced. I haven’t actually heard of GLD so I wasn’t aware it’s relatively the same, but it seems as if they share some similarities.
>Well from looking over PAXG, the price is pegged 1:1 with one Troy ounce of gold. Not only this, but you’re given the benefit of actual physical ownership of specific gold bars. GLD also tracks the price of gold. What do you mean by the physical ownership of gold bars? You mean gold is held in custody? If so, that's the same as GLD
BITO Yes. BITO. It happened. Just like they did it to Gold with the GLD ETF. Just like they did it to Silver with the DLV ETF. How many of the BITO investors know that BITO doesn’t have any direct supply-demand relationship with actual Bitcoin? This, deflated the interest enough, Bitcoin started to face headwinds. Anyone buying GLD instead of physical gold; SLV instead of physical Silver; and BITO (and other synthetic products) instead of actual Bitcoin is knowingly or unknowingly contributing to the Bitcoin sell off.
> Wall Street is doing what they did to gold, via "paper gold". The price of gold is flat for the last ten years. The Wall Street criminals want to sell "paper Bitcoin" and keep the price flat. What are you talking about? If the gold price is "artificially low" because of ETFs, some rich investor can just buy up a bunch of the GLD etf and redeem them for actual gold bars. If the vast majority of rich investors don't think the GLD price is artificially low, then how is the price being "suppressed?" link on how to redeem "paper gold" into real gold: https://www.sec.gov/Archives/edgar/data/1222333/000119312514286430/d767060dfwp.htm
ETF would trade on stock exchanges. They are centralized and can handle high volume, obviously. GLD 5.57 million is the number of shares traded today so far, not dollars. GBTC has 4 million shares traded. These trades have nothing to do with bitcoin transactions. "Too many" is relative. AAPL Apple had 100 million shares traded.
The comments on gold mining are fine as comparison. Banking, not so much. Bitcoin can do a whopping 7 transactions per second. That's 604k in any 24 hours. The banks do millions and millions per day. I'm probably low by an order of magnitude. It's probably millions in one bank and tens or hundreds of millions across the world. Bitcoin is not, and will never be a replacement for banking. Hell, it's not even a good replacement for gold in all functions. Go look at a gold ETF like GLD. The volume THIS MORNING, at time of me writing this is over 4M. Bitcoin couldn't even handle the transactions of a single gold ETF without falling over. I'm pro BTC by the way. I just think these comparisons are fucking stupid.