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by analog31 391 days ago
But they can spend it on stocks, with the hope of maintaining or increasing value. Thats savings, right?
2 comments

Who doesn't love the value of their savings being built 100% on the speculation of the public perception of made up things?
savings are a thermodynamical impossibility. real wealth decays (livestock will die, the roof over your head will leak, the bushel of corn will rot, ...). savings must be invested for it to have future value.
Money was traditionally a way to store value, and not all things decay at a rate that matters. Roman roads still exist. The Parthenon still exists. Roman coins still exist. In any inflationary currency value erodes, and it also encourages the production of less durable goods as time pressure encourages speed of production and not durability.
An underrated fact. The only savings that doesn't decay is someone else's debt, too.
yes thank you, I paraphrased Soddy, and for him debt was virtual wealth (and not subject to decay).
If only there was some material that didn't degrade over time and is hard to produce. Somebody should invent something like that.
It's circular. Sure it's pegged to metal, but won't tell you how much corn or land or homes you can buy with it. What should one oz of gold, hoarded in 2025, be able to buy you in 2050? Many factors will determine that. Theres no such thing as fixed value, unless the definition is self referential.

The only thing to do is turn present day savings in capital, it's the only claim one can have on wealth in the future.

Its value goes up and down, and is as speculative as anything else.
Price does not equal value. One oz today will buy you about the same as 1 oz 100 years ago.
Yes, it'll buy you an oz of gold.

https://www.macrotrends.net/1333/historical-gold-prices-100-...

What does equal value?

In a perpetually inflationary environment it functions that way. Stocks become a universal savings account. Everyone pouring money in raises values whether or not the company being bought has any real value.