[wakawaka28]

No, in 1944 the dollar was fixed at $35 per ounce of gold. It was not a time of crisis for the gold market, because gold was money. The peg was eventually removed (I think in 1971). Right now there are factors driving the price of gold up, including massive central bank purchases and also massive understated inflation in the West. Everyone knows that fiat currencies are fleeting so the world is preparing for an inevitable decline or collapse of the dollar.

[SideQuark]

It's easy to check BLS inflation against old ads for goods and see that BLS inflation is pretty spot on. I've yet to meet someone claiming "massive understated inflation" that has done this simple check honestly.

As to the claim that "fiat currencies are fleeting," it is a fact every country of 200+ has one, so it's safer to say every non-fiat currency has failed.

There's also significant empirical evidence such economies are on the whole less volatile than older ones limited by how fast one can dig material out of a hole. See a list of severity and frequency of US recessions, or study the Great Moderation, or simply look at the volatility of gold prices, to see how unstable non-fiat pricing is.

[djtango]

Have you ever noticed how inflation metrics are always finding ways to ignore how housing and rent has gone up much faster than wages?

Pretty much all the important things in life have gone up more than stated inflation.

I don't care that I can get a cheap very environmentally unsustainable cardigan for less than ever before. Likewise for a watery nutrition-less tomato.

Meanwhile education, housing and healthcare are the least affordable they've ever been.

https://en.m.wikipedia.org/wiki/Baumol_effect

[randomdata]

Inflation isn't a cost of living metric, it is an attempt to determine change in value of the currency. A change in value of, say, housing is independent to a change in value of the currency. And housing is undeniably more valuable than it once was for a long list of factors.

If you want to understand cost of living, just look at your personal bookkeeping. It will paint the most accurate picture. There isn't much to be gained in reporting cost of living in the news – unless you think aliens on some far away planet will take interest a thousand years from now when the signal arrives at their location.

[wakawaka28]

CPI is the most commonly cited inflation metric, and it is actually a cost of living metric. We could also use the velocity of money plus money supply stats, but that is very hard to relate to.

Housing might be somewhat more valuable than it used to be, but the extreme valuation swings we've seen in the last 20 years were due to monetary policy and macroeconomic conditions, and not actual demand. Or I should say, demand for housing is always proportional to population. It's not like when people can't afford a house, that demand disappears. It just can't be acted on.

[randomdata]

> and it is actually a cost of living metric.

It is not. A CPI measures the change in cost of a fixed basket of goods. A COLI measures a change in cost of a fixed level of "well-being".

> It's not like when people can't afford a house, that demand disappears.

It is like that. That's literally what defines demand. Perhaps you have confused "demand" with "desire"? They do share the same first couple of letters.

[Teever]

Why is economics stuff so hard?

Like I swear to god I see variants of this thread almost every other day where someone is like 'i think that this economic thing is broken' and someone else comes along and is like 'no,no, you're just holding it wrong -- The thing you want to use to do this is...'.

And despite witnessing this kind of encounter regularly I'm no more informed about economics. I've taken two first year econ courses and I still don't feel informed about it.

Why is it that all too often economics discussions get further and further away from some objective measurement of reality and turn into semantics arguments over what obscurely named things like M1 and M2 or CPI actually even mean to me anyway?

Is there like an authoritative source that defines all of these things and has a recent dataset of verified data to work work?

Like what's the lib-economy or python package for economic stuff?

[wakawaka28]

How do you think they pick the basket? Many categories are included in CPI, such as housing. Regardless of whatever fudging they do, it is intended to measure the price increases that consumers experience.

>It is like that. That's literally what defines demand.

It is not. You have confused the essence of demand with the actual capability to pay. We could get nuanced about it and say that people who can't pay are not market participants, but they could be. If I can afford to pay $X for a house and the price is higher than that, my inability to buy does not mean my demand went anywhere.

>Perhaps you have confused "demand" with "desire"? They do share the same first couple of letters.

Perhaps you have confused yourself with the kind of person who can make this kind of bold statement without getting laughed at. Go sniff your own farts some more and leave me alone.

[wakawaka28]

>It's easy to check BLS inflation against old ads for goods and see that BLS inflation is pretty spot on. I've yet to meet someone claiming "massive understated inflation" that has done this simple check honestly.

When property values blow up 50% in a year or two and people pay $20k+ over sticker for cars, it's not "supply chain issues" nor 8% inflation dude. I have looked at old ads for stuff, and the difference is that now the same goods are manufactured for 1/10th the cost overseas and somehow cost way more anyway or at best roughly the same price as before. The BLS has a very complex scheme for understating inflation that involves substitutions, hypothetical costs, and other gimmicks. It wasn't always so fishy but the change was made to make the economy look better. I could argue with you at length about details but I can tell it will not be productive.

>As to the claim that "fiat currencies are fleeting," it is a fact every country of 200+ has one, so it's safer to say every non-fiat currency has failed.

Gold and silver are valuable everywhere and have been since they were first discovered many thousands of years ago. So your claim is utterly false. Every fiat currency that has existed has gone to zero, as well as any that were based on claims of redeemability.

>See a list of severity and frequency of US recessions, or study the Great Moderation, or simply look at the volatility of gold prices, to see how unstable non-fiat pricing is.

Gold prices are only volatile in terms of dollars, due to speculation in the futures market. The banks and governments play games with gold prices to discourage investors from seeking it. There are some cyclical or geopolitical factors in it too. But as JP Morgan said, "Gold is money. Everything else is credit." It can be manipulated but not nearly as much as fiat.

[SideQuark]

> I have looked at old ads for stuff, and the difference is that now the same goods are manufactured for 1/10th the cost overseas and somehow cost way more anyway or at best roughly the same price as before

If you believe this is the general reason, then you should invest in all these companies making 80+% profits and get the amazing returns.

Oh yeah, those companies don't exit, maybe because the claimed reason doesn't exist.

> Gold prices are only volatile in terms of dollars, due to speculation in the futures market

That's nonsense. Gold has always been far more volatile than goods, which is precisely the reason the world saw the incontrovertible evidence during the Great Depression, which is why all of the 200+ countries on the planet left it as a standard. If it were some magical better way, then surely at least one of the 200+ countries would do it and win, but it has been clear nearly a century what a bad idea it is.

> Every fiat currency that has existed has gone to zero,

Well, there's 200ish of them that exist right now above zero. And guess what? Every single non-fiat currency has failed, since there are zero left. You can keep claiming otherwise but this is reality.

> Gold and silver are valuable everywhere and have been since they were first discovered many thousands of years ago.

So are cattle and a zillion other old goods. That does not make them a good currency or a basis for an economy.

Tying your economy growth to the rate you can dig up gold is also a reason that those thousands of years saw economic growth at a fraction of a percent. When mankind realized the stupidity of limiting growth in all areas to the growth in digging up gold, and detached the two, economic growth greatly increased. You cannot invest in new production, inventions, and goods, without having capital. Limiting capital, i.e., gold supply, results in lower growth.

[wakawaka28]

>If you believe this is the general reason, then you should invest in all these companies making 80+% profits and get the amazing returns.

I didn't say they were getting great returns. Although their returns are good (and if I could go back in time and invest like 20 years ago I could 100x my money), the fact is that although stuff is cheaper we (individuals and businesses) still can't buy more because money is worth less than it used to be.

>Well, there's 200ish of them that exist right now above zero. And guess what? Every single non-fiat currency has failed, since there are zero left. You can keep claiming otherwise but this is reality.

You can keep denying the reality that gold has much value, but you're wrong. It may not be the official currency anywhere, but it is worth a lot everywhere in the world. Furthermore, central banks hoard gold. If it was as worthless and detached from money as you propose, they would sell it all immediately. But they're buying instead. BRICS countries are launching a gold-backed currency any time now. Get your head out of the sand.

>Gold has always been far more volatile than goods, which is precisely the reason the world saw the incontrovertible evidence during the Great Depression, which is why all of the 200+ countries on the planet left it as a standard. If it were some magical better way, then surely at least one of the 200+ countries would do it and win, but it has been clear nearly a century what a bad idea it is.

Every country wants fiat because they can print it, plain and simple. The way these governments win is not by having a functional currency so much as by having something they can manipulate in their favor. Gold is not easy to manipulate because you can't print it. The avoidance of gold-backed money has nothing to do with "volatility" of gold. The supply of gold is steady, growing at perhaps 2% per year. There can be localized shortages of gold in a gold-based system that create volatility, but that is nothing compared to reckless printing of fiat. A responsibly managed fiat system could potentially be more stable than gold, but artificial manipulations of the money supply are not free and represent unfair enrichment or impoverishment of different players in the economy.

>Tying your economy growth to the rate you can dig up gold is also a reason that those thousands of years saw economic growth at a fraction of a percent. When mankind realized the stupidity of limiting growth in all areas to the growth in digging up gold, and detached the two, economic growth greatly increased. You cannot invest in new production, inventions, and goods, without having capital. Limiting capital, i.e., gold supply, results in lower growth.

You have really muddled things here. For thousands of years, debasement of currency and fiat currencies were also real threats. What really stimulated progress in the last 200 years was the discovery of steam power and oil. The Industrial Revolution. You can certainly invest in new innovations with a gold-based system, and that is indeed what happened. The Great Depression was caused by nothing other than reckless expansion of credit. Some people even think it was deliberately planned so that gold could be stolen by the government in the aftermath. I'm not saying gold is perfect or fiat absolutely can't work, but gold is real and it is the one thing that has truly lasted. Fiat currencies go to zero. Gold has not and will never go to zero, unless a solid gold asteroid hits the planet and we end up with an explosion in supply.

[SideQuark]

> the same goods are manufactured for 1/10th the cost overseas and somehow cost way more anyway

> I didn't say they were getting great returns

Ah, the old voodoo defense of the missing money.

> You can keep denying the reality that gold has much value, but you're wrong

I never said it didn't have value. It's bad as a currency. It's volatile and it hamstrings economies. Please read what is actually written and don't argue with your own strawmen.

> Every country wants fiat because they can print it, plain and simple

Then you have very little understanding of modern economies. Explain carefully the difference between the Fed and Treasury and how new money actually enters the system. You seem to know nothing of this.

The actual reason countries switched is the evidence against gold is overwhelming. Simply google the papers with the empirical data across several hundred years and ~100 countries that make it clear.

You can continue to argue from ignorance, or you can simply educate yourself and read the literature and evidence.

> The supply of gold is steady, growing at perhaps 2% per year.

This too is simply untrue, e.g., https://en.m.wikipedia.org/wiki/File:World_Gold_Production_1....

The mismatch between gold discovery and production versus needs of an economy is simply bad for a currency, which should expand and contract as the needs of the economy demands, otherwise there is more inflation/deflation cycles.

For example. around Christmas, as people increase spending, there is a need for more actual money, otherwise prices will fluctuate as too little money chases more goods. Every January this spending decreases, so, if the money supply didn't contract, then again prices will fluctuate as too much monry chases less sales. As a result, the Fed every xmas releases more money as demand increases, and every Jan pulls money back to prevent these cycles. You cannot do that with gold, or BTC, or any of the "too ignorant to understand money" crowd that has claims of "better" solutions without first understanding the current solutions, and in particular why those solutions exist and what previous problems they solved.

I suspect you're completely unaware of these things, yet continue to argue from ignorance.

> The Great Depression was caused....

You might want to read some literature on the topic first https://scholar.google.com/scholar?hl=en&as_sdt=0%2C15&q=gol...

Question: how many courses on economics have you formally taken and what were they?

[wakawaka28]

>Ah, the old voodoo defense of the missing money.

Nice rebuttal bro.

>>You can keep denying the reality that gold has much value, but you're wrong

>I never said it didn't have value. It's bad as a currency. It's volatile and it hamstrings economies. Please read what is actually written and don't argue with your own strawmen.

It's not bad as a currency. It is portable, divisible, not perishable, and intrinsically valuable. It also does not vary a lot in supply. It's not as volatile as you keep asserting, in real terms. If there is ever a shortage of gold, it merely becomes more valuable and that encourages people to spend the gold they have and hold it for less time when they get it. If it gets more valuable, that also encourages people to dig it up. So any natural shortage is a self-correcting problem for many reasons.

>>Every country wants fiat because they can print it, plain and simple

>Then you have very little understanding of modern economies. Explain carefully the difference between the Fed and Treasury and how new money actually enters the system. You seem to know nothing of this.

I don't care to get into too many details (I know you will be a pedantic jerk about anything I say). But in short, the Fed is a pseudo-private entity intended to give an illusion of independence so that the government does not appear to have the power to directly print money. The Treasury borrows money from the Fed and the public. That is one way that fiat money gets created. There are other types of money too, such as fiat money created through commercial bank lending.

If you're not satisfied with my explanation above, let me refer you to this excellent presentation by Joe Biden's economic advisor Jared Bernstein: https://www.msn.com/en-us/money/markets/biden-economic-advis...

>The actual reason countries switched is the evidence against gold is overwhelming. Simply google the papers with the empirical data across several hundred years and ~100 countries that make it clear.

There are some plausible downsides to gold, but the academics are practically owned by banking institutions. Do you think you'll get to be a famous economist with accepted papers by going against what the cartel wants?

One reason we moved off of the gold standard was because in the wake of World War 2, the US held a disproportionate amount of the world's gold. Being in such a favorable position, the US pushed for a fiat system based on the US dollar with the promise of eventual convertibility of dollars to gold. From there, the US stopped converting dollars into gold directly in 1971, and since then everyone has been using fiat. Who in their right mind would set up a gold-based system to trade with the dominant power who has a fiat system? You'd be trading your precious gold for units that can be rendered worthless at any time. That is exactly why the world is dumping the dollar now and there is so much interest in the BRICS system.

>You can continue to argue from ignorance, or you can simply educate yourself and read the literature and evidence.

You can continue thinking you know everything just because you heard some "expert" apologist for the current system tell you, or you can think for yourself and read up on what I'm telling you.

>>The supply of gold is steady, growing at perhaps 2% per year.

>This too is simply untrue, e.g., https://en.m.wikipedia.org/wiki/File:World_Gold_Production_1....

You don't know what you're looking at. That's production. The current supply of gold is about 212k tons (I think metric tons): https://www.gold.org/goldhub/data/how-much-gold . According to your own link, the production in 2014 was 2860 tons. That's less than 2% of the total supply. I would link you to a chart of the supply over time, but it seems incredibly hard to find one.

>The mismatch between gold discovery and production versus needs of an economy is simply bad for a currency, which should expand and contract as the needs of the economy demands, otherwise there is more inflation/deflation cycles.

What happens with gold is that the price of gold just changes, credit is issued, and/or it circulates faster as needed. Printing currency or issuing credit creates an illusion of abundance when the economy is not productive enough to support the spending that's taking place. Basing the currency on a real thing discourages abuses of the financial system, because you can only keep up a charade so long before people see through it. You can increase the money supply with a gold-based system, just like with a fractional reserve system, so long as people don't call you out on your mismanagement of the supply and exit the system with their gold.

>You cannot do that with gold, or BTC, or any of the "too ignorant to understand money" crowd that has claims of "better" solutions without first understanding the current solutions, and in particular why those solutions exist and what previous problems they solved.

>I suspect you're completely unaware of these things, yet continue to argue from ignorance.

Oh I'm aware of it. You seem to not be though. I would never endorse BTC but gold is in another ballpark entirely.

>>The Great Depression was caused....

>You might want to read some literature on the topic first [condescending link here]

I've read books on the subject, on top of being told in every economics class that it was due to a credit bubble. There were other factors such as a series of crop failures, the Dust Bowl, and so on. But the real crash was in 1929, before the Dust Bowl. By the way, the Federal Reserve was in place before that crash. So I guess their fancy theory didn't fucking work now did it? Or maybe the directors of that system accomplished exactly what they set out to do, which is to seize the country's gold and enrich their friends, and to start the process of getting more power through a fiat money system.

>Question: how many courses on economics have you formally taken and what were they?

I've been out of school so long I don't remember. It doesn't especially matter. You can look up everything I said if you want to, but I don't think you do because you're too conceited. But really, I think I've taken at least 2 general macroeconomics courses. I have received the official story about the world monetary system and the Great Depression formally like 3-5 times in school, starting as a juvenile. It is all plausible, by design, and of course academics cling to that story as nothing else will be accepted by the people who run the system. They cannot tolerate people in positions of authority raising doubts about the financial system or the prudence of printing money.

[csomar]

It's important for people to realize that the US dollars market are quite open that if the current actors thinks that the dollar is going down, it'll go down very fast. So if you are an average HNer (citizen) don't go freak out and put all of your money on gold or bitcoin. (This is not a long-term assessment though; that being impossible to predict the far future).

Nobody wants to see the US dollar collapse overnight. Neither the US nor China (which holds trillions of US bonds). But everyone wants to move from that standard including the US (which, being the reserve currency, has suffered a horrible NIIP since the end of the gold standard[1]).

1: https://en.wikipedia.org/wiki/Net_international_investment_p...